Nevada Power Co. v. Watt

No. C-78-0174 (515 F. Supp. 307) (C.D. Utah April 24, 1981)

ELR Digest

The district court invalidates regulations, 43 C.F.R. § 2803.1-1, promulgated by the Secretary of the Interior which require rights-of-way applicants to reimburse the government for all administrative costs incurred in processing their applications because the regulations preclude consideration of the factors specified in § 304(b) of the Federal Land Policy and Management Act of 1976 (FLPMA), 43 U.S.C. § 1734(b). Plaintiff, a public utility, applied to the Bureau of Land Management for rights-of-way across public lands necessary for the construction of its Allen-Warner Valley Electric Generation and Transmission System. Under defendants' Reimbursement Regulations, plaintiff was required to reimburse the government for "administrative and other costs," including the cost of preparing an environmental impact statement (EIS) for the proposed project. The Secretary of the Interior, in Order No. 3011, interpreted the "reasonable costs" which are recoverable by the government under § 304(b) to be the actual costs incurred by the government in performing statutory responsibilities necessitated by the applications, including the preparation of any EIS. Focusing upon the language and legislative history of § 304(b) of FLPMA, the court determines that Congress intended to give the Secretary of the Interior discretion to determine whether costs of EISs and other expenses are reasonable in each instance after consideration of the factors contained in that section. Therefore, the regulations incorrectly make cost recovery for EISs mandatory. This interpretation is consistent with National Cable Television Association v. United States, 415 U.S. 336 (1974), where the Supreme Court indicated that agencies cannot base fee determinations on broad factors such as public policy, and Alumet v. Andrus, 607 F.2d 911 (10th Cir. 1979), where § 304(b) was read as reflecting a congressional intent that the Secretary of the Interior should consider the benefit bestowed upon the applicant apart from the benefits inuring to the general public when determining reasonable costs. Therefore, the court concludes that the Reimbursement Regulations are invalid since they ignore the limitations of these cases and equate reasonable costs with actual costs, irrespective of the specific guidelines enumerated in § 304(b). No rule of deference to the administrative interpretation isapplicable since the agency has misinterpreted its statutory mandate. Plaintiff's motion for summary judgment is granted and the case is remanded to the Secretary of the Interior so that he may reconsider the assessment of costs in light of the proper legal standards.

[The issues raised in this case are analyzed at 9 ELR 10204 — Ed.]

The full text of this opinion is available from ELR (20 pp. $3.00, ELR Order No. C-1258).

Counsel for Plaintiff
Elliott Lee Pratt, Thomas R. King
Clyde, Pratt, Gibbs & Cahoon
Suite 200, American Savings Plaza, 77 W.2d St.S., Salt Lake City UT 84104
(801) 322-2516

Counsel for Defendants
Ronald L. Rencher, U.S. Attorney; Wallace T. Boyack, Ass't U.S. Attorney
200 P.O. & Cthse. Bldg., 350 S. Main St., Salt Lake City UT 84101
(801) 524-5685

Christensen, J.

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]