Raton Gas Transmission Co. v. F.E.R.C., 87-1021
| Decision Date | 29 July 1988 |
| Docket Number | No. 87-1021,87-1021 |
| Citation | 852 F.2d 612,271 U.S.App.D.C. 314 |
| Parties | RATON GAS TRANSMISSION COMPANY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Eugene Threadgill, Washington, D.C., for petitioner.
Joshua Z. Rokach, F.E.R.C., with whom Catherine C. Cook, General Counsel, and Jerome M. Feit, Sol., F.E.R.C., Washington, D.C., were on the brief, for respondent. Hanford O'Hara, F.E.R.C., Washington, D.C., also entered an appearance for respondent.
Before ROBINSON, GINSBURG and SILBERMAN, Circuit Judges.
Opinion for the Court filed by Circuit Judge SPOTSWOOD W. ROBINSON, III.
This petition for review arises from an unsuccessful attempt by Raton Gas Transmission Company (Raton) to obtain relief from a $4,000 fee charged by the Federal Energy Regulatory Commission. The fee was exacted as recompense to the Commission for processing a filing in which Raton sought a reduction in the rates at which it sells natural gas. The principal question before us is whether Raton's effort is an untimely attack upon a regulation adopted by the Commission more than two years before the present controversy emerged. We find that part of Raton's challenge is jurisdictionally timely and on the merits is viable. We therefore remand this case to the Commission for further consideration.
In 1986, Raton sought the Commission's leave to pass on to its customers a decrease in the cost of its gas. 1 Its filing, termed a "Purchased Gas Adjustment" (PGA), was submitted conformably with Commission regulations promulgated under the Natural Gas Act. 2 These regulations require gas companies to make PGA filings every six months to reflect changes in their gas costs. 3 Raton owns only one pipeline, and its filing was only six pages long. 4
The Independent Office Appropriations Act 5 authorizes the Commission to charge a fee for every service and benefit it provides to those it regulates. Accordingly, in Order No. 361 in 1984, 6 the Commission set fees therefor, including processing of PGA filings. In compliance with the fee schedule, Raton enclosed with its filing a check for $2,300, which had been the standard charge for processing PGA filings. 7 To its dismay, however, Raton was later advised by the Commission that shortly before the filing, the fee for this service had increased to $4,000. 8 Raton paid the remaining amount under protest. 9
Raton later moved for relief. 10 Raton claimed that the Commission had no authority to charge a fee for a PGA filing seeking a reduction, as opposed to an increase, in rates. 11 In the alternative, Raton asked the Commission to establish a fee reasonably related to the actual cost of the staff review of Raton's filing. 12 The Commission rebuffed Raton on both counts, 13 and subsequently denied Raton's request for rehearing. 14 This petition for review followed.
Raton argues that the higher fees currently charged do not accurately reflect the cost to the Commission of processing Raton's PGA filing. 15 Raton also contends that PGA filings envisioning reductions in rates do not confer any "special benefit" on Raton as required by the Independent Office Appropriations Act. 16 The Commission replies that the issues raised by Raton were resolved more than three years ago by Order No. 361 and thus are beyond the pale of judicial review. 17 The Commission also contends that most of these issues have been squarely addressed and decided in its favor by the Tenth Circuit. 18
As the Commission points out, Order No. 361 was promulgated on February 9, 1984, but Raton's motion for relief was not filed until March 20, 1986, long past the 60-day period allowed for judicial review of Commission orders promulgated under the Natural Gas Act. 19 Raton counters with the argument that circuit precedent preserves this court's jurisdiction to entertain a late attack on an agency rule under circumstances of the sort presented here. 20 We resolve this quarrel by examining the scenarios in which a late challenge to an agency order may be deemed excusable.
To begin with, an attack upon the validity of an agency regulation after expiration of the statutory review period is rarely to be permitted. 21 Strict enforcement of the time limit is necessary to preserve finality in agency decisionmaking and to protect justifiable reliance on agency rules. 22 Nevertheless, we have long recognized a limited number of exceptional situations in which an objection to an agency regulation is considered timely even after the statutory review period has ended.
The law of this circuit was recently summarized in our opinion in NLRB Union v. FLRA. 23 There we noted a distinction between challenges that originate in a petition for rulemaking and those that do not. 24 We stated that agency denials of petitions for rulemaking are generally subject to judicial review to a degree commensurate with the nature of the substantive claim. 25
Even absent a petition for rulemaking, a litigant may still, under certain circumstances, question an agency regulation after the expiration of the statutory period for direct review. This we have allowed when the agency's action did not "reasonably put[ ] aggrieved parties on notice of the rule's content," 26 or clearly remained unripe for judicial review throughout the statutory review period. 27 On several occasions we have suggested that there may be review of agency action outside the statutory review period in extreme cases involving gross violations of statutory or constitutional mandates, or denial of an adequate opportunity to test the regulation in court. 28 Our observations in Investment Company Institute v. Board of Governors, 29 aptly sum up our approach in these cases:
Where an aggrieved party has a valid excuse for failing to challenge the initial order promulgating a regulation, the regulation may be opened to attack upon review of a Board adjudication which applies the regulation.... However, absent a convincing justification, the litigant should be bound by the regulation. A contrary rule would thwart the principle of finality underlying the [statutory review period]. 30
Questions of a similar nature arise in cases presenting what at first blush appears to be a timely request for review of recent agency action, but the agency argues that the requester is actually attempting to litigate the validity of an older regulation that is otherwise unreviewable. 31 An agency may, for instance, contend that targeted action merely implements policy choices embodied in an older regulation, for which the statutory period for review has passed. 32 The court's task then is to determine whether there can be meaningful review of the later action without upsetting the basis of the earlier action or instead, whether the later action is inextricably intertwined with the earlier. In the latter event, the caselaw of this circuit makes clear that review may be had only if the earlier action is itself reviewable by reason of the criteria we previously have considered.
This principle is exemplified by our decision in MCI Telecommunications Corp. v. FCC. 33 In that case, MCI challenged a provision in the Federal Communications Commission's Sixth Report and Order, requiring certain common carriers of interstate telephone messages to refrain from filing tariffs. 34 MCI's petition was filed one day after the release of the Sixth Report, but FCC argued that nonetheless it was untimely because it was actually directed at FCC's earlier Fourth Report, which had merely permitted the carriers to forego the filing of tariffs. 35 Because the policy favoring forbearance predated issuance of the Sixth Report by a year, FCC asserted, MCI's challenge to the latter was untimely. 36 We found, however, that FCC in the Sixth Report had reconstructed its forbearance policy fundamentally by changing it from a permissive to a mandatory course of action. 37 Since the Fourth Report did not anticipate the Sixth Report's step in this crucial respect, any necessary connection between the two, we said, was " 'entirely unspoken (or impenetrably obscure).' " 38
In summary, the law of our circuit distinguishes between challenges presented in a petition for rulemaking and those that are not. Attacks launched outside a petition for rulemaking must meet time requirements unless they fall within one of a few well-defined categories. And when an otherwise timely protest is resisted by an agency as an effort to reopen a decision for which the time for judicial review has expired, we must ascertain whether the venture necessarily will implicate the older rule, or whether it is confined to the newer agency action.
In the case before us, we note at the outset that Raton's request for relief from the $4,000 fee did not take the form of a petition for rulemaking. It made its appearance in the course of a PGA filing, and followed Raton's earlier letter of protest accompanying its payment of the higher fee. Raton's motion therefore was an attack upon a rule--the one raising the fee for processing PGA filings--stemming from a particular application.
The motion for relief contained three distinct elements. There was an argument that PGA filings seeking rate decreases instead of increases confer no special benefit, and no fee at all should be charged for them. 39 There was the further argument that the $4,000 fee is not justified by the cost to the Commission of processing Raton's six-page filing, and that, indeed, a uniform fee imposes a hardship on small pipelines. 40 Lastly, there was a request that the Commission allow Raton to pass the amount of any fee through to its customers. 41
We examine first Raton's claim that PGA filings for rate reductions deserve no processing fee and conclude that it is untimely. On its face, Order No. 361 does not limit fees for PGA filings to rate increases;...
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