ELR Citation: ELR 20778
No(s). 84-1547 (Fed. Cir. Jun 26, 1985)

The court holds that the Secretary of Interior acted within his authority under the Independent Offices Appropriation Act (IOAA) and the Minerals Leasing Act by issuing regulations requiring applicants for right-of-way permits to reimburse the government for costs of processing the applications, including the costs of preparing environmental impact statements (EISs). Appellant, an applicant for an oil pipeline right-of-way that was assessed a $2.5 million charge for EIS preparation costs, contends that the Secretary failed to consider the IOAA's requirement that any reimbursement charges by federal agencies be "fair and equitable" and account for factors including whether the expenditures provide value to an identifiable recipient. The court distinquishes the Tenth Circuit's decision in Nevada Power Co. v. Watt invalidating identical Interior regulations for failure to adequately consider statutory cost factors, but which were promulgated in relevant part under the Federal Land Policy and Management Act.

Its inquiry thus narrowed, the court concludes that the regulations at issue are within the constraints imposed by the IOAA. Although the regulations do not use the phrases "fair and equitable" or "value to the recipient," this deficiency is mitigated in four ways. First, the costs cover only the processing of the application, which provides value to an identifiable recipient. Second, the regulations require or allow Interior to estimate the expected processing costs to provide applicants with advance notice. Third, appellant had ample opportunity to object to the costs during extensive negotiations with Interior. Finally, Interior's interpretation is entitled to deference since its regulations do not clearly exceed the scope of the statute.

Counsel for Appellant
Quinn O'Connell
Connole & O'Connell
900 17th St. NW, Washington DC 20530

Counsel for Appellee
Jacques B. Gelin
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2762

Paul B. Smyth, Kristina A. Clark
Office of the Solicitor
Department of Interior, Washington DC 20240
(202) 343-4036

Before Newman and Bissell, JJ.