831 F.2d 1043 (Fed. Cir. 1987), 87-1192, Alaskan Arctic Gas Pipeline Co. v. United States

Docket Nº:87-1192.
Citation:831 F.2d 1043
Party Name:ALASKAN ARCTIC GAS PIPELINE COMPANY, Northern Border Pipeline Company, Pacific Gas Transmission Company and Pacific Gas and Electric Company, and Pacific Interstate Transmission Company, Plaintiffs-Appellees, v. The UNITED STATES, Defendant-Appellant.
Case Date:October 20, 1987
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 1043

831 F.2d 1043 (Fed. Cir. 1987)

ALASKAN ARCTIC GAS PIPELINE COMPANY, Northern Border

Pipeline Company, Pacific Gas Transmission Company and

Pacific Gas and Electric Company, and Pacific Interstate

Transmission Company, Plaintiffs-Appellees,

v.

The UNITED STATES, Defendant-Appellant.

No. 87-1192.

United States Court of Appeals, Federal Circuit

October 20, 1987

Page 1044

George M. Beasley, III, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for appellant. With him on the brief were Richard K. Willard, Asst. Atty. Gen., and David M. Cohen, Director. Also on the brief was Kristina Clark, Dept. of the Interior, Washington, D.C., of counsel.

William W. Brackett, Washington, D.C., argued for appellees.

Before DAVIS, SMITH, and NEWMAN, Circuit Judges.

EDWARD S. SMITH, Circuit Judge.

The proceeding before us involves the Department of the Interior's (Interior) authority under the Independent Offices Appropriation Act (IOAA) 1 and the 1973 amendment to the Mineral Lands Leasing Act (MLA) 2 to recover, pursuant to Interior's regulations implementing these statutes (1975 implementing regulations), 3 the processing costs of applications for gas pipeline rights-of-way across federal lands (application-processing-costs). The United States (Government) appeals from the grant of summary judgment by the United States Claims Court in Alaskan Arctic Gas Pipeline Co. v. United States 4 denying Interior's authority under the IOAA and the 1973 amendment to the MLA to recover application-processing-costs incurred subsequent to the enactment of the 1973 amendment to the MLA but prior to the promulgation of the 1975 implementing regulations. The Claims Court held that Interior's authority under these statutes to recover such costs exists only pursuant to regulations implementing these statutes in effect at the time the costs in issue are incurred. We affirm.

I. Issue

The principal issue on appeal is whether the Claims Court erred, as a matter of law, in holding that Interior's authority, pursuant to the IOAA and the 1973 amendment to the MLA, to recover right-of-way application-processing-costs extends only to the recovery of those costs incurred at a time the regulations implementing these statutes are in effect.

II. Background

The Claims Court, deciding this case on cross motions for summary judgment, granted motions submitted by both parties. Only the Government appeals to this court from the grant of summary judgment against it. For purposes of this appeal, the following facts are significant.

Alaskan Arctic Gas Pipeline Company, Northern Border Pipeline Company, Pacific Gas Transmission Company, Pacific Gas and Electric Company, and Pacific Interstate Transmission Company (the consortium) are a segment of a larger group of gas pipeline companies whose organizational purpose was to provide various component pipelines to complete the Trans-Alaska/Canada/United States Gas Pipeline for the delivery of natural gas from the Prudhoe

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Bay oil and gas field to market areas in the Lower Continental United States. The intended route of the pipeline required the pipeline to traverse federal lands, state-owned lands, and lands owned by private individuals. Prior to initiating construction on federal lands of the natural gas pipeline delivery system, each participating contractor was required by both the IOAA and the 1973 amendment to the MLA to submit to Interior an application for a right-of-way across these lands. In 1974, each member of the consortium filed its application.

Beginning in 1975, Interior sought from the members of the consortium reimbursement, pursuant to the regulations promulgated under the IOAA and the 1973 amendment to the MLA, of Interior's costs in processing the consortium's applications for pipeline rights-of-way across federal lands. The consortium eventually was assessed application-processing-costs totaling approximately $5.2 million.

The consortium, paying all but $257,219.41 of the assessed processing costs, brought action in the United States Claims Court against the United States to recover $4,053,528.42 of the amount already paid to Interior as reimbursement for application-processing-costs. The Government responded that it assessed the costs of processing the consortium's applications in full conformity with its delegated authority under the IOAA and the 1973 amendment to the MLA. In addition, the Government counterclaimed for the balance of the assessed costs, $257,219.41, plus interest. The parties filed cross motions for summary judgment.

In considering the cross motions for summary judgment, the Claims Court bifurcated the liability issues into two categories: (1) application-processing-costs incurred by Interior subsequent to the enactment of the 1973 amendment to the MLA and prior to June 1, 1975, the effective date of Interior's regulations implementing the statutory provisions of the IOAA and the 1973 amendment to the MLA; and (2) application-processing-costs incurred by the Government subsequent to June 1, 1975. The Claims Court granted the consortium's motion for summary judgment to the extent the consortium had been assessed fees relative to costs incurred prior to June 1, 1975, the effective date of the 1975 implementing regulations. The Claims Court, relying on the decision of the United States Court of Claims in Alyeska Pipeline Service Co. v. United States (Alyeska I), 5 held that, if the IOAA or the 1973 amendment to the MLA was to be the source of Interior's authority to recover application-processing-costs, the authority could only be exercised pursuant to the existence of implementing regulations in effect at the time the costs in issue were incurred by Interior. The Claims Court granted the Government's motion for summary judgment with regard to the amount of those fees assessed relative to costs incurred on and subsequent to June 1, 1975, the effective date of the 1975 implementing regulations. Only the Government appeals to this court from the grant of summary judgment against it.

For the reasons set out below, we hold that the Claims Court did not err by denying recovery pursuant to the 1975 implementing regulations promulgated under the IOAA and the 1973 amendment to the MLA of application-processing-costs incurred by Interior subsequent to the enactment of the 1973 amendment to the MLA but prior to the promulgation of the 1975 implementing regulations. We address no other issues that were before the Claims Court in this case.

III. Analysis

Judicial review of the issue on appeal before us requires us to construe the congressional intent underlying the IOAA and the 1973 amendment to the MLA. The statutory provisions of both the IOAA and the 1973 amendment to the MLA establish Interior's authority to obtain reimbursement for costs incurred in processing applications for rights-of-way across federal lands. The IOAA, enacted in 1951, authorizes Interior to obtain reimbursement of costs incurred in issuing licenses and permits

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only pursuant to implementing regulations: 6

Sec. 483a. Services as self-sustaining; uniformity; regulations; deposit in Treasury; effect on other laws

It is the sense of the Congress that any * * * license, permit, * * * or similar thing of value or utility * * * provided, granted, prepared, or issued by any Federal agency * * * to or for any person * * * shall be selfsustaining to the full extent possible, and the head of each Federal agency is authorized by regulation * * * to prescribe therefor such fee, charge, or price * * * as he shall determine * * * to be fair and equitable taking into consideration direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts * * *.

The MLA was amended in 1973 by the enactment of the Trans-Alaska Pipeline Act to provide for reimbursement to Interior by an applicant of application-processing-costs. Unlike the statutory language of the IOAA, the statutory language of the 1973 amendment to the MLA does not expressly authorize reimbursement of application-processing-costs only pursuant to implementing regulations. 7

(l) Reimbursement of costs

The applicant for a right-of-way or permit shall reimburse the United States for administrative and other costs incurred in processing the application, and the holder of a right-of-way or permit shall reimburse the United States for the costs incurred in monitoring the construction, operation, maintenance, and termination of any pipeline and related facilities on such right-of-way or permit area and shall pay annually in advance the fair market rental value of the right-of-way or permit, as determined by the Secretary or agency head.

Although Interior could have promulgated implementing regulations requiring applicants for licenses and permits to reimburse it for all expenses incurred in processing their applications, the only regulation that Interior adopted prior to 1975 provided for a minimal application filing fee. 8 In 1975, however, Interior first promulgated the current comprehensive regulation that provides for reimbursement of all expenses, including the cost of the environmental impact statement. 9

It is well established, in cases involving statutory construction, that the statutory language itself is the best indication of congressional intent. 10 However, if the bare language of the statute fails to provide adequate guidance or if a literal interpretation of the statute would lead to an incongrous result, the court must resort to the purpose and legislative history of the statute to determine the intent of Congress in enacting the statute. 11 Notwithstanding the guidance provided by the statutory language itself or by its legislative history, this court is bound, in performing statutory construction, by case law precedent developed by it and by its predecessor courts. 12

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