Opinion ID: 421215
Heading Depth: 3
Heading Rank: 3

Heading: Management overhead costs

Text: 144 Section 304(b) states that in determining reasonable costs, the Secretary is to consider actual costs (exclusive of management overhead). Public Service argues that Interior's stipulated practice of charging applicants for certain indirect costs incurred by the agency, constitutes a charge for management overhead. Interior replies that by regulation it excludes work deemed management overhead from indirect costs. The utilities argue that all indirect costs--i.e., costs not allocable to specific applications--should be excluded as management overhead. 145 The district court in PSC II expressly declined to reach this issue because of its disposition of the case, expecting Interior to properly apply and explain its application of the overhead exclusion in assessing reasonable costs under section 304(b). See slip op. at 27. We do not address this issue here beyond noting that Interior is authorized by section 504(g) to collect reasonable administrative and other costs. The exclusion of management overhead, under our interpretation of section 304(b), modifies the authority granted in section 504(g) but does not negate it. We expect that Interior will, when calculating reasonable costs of processing, consider the factors listed in section 304(b) as construed in our opinion, as well as the Supreme Court's warning in National Cable and New England Power Co. that an applicant may not be charged for work relating to the agency's general costs of administration. F. Retroactive Application 146 Public Service argues that Interior may not use the FLPMA reimbursement regulations to recover costs incurred prior to the Act's passage. Interior asserts that FLPMA expressly authorizes such recovery: 147 Effective on and after October 21, 1976, no right-of-way for the purposes listed in this subchapter shall be granted, issued, or renewed ... except under and subject to the provisions, limitations, and conditions of this subchapter .... Any pending application for a right-of-way under any other law on the effective date of this section shall be considered as an application under this subchapter. 148 FLPMA § 510(a), 43 U.S.C. § 1770 (emphasis added). 149 We must decide whether this language reflects congressional intent that Interior recover costs under FLPMA incurred prior to the Act's passage in processing applications for rights-of-way that were still pending on the date of enactment. 150 [T]he first rule of construction is that legislation must be considered as addressed to the future, not to the past.... [A] retrospective operation will not be given to a statute which interferes with antecedent rights, or by which human action is regulated, unless such be 'the unequivocal and inflexible import of the terms and the manifest intention' of the legislature. 151 Union Pacific Railroad v. Laramie Stock Yards Co., 231 U.S. 190, 199, 34 S.Ct. 101, 102, 58 L.Ed. 179 (1913) (quoting United States v. Heth, 7 U.S. (3 Cranch) 399, 413, 2 L.Ed. 479 (1806)). This circuit has said that [n]ormally, retroactive application of legislative acts is impermissible absent a clear indication of congressional intent. Jensen v. United States, 662 F.2d 664, 667 (10th Cir.1981); accord Edgar v. Fred Jones Lincoln-Mercury, 524 F.2d 162 (10th Cir.1975). 152 The question before us is purely one of legislative intent. This intent must be gleaned from the statute for there is little legislative history on the point. We believe the language of section 510(a) indicates that Congress intended costs to be assessed retroactively. Accordingly, we hold that Interior may charge applicants for rights-of-way pending at the date of FLPMA's enactment for reasonable costs of processing incurred prior to the Act's passage. See generally Hunter v. Morton, 529 F.2d 645, 648-49 (10th Cir.1976); Hannifin v. Morton, 444 F.2d 200, 202-03 (10th Cir.1971); Southwestern Petroleum Corp. v. Udall, 361 F.2d 650, 654-55 (10th Cir.1966). G. The Pre-FLPMA Reimbursement Regulations 153 Finally, we must consider the validity of the pre-FLPMA regulations and the effect of the trial court's holding in PSC I upon the cases on appeal here. The pre-FLPMA regulations were litigated in PSC I, where the trial court held that under the IOAA and the PLAA, Interior could recover only costs for services providing special benefits to applicants beyond those accruing to the public at large. The court held specifically that the costs of an EIS could not be charged to applicants because they did not provide special benefits to [applicants] beyond those which accrue to the public at large. PSC I, 433 F.Supp. at 156. 154 One of the parties in PSC II, Sierra Pacific, was granted its right-of-way on July 6, 1976, three months prior to FLPMA's enactment. Interior charged costs against Sierra Pacific under the reimbursement regulations promulgated under the IOAA and PLAA, and not under the FLPMA regulations that we have struck down today. The trial court in PSC II held Interior collaterally estopped from contesting the validity of the pre-FLPMA regulations. PSC II, slip op. at 15. We agree that Interior is estopped to recover costs from Sierra Pacific under the earlier regulations, 17 and that those costs actually collected must be refunded. 155 The pre-FLPMA regulations are also involved in Colorado-Ute. In that case, the trial court affirmed an IBLA decision imposing reimbursement costs on Colorado-Ute for expenses incurred in processing its application for a right-of-way granted prior to FLPMA, based on pre-FLPMA regulations. Colorado-Ute argues on appeal that Interior should be collaterally estopped from contesting the regulations' validity because the issue was fully litigated in PSC I. However, Colorado-Ute did not raise this issue in the trial court, but instead contested the regulations on the merits. The utility may not raise this issue for the first time on appeal. See, e.g., Bradford v. United States ex rel. Department of Interior, 651 F.2d 700, 704 (10th Cir.1981). The pre-FLPMA regulations were before the trial court, and its determination is open to our review on appeal. 156 The pre-FLPMA regulations were promulgated under the authority of the IOAA and the PLAA. Because we find the IOAA 18 dispositive, we do not address the other alleged sources of authority. Unlike FLPMA, the IOAA provides little legislative history relevant to cost reimbursement. Other than the statutory command that fees charged be fair and equitable, 31 U.S.C. § 483a, the IOAA reveals none of the evidence of Congressional intent that we found so compelling in construing FLPMA § 304(b). Colorado-Ute's only substantive argument is that the regulations were invalid under National Cable and New England Power Co. 157 We have discussed those cases earlier in this opinion, and we will not repeat that discussion here. Interior may, consonant with National Cable and New England Power Co., recover the full costs of services provided to Colorado-Ute as an identifiable beneficiary. These costs may include the full expenses of an EIS triggered under NEPA by Colorado-Ute's application. 19 Interior may not charge Colorado-Ute with general management costs and other expenses not incurred in agency action relating specifically to Colorado-Ute's application. See Mississippi Power, 601 F.2d at 230. 158 The trial court's affirmance of the costs assessed against Colorado-Ute was apparently based on its analysis of FLPMA. We remand so that it may reexamine those charges under the IOAA in light of our opinion.