Commonwealth Edison Co. v. U.S. Nuclear Regulatory Com'n

• Decision Date: 01 September 1987
• Docket Number: No. 85-2928,85-2928
• Citation: Commonwealth Edison Co. v. U.S. Nuclear Regulatory Com'n, 830 F.2d 610 (7th Cir. 1987)
• Parties: COMMONWEALTH EDISON CO., Petitioner, v. UNITED STATES NUCLEAR REGULATORY COMMISSION, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 610

830 F.2d 610

COMMONWEALTH EDISON CO., Petitioner, v.UNITED STATES NUCLEAR REGULATORY COMMISSION, Respondent.

No. 85-2928.

United States Court of Appeals Seventh Circuit.

Argued Feb. 10, 1986.

Decided May 15, 1987.

Rehearing Granted July 9, 1987.

Decided on Rehearing Sept. 1, 1987.

Frederick C. Williams, Washington, D.C., for petitioner.

Irwin B. Rothschild, III, U.S. Nuclear Reg. Comm., Washington, D.C., for respondent.

Before WOOD and COFFEY, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

ESCHBACH, Senior Circuit Judge.

In this case Commonwealth Edison ("Edison") challenges as illegally retroactive a final order of the Nuclear Regulatory Commission("NRC") requiring Edison to pay fees at the price ceilings established in a 1984 regulation for the NRC's license application review work regarding four nuclear reactors.Edison also challenges the interest and penalty charges applied to the review fee.The NRC argues that we have no jurisdiction because Edison failed to petition for review of the 1984 Rule within the statutory time limit.The NRC also argues that even if we have jurisdiction, the fees are not illegally retroactive.We have jurisdiction over this case, and hold that both the fees and the penalty and interest charges were proper.

I

In 1978 the NRC promulgated a final rule amending a regulation requiring, inter alia, applicants for operating licenses for nuclear facilities to pay a fee for the work involved in the NRC's review of the license application.43 Fed.Reg. 7210(Feb. 21, 1978)("1978 Rule").The 1978 Rule was issued under the authority of the Independent Offices Appropriations Act ("IOAA"), which is presently codified at 31 U.S.C. Sec. 9701.

The 1978 Rule set ceiling figures or caps, above which any party charged a fee under the 1978 Rule would not be assessed.10 C.F.R. Sec. 170.21 & n. 3, 43 Fed.Reg. 7219-20(Feb. 21, 1978).The rule provided that fees "are payable upon notification by the Commission when the review of the project is completed."10 C.F.R. Sec. 170.12(b),43 Fed.Reg. 7218-19(Feb. 21, 1978).A related rule set hourly rates for the professional services of the NRC staff members performing the review work.The review work we are concerned with here was performed during the period the 1978 Rule was in effect.¹

In 1982 the NRC issued a notice of proposed rulemaking ("1982 Proposed Rule") to amend the 1978Rule. 47 Fed.Reg. 52,454(Nov. 22, 1982).In its proposed rule, the NRC suggested removing all ceilings relevant to the applications at bar.Id. at 52,454, 52,456.

Several utilities, including Edison, commented on the proposed rule.Some of these comments specifically raised the challenge to the 1984 Rule that Edison raises in this petition.The final rule ("1984 Rule") was promulgated on May 21, 1984.10 C.F.R. Sec. 170(1984),49 Fed.Reg. 21,283(May 21, 1984).The 1984 Rule became effective on June 18, 1984.It retained ceilings but set them at a higher level than the 1978Rule. 10 C.F.R. Secs. 170.20-21,49Fed.Reg. 21,363(May 21, 1984).It is important to note, however, that the 1984 Rule continued to apply the 1978 hourly rates to all review work performed prior to the effective date of the 1984 Rule.These hourly rates were not raised.Thus the cost for all the review work at issue here was assessed at the 1978 hourly rates.

In early 1985, the NRC issued bills to Edison under the 1984 Rule for license application review work for four nuclear reactors, two at Edison's Braidwood facility and two at Edison's Byron facility.These bills stated that they covered "the cost of the Operating License Review through June 23, 1984."They were assessed using the 1978 hourly rates for professional services.All of the invoices exceeded the 1978 ceilings but were within the 1984 ceilings.

Edison contested the fees as illegally retroactive and eventually paid a lower amount.The NRC issued several notices demanding payment, culminating in a final order issued on September 13, 1985, that charged Edison for the unpaid remainder.The notice also charged interest and a penalty pursuant to 31 U.S.C. Sec. 3717.In response Edison on November 4, 1985, filed a petition in this court to review both the propriety of the fees and of the interest and penalty charged thereon.After the announcement of this court's original decision on May 15, 1987, Edison filed a petition for rehearing, to which the government responded.We granted the petition for rehearing on July 9, 1987, and withdrew and vacated our original opinion.We now render this opinion on rehearing.

II

As the issue of initial forum jurisdiction over these fee decisions of the NRC has not been previously addressed explicitly, we treat the matter briefly in order to satisfy our duty to determine our own jurisdiction.The federal appeals courts have exclusive jurisdiction under a provision of the Administrative Orders Review Act(more commonly referred to as the Hobbs Act) over "all final orders of the Atomic Energy Commission[now the Nuclear Regulatory Commission] made reviewable by section 2239 of title 42."28 U.S.C. Sec. 2342(4).Section 2239(b) of Title 42 provides that the Hobbs Act governs review of "[a]ny final order entered in any proceeding of the kind specified in subsection (a)[of section 2239]."Subsection (a) proceedings include those "for the granting, suspending, revoking, or amending of any license."42 U.S.C. Sec. 2239(a)(1).SeeFlorida Power & Light Co. v. Lorion, 470 U.S. 729, 105 S.Ct. 1598, 1601, 84 L.Ed.2d 643(1985).

The general rule reiterated by the Lorion Court is that "[i]n the absence of specific evidence of contrary congressional intent, ... review of orders resolving issues preliminary or ancillary to the core issue in a proceeding should be reviewed in the same forum as the final order resolving the core issue."Lorion, 105 S.Ct. at 1606.Lorion reviewed the legislative history and "the basic congressional choice of Hobbs Act review,"Lorion, 105 S.Ct. at 1605, and concluded that "[a]bsent a firm indication that Congress intended to locate initial APA review of agency action in the district courts, we will not presume that Congress intended to depart from the sound policy of placing initial APA review in the courts of appeals."Id. at 1607.The Supreme Court found Congress's sound policy to be based on several considerations: the desire to avoid unnecessary duplication of factfinding, the preference for a factual record developed by the agency, and the desire for judicial review to undercut as little as possible the "very purpose" of summary and informal procedures--to save time where possible on matters not requiring the detailed formal application of agency expertise.Id. at 1605-07.

In Lorionthe Court determined that the Hobbs Act granted the federal appellate courts exclusive initial review jurisdiction over a challenge to the NRC's denial of a request to institute a proceeding to suspend a nuclear plant's operating license.Id. at 1605, 1608;see10 C.F.R. Sec. 2.206.The core issue was whether to suspend a license by invoking a section 2239(a) proceeding.The ancillary issue was whether to grant a private individual's request that the NRC institute such a proceeding.

In this case the core issue is whether to grant operating licenses in a section 2239(a) proceeding.The "ancillary or preliminary" issue is whether to uphold the NRC's bill for review costs incurred during the section 2239(a) proceeding considering Edison's license application.The secondary issue here bears at least the same degree of connection to the core issue as the secondary issue in Lorion bore to the core issue there.Here, as in Lorion, duplicating and bifurcating judicial review would exact a significant cost to the agency's efficiency and workload.Congress's intent was to avoid this cost.Id. at 1606-08;see alsoRockford League of Women Voters v. NRC, 679 F.2d 1218, 1220-21(7th Cir.1982)(applying similar factors and reaching same result as Lorion under facts analogous to those in Lorion ).

Of course, if Congress had expressed some other intent we would be bound to follow it.Lorion, 105 S.Ct. at 1609.But that is not the case here.The Court in Lorion determined that in Hobbs Actcases"the indications of legislative intentwe have been able to discern suggest that Congress intended to locate initial subject matter jurisdiction in the courts of appeals."Id.There is no legislative intent evinced in the IOAA or its legislative history that suggests an intent contrary to that Congress expressed in the Hobbs Act.Thus the intent in the Hobbs Act favoring initial appellate review is applicable to challenges to fee regulations promulgated by the NRC under the IOAA.

Finally, we note that other courts of appeals have exercised initial review jurisdiction over challenges to the NRC's license fee regulations.New England Power Co. v. NRC, 683 F.2d 12(1st Cir.1982);Mississippi Power & Light Co. v. NRC, 601 F.2d 223(5th Cir.1979).While neither opinion discussed initial review jurisdiction, both courts were of course under the same obligation we are to satisfy ourselves of subject-matter jurisdiction before proceeding to the merits.Edison has chosen the proper initial forum in which to challenge its license application review fee.

III

The NRC argues that petitioner's challenge to its bill for licensing application review has come too late because the Hobbs Act requires that a party aggrieved by a final order file a petition for its review within sixty days of the order's entry, 28 U.S.C. Sec. 2344, and the NRC claims that the review requested here is of the 1984 Rule itself and not simply its application to Edison.Edison does not dispute the application of the Hobbs Act or its character as a jurisdictional bar, which may not be altered or waived by the courts.See, e.g., Illinois Central Gulf Railway Co. v. ICC, 720 F.2d 958, 960(7th Cir.1983);Atchinson, Topeka, and Sante Fe...