EA-97-582 - Mallinckrodt Veterinary, Inc.

February 6, 1998

EA 97-582

Ashok Chawla, President
Mallinckrodt Veterinary, Inc.
675 McDonnell Blvd.
P.O. Box 5840
St. Louis, MO 63134

SUBJECT:

NOTICE OF VIOLATION (NRC Inspection Report 030-07609/97001(DNMS))

Dear Mr. Chawla:

This refers to the inspection conducted on November 17 and 18, 1997, with continuing NRC review through December 5, 1997, at Mallinckrodt Veterinary, Inc. (MVI) in Terre Haute, Indiana. During the inspection, several apparent violations of NRC requirements were identified and are discussed in the NRC inspection report transmitted by our letter dated December 17, 1997. The letter also provided MVI the option of providing a written response or attending a predecisional enforcement conference to address the apparent violations, their cause, and corrective actions to preclude recurrence. At MVI's request, a predecisional enforcement conference was held on January 27, 1998, at the Region III office.

Based on the information developed during the inspection and the information that MVI provided during the conference, the NRC has determined that violations of NRC requirements occurred. These violations are cited in the enclosed Notice of Violation (Notice) and the circumstances surrounding them are described in detail in the subject inspection report. The violations involve failure to: (1) provide timely notification to the NRC that no principal activities were conducted for a period of 24 months in areas unsuitable for release in accordance with NRC requirements; (2) certify disposition of all licensed material for Buildings 3 and 84 which were demolished; (3) assign a new Radiation Safety Officer (RSO) and amend the license when the authorized RSO left; and (4) receive prior written consent from the NRC regarding a change of ownership.

The first three violations mentioned above represent a breakdown in MVI's control of licensed activities which is of significant concern to the NRC. When principal NRC licensed activities ceased, MVI failed to maintain oversight of its radiation safety program. For example, MVI did not keep apprised of new NRC regulatory requirements, particularly those requirements which address decommissioning of an NRC licensed site. As a result, licensed material was left unattended and for all practical purposes abandoned in several locations onsite. Fortunately, it appears that no incidents occurred to cause exposure to members of the public. There is no excuse for abandonment of licensed responsibilities, particularly when licensed material exists onsite in quantities that exceed NRC release criteria.

As stated in Information Notice 94-21 "Regulatory Requirements When No Operations Are Being Performed," the radiation safety program required by NRC regulations and license conditions must be maintained in an active state while the license is in effect. Without a license amendment, a licensee may not suspend required radiation safety programs and then attempt to re-establish these programs at a later date. The license must be amended to authorize such program changes and, until then, licensees are required to maintain control of activities as specified by the license.

Despite the apparent minimal safety consequence of the licensed material remaining on site, the violations demonstrate a significant lack of oversight and control of licensed activities. As such, the violations in Section I of the Notice have been classified in the aggregate in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600 as a Severity Level III problem.

In accordance with the Enforcement Policy, a base civil penalty in the amount of $2,750 is considered for a Severity Level III violation. Because your facility has not been the subject of escalated enforcement actions within the last two inspections, the NRC considered whether credit was warranted for Corrective Action in accordance with the civil penalty assessment process in Section VI.B.2 of the Enforcement Policy. Credit for corrective actions is warranted because MVI's corrective actions were considered prompt and comprehensive. These actions included, but are not limited to: (1) the organization of a corporate oversight group which is directly involved with the regulatory affairs of Mallinckrodt, Inc.'s, subsidiaries and (2) Mallinckrodt corporate as well as MVI officials have been and continue to work closely with the new owners and NRC license holders of the property previously operated under the MVI license to ensure proper disposition of all radioactive waste left onsite by December 1998.

Therefore, to encourage prompt and comprehensive correction of violations and in recognition of the absence of previous escalated enforcement action, I have been authorized not to propose a civil penalty in this case.

The violation in Section II of the Notice involves the transfer of control of the license without prior written consent from the Commission. This violation is categorized at Severity Level IV in accordance with the Enforcement Policy.

You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. The NRC will use your response, in part, to determine whether further enforcement action is necessary to ensure compliance with regulatory requirements.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosure, and your response will be placed in the NRC Public Document Room.

Sincerely, Original signed by J. Caldwell A. Bill Beach Regional Administrator

Docket No. 030-07609
License No. 13-01264-05

Enclosure: Notice of Violation

cc w/encl:
Roy Brown
Director of Regulatory Affairs
Mallinckrodt Medical, Inc.

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NOTICE OF VIOLATION

Mallinckrodt Veterinary, Inc. Terre Haute, Indiana

Docket No. 030-05798 License No. 13-01264-05 EA 97-582

During an NRC inspection conducted on November 17 and 18, 1997, with continuing NRC review through December 5, 1997, violations of NRC requirements were identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the violations are listed below:

I. Programmatic Issues

A. 10 CFR 30.36(d) requires, in part, that licensees shall provide notification to NRC in writing within 60 days of the occurrence that no principal activities have been conducted for a period of 24 months in any separate building or outdoor area that contains residual radioactivity such that the building or outdoor area is unsuitable for release in accordance with NRC requirements.

Contrary to the above, as of November 17, 1997, the licensee did not notify NRC in writing within 60 days as required. Specifically, no principal activities (activities authorized by the license which are essential to achieving the purpose(s) for which the license was issued or amended) were conducted in buildings 201 and 209 since December 1993. The buildings contained residual radioactivity and were unsuitable for release in accordance with NRC requirements. In addition, notification was not made to the NRC of two outdoor burial sites which contain residual radioactivity and are unsuitable for release in accordance with NRC requirements. (01013)

B. 10 CFR 30.36(j) requires, in part, that as the final step in decommissioning, the licensee shall: (1) certify disposition of all licensed material, including accumulated wastes, by submitting a completed NRC Form 314 or equivalent information; and (2) conduct a radiation survey of the premises where licensed activities were carried out and submit a report of the results of this survey unless the licensee demonstrates that the premises were suitable for release in some other manner.

Contrary to the above, as of November 17, 1997, as a final step in decommissioning two buildings, the licensee did not: (1) certify disposition of all licensed material, including accumulated wastes, by submitting a completed NRC Form 314 or equivalent information to the NRC; and (2) did not submit a report of the radiation survey results or demonstrate in any other manner that the premises were suitable for release. Specifically, Buildings 3 and 84 located at 1331 S. First Street, Terre Haute, Indiana, were used for licensed activities before they were demolished in 1995 and 1996 respectively. The licensee did not certify to the NRC that all licensed material within those buildings had been disposed of or demonstrate that the premises were suitable for release. (02013)

C. Condition 11. of License No. 13-01264-05 authorizes a specifically named individual as the Radiation Safety Officer (RSO).

Contrary to the above, as of April 1995, the individual specifically named as RSO left the licensee's employ and was not replaced. (03013)

These violations represent a Severity Level III problem (Supplement VI).

II. Licensing Issue

10 CFR 30.34(b) requires, in part, that no NRC license nor any right under a license shall be transferred or assigned through transfer of control of any license to any person, unless the Commission gives its consent in writing.

Contrary to the above, on June 30, 1997, control of NRC License No. 13-01264-05 was transferred from Mallinckrodt Veterinary, Inc., to Schering-Plough Animal Health Corporation without prior written consent from the Commission. (01014)

This is a Severity Level IV violation (Supplement VI).

Pursuant to the provisions of 10 CFR 2.201, Mallinckrodt Veterinary Inc., is hereby required to submit a written statement or explanation to the U.S. Nuclear Regulatory Commission, ATTN: Document Control Desk, Washington, D.C. 20555, with a copy to the Regional Administrator, Region III, within 30 days of the date of the letter transmitting this Notice of Violation (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" and should include for each violation: (1) the reason for the violation, or, if contested, the basis for disputing the violation, (2) the corrective steps that have been taken and the results achieved, (3) the corrective steps that will be taken to avoid further violations, and (4) the date when full compliance will be achieved. Your response may reference or include previous docketed correspondence, if the correspondence adequately addresses the required response. If an adequate reply is not received within the time specified in this Notice, an order or a Demand for Information may be issued as to why the license should not be modified, suspended, or revoked, or why such other action as may be proper should not be taken. Where good cause is shown, consideration will be given to extending the response time.

If you contest this enforcement action, you should also provide a copy of your response to the Director, Office of Enforcement, United States Nuclear Regulatory Commission, Washington, D.C. 20555-0001.

Because your response will be placed in the NRC Public Document Room (PDR), to the extent possible, it should not include any personal privacy, proprietary, or safeguards information so that it can be placed in the PDR without redaction. If personal privacy or proprietary information is necessary to provide an acceptable response, then please provide a bracketed copy of your response that identifies the information that should be protected and a redacted copy of your response that deletes such information. If you request withholding of such material, you must specifically identify the portions of your response that you seek to have withheld and provide in detail the bases for your claim of withholding (e.g., explain why the disclosure of information will create an unwarranted invasion of personal privacy or provide the information required by 10 CFR 2.790(b) to support a request for withholding confidential commercial or financial information). If safeguards information is necessary to provide an acceptable response, please provide the level of protection described in 10 CFR 73.21.

Dated at Lisle, Illinois
this 6th day of February 1998