[Federal Register Volume 79, Number 3 (Monday, January 6, 2014)]
[Notices]
[Pages 666-669]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-31545]


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NUCLEAR REGULATORY COMMISSION

[NRC-2013-0282; IA-13-038]


In the Matter of Joseph S. Shepherd; Order Conditioning 
Involvement in NRC-Licensed Activities

I

    Joseph S. Shepherd is the President and Owner of Foss Therapy 
Services, Incorporated (FTS) in North Hollywood, California. FTS does 
not possess a license issued by the Nuclear Regulatory Commission 
pursuant to 10 CFR Part 30. However, FTS is the holder of a State of 
California materials license, which authorizes the use of radioactive 
material for the maintenance, repair, and installation of self-shielded 
irradiators. The holder of a State license may perform work authorized 
by the license in other state or federal jurisdictions provided the 
State licensee files for reciprocity with the appropriate regulatory 
authority.
    On September 8, 2008, the NRC issued Mr. Shepherd an Order, ``Order 
Prohibiting Involvement in 10 CFR Part 71 Activities and Conditioning 
Other NRC Licensed Activities'' (IA-08-014). The NRC issued the Order 
to Mr. Shepherd after he committed multiple violations of 10 CFR 
110.7b, ``Deliberate Misconduct.'' These violations arose out of Mr. 
Shepherd's employment by Source Production and Equipment Company, Inc. 
(SPEC), of St. Rose, Louisiana. SPEC, an NRC licensee, hired Mr. 
Shepherd to perform certain maintenance inspections required by the NRC 
Certificate of Compliance for Model No. 5979 shipping casks prior to 
shipping NRC-licensed radioactive material to Mexico. The NRC 
determined through inspection and an investigation that, on three 
separate occasions, Mr. Shepherd deliberately provided materially 
inaccurate information to SPEC concerning the inspection of Model No. 
5979 packages. Mr. Shepherd provided the inaccurate information in 
various documents, such as checklists and bills of lading. By 
deliberately providing materially inaccurate information, Mr. Shepherd 
caused SPEC to violate 10 CFR 71.3, ``Requirement for License'' and 10 
CFR 71.17m ``General License; NRC-approved package.'' For that reason, 
Mr. Shepherd's actions violated 10 CFR 110.7b, ``Deliberate 
Misconduct.''
    The September 8, 2008, NRC Order, in part, prohibited Mr. Shepherd 
indefinitely from packaging any Type B shipments and from preparing any 
paperwork for a Type B shipment in any area of NRC jurisdiction. The 
Order required Mr. Shepherd to notify the NRC in writing at least 5 
business days before conducting licensed activities in NRC 
jurisdiction, a condition designed to facilitate NRC inspection of Mr. 
Shepherd's activities. The Order also required that, prior to 
conducting licensed activities in NRC jurisdiction, Mr. Shepherd notify 
the customer, that the NRC had issued the Order to him and make the 
Order available to the customer. These notifications were

[[Page 667]]

required for a period of 5 years from the date of the September 8, 
2008, Order; that is, until September 8, 2013.

II

    In early 2012, the Uniformed Services University of the Health 
Sciences (USU) in Bethesda, Maryland hired FTS to remove a Mark I Model 
68A irradiator from a facility in North Carolina and install the 
irradiator at USU. Although USU is affiliated with the United States 
military services, it is under NRC jurisdiction. FTS's contract with 
USU originally involved a joint venture with another company, but FTS 
became the sole contractor after the other company was unable to 
fulfill the contract. On April 4, 2012, FTS submitted to the NRC's 
Region IV an NRC Form 241, ``Report of Proposed Activities in Non-
Agreement States, Areas of Exclusive Federal Jurisdiction, or Offshore 
Waters.'' With this form, FTS provided notification of their intent to 
conduct work at USU under reciprocity; that is, under FTS's California 
license.
    On April 13, 2012, the NRC inspected FTS's work on the self-
shielded irradiator at USU. After observing the activities of the day 
and watching FTS finish loading radioactive sources into USU's 
irradiator, an NRC inspector interviewed Mr. Shepherd regarding the 
notification provisions of the 2008 Order issued to him. Mr. Shepherd 
acknowledged that he had not notified USU of the Order and that he had 
not made the Order available to USU.
    On April 25, 2012, the NRC Office of Investigations (OI) initiated 
an investigation to determine if Mr. Shepherd willfully failed to 
adhere to the conditions of his Order when he worked at USU without 
notifying the USU of the Order issued to him and without making the 
Order available to USU. Based on OI's investigation, the NRC finds that 
Mr. Shepherd willfully violated the Order, in careless disregard of its 
requirements. Specifically, the NRC finds that Mr. Shepherd willfully 
failed to notify USU of the Order issued to him and willfully failed to 
make the Order available to USU prior to performing work at the 
facility. Although Mr. Shepherd has stated that he believed the Order's 
notification requirements did not apply to his work at USU because USU 
was under military jurisdiction, rather than NRC jurisdiction, Mr. 
Shepherd knew that belief may have been incorrect, yet failed to verify 
USU's jurisdictional status. For example, Mr. Shepherd acknowledged 
that prior to working at USU he reviewed USU's NRC license, a document 
that states ``U.S. Nuclear Regulatory Commission Materials License'' at 
the top of the first page. Mr. Shepherd also submitted a Form 241 to 
the NRC, an action that would not have been required had USU not been 
under NRC jurisdiction.
    In a letter dated August 15, 2013, the NRC informed Mr. Shepherd 
that the NRC was considering escalated enforcement action against him 
for an apparent violation of the NRC Order issued to him on September 
8, 2008. In the letter, the NRC offered Mr. Shepherd the opportunity to 
attend a Predecisional Enforcement Conference (PEC) or request 
Alternative Dispute Resolution (ADR). At Mr. Shepherd's request, a PEC 
was conducted on September 25, 2013.
    During the PEC, Mr. Shepherd acknowledged the apparent violation 
and the failure to provide notification to USU prior to performing work 
as required by the Order, indicating that he made a mistake. Mr. 
Shepherd also acknowledged that he would not have otherwise notified 
USU if he had not discussed the required notification with the NRC 
inspector during the inspection because he thought USU was under 
military jurisdiction and not NRC jurisdiction.
    Based on the results of the inspection, the OI investigation, and 
the information provided during the PEC, the NRC finds that Mr. 
Shepherd willfully, in careless disregard, violated the conditions of 
the 2008 NRC Order against him because, prior to conducting work at the 
facility, Mr. Shepherd failed to notify USU of the Order issued to him 
and failed to make the Order available to USU. In sum, the NRC finds 
that Mr. Shepherd's actions constitute a violation of NRC requirements.

III

    The NRC must be able to rely on licensees, their contractors, and 
their employees to comply with NRC requirements. Mr. Shepherd is 
currently prohibited from involvement in 10 CFR Part 71 activities, as 
set forth in the Order issued to him on September 8, 2008. This 
requirement of the Order remains in effect. The 2008 Order also 
required Mr. Shepherd to notify the NRC in writing at least 5 business 
days before working in NRC jurisdiction, in order to facilitate NRC 
inspections of his activities. In addition, the 2008 Order required 
that, before performing work, Mr. Shepherd notify customers that the 
NRC had issued an Order to him and make the Order available to 
customers.
    Based on Mr. Shepherd's violation of the September 8, 2008, NRC 
Order, I lack reasonable assurance that Mr. Shepherd can be relied 
upon, at this time, to comply with NRC requirements. Based on the 
current violation, and because the notification requirements from the 
prior Order expired on September 8, 2013, the public health, safety, 
and interest require that the NRC issue Mr. Shepherd this Order. This 
Order requires that, before working in NRC jurisdiction, Mr. Shepherd 
(1) notify the NRC of his planned work and confirm that he has verified 
the jurisdictional status of his customer; and (2) notify the customer 
that the NRC has issued the September 8, 2008, NRC Order, and this 
Order to him and make the Orders available to the customer. These 
requirements will remain in effect for 3 years from the effective date 
of this Order. This Order also requires that Mr. Shepherd must 
determine whether the customer is under NRC jurisdiction, document his 
determination and state the basis for his determination. This 
requirement will remain in effect for 3 years from the effective date 
of this Order. The documentation of this requirement shall be 
maintained for a period of 4 years from the effective date of the 
Order.

IV

    Accordingly, pursuant to Sections 81, 161b, 161i, 161o, 182, and 
186 of the Atomic Energy Act of 1954, as amended, and the Commission's 
regulations in 10 CFR 2.202, 10 CFR Part 71, 10 CFR 110.7b, and 10 CFR 
150.20, it is hereby ordered that, from the effective date of this 
order:
    1. For a period of 3 years, Mr. Shepherd shall notify the NRC in 
writing at least 5 business days before conducting licensed activities 
in NRC jurisdiction. Mr. Shepherd may provide this notification 
electronically either by email to: R4_Reciprocity.Resource@nrc.gov, or 
by faxing this notification to (817) 200-1188. Mr. Shepherd may also 
provide this notification by mail to Regional Administrator, U.S. 
Nuclear Regulatory Commission, ATTN: Division of Nuclear Material 
Safety, 1600 East Lamar Blvd., Arlington, TX 76011. If this 
notification is provided by mail, Mr. Shepherd must ensure this 
notification is received by the NRC at least 5 business days before 
conducting licensed activities. The notification shall provide the 
name, location, and phone number of the customer; and it shall describe 
the type of work to be performed.
    2. For a period of 3 years, Mr. Shepherd shall take the following 
actions before working for any customer, or for any contractor of a 
customer, who manufactures, produces, transfers, receives, acquires, 
owns, possesses, or uses byproduct material. Mr. Shepherd shall: (a) 
Determine

[[Page 668]]

whether the customer or its job site is under NRC jurisdiction, (b) 
document his determination in writing, and (c) state in writing the 
basis for his determination. Mr. Shepherd shall maintain this 
documentation for a period of 4 years from the effective date of this 
Order, and he shall make the documentation available for NRC 
inspection.
    3. For a period of 3 years, before conducting licensed activities 
in NRC jurisdiction, Mr. Shepherd shall notify each customer in writing 
that the NRC has issued the September 8, 2008, Order and this Order to 
him, and he shall make the Orders available to the customer. Mr. 
Shepherd shall maintain copies of these notifications for 4 years from 
the effective date of this Order, and he shall make the copies 
available for NRC inspection.
    4. Mr. Shepherd is currently employed by Foss Therapy Services. 
Should Mr. Shepherd seek other employment involving NRC-regulated 
activities within 3 years from the effective date of this Order, before 
accepting employment he shall provide the employer a copy of both this 
Order and the September 8, 2008 Order.
    The Director, Office of Enforcement, may, in writing, relax or 
rescind any of the above conditions upon demonstration by Joseph S. 
Shepherd of good cause.
    Issuance of this Order does not alter the provisions in the 
September 8, 2008, Order issued to Mr. Shepherd, including the 
provision indefinitely prohibiting Mr. Shepherd's involvement with 
shipments of Type B quantities of NRC-licensed material.

V

    In accordance with 2.202, Joseph S. Shepherd must submit a written 
answer to this Order under oath or affirmation within 20 days of its 
issuance. The response shall admit or deny the charge made in the 
Order. Joseph S. Shepherd's failure to respond to this Order could 
result in additional enforcement action in accordance with the 
Commission's Enforcement Policy. Any person adversely affected by this 
Order may submit a written answer to this Order within 20 days of its 
issuance. In addition, Joseph S. Shepherd and any other person 
adversely affected by this Order may request a hearing on this Order 
within 30 days of its issuance. Where good cause is shown, 
consideration will be given to extending the time to answer or request 
a hearing. A request for extension of time must be made in writing to 
the Director, Office of Enforcement, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001, and include a statement of good 
cause for the extension.
    The response to this Order and the Notice shall be submitted to the 
Secretary, U.S. Nuclear Regulatory Commission, ATTN: Rulemakings and 
Adjudications Staff, Washington, DC 20555-0001. Copies shall also be 
sent to: Director, Office of Enforcement, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001; the Assistant General Counsel 
for Materials Litigation and Enforcement at the same address; Regional 
Administrator, U.S. Nuclear Regulatory Commission, ATTN: Regional 
Administrator, Region I, 2100 Renaissance Blvd., King of Prussia, PA 
19406. This response should be clearly marked as a ``Reply to a Notice 
of Violation and Order; IA-13-038.''
    All documents filed in NRC adjudicatory proceedings, including a 
request for hearing, a petition for leave to intervene, any motion or 
other document filed in the proceeding prior to the submission of a 
request for hearing or petition to intervene, and documents filed by 
interested governmental entities participating under 10 CFR 2.315(c), 
must be filed in accordance with the NRC E-Filing rule (72 FR 49139, 
August 28, 2007). The E-Filing process requires participants to submit 
and serve all adjudicatory documents over the internet, or in some 
cases to mail copies on electronic storage media. Participants may not 
submit paper copies of their filings unless they seek an exemption in 
accordance with the procedures described below.
    To comply with the procedural requirements of E-Filing, at least 
ten 10 days prior to the filing deadline, the participant should 
contact the Office of the Secretary by email at hearing.docket@nrc.gov, 
or by telephone at 301-415-1677, to request (1) a digital 
identification (ID) certificate, which allows the participant (or its 
counsel or representative) to digitally sign documents and access the 
E-Submittal server for any proceeding in which it is participating; and 
(2) advise the Secretary that the participant will be submitting a 
request or petition for hearing (even in instances in which the 
participant, or its counsel or representative, already holds an NRC-
issued digital ID certificate). Based upon this information, the 
Secretary will establish an electronic docket for the hearing in this 
proceeding if the Secretary has not already established an electronic 
docket.
    Information about applying for a digital ID certificate is 
available on the NRC's public Web site at http://www.nrc.gov/site-help/e-submittals/apply-certificates.html. System requirements for accessing 
the E-Submittal server are detailed in the NRC's ``Guidance for 
Electronic Submission,'' which is available on the agency's public Web 
site at http://www.nrc.gov/site-help/e-submittals.html. Participants 
may attempt to use other software not listed on the Web site, but 
should note that the NRC's E-Filing system does not support unlisted 
software, and the NRC Meta System Help Desk will not be able to offer 
assistance in using unlisted software.
    If a participant is electronically submitting a document to the NRC 
in accordance with the E-Filing rule, the participant must file the 
document using the NRC's online, Web-based submission form. In order to 
serve documents through the Electronic Information Exchange System, 
users will be required to install a Web browser plug-in from the NRC's 
Web site. Further information on the Web-based submission form, 
including the installation of the Web browser plug-in, is available on 
the NRC's public Web site at http://www.nrc.gov/site-help/e-submittals.html.
    Once a participant has obtained a digital ID certificate and a 
docket has been created, the participant can then submit a request for 
hearing or petition for leave to intervene. Submissions should be in 
Portable Document Format (PDF) in accordance with NRC guidance 
available on the NRC's public Web site at http://www.nrc.gov/site-help/e-submittals.html. A filing is considered complete at the time the 
documents are submitted through the NRC's E-Filing system. To be 
timely, an electronic filing must be submitted to the E-Filing system 
no later than 11:59 p.m. Eastern Time on the due date. Upon receipt of 
a transmission, the E-Filing system time-stamps the document and sends 
the submitter an email notice confirming receipt of the document. The 
E-Filing system also distributes an email notice that provides access 
to the document to the NRC's Office of the General Counsel and any 
others who have advised the Office of the Secretary that they wish to 
participate in the proceeding, so that the filer need not serve the 
documents on those participants separately. Therefore, applicants and 
other participants (or their counsel or representative) must apply for 
and receive a digital ID certificate before a hearing request/petition 
to intervene is filed so that they can obtain access to the document 
via the E-Filing system.
    A person filing electronically using the NRC's adjudicatory E-
Filing system

[[Page 669]]

may seek assistance by contacting the NRC Meta System Help Desk through 
the ``Contact Us'' link located on the NRC's public Web site at http://www.nrc.gov/site-help/e-submittals.html, by email to 
MSHD.Resource@nrc.gov, or by a toll-free call at 866-672-7640. The NRC 
Meta System Help Desk is available between 8 a.m. and 8 p.m., Eastern 
Time, Monday through Friday, excluding government holidays.
    Participants who believe that they have a good cause for not 
submitting documents electronically must file an exemption request, in 
accordance with 10 CFR 2.302(g), with their initial paper filing 
requesting authorization to continue to submit documents in paper 
format. Such filings must be submitted by: (1) First class mail 
addressed to the Office of the Secretary of the Commission, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: 
Rulemaking and Adjudications Staff; or (2) courier, express mail, or 
expedited delivery service to the Office of the Secretary, Sixteenth 
Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 
20852, Attention: Rulemaking and Adjudications Staff. Participants 
filing a document in this manner are responsible for serving the 
document on all other participants. Filing is considered complete by 
first-class mail as of the time of deposit in the mail, or by courier, 
express mail, or expedited delivery service upon depositing the 
document with the provider of the service. A presiding officer, having 
granted an exemption request from using E-Filing, may require a 
participant or party to use E-Filing if the presiding officer 
subsequently determines that the reason for granting the exemption from 
use of E-Filing no longer exists.
    Documents submitted in adjudicatory proceedings will appear in the 
NRC's electronic hearing docket which is available to the public at 
http://ehd1.nrc.gov/ehd/, unless excluded pursuant to an order of the 
Commission, or the presiding officer. Participants are requested not to 
include personal privacy information, such as social security numbers, 
home addresses, or home phone numbers in their filings, unless an NRC 
regulation or other law requires submission of such information. 
However, a request to intervene will require including information on 
local residence in order to demonstrate a proximity assertion of 
interest in the proceeding. With respect to copyrighted works, except 
for limited excerpts that serve the purpose of the adjudicatory filings 
and would constitute a Fair Use application, participants are requested 
not to include copyrighted materials in their submission.
    If a person other than Joseph S. Shepherd requests a hearing, that 
person shall set forth with particularity the manner in which his 
interest is adversely affected by this Order and shall address the 
criteria set forth in 10 CFR 2.309(d) and (f).
    If a hearing is requested by Joseph S. Shepherd or a person whose 
interest is adversely affected, the Commission will issue an Order 
designating the time and place of any hearings. If a hearing is held, 
the issue to be considered at such hearing shall be whether this Order 
should be sustained. In the absence of any request for hearing, or 
written approval of an extension of time in which to request a hearing, 
the provisions specified in Section IV above shall be final 30 days 
from the date this Order is issued without further order or 
proceedings. If an extension of time for requesting a hearing has been 
approved, the provisions specified in Section IV shall be final when 
the extension expires if a hearing request has not been received.
    An answer or a request for hearing shall not stay the immediate 
effectiveness of this order.

    Dated at Rockville, Maryland, this 20 day of December 2013.

    For the Nuclear Regulatory Commission.
Roy P. Zimmerman,
Director, Office of Enforcement.
[FR Doc. 2013-31545 Filed 1-3-14; 8:45 am]
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