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Commonwealth Edison Co. v. Nuclear Regulatory Commission

decided: May 15, 1987.

COMMONWEALTH EDISON CO., PETITIONER,
v.
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.

Author: Eschbach

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.

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. § 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.

II

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.

III

A. Jurisdiction over the Challenge to ...


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