Opinion ID: 182528
Heading Depth: 2
Heading Rank: 1

Heading: Regulatory Claims

Text: At the time Chattler filed her application, section 51.63(c) of Title 22 of the Code of Federal Regulations stated: The passport expedite fee will be refunded if the Passport Agency does not provide the requested expedite processing as defined in § 51.66. Section 51.66(b) defined expedited processing as completing processing within 3-business days commencing when the application reaches a Passport Agency. . . . The processing will be considered completed when the passport is ready to be picked up by the applicant or is mailed to the applicant. The government concedes that Chattler is entitled to a refund of her $60 expedite fee because the government failed to process her application within three business days. The issue is whether Section 51.63 unambiguously requires that the government automatically provide a refund, or whether the government can, consistent with the regulations, require an applicant to make a refund request before it is obliged to issue the refund. We review a grant of summary judgment under the law of the regional circuit. Serdarevic v. Advanced Med. Optics, Inc., 532 F.3d 1352, 1362 (Fed.Cir. 2008). The Ninth Circuit reviews the grant of summary judgment de novo, determining whether, viewing all evidence in the light most favorable to the nonmoving party, there are genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Kraus v. Presidio Trust Facilities Div., 572 F.3d 1039, 1043-44 (9th Cir.2009). We defer to the agency's interpretation of its own regulation unless it is plainly erroneous or inconsistent with the regulation. Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414, 65 S.Ct. 1215, 89 L.Ed. 1700 (1945) ( Seminole Rock ). The agency interpretation need not be the best or most natural one by grammatical or other standards. Pauley v. Beth-Energy Mines, Inc., 501 U.S. 680, 702, 111 S.Ct. 2524, 115 L.Ed.2d 604 (1991). The Department of State interprets Section 51.63 as requiring a request before a refund is issued. A statement on the Department of State's website first published on June 14, 2007 states: Travelers who: A) Paid the $60 fee for expedited service and B) Have reason to believe that they did not receive expedited service should contact the Department of State to request that the Department consider a refund of the expedite fee. Customers should submit a written request with their passport number, if available, name, date and place of birth, and approximate date(s) they applied for their passport and received their passport (if applicable). Mailing address and phone number should also be included. Decl. of Florence Fultz In Supp. Of Def.'s Mot. For Summ. J., Fultz Ex. 14 p. 5, Chattler v. United States, No. 07-CV-04040 (filed January 30, 2009), ECF No. 111-8 (emphases added). See also Refund of Expedite Passport Fees, Travel.State.Gov Policy and Announcements, http://www.travel.state.gov/passport/ppi/refund/refund_3259.html (last visited Oct. 27, 2010) (similar statement in current iteration). The government has represented in its brief and at oral argument that its long-standing practice has been to require a request from the applicant before a refund is issued. Br. of Def.-Appellees 6, 23 (There is not and has never been an automated process for identifying which applicants received the expedite processing within the meaning of the regulation. Instead, the Department reasonably relies upon refund requests by unsatisfied applicants to trigger the [refund] process.); Oral Arg. 20:55-21:08, 24:30-24:55, available at http://oralarguments.cafc.uscourts.gov/mp3/2010-1066.mp3 ([T]he department's view is that has been its practice [to require a request] consistently and historically all the way along.). Chattler argues that this interpretation is contradicted by the preamble of the Federal Register Notice implementing the expedited processing rules: There will be situations in which expedited passport processing cannot be completed within three days. . . . In such circumstances, the applicant will be notified and the fee will be refunded. 59 Fed.Reg. 48,998, 48,999 (Sept. 26, 1994). Chattler's argument is inapposite. The phrase the fee will be refunded in the preamble sheds no light on the meaning of the phrase, [t]he passport expedite fee will be refunded in Section 51.63; as discussed below, will does not imply will automatically. To the extent that the preamble suggests that the Department is responsible for initiating the refund process by notifying the applicant of the Department's failure to process her expedite request within the specified time frames, Chattler has not argued that she failed to receive such notice. Thus, the preamble does not serve to undermine the Department's interpretation of Section 51.63 as requiring a refund request. Chattler next argues that the Department's interpretation is plainly erroneous or inconsistent with the regulation. See Seminole Rock, 325 U.S. at 414, 65 S.Ct. 1215. Chattler argues that the word will unambiguously compels the government to issue a refund automatically to all passport applicants who requested but failed to receive expedited processing, without regard to whether a request was made. The government argues that will does not prescribe the procedure or process by which the refund will be granted, and that the Department of State's requirement of a refund request as a condition to the issuance of a refund is consistent with the regulation. The government's analogy helps to illustrate this point. A retail policy could read: The difference in purchase price will be refunded if another store advertises this product for less. The most natural reading of will be refunded does not presuppose an automatic procedure for administering the refund. Instead, it is wholly consistent with a policy requiring a customer to make a request for a refund of the difference. To suggest, as Chattler essentially argues, that these procedural requirements are inconsistent with the word will simply because an applicant may not take the necessary steps to collect a refund is contrary to the plain meaning and ordinary usage of the word. This court again agrees with the government. In the context of Section 51.63, the word will simply describes future action, but does not preclude the imposition of conditions before such action is due. The possibility that a request may not be made by an applicant, and as a consequence, a refund may not be issued, does not make the withholding of refunds arbitrary. Nor is such government action discretionary; if a request is made (and the applicant is entitled to a refund) the government concedes that a refund must and will be issued. The agency's interpretation is consistent with the language of Section 51.63 and is not plainly erroneous or inconsistent with the regulation. See Seminole Rock, 325 U.S. at 414, 65 S.Ct. 1215. Thousands of refunds have issued to applicants who initiated the refund process by submitting a refund request. Chattler argues that only a relatively small percentage of applicants who were entitled to a refund for the Department's failure to expedite actually received the refund, and that the refund request requirement is simply a means for the Department to retain undeserved funds. The government responds that the statistics underreport the true percentages, and that the refund request requirement is necessary to ensure that refunds are received by the proper parties. Even if we accept the factual validity of Chattler's statistics, the failure of some parties to request a refund may be due to any number of reasons, and the government's retention of unrequested refunds does not compel the conclusion that the Department imposed the refund request requirement as a means of improperly retaining the fees rather than as a reasonable way of assuring that refunds are made to the proper parties. For the foregoing reasons, this court holds that the phrase, will be refunded in Section 51.63(c) of the Code of Federal Regulations Title 22 does not imply will be refunded without further action by the applicant, and does not require the government to issue an automatic refund without a request by the applicant. We thus affirm the district court's grant of the government's summary judgment motion on Chattler's regulatory claim.