UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT
decided: May 15, 1987.
COMMONWEALTH EDISON CO., PETITIONER,
NUCLEAR REGULATORY COMMISSION, RESPONDENT
Petition for Review of an Order of the Nuclear Regulatory Commission. Originally Reported at:
Wood and Coffey, Circuit Judges, and Eschbach, Senior Circuit Judge.
ESCHBACH, Senior Circuit Judge
In this case Commonwealth Edison ("Edison") challenges 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. The NRC argues that we have no jurisdiction because Edison failed to petition for review of the 1984 Rule within the statutory time limit. We agree that we have no jurisdiction over the challenge to the 1984 Rule, and will dismiss that portion of Edison's petition. Edison has also argued that the NRC is not an executive or legislative agency required under 31 U.S.C. § 3717 to assess interest and a late payment penalty on outstanding debts owed the United States. We disagree and hold that the NRC is an executive or legislative agency for the purposes of section 3717. On this portion of Edison's claim we have jurisdiction and will on the merits deny its petition for review.
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. § 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. § 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. § 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.*fn1
In 1982 the NRC issued a notice of proposed rulemaking ("1982 Proposed Rule") to amend the 1978 Rule. 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, provided comments 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. ) 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 1978 Rule. 10 C.F.R. §§ 170.20-21, 49 Fed. 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 of the original fees. The notice also charged interest and a penalty pursuant to 31 U.S.C. § 3717. In response Edison on November 4, 1985, filed a petition in the court to review both the propriety of the fees and of the interest and penalty charged thereon.
Although Edison expressed serious doubt in its petition for review regarding this court's initial review jurisdiction, both parties now agree that Edison's petition is properly addressed to this court rather than to a federal district court. As the issue of jurisdiction over these fee decisions of the NRC has not been previously addressed explicitly, we address the matter briefly in order to satisfy our duty to determine our own jurisdiction. The federal circuit 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. § 2342(4). Section 2239(b) of Title 42 provides that the Hobbs Act governs review of "any 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. § 2239(a)(1). See Florida 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 "in 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 "absent 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 Lorion the 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; see 10 C.F.R. § 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 in the agency's efficiency and workload. Congress's intent was to avoid this cost. Id. at 1606-08; see also Rockford 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 Act cases "the indications of legislative intent we 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 1(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.
A. Jurisdiction over the Challenge to the 1984 rule
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. § 2344. The NRC claims that the review requested here is that of the 1984 rule itself, which clearly became effective more than sixty days prior to Edison's November 4, 1986 filing of its petition. Edison does not dispute the application of the Hobbs Act or its character as a jurisdictional bar, which may not be altered by the courts. See, e.g., Illinois Central Gulf R. Co. v. ICC, 720 F.2d 956, 960 (7th Cir. 1983); Atchinson, Topeka, and Santa Fe Railway v. ICC, 687 F.2d 912, 918 (7th Cir. 1982); see also, e.g., Eagle-Picher Industries v. EPA, 759 F.2d 905, 911 (D.C.Cir. 1985). Instead, Edison argues that its petition is properly characterized as a challenge to the NRC's application of the rule to Edison's bill, and that so understood it is timely since its petition was filed within sixty days of that final order. Specifically, Edison argues that the 1984 rule is retroactive in any application to work performed prior to its effective date. Edison also argues that it was not provided satisfactory notice of the NRC's intent to apply the 1984 ceiling to work done prior to the effective date of the 1984 Rule. In both of these challenges, the fundamental condition about which Edison complains is the requirement that it pay costs beyond the 1978 ceiling for work performed prior to the effective date of the 1984 Rule.
The challenges Edison raises to the 1984 rule are in actuality challenges to the substance of the 1984 rule or to the procedures by which that rule was adopted; Edison's complaints regarding its fees rely on no facts or law unique to the application of the 1984 Rule to Edison. The NRC's position was clear and its application to Edison was not in question. Despite Edison's contentions to the contrary, the rule as promulgated clearly contemplated that the 1984 ceiling would apply to all work for which no bill had yet issued. This, of course, included work performed prior to the effective date of the 1984 Rule. Thus whatever the merits of Edison's challenge, see Nevada Power Co. v. Watt, 711 F.2d 913, 933 n. 19 (10th Cir. 1983) (rejecting a very similar, if not materially identical, challenge on the merits, citing Hannifin v. Morton, 444 F.2d 200 (10th Cir. 1971)), it is not a challenge to some unexpected interpretation of the rule; it is a challenge to the rule itself as that rule was understood at the time of its promulgation. Thus the time period for making this challenge began to run on the date the final rule was entered. Cf., e.g., Western Union Telegraph Co. v. FCC, 249 U.S. App. D.C. 112, 773 F.2d 375, 375 (D.C.Cir. 1986); B.J. McAdams, Inc. v. ICC, 551 F.2d 1112, 1114-15 (8th Cir. 1977); Northwest Marine Terminals Association v. Federal Maritime Board, 218 F.2d 815, 815 (9th Cir. 1955). Edison's challenge comes too late.
Were the courts generally to find jurisdiction over challenges phrased as attacks to the application of a rule that actually are indirect attacks upon the rule itself, the statutory limitation upon direct review would become meaningless, as it would eviscerate the "purpose of the time limit . . . to impart finality into the administrative process, thereby conserving administrative resources and protecting the reliance interests of those who might conform their conduct to the administrative regulations." Illinois Central, 720 F.2d at 960; accord, e.g., Eagle-Picher, 759 F.2d at 911; National Resources Defense Council v. NRC, 215 U.S. App. D.C. 32, 666 F.2d 595, 602 (D.C.Cir. 1981). Thus courts must go beyond the mere fact that a challenge arises in a proceeding applying a general rule; a party's claim that indirect review should be allowed after the expiration of the direct review period must be carefully examined to prevent the allowance of such indirect review from violating Congress's explicit and deliberate intent to bind the courts in order to provide finality to agency orders not challenged on direct review. Eagle-Picher, 759 F.2d at 911, 913-14; City of Rochester v. Bond, 195 U.S. App. D.C. 345, 603 F.2d 927, 935 (D.C.Cir. 1979); see also Illinois Central, 720 F.2d at 960-61. We have made it clear that "what is essentially a collateral attack" upon the validity of a rule will "ordinarily . . . be barred by the sixty-day time limit of 28 U.S.C. § 2344." Illinois Central, 720 F.2d at 960.*fn2
Nevertheless, there are some carefully limited exceptions, for if the courts were to cut off from indirect review every challenge that technically was available during the time period for direct review, some parties, especially those justifiably not parties to the rulemaking proceedings, would on occasion be denied effective opportunities for review. E.g., Illinois v. ICC, 722 F.2d 1341, 1349 (7th Cir. 1983); Illinois Central, 720 F.2d at 960-61; Geller v. FCC, 198 U.S. App. D.C. 31, 610 F.2d 973, 977-78 (D.C.Cir. 1979); Functional Music, Inc. v. FCC, 107 U.S. App. D.C. 34, 274 F.2d 543, 545-47 (D.C. Cir.), cert. denied, 361 U.S. 813, 80 S. Ct. 50, 4 L. Ed. 2d 60 (1959). The courts have thus held that the jurisdictional bar does not prevent indirect review of a regulation in a later proceeding applying the regulation in effective opportunity for review would be denied by requiring direct review. See, e.g., RCA Global Communications, Inc. v. FCC, 244 U.S. App. D.C. 402, 758 F.2d 722, 730 (D.C.Cir. 1985) ("self-evidently the [time period] does not run until the agency has decided a question in a manner that reasonably puts aggrieved parties on notice of the rule's content"); Illinois Central, 720 F.2d at 960-61 (7th Cir. 1983) (when a "short-term" measure lasted more than two years the changed circumstances justified indirect review); Geller, 610 F.2d at 977-78 (D.C.Cir. 1979) (changed circumstances warranted indirect review); Functional Music, 274 F.2d at 545-47 (D.C.Cir. 1959) (continual postponements of effective date of regulation prevented parties' ability to review effectively during direct review and justified indirect review); see also Illinois v. ICC, 722 F.2d at 1349 (possibility that affected party may have justifiably been unaware of impact of proposed rule warranted indirect challenge).
The primary and common characteristic of these cases is that some later change in events or some failure by an agency effectively to communicate or carry out its intentions prevented the party that later sought indirect review from having effective notice during the direct review period that its interests would be affected. Indeed, several of the cases directly rely on this rationale. E.g., Eagle-Picher, 759 F.2d at 914; RCA Global Communications, Inc. v. FCC, 244 U.S. App. D.C. 402, 758 F.2d 722, 730 (D.C.Cir. 1985); Illinois v. ICC, 722 F.2d at 1349; Recreational Vehicle Industry Association v. EPA, 209 U.S. App. D.C. 307, 653 F.2d 562, 568 (D.C. Cir. 1981); NRDC V. NRC, 666 F.2d at 602-03; see also Microwave Communications v. FCC, 169 U.S. App. D.C. 154, 515 F.2d 385, 389-91 (D.C.Cir. 1974) (explaining importance of notice to the jurisdictional provisions of 28 U.S.C. § 2344).
There admittedly exists general language in some opinions suggesting exceptions theoretically independent of any relationship to ineffective notice. In fact, however, an examination of the cases reveals that in almost every case where courts have allowed indirect review ineffective notice has played some part in the decision.*fn3 While we believe that there may be some limited circumstances under which indirect review would be justified for some reason other than ineffective notice, the case at bar does not involve any such circumstances.*fn4
Therefore Edison's claim that it has some justifiable reason for not challenging the 1984 Rule during the direct review period must rest entirely on its argument that while it was a party to the proceedings, those proceedings and the final rule as adopted did not fairly put it on notice of the NRC's intent to apply the 1984 ceilings to work performed prior to the effective date of the rule, or alternatively, that the rulemaking proceedings did not effectively notify Edison that those ceilings would affect charges assessed against its pending applications.
The NRC's regulatory history, the 1982 Proposed Rule, and the 1984 Final Rule all effectively notified Edison that the raised ceilings would apply to review work performed prior to the effective date of the 1984 Rule. The NRC in 1968 first provided notice to regulated utilities that it would charge review fees only upon the completion of all the review work necessary to decide whether to issue a license for a facility.*fn5 33 Fed. Reg. 10,923, 10,926 (Aug. 1, 1968). From that time until the promulgation of the 1984 Rule, the NRC's rules have consistently maintained that requirement. 36 Fed. Reg. 145, 145 (Jan. 6, 1971) (revising fee schedule but maintaining provision regarding when fee becomes payable); 38 Fed. Reg. 4272, 427 3 (July 11, 1973) (same); 43 Fed. Reg. 7210, 7218-19, (Feb. 21, 1978) (same). Thus Edison was or should have been well aware prior to the events relevant here that it would owe no fees until all review work was completed.
When the review work was completed the bill was assessed at the rate in effect at that time. The comments accompanying the 1978 Rule explicitly provided that "in the case of Part 50 construction permits, manufacturing licenses, and operating licenses, where the permit review is completed on or after the effective date of this amendment to Part 170 [the license fee schedule], the revised schedule will apply." 43 Fed. Reg. 7210, 7215 (1978). This statement clearly communicated the intent of the NRC in 1978 to apply the higher 1978 fees to work performed on applications prior to the effective date of the 1978 Rule as long as the review work on those applications was not completed by the effective date of that rule.
In its briefs and at oral argument Edison employed as a regular refrain references to a footnote in the 1978 Rule. The footnote provided that "when review of the permit, license, approval, or amendment is complete, the expenditures for professional manpower [sic] and appropriate support services will be determined and the appropriate fee assessed, but in no event, will the fee exceed that shown in the schedule of facility fees." 43 Fed. Reg. 7210, 7220 (Feb. 21, 1978) (formerly codified at 10 C.F.R. § 170.21 n.3). This footnote also makes clear that the NRC provided notice that the appropriate fee to be assessed is the one in effect at the time that the review work is completed. Thus this footnote is another indicator that Edison received adequate notice prior to the direct review period that the ceiling applied to work performed prior to the effective date of the 1984 Rule would be the 1984 ceilings.
When the NRC in the 1982 Proposed Rule next suggested an amendment to the Part 170 fee schedule, it continued this practice, even going so far this time as to suggest the complete abolition of ceilings. 47 Fed. Reg. 52,454, 52,456. The Statement of Considerations that accompanied the 1982 Proposed Rule provided in pertinent part:
We are proposing to remove the ceiling or upper limit on fees for reactor permits and licenses. Fees or charges would be based on actual cost expended for the review . . . .
For those construction permit [CP] applications currently on file with the Commission, fees will be assessed based on the actual professional hours and contractual services costs expended from the date the application was filed to the date the CP is issued. Professional hours expended in reviewing applications prior to the effective date of this proposed regulation will be billed at the professional rates established in the March 23, 1978 Rule. Professional time expended on or after the effective date of the proposed regulation will be assessed at the FY 1981 rates shown in the new 10 CFR 170.20. With respect to operating license applications currently on file with the Commission, the same procedure would apply except that fees will be assessed based on the actual professional staff hours and contractual services costs expended from the date the CP was issued to the issuance of the full power (100 %) operating license.
47 Fed. Reg. 52,454, 52,456 (Nov. 22, 1982) (bracketed and parenthetical language in original) (emphasis added). This language makes clear that the NRC intended to apply its proposed abolition of ceilings to review work performed prior to the effective date of any final rule. The quoted language does not apply the 1978 cap to review work performed prior to the effective date of a final rule and then lift that cap for review work performed later. The language instead provides that all actual costs will be charged for all the review work performed on "operating license applications currently on file . . . from the date the CP was issued to the issuance of the full power (100 % ) operating license." Id. Thus the quoted language does not distinguish between the work performed before and after the effective date of the final rule (as Edison contends) -- any change in the 1978 ceiling applies to both time periods. This absence of a distinction between the two time periods is especially telling since the NRC does distinguish the two time periods in discussing which hourly rates apply: the 1978 hourly rates apply to all work performed prior to the effective date of any final rule, and the 1984 hourly rates apply to work done later. Id. Thus the NRC's decision not to distinguish between the two time periods in regard to the change in the 1978 ceilings should have made Edison aware that the NRC intended to apply any change in the 1978 ceilings to costs for work performed prior to the effective date of any final rule. Edison should have realized that while the 1978 hourly rates would apply to all work performed prior to the effective date of the 1984 Rule the 1978 cap would not. The NRC eventually chose to retain ceilings in the 1984 Rule, albeit higher ones, but nothing in the final 1984 Rule in any way suggests that the NRC intended to alter this policy of applying any change in the 1978 ceilings to work performed prior to the effective date of the 1984 Rule.
This long and consistent history of the NRC's position regarding the application of new fee schedules constituted more than effective notice to Edison.*fn6
Nor is our decision on the issue of adequate and effective notice an abstract judgment or hindsight. The formal comments filed during the notice-and-comment period considering the 1982 Proposed Rule reveal that the proposed rule provided actual notice to a major portion of the industry. Several of the comments directly addressed the issue of whether the NRC could raise the 1978 ceiling on fees for work done prior to the effective date of any new rule. These comments, including one filed by Edison, addressed as a foregone conclusion the intent of the NRC to make such charges. Edison's comment was filed in a letter to the NRC dated January 18, 1983 by "L. O. Delgeorge, Director of Nuclear Licensing" for Edison, and it noted in its section headed "Operating License Fees" that:
Also not address is how branch costs for operating license applicants will be allocated where the cost is calculated from the date of the construction permit, which would extend as far back as 1973. Not only is this retrospective fee assessment based on rules promulgated after the fact unfair, but it also creates the problem of the availability of adequate time documentation over a ten-year period.
Thus Edison did in fact realize during the notice-and-comment period to the 1982 Proposed Rule that the NRC would apply any change in the 1978 ceiling to license review work performed prior to the effective date of the final rule.
In sum, the history of regulatory language and practice makes clear that Edison knew that the NRC intended in the 1982 Proposed Rule to remove the 1978 ceiling for all the review work done in applications pending at the time the final rule became effective. The final 1984 Rule in fact instituted higher ceilings rather than removing ceilings altogether, but it made no other relevant alteration in the license review fee system. Edison thus actually understood at the time of the 1984 Rule that its license review fees would be calculated in precisely the manner to which it now objects. Therefore Edison cannot at this point belatedly complain that it did not receive adequate notice of the manner in which the fees would be calculated.
Edison also complains, however, that it did not know for certain before it received the fee assessments at bar that the review costs for its facilities would actually exceed the 1978 ceilings. This is the only information Edison lacked during the period for direct review of the 1984 Rule. Edison makes much of this ignorance in its attempt to avoid the jurisdictional bar. Its claim here is essentially that after full participation in a rulemaking proceeding it should be free to ignore the clear impact of a rule that allowed a significant increase in the total fees. Edison's claimed justification is that it did not know the exact dollar amount of the fees it had incurred so far and thus it did not know whether the review fees for its facilities would exceed the 1978 ceilings. This contention ignores the obvious potential for, indeed the probability that, the review costs would exceed the 1978 ceilings. The NRC did not raise the ceilings as an empty gesture; its stated intent was to recover costs that exceeded the 1978 ceilings. By failing to petition for review within the statutory period, Edison took upon itself the risk that fees in excess of the 1978 ceilings would be charged to it after review was foreclosed.
To accept Edison's argument would be to elevate form over substance. The whole purpose of the NRC in raising the ceilings that it knew were going to occur, and that would otherwise have not been recoverable. This was stated explicitly in the NRC's statements explaining its 1982 Proposed Rule, 47 Fed. Reg. 52,454, 52,455-56 (Nov. 22, 1982), and the comments of the parties to the rulemaking reflect their actual understanding that recovery of such costs motivated the rulemaking. The agency's statements also made clear that significant additional costs could be expected by the regulated parties because the safety aspects of the license review process had been significantly expanded. 47 Fed. Reg. 52,454, 52,455-56 (Nov. 22, 1982). The NRC noted explicitly that "the emphasis on safety has increased appreciably and costs have increased." Id. at 52,455. The NRC also stated that the 1978 ceiling "prevents full cost recovery for most applications," id. at 52,456, and the NRC recognized that full cost recovery was Congress's intent in the IOAA, id. at 52,455. Its purpose in proposing the rule was clearly to effect full cost recovery in accordance with the IOAA. Id. Thus the NRC made it crystal clear in its proposed rule that license applicants for whom review work was performed prior to the effective date of the 1984 Rule could generally expect fees in excess of the 1978 ceiling were the proposed rule to be enacted. Hence Edison's argument that its indirect challenge should be allowed because it was "uncertain" whether its fees would be in excess of the 1978 Rule flies in the face of the clear warning issued by the NRC.
If Edison's position in this litigation were accepted it would mean that no party to the rulemaking or other interested party was required to meet the sixty-day jurisdictional bar because no regulated party would have known for certain if its fees would exceed the 1978 Rule's ceilings. This result would essentially nullify the sixty-day requirement of the Hobbs Act. It would virtually guarantee that whenever a new rule was passed those with objections to the rule would choose not to file for direct review and would wait in the hope that the rule would in the first instance be applied to someone else, who would then be required, in effect, to foot the legal bill for all of those within the entire industry who had similar objections. This is precisely what the rulemaking process seeks to avoid by encouraging all interested parties to join in notice and comment, and then by requiring that parties displeased with the final outcome challenge the rule directly. Congress's preference for administrative finality includes an interest in obtaining judicial consideration of administrative action in a timely fashion, thus providing predictability and consistency, which are fundamentally important to the agency, the regulated parties, and other interested persons. The NRC's notice of proposed rulemaking effectively notified the parties to the rulemaking, including Edison, that they should expect the 1978 ceiling to be lifted.
The fundamental concern in cases such as this is whether effective review of the issue was possible at the time of the issuance of the final rule, and whether the party now raising the issue can fairly be said to have been at the time on notice of the agency's position so that it had at that time an effective opportunity for review. In this case the NRC's position was clear on the date the 1984 Rule was promulgated, and Edison had actual notice at that time of the NRC's position. Edison has offered us no legitimate reason for not invoking the jurisdictional bar set by Congress, and we hold that Edison's petition is thus foreclosed to the extent that it seeks review of the 1984 Rule.
B. Jurisdiction over the Challenge to the Application of 31 U.S.C. § 3717
Edison also challenges the assessment of interest and a late payment penalty upon the unpaid portion of the fee assessment pursuant to 31 U.S.C. § 3717. While the parties did not themselves distinguish the question of our jurisdiction over the section 3717 challenge from the challenge to the 1984 Rule, the two challenges rest on fundamentally different jurisdictional grounds.
The Hobbs Act requires that challenges to an agency's final order be filed within sixty days of their entry. Both parties agree that the petition here was filed within sixty days of the final order assessing Edison costs for the license review work and applying interest and a late payment penalty. The reason the challenge to the 1984 ceilings is not within our jurisdiction is because that challenge is actually an indirect challenge to the 1984 Rule itself and should have been brought within sixty days of its entry, rather than as an indirect challenge within sixty days after the rule's application to Edison.
It is impossible to characterize the challenge to the application of 31 U.S.C. § 3717 as an indirect challenge to some earlier final rule. There is no earlier final rule presented on this record that in any way addresses the application of interest or penalties to license review fee assessments. According to the record, the NRC itself appears to have been unsure whether to apply its own debt-collection regulations or section 3717. The challenge to section 3717 is accordingly a challenge to the final order assessing interest and a late payment penalty on the unpaid portion of Edison's fee assessment. As we have noted, Edison petitioned for review of that order within the statutory time period. We have jurisdiction to consider the challenge to the assessment of interest and a late payment penalty pursuant to 31 U.S.C. § 3717.
Edison argues that even if it must pay the full principal of the bill issued to it, it may not be held liable for interest or penalties under 31 U.S.C. § 3717 because the NRC is not an "executive or legislative agency" required to exact interest and penalties under that section. Edison also argues it is not liable to pay both interest and a penalty fee on the amount it has contested and withheld. We reject both of these contentions.
A. "Executive or Legislative" Agencies Under Section 3717
Section 3717 of Title 31 had its origin in the Debt Collection Act of 1982 ("1982 Act"), Pub. L. No. 97-365, § 11, 96 Stat. 1749, 1755-56, and was originally codified as 31 U.S.C. § 952(e). The 1982 Act amended the Debt Collection Act of 1966 ("1966 Act"), Pub. L. No. 89-508, 80 Stat. 308, which had been primarily designed to increase agencies' powers to compromise debts owed the United States. E.g., S. Rep. No. 1332, 89th Cong., 2d Sess. 1-5, 8-9 (1966), reprinted in 1966 U.S. Code Cong. & Admin. News 2532, 2532-36, 2539; H.R. Rep. No. 1533, 89th Cong., 2d Sess. (1966). It was also structured to provide the agencies more teeth in their efforts to collect delinquent debts. Id. The 1966 Act provided in pertinent part that:
"agency" means any department, office, commission, board, service, Government corporation, instrumentality or other establishment or body in either the executive or legislative branch of the federal government.
The 1982 Act provided additional enforcement tools to the agencies, including the interest and penalty provision that became section 3717. Debt Collection Act of 1982, Pub. L. No. 97-365, § 11, 96 Stat. 1749, 1755-56 (codified as amended in scattered sections of titles 5, 26, 31 & 42). The 1982 Act did not, however, alter the scope of the 1966 Act. Pub. L. No. 97-365, 96 Stat. 1749. It was at that time codified as 31 U.S.C. § 952(e).
In early 1983 the relevant portion of Title 31 was recodified in an effort to increase its clarity without affecting its substance. Revision of Title 31, U.S.C., Pub. L. No. 97-452, 96 Stat. 2467 (1983); see also Detailed Explanation Prepared by the Office of Law Revision Counsel, 1982 U.S. Code Cong. & Admin. News 4301. The statute codified the interest and penalty provision as section 3717 of the new title.
At no place in section 3717 is "executive or legislative agency" defined. The definitional section for Chapter 37 provides that "'executive or legislative agency' means a department, agency, or instrumentality in the executive or legislative branch of the government." 31 U.S.C. § 3701(a)(4).
Edison claims that application of the plain meaning rule of construction excludes the NRC from the authority provided by section 3717 because it is an "independent" agency and therefore necessarily is not an executive or legislative agency.*fn7 We disagree.
The plain meaning argument actually cuts against Edison. The scheme of the Constitution envisions only three branches of government. Because the NRC is not within the judicial branch, it must be a legislative or executive agency.
The NRC was explicitly established by Congress as an "independent" agency, 28 U.S.C. § 5801(a). Its structural independence is due more specifically to the commissioners' insulation from dismissal by the President except for "inefficiency, neglect of duty, or malfeasance in office," 28 U.S.C. § 5801(e). These are the explicit statutory features of the NRC's "independence." Neither of them suggests that Congress intended the NRC to be exempt from later, duly enacted legislation like the Debt Collection Act of 1982, and the parties have suggested no other provision that would do so.*fn8 If Congress wished to exempt "independent" agencies in general of the NRC in particular from the reach of that act it could have said so explicitly. As it reads it exempts the judicial branch from its reach, but otherwise covers the entire gamut of executive and legislative agencies. The NRC must be an executive or legislative agency and nothing in the statute or its legislative history suggests that Congress intended to carve out an exception for "independent" agencies.
Moreover, the purpose of Congress in passing the 1982 Act and the predecessor 1966 Act firmly supports our conclusion that the NRC is an executive or legislative agency for the purpose of section 3717. The intent of Congress was quite clearly to do all it could to provide the agencies and the Justice Department effective but fair tools for collecting the massive debts owed the United States. E.g., S. Rep. No. 97-738, 97th Cong., 2d Sess. 1, reprinted in 1982 U.S. Code Cong. & Admin. News 3377; S. Rep. No. 1332, 89th Cong., 2d Sess. 1-5, 8-9 (1966), reprinted in 1966 U.S. Code Cong. & Admin. News 2532, 2532-36, 2539; H.R. Rep. No. 1533, 89th Cong. 2d Sess. (1966). Congress wished to address the problem of debts owed the United States in as broad and effective a fashion as possible. Obviously, Congress's purpose would be better served by providing these tools to the independent agencies as well as to the rest of the agencies within the legislative or executive branches. Allowing and even requiring the NRC to take part in the recovery of debts owed to it is hardly inconsistent with the independence necessary for the NRC's commissioners and staff to regulate the nuclear power and research industries.
Finally, the act explicitly authorized the Attorney General to interpret the act, 31 U.S.C. § 3711(e)(2); see also 31 U.S.C. § 3717(h), and both parties to this litigation admit, as they must, that we owe significant deference to the Attorney General's interpretation. See, e.g., Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S. Ct. 2778, 2781-82, 81 L. Ed. 2d 694 (1984); Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 564-66, 100 S. Ct. 790, 796-97, 63 L. Ed. 2d 22 (1980). Both parties also agree that the Attorney General's interpretation of the section is that it reaches independent agencies. See 4 C.F.R. §§ 101-105. Thus the Attorney General's interpretation matches our own reading of the section's language and purpose.
Therefore, we hold that under the circumstances of this case the NRC is an "executive or legislative agency" for the purposes of section 3717.
B. Penalty and Interest Provisions
Edison argues that the NRC is precluded by its own regulations, see 10 C.F.R. § 15.37, from charging both interest and a late penalty fee on the overdue and unpaid portions of Edison's bill. This argument fails because the NRC also relied, as it was required to do, directly on its mandatory duty under section 3717.
Edison's only argument against the application of section 3717 is the one we have just rejected, namely, that the NRC is not an executive or legislative agency. Thus the NRC may properly apply the provisions of section 3717 to the overdue bills. Those provisions are mandatory and require that "the head of an executive or legislative agency shall charge a minimum annual rate of interest on an outstanding debt on a United States Government claim," 31 U.S.C. § 3717(a)(1), and that "the head of an executive or legislative agency shall assess on a claim owed by a person," 31 U.S.C. § 3717(e), "a penalty charge or not more than 6 percent a year for failure to pay a part of a debt more than 90 days past due," 31 U.S.C. § 3717(e)(2). Thus the plain language of the statute given its ordinary meaning requires the NRC to assess both interest and a late payment penalty. Section 3717(f) further confirms this reading by noting that "interest under subsection (a) of this section does not accrue under subsection (e) of this section." Section (f) would be mere plusage without meaning if interest and the late payment penalty could not be applied to the same debt.
An agency, of course, cannot by regulation free itself from a duty imposed by statute, see National Muffler Dealers Association, Inc. v. United States, 440 U.S. 472, 477, 99 S. Ct. 1304, 1307, 59 L. Ed. 2d 519 (1979); Water Quality Association v. United States, 795 F.2d 1303, 1306 (7th Cir. 1986), and section 3717 is directly enforceable by agencies in the provisions pertinent here. Thus the NRC must enforce it.*fn9 The application of both interest and a late payment penalty was appropriate under the circumstances of this case.*fn10
In accordance with the foregoing opinion, Edison's petition for review is in part DISMISSED and in part DENIED.