Opinion ID: 198749
Heading Depth: 2
Heading Rank: 2

Heading: reimbursable expenses

Text: 23 The Cruise Line requests that it be reimbursed for the following actual expenses that were classified as reestablishment expenses by the GSA: 24 Landing Fees at World Trade Center $ 1,825.50 Forwarding of Calls $ 1,500.36 Attorney Search Time $11,353.50 Marine Sanitary System $ 3,512.72 Electric and Telephone Hook Up $ 2,416.40 Install-Sanitary System $ 1,019.44 Backflow Preventer $ 310.00 Deck Plates $ 1,211.00 Floating Piers $ 3,800.00. 25 These expenses were not reimbursed because they were related to the interim move or exceeded a regulatory cap. 3 26 The Cruise Line primarily contests the reclassification of expenses. There are two regulatory caps involved: (1) search costs are capped at $1,000 and limited to those that are reasonable and necessary, see 49 C.F.R. § 24.303(a)(13); and (2) reestablishment expenses are capped at $10,000, see 49 C.F.R. § 24.304. The Cruise Line alleges that the GSA arbitrarily reclassified expenses that were valid uncapped moving expenses so that they would fall within a regulatory cap. We find, however, that the GSA considered the pertinent evidence and factors and articulated an explanation for its action which falls well within the bounds of reasoned decision making. Baltimore Gas, 462 U.S. at 105-06. 27 The GSA, relying on the audit, excluded the attorney's search fees because they exceeded the $1000 cap which had already been met, and because the attorney's rate of $135/hr was unreasonable. The regulations entitle the Cruise Line to reimbursement for actual expenses, not to exceed $1,000, as the Agency determines to be reasonable, which are incurred in searching for a replacement location. 49 C.F.R. § 24.303(13). The provision applies to fees paid to a real estate agent or broker to locate a site, and they could arguably apply to similar fees paid to an attorney. Nevertheless, the provision also permits the GSA to determine whether the fees are reasonable. The appellant has presented no evidence to suggest that the GSA's determination on this matter was arbitrary and capricious or an abuse of discretion. As the GSA's decision was consistent with the regulations, we defer to the GSA's judgment. 28 In support of its claim that the GSA arbitrarily reclassified relocation expenses as reestablishment expenses, the Cruise Line relies on the audit itself, which concludes that $23,903 of the total proposed amount were actual paid or incurred expenses, and were allocable to the permanent relocation of the claimant. We note, however, that the appellant has pulled the first sentence of a paragraph out of context. The remainder of the paragraph indicates that relocation expenses is a catch-all phrase that includes both moving expenses and reestablishment expenses, which are subject to different monetary limits. The audit clearly explains that it reclassified $25,184.37 of the expenses as reestablishment expense to be consistent with the regulations. The appellant suggests capriciousness in the audit's decision to reclassify the expenses for the purpose of maintaining the integrity of the regulatory limitations. However, we read this statement as honoring Congress's intent to limit certain reestablishment expenses which include alterations to the replacement real property such as those listed by the Cruise Line. 29 The distinction between moving expenses and reestablishment expenses originates with Congress. See 42 U.S.C. § 4622. The regulations have interpreted moving expenses to include, among other things: 30 Disconnecting, dismantling, removing, reassembling, and reinstalling relocated machinery, equipment, and other personal property including substitute personal property described at § 24.303(a)(12). This includes connection to utilities available nearby. It also includes modification to the personal property necessary to adapt it to the replacement structure, the replacement site, or the utilities at the replacement site, and modification necessary to adapt the utilities at the replacement site to the personal property. 31 49 C.F.R. § 24.303(a)(3) (emphasis added). In contrast, reestablishment expenses include: 32 (1) Repairs or improvements to the replacement real property as required by Federal, State or local law, code or ordinance. 33 (2) Modifications to the replacement property to accommodate the business operation or make replacement structures suitable for conducting the business. 34 . . . 35 (4) Provision of utilities from right-of-way to improvement on the replacement site. 36 49 C.F.R. § 24.304 (a) (emphasis added). The obvious distinction between moving and reestablishment expenses is whether modifications are made to personal property or to the replacement real property. The GSA's position that the specified expenses are in fact reestablishment expenses is supported by the record. The audit concluded that: (1) the marine sanitary system is an allowable expense under § 24.304(a)(2); (2) the electric and telephone hook up are reestablishment expenses allowable under § 23.304 (a)(4); (3) the installation of the sanitary system is covered by § 23.304(a)(2); (4) the backflow preventer is covered by § 23.304(a)(2); (5) installation of deck plates is allowable under § 23.304(a)(2); and (6) installation of floating piers is allowable under § 23.304(a)(2). We find nothing unreasonable in the GSA's application of the regulations. 37 Instead, the Cruise Line hangs its hat on the argument that under Pou Pacheco the regulatory caps are guidelines only, and can be exceeded if there is evidence of unusual expense. Unfortunately, the appellant overlooks the distinction in posture between Pou Pacheco and the current case and its effect on the standard of review and deference that we afford to the agency's award. In this case, we may only remand to the district judge if we find that the GSA acted in an arbitrary and capricious manner, not if we believe that the regulations could have reasonably been interpreted differently. In Pou Pacheco, we considered whether a jury and court award was sustainable -- a related, but substantially different question, involving a different standard of review. 38 Regardless of the hardship to the Cruise Line that resulted from its forced relocation from Fan Pier, short of evidence that the GSA's decision in this case was arbitrary and capricious, we have no choice but to sustain the district court's decision that the GSA's award was based on a reasonable interpretation of the regulations. 39 Affirmed.