City of Idaho Falls v. Federal Energy Regulatory Commission
393 U.S. App. D.C. 424
D.C. Cir.2011Background
- 1987 regulation (Order No. 469) tied FERC land-use fees to Forest Service linear-rights-of-way schedule, updated via an Executive Director; 11.2(b) directs updates reflecting Forest Service land values.
- 2008– Forest Service and BLM revised zone values using Census of Agriculture data, expanding to 12 zones and raising many values.
- 2009 Update issued under Regulation 11.2 adopting the revised Forest Service schedule, resulting in substantially higher rental fees.
- Licensees sought rehearing arguing APA notice-and-comment was required and that FERC unlawfully delegated rate-setting to other agencies.
- FERC denied rehearing, asserting 11.2 required using the updated data as an ordinary, ministerial update; petitioners challenged this as a change in FERC methodology and a unlawful delegation.
- DC Circuit grants petition, vacates the 2009 Update, holding Regulation 11.2 cannot compel change in methodology without notice and comment and that FERC violated FPA 10(e)(1) by effectively outsourcing rate-setting to FS/BLM.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did FERC's 2009 Update change its methodology for setting rental fees? | Licensees: APA notice and comment required for a methodology change. | FERC: 11.2 allows updating based on FS data; no new rule, thus no notice. | Yes, it changed methodology; notice and comment required. |
| Does Regulation 11.2 improperly delegate 10(e)(1) duties to FS/BLM? | Delegation to FS/BLM violates FPA 10(e)(1) | Regulation 11.2 permits updating data; delegation is permissible | Yes, improper delegation; 11.2 cannot foreclose independent review. |
Key Cases Cited
- Alaska Professional Hunters Ass'n, Inc. v. FAA, 177 F.3d 1034 (D.C.Cir.1999) (notice and comment required for significant rule changes)
- City of Tacoma v. FERC, 331 F.3d 106 (D.C.Cir.2003) (FERC's duties under 10(e)(1) are exclusive and non-delegable)
- E. Columbia Basin Irrigation Dist. v. FERC, 946 F.2d 1550 (D.C.Cir.1991) (FERC must independently review cost data to ensure reasonableness)
- Paralyzed Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579 (D.C.Cir.1997) (interpretation of regulations must be distinct from the regulation itself for notice)
- Stinson v. United States, 508 U.S. 36 (1993) (deference to agency interpretation of its regulations limited when it violates statutes)