Central & Southern Motor Freight Tariff Ass'n, Inc. v. U.S.

• Decision Date: 22 November 1985
• Docket Number: No. 84-1268,84-1268
• Parties: CENTRAL & SOUTHERN MOTOR FREIGHT TARIFF ASSOCIATION, INC., et al., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 722

777 F.2d 722

250 U.S.App.D.C. 63

CENTRAL & SOUTHERN MOTOR FREIGHT TARIFF ASSOCIATION, INC. et al., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission Respondents.

No. 84-1268.

United States Court of Appeals District of Columbia Circuit.

Argued Sept. 10, 1985.

Decided Nov. 22, 1985.

Petition for Review of an Order of the Interstate Commerce commission.

Elliott Bunce, with whom John W. McFadden, Jr., Kim D. Mann and Andrew J. Carraway, Arlington, Va., were on brief, for petitioners.

Richard J. Osterman, Jr., Atty., Interstate Commerce Commission, with whom J. Paul McGrath, Asst. Atty. Gen., Dept. of Justice, Robert S. Burk, Acting General Counsel, Ellen D. Hanson, Associate General Counsel, I.C.C., Catherine G. O'Sullivan and Frederic Freilicher, Attys., Dept. of Justice, Washington, D.C., were on brief, for respondents.

John Broadley, Robert S. Burk, Attys., I.C.C. and Barry Grossman, Atty., Dept. of Justice, Washington, D.C., also entered appearances for respondents.

Before WALD, MIKVA and STARR, Circuit Judges.

STARR, Circuit Judge:

This petition for review arises from efforts of the Interstate Commerce Commission, pursuant to the Independent Offices Appropriation Act, 31 U.S.C. Sec. 9701 (1982) (as amended), to update the fees charged for various services rendered by the Commission. The ICC's final decision, Regulations Governing Fees for Services Performed in Connection with Licensing and Related Services, 1 I.C.C.2d 60 (1984), adopted fees for 72 separate services. Petitioners, a number of motor carrier rate associations ("Associations") which function both as trade associations and as joint rate-setting authorities, challenge the fees imposed for processing and approval of four items: (1) rate association agreements; (2) amendments to rate association agreements; (3) requests for general rate increases; and (4) rate tariffs.

Although the underlying facts of this dispute are complex, the two principal issues before us can be simply stated. The first is whether the ICC may lawfully charge motor carriers the Commission's full costs of processing these filings, in the face of the motor carriers' contention that part or all of the identifiable benefits of the filings inure to the public at large rather than to the carriers. The second issue is whether the ICC properly computed its processing costs. As to the first issue, we conclude that in each instance the ICC's decision to impose fees sufficient to recoup its full costs was lawful. We also upheld in most respects the ICC's computation of costs. For reasons to be set forth, we remand the case to the ICC for further consideration and explanation of two cost items, namely, operations overhead and tariff processing.

I

The Independent Offices Appropriation Act (IOAA), passed in 1952, authorizes federal agencies to prescribe and collect fees for their services. The statute's express purpose is to make such services "self-sustaining to the extent possible." 31 U.S.C. Sec. 9701(a) (1982). The IOAA describes only in the most general terms how this desideratum of agency self-sufficiency is to be accomplished; agencies are statutorily instructed to be fair in imposing any fee regime and to consider such factors as costs to the Government, the value of the service to the recipient, the public policy or interest being served, and "other relevant facts." Id. Sec. 9701(b)(2)(A)-(D).

A

In 1959, the old Bureau of the Budget (now, of course, part of the Office of Management and Budget (OMB)) provided administrative guidance to the agencies for implementation of the IOAA in Budget Circular No. A-25, "User Charges" (September 23, 1959). The Circular construed the IOAA as authorizing a "reasonable charge" to "each identifiable recipient for a measurable unit or amount of Government service or property from which he derives a special benefit," id. p 3; the Circular further interpreted the IOAA as precluding a charge for services rendered "when the identification of the ultimate beneficiary is obscure and the services can be primarily considered as benefitting broadly the general public," id. p 3(a)(2). The Circular stated that "[w]here a service (or privilege) provides special benefits to an identifiable recipient above and beyond those which accrue to the public at large, a charge should be imposed to recover the full cost to the Federal Government of rendering the service." Id. p 3(a)(1) (emphasis added).

B

In 1966, the ICC promulgated its first schedule of fees pursuant to the IOAA and Circular A-25. Ex Parte No. 246, Regulations Governing Fees for Services, 326 I.C.C. 573 (1966). A supplementary decision, 329 I.C.C. 814 (1967), effected some minor adjustments to the fee schedule. These 1966-67 decisions imposed fees for 34 services. Included in that schedule were fees for analysis and approval of rate association agreements. Under federal law, of course, a rate association may operate with antitrust immunity only if the Commission, applying detailed statutory criteria, approves the association's agreement and amendments. 49 U.S.C. Sec. 10706(b) (1982). In contrast to rate association agreements, the ICC under the 1966-67 decisions imposed no fee for filing of either rate tariffs or general rate increases, the latter of which effectively permit a carrier to file multiple tariffs at once. Federal law requires carriers to have on file with the Commission up-to-date tariffs detailing the rates they will charge for all their services. 49 U.S.C. Sec. 10761(a).

The fees imposed by the 1966-67 decisions were, by design, generally lower than the full costs of Commission services. This was so for three reasons. First, fees were set at approximately 50 percent of the ICC's costs as estimated during a four-week internal study. The 50 percent figure was utilized to take into account benefits accruing to the general public by the ICC's providing these services. Second, fees were capped at $200. Thus, although the Commission's cost study indicated, for example, a cost of $2,019 for processing a rate bureau agreement, and $499 in costs for processing an amendment to an approved agreement, the Commission charged only the $200 maximum for these two services. Finally, as we already observed, the Commission charged no fees for such services as filing of tariffs and general rate increases.

In 1971, the Commission revised the 1966-67 schedule in two respects, namely by increasing fees for most services and imposing fees for ten additional services which were previously furnished gratis. See 339 I.C.C. 555 (1971). This decision was rendered, at least in part, in response to Congressional sentiment that the Executive Branch was, in general, not receiving sufficient compensation for its various services. See S.REP. NO. 1375, 90th Cong., 2d Sess., July 9, 1968, cited at 339 I.C.C. at 557. The ICC's 1971 decision, however, perpetuated the agency's general policy of charging 50 percent of estimated costs. On the other hand, the $200 ceiling was eliminated, and fees for rate association agreements and amendments to such agreements were both increased to $300. Id. at 577. Although initially proposing a fee of $.50 per page for tariffs, the ICC, in the wake of public comments, abandoned that proposal, stating that "at the present time, we are reluctant to impose a fee for filing tariff pages" because the benefit to a carrier which files a tariff "is rather remote or obscure." Id. at 562. No fee was considered for general rate increases.

C

Thus matters stood when litigation erupted in the mid-1970s over the fees charged by various administrative agencies. Between 1974 and 1976, the Supreme Court and this court had occasion to address a number of challenges to agency fee schedules. In two cases, the Supreme Court determined that certain fee schedules and annual assessments were overbroad, inasmuch as the fees represented attempts by the agencies to recover from regulated industries the full costs of the agencies' regulatory apparatus. The Court concluded that such fees or assessments went beyond the recovery of costs for benefits conferred upon identifiable beneficiaries; such charges, the Court reasoned, were more conceptually akin to taxes, which could, of course be levied only by Congress. National Cable Television Ass'n v. United States (NCTA I), 415 U.S. 336, 340-44, 94 S.Ct. 1146, 1148-50, 39 L.Ed.2d 370 (1974); Federal Power Comm'n v. New England Power Co., 415 U.S. 345, 349-51, 94 S.Ct. 1151, 1154-55, 39 L.Ed.2d 383 (1974); see also National Ass'n of Broadcasters v. FCC, 554 F.2d 1118 (D.C.Cir.1976) (applying NTCA I to strike down FCC fee schedule). New England Power, moreover, expressed general approval for the interpretation of the IOAA embodied in Circular A-25, see 415 U.S. at 349-51, 94 S.Ct. at 1154-55, although the Court did not specifically examine the question whether an agency could recover the full costs of providing specific services to identifiable beneficiaries.

The full-cost issue was subsequently addressed in the setting of a fee regime for common carriers and equipment manufacturers imposed by the Federal Communications Commission. In Electronic Industries Ass'n v. FCC, 554 F.2d 1109 (D.C.Cir.1976), this court held that the FCC was "not prohibited from charging an applicant or grantee the full cost of services rendered to an applicant which also result in some incidental public benefits." Id. at 1115 (emphasis added); accord Mississippi Power & Light Co. v. NRC, 601 F.2d 223, 229 (5th Cir.1979) (agency "may recover the full cost of providing a service to a private beneficiary, regardless of whether that service may also benefit the public") (emphasis in original); see also National Cable Television Ass'n, Inc. v. FCC (NCTA II), 554 F.2d 1094, 1104 (D.C.Cir.1976) (approving FCC policy of recovering costs associated with processing of applications and tariff filings, but requiring FCC to state its cost basis more...