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Parties Involved:
COMSAT Corporation
Intervenor
Federal Communications Commission
Appellee
Lockheed Martin Corporation
Intervenor
PanAmSat Corporation
Appellant

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 17, 2004 Decided June 8, 2004

No. 03-1133

PANAMSAT CORPORATION,

APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION,

APPELLEE

LOCKHEED MARTIN CORPORATION AND COMSAT CORPORATION,

INTERVENORS

Consolidated with

03-1134

Appeal and Petition for Review of an Order of the

Federal Communications Commission

–————

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

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Brita Dagmar Strandberg argued the cause for appellant/petitioner. With her on the briefs were Henry Goldberg

and Joseph A. Godles.

Stanley R. Scheiner, Counsel, Federal Communications

Commission, argued the cause for appellee/respondents.

With him on the brief were Robert H. Pate III, Assistant

Attorney General, Catherine G. O’Sullivan and Andrea Limmer, Attorneys, John A. Rogovin, General Counsel, Federal

Communications Commission, and Daniel M. Armstrong, Associate General Counsel.

Helgi C. Walker argued the cause for intervenor COMSAT

Corporation. With her on the brief was Lawrence W. Secrest

III.

Before: EDWARDS, SENTELLE, and ROGERS, Circuit Judges.

Opinion for the Court filed by Circuit Judge EDWARDS.

EDWARDS, Circuit Judge: This case involves petitioner

PanAmSat Corporation’s requests to the Federal Communications Commission (‘‘FCC’’ or ‘‘Commission’’) for partial

refunds of satellite regulatory fees it paid for fiscal years

1995, 1997, and 1999. For fiscal years 1995, 1997, 1998, and

1999, the FCC exempted COMSAT Corporation, a competitor

of PanAmSat, from satellite regulatory fees. COMSAT’s

exemption caused the other parties subject to satellite regulatory fees, including PanAmSat, to pay fee amounts that

covered COMSAT’s regulatory costs. In PanAmSat Corp. v.

FCC, 198 F.3d 890, 895 (D.C. Cir. 1999), we found that the

Commission’s exemption of COMSAT in fiscal year 1998 was

premised on an impermissible interpretation of § 9 of the

Communications Act, and remanded to the Commission for

further proceedings. On remand, in the order under review

in this case, the Commission held that in light of this court’s

decision in PanAmSat, COMSAT should have been assessed

the regulatory fee for fiscal year 1998. In the Matter of

Assessment and Collection of Regulatory Fees for Fiscal

Year 1998, 18 F.C.C.R. 6944, 6944 (2003) (‘‘Order’’). Accordingly, it assessed fees on COMSAT for fiscal year 1998 and

later granted PanAmSat a partial refund of the fees overpaid

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in 1998 as a result of COMSAT’s exemption. At the same

time, the Commission declined to apply PanAmSat to fiscal

years 1995, 1997, and 1999 to assess fees on COMSAT for

those fiscal years.

PanAmSat petitions this court for review of the Commission’s decision on remand, arguing that it is entitled to

refunds of the portion of fees it paid to cover COMSAT’s

regulatory costs for 1995, 1997, and 1999. However, PanAmSat did not file timely challenges to the Commission’s orders

assessing fees and exempting COMSAT in 1995, 1997, and

1999, and PanAmSat reached no conclusion on the permissibility of COMSAT’s exemption for those years. Therefore,

we hold that the FCC violated no law and engaged in no

arbitrary or capricious action in denying PanAmSat’s refund

requests for fiscal years 1995, 1997, and 1999. Accordingly,

we deny the petition for review.

I. BACKGROUND

Petitioner PanAmSat Corporation and intervenor COMSAT

Corporation are both operators of geosynchronous space stations, which are domestic and international satellites that

provide communication. Pursuant to its authority under § 9

of the Communications Act, the Commission assesses regulatory fees on satellite operators to recover costs of ‘‘enforcement activities, policy and rulemaking activities, user information services, and international activities.’’ 47 U.S.C.

§ 159(a)(1) (2000). The Commission divides its total satellite

regulatory costs among operational space stations and assesses fees on each operator based on this calculation. As a

result, the Commission’s exemption of any space station

operator from these fees increases the fees assessed on other

space station operators. During the fiscal years in question,

COMSAT operated as the United States signatory to two

satellite systems, the International Telecommunications Satellite Organization (‘‘Intelsat’’) and the International Maritime

Satellite Organization (‘‘Inmarsat’’). At the time, Intelsat and

Inmarsat were international organizations that owned satelUSCA Case #03-1133 Document #826483 Filed: 06/08/2004 Page 3 of 11
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lites used by their signatories to provide international communication.

In 1995, 1997, 1998, and 1999, the Commission exempted

COMSAT from space station fees for its Intelsat and Inmarsat satellites. Believing that Congress only intended for

space station fees to be assessed on space stations directly

licensed by the FCC under Title III of the Communications

Act, and not on space stations operated by international

organizations subject to the International Organization Immunities Act, see In the Matter of Assessment and Collection

of Regulatory Fees for FY 1995, 10 F.C.C.R. 13,152, 13,550

(1995), the Commission exempted COMSAT from the satellite

regulatory fee in separate orders for the years 1995, 1997,

1998, and 1999, see id.; In the Matter of Assessment and

Collection of Regulatory Fees for Fiscal Year 1997, 12

F.C.C.R. 17,161, 17,187 (1997); In the Matter of Assessment

and Collection of Regulatory Fees for Fiscal Year 1998, 13

F.C.C.R. 19,820 (1998), 1998 WL 320272 n.108 (F.C.C.); In

the Matter of Assessment and Collection of Regulatory Fees

for Fiscal Year 1999, 14 F.C.C.R. 9868, 9982-83 (1999). As a

result, in each of those fiscal years, PanAmSat paid fee

amounts that partially covered regulatory costs attributable

to COMSAT.

PanAmSat petitioned this court for review of the order

assessing fees for fiscal year 1998. While the appeal was

pending, the Commission issued an order assessing fees and

exempting COMSAT for fiscal year 1999. PanAmSat did not

petition for review of the Commission’s orders assessing

regulatory fees for 1995, 1997, or 1999.

In PanAmSat’s challenge to the 1998 fee assessment order,

the court faced a jurisdictional problem, because, ‘‘[a]lthough

PanAmSat attacks a 1998 Order, the decisions it complain[ed]

of [were] identical to the formulations reached by the Commission in its 1997 Order.’’ PanAmSat, 198 F.3d at 892. We

noted that ‘‘[t]he statute authorizing judicial review states

that petitions for review must be filed within 60 days of the

final order.’’ Id. (citing 28 U.S.C. § 2344). We concluded

that ‘‘PanAmSat’s petition [was] timely for the 1998 Order

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but not for that of 1997,’’ id., and thus reached the merits of

PanAmSat’s attack on the FCC’s exemption of COMSAT

from regulatory fees in 1998.

On the merits, PanAmSat held that § 9 of the Communications Act ‘‘plainly does not require – and may not permit –

Comsat’s exemption from space station regulatory fees.’’ Id.

at 895. We noted that the ‘‘plain terms of § 9’’ did not

require COMSAT’s exemption, and that the Commission had

‘‘relied solely’’ on legislative history when it first granted the

exemption in 1995. Id. at 895-96. The decision concluded

that, even if the House report upon which the Commission

relied were taken ‘‘as gospel,’’ ‘‘the key passage seems most

plausibly to leave Comsat subject to fees for the regulatory

activity it generates, and to exempt organizations like Intelsat

and Inmarsat themselves.’’ Id. at 896. Thus, we found that

the legislative history did not support COMSAT’s exemption.

At the same time, we recognized that ‘‘[p]erhaps there is

some ambiguity in the coverage of the ‘space station’ category

in § 9, such that the Commission might ‘permissibly’ read the

statute as allowing a Comsat exemption.’’ Id. Therefore, the

case was remanded to the Commission for reconsideration of

COMSAT’s exemption.

The Commission released its order assessing fees for fiscal

year 1999 on June 18, 1999. PanAmSat was decided on

December 21, 1999. Even though PanAmSat was still pending when the FCC’s 1999 fee order was issued, PanAmSat did

not file a petition for reconsideration of the 1999 fee order

within 30 days of the order as required by 47 U.S.C. § 405(a).

Rather, on September 22, 1999, PanAmSat paid its regulatory

fees for fiscal year 1999 ‘‘under protest,’’ and requested a

‘‘partial refund in the event that the court invalidate[d] elements of the fees as a result of the appeal.’’ See Letter from

Joseph Godles, Attorney for PanAmSat Corp. to FCC of

9/22/99 at 1, Joint Appendix (‘‘J.A.’’) 16. Subsequently, following release of the PanAmSat decision, PanAmSat requested a refund of regulatory fees for fiscal years 1995, 1997,

1998, and 1999. See Letter from Henry Goldberg, Attorney

for PanAmSat Corp. to Christopher J. Wright, General Counsel, FCC of 2/15/00 at 4, J.A. 41.

USCA Case #03-1133 Document #826483 Filed: 06/08/2004 Page 5 of 11
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In the order assessing fees for fiscal year 2000, the Commission concluded that COMSAT’s exemption was contrary to

Congress’s intent: ‘‘It would unreasonably frustrate the intent of Congress to suppose that it framed the fee schedule in

a way that made a category of costs either unrecoverable or

not chargeable against the party most directly related to

them, without creating an express exemption.’’ In the Matter

of Assessment and Collection of Regulatory Fees for Fiscal

Year 2000, 15 F.C.C.R. 14,478, 14,488 (2000). Accordingly,

for fiscal year 2000, the Commission assessed regulatory fees

on COMSAT. This court affirmed the Commission’s decision,

holding that ‘‘we cannot find the Commission’s refusal to

fashion an exemption unreasonable.’’ See COMSAT Corp. v.

FCC, 283 F.3d 344, 347 (D.C. Cir. 2002).

On April 9, 2003, the Commission released an order addressing ‘‘whether and in what amount COMSAT Corporation

should be required to pay the geosynchronous space station

regulatory fee identified in section 9 of the Communications

Act, 47 U.S.C. § 159(g), for Fiscal Year 1998.’’ Order, 18

F.C.C.R. at 6944. In light of this court’s decisions in

PanAmSat and COMSAT, and its own 2000 fee assessment

order, the Commission concluded that ‘‘COMSAT should have

been assessed the section 9 regulatory fee for fiscal year

1998.’’ Order, 18 F.C.C.R. at 6947-48. The Commission further held:

13. On the other hand, PanAmSat cannot be applied to fiscal years prior to 1998. Newly established law does not apply to proceedings already

closed. See Reynoldsville Casket Co. v. Hyde, 514

U.S. 749, 758 (1995). The rulemakings for fiscal

years before 1998 have long since become final.

14. We also decline to apply PanAmSat to Fiscal

Year 1999. PanAmSat did not challenge the Commission’s failure to assess a fee in FY 1999.

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Id. at 6948. The Commission pointed out that ‘‘PanAmSat

had ample opportunity to seek review of the 1999 fee order

and did not do so.’’ Id.

PanAmSat timely petitioned this court for review of the

Commission’s order on remand assessing fees on COMSAT

for fiscal year 1998 and not for fiscal years 1995, 1997, and

1999. By letter dated December 19, 2003, the Commission

granted PanAmSat a partial refund for overpayment in 1998,

noting that ‘‘the payment of COMSAT’s FY 1998 fee warrants

the recomputation of Panamsat’s fee for that year.’’ Letter

from Mark A. Reger, Chief Financial Officer, FCC, to Henry

Goldberg of 12/19/03 at 1, J.A. 72. The parties do not dispute

that the Order reflects a final agency decision to deny

PanAmSat’s requests for partial refunds of the regulatory

fees it paid in 1995, 1997, and 1999.

II. ANALYSIS

We set aside a decision of the FCC if it is ‘‘arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law.’’ 5 U.S.C. § 706(2)(A) (2000). It is undisputed that PanAmSat did not timely seek reconsideration or

petition this court for review of the FCC’s orders assessing

fees and exempting COMSAT for fiscal years 1995, 1997, and

1999. Nonetheless, PanAmSat contends that the Commission’s denial of its refund requests for its alleged overpayments in those years is arbitrary, capricious, and unlawful in

light of this court’s decision in PanAmSat. We find no merit

in this claim.

Because PanAmSat failed to challenge the underlying orders assessing the fees for fiscal years 1995, 1997, and 1999,

the fee orders for those years are final. Accordingly,

PanAmSat’s refund requests are not timely. PanAmSat cannot belatedly seek to overturn final Commission orders assessing fees in the guise of refund requests. In each instance, there was a 60-day time limit pursuant to 28 U.S.C.

§ 2344 during which affected parties could challenge the FCC

orders. PanAmSat could have, but did not petition for review

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of the fee orders for 1995, 1997, and 1999. Once the 60-day

time limitations periods passed, the fee orders were final.

Our decision in PanAmSat addressed only the Commission’s 1998 fee order. Indeed, we found that ‘‘PanAmSat’s

petition [was] timely for the 1998 Order but not for that of

1997.’’ PanAmSat, 198 F.3d at 892. It is clear that PanAmSat did not purport to consider the merits of PanAmSat’s

challenges to any fee order other than the one assessing fees

for 1998.

It does not matter that the 1995, 1997, and 1999 fees were

levied pursuant to the same rationale used by the Commission

to justify the 1998 fees. PanAmSat held that ‘‘the FCC was

mistaken in its conclusion that the statute compelled an

exemption for Comsat,’’ but it did not hold that an exemption

for COMSAT was impermissible under § 9 of the Communications Act. Rather, the court recognized the possibility of

‘‘some ambiguity in the coverage of the ‘space station’ category in § 9, such that the Commission might ‘permissibly’ read

the statute as allowing a Comsat exemption.’’ Id. at 896.

Therefore, PanAmSat cannot be understood as holding unlawful the orders assessing regulatory fees and exempting

COMSAT in 1995, 1997, and 1999. Because PanAmSat

leaves open the possibility that a COMSAT exemption is

lawful, PanAmSat’s claim that the decision conflicts with the

1995, 1997, and 1999 fee orders is mistaken. Those orders

were never challenged and never found to be unlawful.

PanAmSat suggests that, because the Commission had not

yet ruled on another party’s petition for reconsideration of

the 1999 fee order when this court issued its decision in

PanAmSat, the 1999 fee order was not yet final at that time.

PanAmSat alleges that, under those circumstances, the Commission abused its discretion in failing to reconsider, sua

sponte, COMSAT’s exemption for fiscal year 1999 after the

PanAmSat decision was issued. See Petitioner’s Br. at 25.

We disagree. The Commission correctly points out that

PanAmSat had ample opportunity to seek review of the 1999

order but failed to do so. Order, 18 F.C.C.R. at 6948. Due

to PanAmSat’s failure to challenge the agency action that

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allegedly caused its overpayment, PanAmSat cannot now be

entitled to a refund for that purported overpayment. And we

cannot ignore PanAmSat’s failure to pursue a timely challenge simply because another party petitioned the Commission for reconsideration of the 1999 fee order on an entirely

unrelated issue. See Petition for Reconsideration of the

Cellular Telecommunications Industry Association, In the

Matter of Assessment and Collection of Regulatory Fees for

Fiscal Year 1999, MD Docket 98-200, J.A. 3-15 (challenging

the Commission’s assessment of subscriber fees for commercial mobile radio services for fiscal year 1999).

PanAmSat’s reliance on National Association of Broadcasters v. FCC, 554 F.2d 1118 (D.C. Cir. 1976) (‘‘NAB’’) is

misplaced. NAB permitted broadcasters to sue the FCC for

refunds after a Supreme Court decision invalidated certain

aspects of the fee schedule, despite their failure to appeal an

earlier Fifth Circuit decision upholding the fees. But this

court made clear that the holding permitting refunds in that

particular case was an exception to the general rule that

those who do not challenge fee assessments waive their right

to a refund:

[A]ll of the petitioners now before us could have

appeared before the Fifth Circuit upon remand of

the NCTA case from the Supreme Court to request

that the court of appeals consider its decision in

Clay Broadcasting regarding the entire 1970 fee

schedule, but did not do so. Absent extenuating

circumstances, we would normally be inclined to

hold that they had thereby waived any further challenge to the fees they were contesting in that action.

Id. at 1127 (emphasis added). In NAB, we clearly identified

those extenuating circumstances:

But here petitioners justifiably relied on statements

by the FCC to the effect that action on refunds

would be taken by the Commission on its own initiative. Since the FCC led petitioners to believe that

more timely action on their part was unnecessary,

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the prior possibility of an application to the Fifth

Circuit on remand cannot bar the present suit.

Id. In that case, the affected parties, unlike PanAmSat, were

misled by the Commission to believe that the Commission

would act on refunds on its own. And, in NAB, the court

found that the fee regime, unlike the one at issue here,

required regulated parties ‘‘to protest a fee assessment only

after payment.’’ Id. Those circumstances are not present

here. Absent such circumstances, the normal rule applies:

PanAmSat was required to raise a timely challenge to the

disputed orders assessing fees in order to be able to claim a

partial refund of fees it paid pursuant to those orders.

Finally, we find no merit in PanAmSat’s reliance on the

Commission rule authorizing the agency to grant refunds

when ‘‘no regulatory fee is required or an excessive fee has

been paid.’’ 47 C.F.R. § 1.160(a)(1) (2003). PanAmSat notes

that this regulation specifies no time limit on the availability

of refunds, suggesting that a refund request may be filed at

any time by an aggrieved party. See Petitioner’s Br. at 17.

This is a faulty construction of the rule. PanAmSat failed to

raise a timely challenge to the agency’s finding that a regulatory fee was ‘‘required’’ in 1995, 1997, and 1999. Indeed,

there has never been a finding that PanAmSat paid excessive

fees for those fiscal years pursuant to a timely challenge by

PanAmSat. Because the orders establishing the fees for

those years were never challenged or found to be unlawful,

the resulting fees were properly ‘‘required.’’ Therefore,

PanAmSat can claim no refunds for 1995, 1997, and 1999.

PanAmSat argues, for the first time on appeal, that finality

is a non-issue because the Commission has routinely considered and granted waivers and refunds after the underlying

fee proceedings had closed. See Petitioner’s Br. at 19.

PanAmSat never raised this argument in its filings to the

Commission, so this argument is not properly before the

court. See Washington Ass’n for Television and Children v.

FCC, 712 F.2d 677, 681 (D.C. Cir. 1983) (‘‘As a general rule,

claims not presented to the agency may not be made for the

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first time to a reviewing court.’’). Even if we were to reach

the merits of the claim, however, the examples identified by

PanAmSat are not comparable to this case. In the cases

cited by PanAmSat, the Commission granted waivers, reductions, and refunds based on evidence of financial hardship, or

based on mistaken overpayment. PanAmSat’s payments in

1995, 1997, and 1999 involved no claimed financial hardship;

and they were not mistaken overpayments, because there has

never been a finding that the fees assessed in those years

were unlawful.

III. CONCLUSION

For the foregoing reasons, we deny the petition for review.

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