author: WILKEY, Circuit Judge:

text:
    MEMPHIS LIGHT, GAS AND WATER DIVISION, Petitioner, v. FEDERAL POWER COMMISSION, Respondent, Texas Gas Transmission Corporation and Tennessee Valley Municipal Gas Association, etc., Intervenors. PUBLIC SERVICE COMMISSION OF the STATE OF NEW YORK, Petitioner, v. FEDERAL POWER COMMISSION, Respondent, Texas Gas Transmission Corporation, Intervenor.
    Nos. 24517, 24632.
    United States Court of Appeals, District of Columbia Circuit.
    Argued March 25, 1974.
    Decided June 26, 1974.

      Richard A. Solomon, Washington, D. C., for petitioner in No. 24632.
    George E. Morrow, Memphis, Tenn., with whom Reuben Goldberg, Washington, D. C., was on the brief, for petitioner in No. 24517.
    Charles E. Bullock, Atty., F. P. C., with whom Leo E. Forquer, Gen. Counsel, and George W. McHenry, Jr., Sol., F. P. C., were on the brief, for respondent.
    Christopher T. Boland, Washington, D. C., with whom Melvin Richter, Washington, D. C., was on the brief for inter-venor, Texas Gas Transmission Corp. George J. Meiburger, Washington, D. C., also entered an appearance for interve-nor, Texas Gas Transmission Corp.
    Reuben Goldberg, Washington, D. C., entered an appearance for intervenors Tennessee Valley Municipal Gas Assn., et al.
    Before FAHY, Senior Circuit Judge, ROBINSON and WILKEY, Circuit Judges.
   WILKEY, Circuit Judge:

This ease reaches us on remand from the Supreme Court, which held that section 441 of the Tax Reform Act of 1969 does not limit the authority of the Federal Power Commission [FPC] under the Natural Gas Act to permit a regulated utility to change for ratemak-ing purposes its method of depreciation on pre-1970 and replacement property from flow-through to normalization. This court must now review on other grounds the validity of the FPC’s decision to allow Texas Gas Transmission Corporation [Texas Gas] to make such a shift in depreciation practices.

I. The Circumstances Underlying this Appeal

In June 1969 Texas Gas filed a rate increase with the FPC. In its accompanying statement of reasons for the requested change Texas Gas attributed as a cause of the increase its proposed discontinuance of the use of liberalized depreciation and reversion to straight-line depreciation. At the ensuing hearing the Presiding Examiner segregated the issues involved into two phases, Phase I to consist of questions of rate of return, associated income taxes, and reversion to straight-line depreciation. After settlement of many issues by the parties the FPC was left with the depreciation question to resolve. Following briefing by the parties, but without oral argument, the FPC issued in June 1970 an order permitting Texas Gas to change its method of liberalized depreciation for rate-making purposes from flow-through to normalization with respect to pre1970 and post-1969 non-expansion property. This decision was reaffirmed by the FPC in its Opinion and Order Denying Rehearing in July 1970.

An appeal to this court was then taken. We held that the Tax Reform Act had deprived the FPC of the authority to allow such a change in depreciation methods. However, the Supreme Court then held that the FPC retained such authority and remanded the case to this court to decide the merits pursuant to section 19(b) of the Natural Gas Act.

Two primary aspects of the FPC decision are challenged in this appeal. First, was there substantial evidence on which the FPC based its decision? Second, were the parties sufficiently apprised of the possible remedy of a shift to normalization, as opposed to straight-line depreciation ?

11. The Substantial Evidence Question

Memphis Light, Gas and Water Division [Memphis Light] and Public Service Commission of the State of New York [Public Service] challenge as lacking substantial evidence the FPC’s decision allowing Texas Gas to normalize its federal income taxes in computing its rates. Specifically they attack the FPC’s findings that liberalized depreciation on non-expansion property will no longer produce permanent tax savings, and that tax savings on expansion property will not be available to offset declining depreciation on older properties.

A.

At the outset we note that the scope of our review is limited, for Congress has ordained that the FPC is to be granted broad discretion in the regulation of the natural gas industry. The Supreme Court has acknowledged the presumption of validity accorded the FPC:

Section 19(b) of the Natural Gas Act provides without qualification that the “finding of the Commission as to the facts, if supported by substantial evidence, shall be conclusive.” More important, we have heretofore emphasized that Congress has entrusted the regulation of the natural gas industry to the informed judgment of the Commission, and not to the preferences of reviewing courts. A presumption of validity therefore attaches to each exercise of the Commission’s expertise, and those who would overturn the Commission’s judgment undertake “the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences.” FPC v. Hope Natural Gas Co., 320 U.S. 591, 602, 64 S.Ct. 281, at 228, 88 L.Ed. 333 (1944). We are not obliged to examine each detail of the Commission’s decision; if the “total effect of the rate order cannot be said to be unjust and unreasonable, judicial inquiry under the Act is at an end.” Ibid.

This general principle of deference has been carried over to the particular area of depreciation for ratemaking purposes. Prior to 1966 the various circuit courts acceded to the FPC view that liberalized depreciation provided only a tax deferral and not a tax savings. Hence companies were allowed to take liberalized depreciation for tax purposes but to normalize for ratemaking purposes, to ensure that current consumers would pay their fair share and not burden future consumers. However, when in 1966 the FPC completely changed its view and concluded that liberalized depreciation would result in a permanent tax saving where there was a growing or stable plant, the courts applauded the FPC’s flexibility and affirmed the requirement that companies flow-through the tax savings to current consumers. Given the traditional wide discretion of the FPC, petitioners must meet a heavy burden to sustain their challenge.

B.

The portion of the FPC order challenged here is the approval of Texas Gas’ abandonment of flow-through for accounting and ratemaking purposes. This decision, which represents a change from the position of the FPC in Alabama-Tennessee Natural Gas Co., was based on the FPC’s determination that, given the current situation in the gas industry and the particular facts as to Texas Gas, Texas Gas would no longer obtain a tax savings from the use of liberalized depreciation on pre-1970 and post-1969 non-expansion property.

In capsule form, the FPC analysis proceeded as follows:

(a) Because of Texas Gas’ election under the Tax Reform Act, depreciation on post-1969 expansion property would be subject to normalization, not flow-through.

(b) Therefore, tax depreciation on post-1969 expansion property would, not be available to offset declining tax depreciation on other, older property.

(c) Excluding such expansion property, the continued use of liberalized depreciation on non-expansion property would not create a tax saving; there would not be a stable basis of tax depreciation because the permissible tax depreciation life of natural gas property is much shorter than the actual physical life.

(d) It follows that normalization for ratemaking purposes will provide a greater potential for stable rates for consumers, and a better chance for the company to earn a fair rate of return without future rate increases.

(e) Additionally, normalization will improve the company’s before tax coverage of interest, thus improving the company’s securities, and will also help alleviate current shortages of cash.

Petitioners attack several steps in this rationale as lacking substantial evidence, and indeed as lacking any evidence whatever. We find the objections unpersuasive and affirm the decision of the FPC as based on substantial evidence. Not only do we find evidence supporting the FPC, but much of this evidence is uncontradicted-in the record, briefs, and oral argument.

C.

First, we find that there is sufficient evidentiary support for the FPC determination that the pre-1970 plant will not remain stable, in the sense that the basis of tax depreciation will decline. Contrary to Memphis Light’s assertion that there is no relevant evidence, a senior vice-president of Texas Gas testified at the hearings that tax depreciation on the existing plant would fall by $1.1 million between 1970 and 1971. Investment of $33 million in new plant would be necessary to maintain the same dollar differential between tax and book depreciation. Thus, if annual replacement investment were less than $33 million, the amount of tax depreciation on the pre-1970 plant would decline, and liberalized depreciation would no longer produce a tax saving which could be passed on to the consumer in the form of lower current rates.

The FPC looked to the annual reports of Texas Gas previously filed with the agency, and determined that annual plant retirements from 1965 to 1969 averaged $2.7 million, valued at original cost. While Memphis Light is technically correct that this evidence was not in the record as such, nevertheless courts have traditionally permitted the FPC to go to materials such as filed company reports which are dehors the record. Hence, there are adequate grounds for the FPC to conclude that it is unlikely that replacement investment will be sufficient to maintain a stable plant, in the sense that the basis of tax depreciation related thereto will decline. We believe that this evidence meets the requirements set forth long ago by Chief Justice Hughes, that substantial evidence be “more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Although a reviewing court might prefer more evidence in the record as the basis for the FPC decision, we cannot say that there is not substantial evidence behind the FPC order and opinion.

In reaching the conclusion that the continued use of liberalized depreciation on the pre-1970 plant will not produce a tax saving, the FPC stated that the gas supply was an important factor in determining the depreciable life for tax purposes. Memphis Light contends that there is no evidence to support the FPC’s statement that the tax depreciation life of Texas Gas’ natural gas properties “is dependent on the gas supply rather than the useful physical life of the plant,” and that there is no evidence that the gas supply is a limiting factor for Texas Gas. Again we find that there, is evidence both in the record and in sources suitable for official notice which form a sufficient basis for the FPC’s conclusion. The chief executive officer of Texas Gas testified at the hearings that the entire industry faces a serious shortage of natural gas ; other testimony indicated that Texas Gas did not foresee rapid growth in the future. On a more general level, the serious natural gas shortage has been recognized by the Supreme Court and by various FPC publications. The dependence of tax depreciation life on the gas supply has been frequently acknowledged by the FPC

These factors combined to cause the FPC to recognize that the conditions which earlier had led to the requirement of flow-through were no longer applicable to a company such as Texas Gas. It was highly improbable that Texas Gas would make sufficient replacements in its pre-1970 plant to cause liberalized depreciation to result in a tax saving to be passed on to the consumer in the form of lower current rates.

Second, we believe that the FPC’s determination that the benefits of liberalized depreciation on post-1969 expansion property will not be available to offset decreased depreciation on pre-1970 and replacement property is adequately supported by evidence and logic. The FPC rests this conclusion on the election made by Texas Gas pursuant to the Tax Reform Act to abandon flow-through and to normalize with respect to post-1969 expansion property. Under this normalization method, Texas Gas is to pay taxes based on liberalized depreciation on the post-1969 expansion property but to charge rates based on straight-line depreciation. The difference between the straight-line and liberalized depreciation is to be placed in a reserve account.

Petitioners contend that the funds in the reserve account established pursuant to the Tax Reform Act are not earmarked for the specific property which generated the deferral in taxes, but instead can be used against both expansion and non-expansion property. Under this theory the change in depreciation methods would not affect utility rates for several years. However, we believe this interpretation of the election is at odds with the intent of Congress in the Tax Reform Act. Comments in the House, Senate, and Conference Reports all suggest that a reserve is to be established “for future tax liability,” i. e., as an offset of declining depreciation on the same post-1969 property in later years. It is true, as Memphis Light urges, that the Congress was not concerned that the funds be kept in a specific named account; the Congress simply required that the funds be set aside in some reserve account, with any nomenclature. This reserve is an asset of the company and can be used for a restricted variety of purposes. However, if the reserve were dissipated by being used against the declining depreciation on non-expansion property, the purpose of normalization on post-1969 expansion property would be defeated.

Public Service further suggests that it is incorrect to evaluate the depreciation reserve fund on post-1969 expansion property separate from the totality of depreciation on all property. However, the fact that depreciation is to be taken on property as a whole does not alter the fact that pursuant to the election under the Tax Reform Act Texas Gas must add to a. reserve on its books amounts attributable to the difference between liberalized and straight-line depreciation on post-1969 expansion property.

Memphis Light additionally urges that the election under the Tax Reform Act could have no effect until after the test years involved here. Memphis Light suggests that there is no evidence that Texas Gas has in fact acquired any expansion property. These claims are of little import. The FPC may always consider a test year’s data in the light of the predictable future situation. The fact that there may have been no expansion property merely produces the same result as a separation of depreciation on expansion property from other property, i. e., there is no depreciation on the former available to offset declines in depreciation on the latter.

Third, Memphis Light challenges a subsidiary statement of the FPC, that, as compared with flow-through, normalization will offer “more hope for stability of rates for its customers.” According to Memphis Light, there is no evidence to support this statement. However, a perusal of the record indicates that a vice-president of Texas Gas explicitly stated that normalization would provide “a little more chance of stability of rates” than flow-through. He further stated that, “Under straight-line depreciation, there would be greater stability of rates for the customers and more assurance that the company could earn its fair rate of return without an increase in rates.” He then went on to point out specific differences in the ability of the company to absorb costs under the straight-line and flow-through methods.

In addition to this testimony, there is the logical fact that normalization causes current consumers to pay their fair share of tax costs attributable to depreciation, so that future consumers will not be forced to pay higher tax costs when the basis for depreciation declines. Normalization effects a stabilization in rates between present and future consumers, insofar as rates reflect depreciation.

Fourth, Memphis Light contends that there is no evidentiary support for the FPC’s conclusion that normalization would produce an enhancement of the quality of Texas Gas’ securities, by improving the company’s before tax coverage of interest. Again, there is a clear statement in the record by the vice-president of Texas Gas that the quality of securities would be lower if liberalized depreciation with flow-through were continued than if straight-line depreciation were utilized, because of differences in the before tax interest coverage. This witness’ testimony was cross-examined. No contradictory information was introduced. We conclude that this relatively subordinate finding of the FPC was based on substantial evidence.

III. e Notice of Normalization as an Alternative

Memphis Light contends that it was not put on notice that normalization would be considered until twelve days before the FPC opinion issued, which was well after the filing of briefs and the closing of the record. We are not persuaded that this is a ground for reversal or even a remand to the FPC because there has been no suggestion of prejudice to anyone by this lack of notice.

The theory behind Memphis Light’s objection apparently is that since the initial pleadings and evidence of Texas Gas only concerned the possibility of shifting from flow-through to straight-line depreciation, the parties such as Memphis Light did not have notice of the possibility that the FPC might allow normalization, as it in fact did. It is true that there was no formal notice that normalization would be considered; there were only two instances where normalization was explicitly suggested: (1) in the initial brief of an intervenor, and (2) in a letter filed by Texas Gas twelve days before the actual FPC opinion. However, some testimony before the hearing examiner did relate to normalization.

Whether the notice amounts to sufficient notice or not, we need not here decide. Even if the notice were inadequate, such lack of knowledge would be significant only if the parties would have taken a different approach or presented different evidence than they did when they were merely opposing the adoption of straight-line by Texas Gas. But Memphis Light has given no hint as to the possible existence of any evidence, which Memphis Light rationally would offer to defeat normalization, but which it would not also present to defeat straight-line.

The FPC considered this problem of proper notice concerning normalization in its Opinion Denying Rehearing. It felt that normalization was simply another solution of the problem, preferable to straight-line:

Normalization, as our opinion indicates, would improve the company’s cash position, would, in effect, provide it with an interest free fund, and, because of the deduction of the accumulated reserves in Account 282 from the rate base, would reduce the company’s cost of service and benefit consumers. This is a solution which we find more in the public interest than reversion to straight-line depreciation .

Since the FPC could have granted Texas Gas the opportunity to change to straight-line, it certainly could adopt what it viewed as an approach more favorable to the public consumer.

The FPC analysis is correct, unless there is some evidence that is rational to introduce in normalization hearings but not rational to introduce in straight-line hearings. If there is such evidence, the parties have not so notified this court in briefs or oral argument. Furthermore, the petitioners have not demonstrated that some harm might result from normalization which would be different from harm resulting from straight-line depreciation, the proposed change of which there was all due notice. Lacking any such indication of differences in approach, evidence, or harm, this court cannot label as unfair or improper the FPC’s adoption of normalization in a proceeding initially brought to effect a change to straight-line.

IV. Conclusion

We believe that the FPC has complied with the applicable statutory and judicial requirements. The FPC was justified in allowing Texas Gas to change from flow-through to normalization, given the circumstances involved.

We find no conflict between the rate increase allowed Texas Gas and the “actual expenditures theory,” by which rates of utilities are supposed to reflect actual payments. For while Texas Gas is not currently paying taxes at straight-line rates, it is incurring the liability now to pay increased taxes in the future. Such a method as normalization, whereby current consumers are prevented from forcing future consumers to pay their deferred taxes, does not amount to causing an increase of rates based on fictitious taxes. And the Supreme Court specifically noted in its opinion in this case that normalization was permissible even though it might result in an increase in rates.

The result reached in this case conforms to the standard recently reaffirmed by the Supreme Court,

[Rjates are “just and reasonable” only if consumer interests are protected and if the financial health of the pipeline in our economic system remains strong. Affirmed.

      . 26 U.S.C. § 167 (Z).

      . 15 U.S.C. § 717 et seq.

      . FPC v. Memphis Light, Gas & Water Division, 411 U.S. 458, 93 S.Ct. 1723, 36 L.Ed.2d 426 (1973).

      . Joint Appendix [hereinafter App.] at 47.

      . App. at 53.

      . FPC Opinion No. 578, 43 F.P.C. 824 (1970), App. at 100.

      . FPC Opinion No. 578-A, 44 F.P.C. 140 (1970), App. at 145.

      . Memphis Light, Gas & Water Division v. FPC, 149 U.S.App.D.C. 238, 462 F.2d 853, rehearing denied, 149 U.S.App.D.C. 250, 462 F.2d 865 (1972).

      . 411 U.S. 458, 93 S.Ct. 1723, 36 L.Ed.2d 426 (1973).

      . 15 U.S.C. § 717r(b).

      . Normalization is one of three methods by which a public utility can compute depreciation. Under normalization, utilities use liberalized depreciation methods in calculating their federal income taxes, but compute their cost of service, which includes federal income taxes, as if they were using straight-line depreciation. The difference between these two tax amounts must be placed in a deferred tax reserve account. See 26 U.S.C. § 167(l) (3) (G), cited infra at n. 37.
      The second method is flow-through. Here utilities use liberalized depreciation both for tax and ratemaking purposes. Hence current consumers receive the benefit of current accelerated depreciation deductions via lower rates. The third method, straight-line depreciation, requires the utility to use the straight-line depreciation method for both tax and rate purposes. See generally FPC v. Memphis Light, Gas & Water Division, 411 U.S. at 460, 93 S.Ct. at 1723.

      . Non-expansion property includes all pre-1970 property and any post-1969 property which does not increase • the productive or operational capacity of the taxpayer. The term “non-expansion property” is used to apply to both pre-1970 and post-1969 property. “Replacement property” is post-1969 non-expansion property only. See 26 U.S.C. § 167(l) (4).

      . Expansion property is post-1969 property which increases the productive or operational capacity of the taxpayer. See id.

      . Permian Basin Area Rate Cases, 390 U.S. 747, 767, 88 S.Ct. 1344, 1360, 20 L.Ed. 312 (1968).

      . The FPC view was enunciated in Amere Gas Utilities Co., 15 F.P.C. 760 (1956).

      . See, e. g., Cities of Lexington et al. v. FPC, 295 F.2d 109, 114 (4th Cir. 1961); El Paso Natural Gas Co. v. FPC, 281 F.2d 567, 573-574 (5th Cir. 1960), cert. denied sub nom. California v. FPC, 366 U.S. 912, 81 S.Ct. 1083, 6 L.Ed.2d 236 (1961). Cf. Panhandle Eastern Pipe Line Co. v. FPC, 115 U.S.App.D.C. 8, 316 F.2d 659 (en banc), cert. denied, 375 U.S. 881, 84 S.Ct. 147, 11 L.Ed.2d 111 (1963).

      . Alabama-Tennessee Natural Gas Co., 31 F.P.C. 208 (1964), aff’d, 359 F.2d 318 (5th Cir.), cert. denied, 385 U.S. 847, 87 S.Ct. 69, 17 L.Ed.2d 78 (1966). See also City of Chicago v. FPC, 128 U.S.App.D.C. 107, 385 F.2d 629 (1967), cert. denied sub nom. P.S.C. of Wisconsin v. FPC, 390 U.S. 945, 88 S.Ct. 1028, 19 L.Ed.2d 1133 (1968).

      . The Supreme Court reaffirmed the traditional principle in Memphis Light:
      [T]here is no indication in the legislative history of this tax measure that Congress desired to modify, as respects the precise issue involved here, the broad discretion of the Commission delineated in Mope Mata-ral Oas and in other rate cases.
      * * * * s¡:
      The lower Courts have allowed the Commission broad discretion in determining proper depreciation methods for ratemak-ing purposes.
      411 U.S. at 466, 467, 93 S.Ct. at 1728.

      . 31 F.P.C. 208 (1964), aff’d, 359 F.2d 318 (5th Cir.), cert. denied, 385 U.S. 847, 87 L.Ed. 69, 17 L.Ed.2d 78 (1966).

      . This action was pursuant to the general FPC policy announced in Order No. 404, 43 F.P.C. 740, rehearing denied, 44 F.P.C. 16 (1970). This court affirmed that order in our previous consideration of the case at bar, 149 U.S.App.D.C. 238, 250, 462 F.2d 853, 865 (1972), and that part of our decision was not brought to the Supreme Court in Memphis Light. See 411 U.S. 458, 463 n. 9, 93 S.Ct. 1723, 1727, n. 9, 36 L.Ed.2d 426.

      . “Excluding new expansion facilities from consideration, the continued use of liberalized depreciation on the pre-1970 plant will not create a tax saving. It is not an answer to urge that the allowable tax depreciation of the pipeline plant remaining after exclusion of the post-1969 expansion facilities will be sufficiently stable to avoid forever repayment of taxes earlier avoided by liberalized depreciation. This is because the permissible tax depreciation life of natural gas properties is much shorter than the physical life of such properties. In other words, the period of time over which the properties would be useful and depreciable for tax purposes is dependent on the gas supply rather than the useful physical life of the plant. It therefore follows that the pre-1970 tax plant will not be a stable plant in the sense that plant retirements are replaced by new facilities, but the basis of tax depreciation related thereto will decline, so that there is little chance with respect to this plant that there will be any permanent tax savings. Under these circumstances, therefore, Texas Gas is correct in contending that normalization in computing the tax allowance for rate purposes with respect to its pre-1970 facilities offers more hope for stability of rates for its customers and more assurance that the company can earn its fair rate of return without future rate increases. Further benefits of normalization are that it will improve the company’s before tax coverage of interest, thereby enhancing the quality of its securities, and that it will help alleviate present day cash shortages.” 43 F.P.O. at 829-30, App. at 108-09.

      . The Supplemental Brief for Memphis Light at 7 states :
      This is the finding for which there is no evidentiary support. There is nothing in the record on the stability of Texas Gas’ pre-1970 plant, nothing on plant retirements, nothing on replacement facilities.

      . Testimony of Senior Vice-President Mey-thaler, App. at 17-18.

      . Public Service contends in its Supplemental Brief at 18 that these figures are irrelevant. We disagree. Furthermore, Public Service seems to have completely misinterpreted the import of the figures, for it incorrectly states that the FPC said that the increase in taxes would be $33 million in 1971.

      . See Supplemental Brief for FPO at 11.

      . See Alabama-Tennessee Natural Gas Co. v. FPC, 359 F.2d at 336-339. There the Fifth Circuit approved the FPC’s use of materials such as the forms here used, and other statistics and forecasts, to support its findings on tax savings resulting from liberalized depreciation. Cf. NLRB v. Gissel Packing Co., 395 U.S. 575, 612 n.32, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969); NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 348-349, 73 S.Ct. 287, 97 L.Ed. 377 (1953).

      . Treasury Regulation 1.167(1) — 4(c) characterizes as replacement investment the dollar amount equal to plant retirements in a given year valued at original cost.
      We do not decide here whether this Treasury Regulation utilized by the FPO to characterize part of Texas Gas’ new investment as replacement investment is valid. All we do decide is that there is substantial evidence on which the FPC could conclude that replacement would not be sufficient to parlay liberalized depreciation on pre-1970 plant into a tax saving.

      . Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938).

      . 43 F.P.C. at 829, App. at 108.

      . Supplemental Brief for Memphis Light at 9.

      . Testimony of Texas Gas Chief Executive Elmer, App. at 4.

      . Testimony of Texas Gas Senior Vice-President Meythaler, App. at 18. We note that Mr. Meythaler did not say that there would be zero growth, but only that the growth picture would not be “as rosy” as previously. The FPC recognized that there would be some growth in the future. 43 F.P.C. at 831, App. at 110.

      . FPC v. Louisiana Power & Light Co., 406 U.S. 621, 626, 92 S.Ct. 1827, 32 L.Ed.2d 369 (1972).

      . See, e. g., FPC Staff Report No. 2, National Gas Supply and Demand 1971-1990 (1972), quoted in FPC v. Louisiana Power & Light Co., 406 U.S. at 626 n. 2, 92 S.Ct. 1827 at 1831 n. 2.

      . See, e. g., City of Detroit v. Panhandle Eastern Pipe Line Co., 3 F.P.C. 273, 282 (1942), aff’d sub nom. Panhandle Eastern Pipe Line Co. v. FPC, 143 F.2d 488 (8th Cir. 1944), aff’d, 324 U.S. 635, 65 S.Ct. 821, 89 L.Ed. 1241 (1945); United Carbon Co., 25 F.P.C. 181, 184-86 (1961); Olin Gas Transmission Corp., 17 F.P.C. 685, 688-90 (1956).

      . Such educated predictions of trends are often a necessary part of the FPC’s decision-making process. See Alabama-Tennessee Natural Gas Co. v. FPC, 359 F.2d at 339.

      . 26 U.S.C. § 167(1) (3) (G) provides,
      Normalization method of accounting. — In order to use a normalization method of accounting with respect to any public utility property—
      (i) the taxpayer must use the same method of depreciation to compute both its tax expense and its depreciation expense for purposes of establishing its cost of service for ratemaking purposes and for reflecting operating results in its regulated books of account, and
      (ii) if, to compute its allowance for depreciation under this section, it uses a method of depreciation other than the method it used for the purposes described in clause (i), the taxpayer must make adjustments to a reserve to reflect the deferral of taxes resulting from the use of such different methods of depreciation.

      . See Supplemental Brief for Memphis Light at 10-14, Supplemental Brief for Public Service at 16-17.

      . H.R.Rep.No.413, 91st Cong., 1st Sess., pt. 1, at 132 (1969), provides that normalization involves
      computing the greater Federal income tax liability that would have resulted from use of straight line depreciation and adding this amount to a reserve account for future tax liability on the regulated utility’s books of account.

      . See Staff of Joint Comm, on Internal Revenue Taxation, 91st Cong., 1st Sess., General Explanation of the Tax Reform Act of 1969, at 152 (Comm.Print 1969), which notes,
      In some jurisdictions the purpose and effect of normalizing is accomplished by additions to a reserve for depreciation. The Act permits such a definition of normalization and does not require that additions be to a separate account described as a “reserve for deferred taxes.”

      . See the description of the reserve account, known as FPC Account 282, in 18 C.F.R. Part 201, § 282. The comments in the Senate and Conference Reports provide further elaboration. The Senate Report describes normalization as involving “the utility retaining the current tax reduction and using this money in lieu of capital that would otherwise have to be obtained from equity investments or borrowing.” S.Rep.No.552, 91st Cong., 1st Sess. 171 (1969). The Conference Report defines the term normalization in identical language to the Senate Report. See H.R.Rep.No.782, 91st Cong., 1st *Sess. 312 (1969).

      . See Supplemental Brief for Public Service at 14-16.

      . Supplemental Brief for Memphis Light at 10.

      . See note 36 supra.

      . FPC Opinion No. 578, 43 F.P.C. at 830, App. at 109.

      . Supplemental Brief for Memphis Light at 9.

      . Cross-examination of witness Meythaler, App. at 34-35.

      . Rebuttal testimony of witness Meythaler, App. at 29.

      . Id. at 29-30.

      . Supplemental Brief for Memphis Light at 9.

      . Testimony of witness Meythaler, App. at 15-17.

      . Cross-examination of witness Meythaler, App. at 37-40.

      . Supplemental Brief for Memphis Light at 8.

      . Memorandum Initial Brief for Western Kentucky Gas Co., App. at 83-84.

      . App. at 98.

      . See App. at 28-29, 34-35.

      . FPC Opinion No. 578-A, 44 F.P.C. at 142, App. at 147 (emphasis supplied).

      . Puhlie Service contends in its Supplemental Brief at 24-28 that even if the notice were sufficient, it was improper to consider the treatment of depreciation separate from the appropriate rate of return. We disagree. The whole thrust of the FPO analysis of depreciation is whether a tax saving is no longer available and at most a tax deferral possible; this is properly separable from general rate of return questions.

      . However, we must state that we cannot applaud the FPG’s heavy reliance on material outside the record. It would be preferable if the FPC could insure expression on the record of a broad range of views.

      . See, e. g., FPC v. United Gas Pipe Line Co., 386 U.S. 237, 245, 87 S.Ct. 1003, 18 L.Ed.2d 18 (1967).

      . If normalization were interpreted to have such an effect as suggested by petitioners, it would always violate the actual taxes paid principle.

      . 411 U.S. at 472-473, 93 S.Ct. 1723.

      . Id. at 474, 93 S.Ct. at 1732, citing to FPC v. Hope Natural Gas Co., 320 U.S. 591, 64 S.Ct. 281, 88 L.Ed. 333 (1944).


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    EXPEDITIONS UNLIMITED AQUATIC ENTERPRISES, INC., et al., Appellants, v. SMITHSONIAN INSTITUTE et al.
    No. 73-1297.
    United States Court of Appeals, District of Columbia Circuit.
    Argued April 10, 1974.
    Decided June 26, 1974.
    John J. Pyne, Washington, D. C., for appellants.
    N. Richard Janis, Asst. U. S. Atty., with whom Harold H. Titus, Jr., U. S. Atty., at the time the brief was filed, and John A. Terry, Asst. U. S. Atty., were on the brief, for appellees.
    Before BAZELON, Chief Judge, LEVENTHAL, Circuit Judge, and SOLOMON, United States District Judge for the District of Oregon.

       Sitting by designation pursuant to 28 U.S.C. § 294 (d).

   PER CURIAM:

Expeditions Unlimited Aquatic Enterprises, Inc., and Norman Scott (appellants) filed an action for libel against the Smithsonian Institution, its regents, and Clifford Evans (appellees) on January 8, 1971. On the same day another action between the same parties was filed. On March 12, 1971, appellees filed a motion to dismiss or in the alternative for summary judgment. On December 13, 1971, the parties filed their final briefs and the court took the motion under advisement.

On January 17, 1972, the court entered summary judgment for appellees. Neither the appellants nor the appellees learned of the entry of judgment. While engaged in discovery in the companion case, counsel for the parties periodically discussed whether there had been a decision on the motion in this case. On November 20, 1972, in a conversation with the trial judge’s clerk, counsel for appellants first learned that the order granting summary judgment in favor of appellees had been entered more than ten months earlier.

On December 4, 1972, appellants filed a motion to vacate and re-enter the summary judgment in order to preserve their right to appeal. The appellees did not oppose the motion. Nevertheless, the court denied it without opinion on December 19, 1972. Appellants filed a timely appeal.

Rule 60(b)(6) of the Federal Rules of Civil Procedure allows a district court to relieve a party from a final judgment for “any . . . reason justifying relief from the operation of the judgment.” This section “vests power in courts adequate to enable them to vacate judgments whenever such action is appropriate to accomplish justice.” Klapprott v. United States, 335 U.S. 601, 615, 69 S.Ct. 384, 398, 93 L.Ed. 266 (1949).

Here none of the parties knew of the judgment until ten months after it had been entered. The clerk did not notify the parties of the entry of judgment as required under Rule 77(d) of the Federal Rules of Civil Procedure, nor did the trial judge follow the usual practice of sending the parties copies of the opinion or order granting summary judgment. The motion to vacate and re-enter the judgment was filed only two weeks after appellants learned that the judgment had been entered.

We recognize that Rule 77(d) provides that the failure of the clerk to notify a party of the entry of judgment does not extend the time within which the party may appeal. This rule is intended to preserve the finality of judgments. If the parties do not know of the entry of judgment, the winning party cannot rely on the judgment and the losing party cannot make a “free, calculated, deliberate” choice not to appeal. Ackermann v. United States, 340 U.S. 193, 198, 71 S.Ct. 209, 95 L.Ed. 207 (1950). In these circumstances the purposes behind Rule 77(d) would not be served by denying the losing party the privilege of appealing and, in our view, justice demands that the losing party be given that opportunity.

Although several cases in this circuit have held that a motion to vacate and re-enter a judgment under Rule 60(b) cannot be used to extend the time for appeal, the facts in those cases are distinguishable. In Lord v. Helmandollar, 121 U.S.App.D.C. 168, 348 F.2d 780 (1965), cert. denied, 383 U.S. 928, 86 S.Ct. 929, 15 L.Ed.2d 847 (1966), local counsel received notice of the entry of judgment but out-of-state counsel did not. The negligence of local counsel and not the failure of the clerk or the court resulted in the failure to timely appeal. In Hodgson v. United Mine Workers, 153 U.S.App.D.C. 407, 413, 414, 473 F.2d 118, 124, 125 (1972), appellant moved to vacate the judgment under Rule 60(b) even though he could have sought a thirty-day extension of time to appeal. Fed.R.App.P. 4(a). In each case counsel knew of the entry of judgment in time to perfect an appeal under the Rules.

We believe that a trial court may vacate and re-enter a judgment under Rule 60(b) to allow a timely appeal when neither party had actual notice of the entry of judgment, when the winning party is not prejudiced by the appeal, and when the losing party moves to vacate the judgment within a reasonable time after he learns of its entry. Smith v. Jackson Tool & Die, Inc., 426 F.2d 5 (5th Cir. 1970); 6A Moore’s Federal Practice ¶ 60.03[9] (2nd ed. 1971). A reasonable time might be judged by the thirty-day period in which a party must file a notice of appeal under Rule 4(a) of the Federal Rules of Appellate Procedure.

The order of the district court denying appellants’ motion to vacate is reversed.

      . In Weedon v. Garlen, 136 U.S.App.D.C. 1, 419 F.2d 303 (1969), appellant moved on September 12, 1967, to vacate a default judgment entered seven years earlier. This motion was denied on November 17, 1967, but none of the parties received notice of the order denying the motion. On January 19, 1968, appellant learned of the order. He filed a motion to vacate on January 24. The motion was denied on February 13. On March 18, he filed a notice of appeal from the order of February 13. He did not seek a thirty-day extension of time within which to appeal. Fed.R.Civ.P. 73(a) (1968) ; see Fed.R.App.P. 4(a). Since the notice of appeal was filed more than thirty days after the entry of the order from which the appeal was taken, this court did not have jurisdiction over the appeal. Randolph v. Randolph, 91 U.S.App.D.C. 170, 198 F.2d 956 (1952). The comments on the use of Rule 60(b) to preserve the right to appeal are therefore dicta.


text:
    Marcy SCHUCK, Individually and on behalf of her infant son, et al., Appellants, v. Earl L. BUTZ, Secretary of Agriculture.
    No. 72-1973.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Oct. 25, 1973.
    Decided July 25, 1974.
    Rehearing Denied Aug. 23, 1974.
    Alan B. Morrison, Washington, D.C., with whom Peter H. Schuck, Washington, D.C., was on the brief, for appellants.
    James F. McMullin, Asst. U.S. Atty., for appellee. Harold H. Titus, Jr., U.S. Atty. at the time the brief was filed, John A. Terry, Robert S. Rankin, Jr., and Gregory C. Brady, Asst. U.S. Attys., were on the brief for appellee. Garey G. Stark, Asst. U.S. Atty., entered an appearance for appellee.
    Before BAZELON, Chief Judge, and McGOWAN and MacKINNON, Circuit Judges.
   PER CURIAM:

On February 9, 1972, appellants filed a petition with the Secretary of Agriculture, pursuant to 7 C.F.R. § 1.28, asking him to impose an immediate ban on the addition of sodium nitrates and sodium nitrites (hereinafter referred to as nitrites) to meat products. Appellants further requested that the Secretary appoint a panel of “distinguished scientists” to determine the usefulness of nitrites in preventing botulism in meat products.

On March 16, 1972, Assistant Secretary Richard Lyng responded to the petition in a letter which stated that the Department would not immediately prohibit all use of nitrites in meat. He asserted that there was no convincing evidence that the addition of nitrites to meat would result in an “adulterated” product. He also pointed to evidence that the addition of nitrites may reduce the dangers of botulism in meat products, and suggested that a ban on nitrites would eliminate this benefit, perhaps unnecessarily. The letter concluded :

A research effort to develop more information on nitrite is being carried out by the American Meat Institute Foundation representing principal members of the meat industry. The U.S. Department of Agriculture and the Food and Drug Administration are cooperating in that effort.
We recognize the extreme importance and the seriousness of the problem at hand and are giving it priority attention. We believe that any action we take must be based on sound, scientific knowledge.

On May 3, 1972, appellants filed a complaint in the District Court, requesting “an order directing the defendant to repeal that portion of Regulations 318.-7[(c)](4) which authorizes the use of nitrites in meat products . . . ” The Department responded with a Statement of Reasons in which it said that the petition was denied because there was “no convincing evidence presented' which indicated that the use of sodium nitrite or sodium nitrate, within the limits specified by the regulations, would result in a product that is hazardous to human health.” The Department offered studies in support of its position and responded to particular points and authorities raised in appellants’ petition. The Statement of Reasons, including the studies and the responses to particular points raised by appellants, formed the basis for the Department’s motion for summary judgment. A cross-motion for summary judgment was filed by appellants and, after a hearing, summary judgment was granted in favor of the Department.

On appeal, appellants have recognized for the first time that the relief sought by them at the administrative and trial court levels, namely, a ban on nitrites, is legally available only through a rule-making' proceeding, held in accordance with 5 U.S.C. § 553 and 7 C.F. R. § 1.27, to repeal the departmental regulation that permits the addition of nitrites to fix color. Appellants have accordingly modified their request for relief “to ask only that the Secretary be required to hold a rule making proceeding under the Administrative Procedure Act . . . and his own regulations with regard to the matters raised in the petition.”

Appellants’ petition for a ban focused the Department’s response on the ultimate validity of the rule permitting use of nitrites to fix color. Thus, the Department asserted in its Statement of Reasons that the petition did not present “the sound, scientific, and convincing evidence needed to make a final determination.” A petition for rule making, involving public inquiry into the issues, may raise different questions and elicit different responses than a request for a final determination that the rule must be changed. The Department has not been asked to consider the advisability of a rule-making proceeding, and neither the Department’s decision nor the administrative record has been shaped by reference to such a request. The Department, rather than this court, must be given the first opportunity to evaluate the need for a rule-making proceeding. See McKart v. United States, 395 U.S. 185, 195, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969); Unemployment Compensation Commission v. Aragon, 329 U.S. 143, 155, 67 S.Ct. 245, 91 L.Ed. 136 (1946).

Without passing on the sufficiency of the present record to support either a decision permitting the use of nitrites or a denial of a petition for rule making, we note that the Department itself has recognized that the use of nitrites raises questions deserving of intensive study. Should appellants file a petition for rule making, new data from the Department’s studies and the additional information appellants claim to have recently obtained will place the Department in a better position now to determine whether a rule making proceeding is desirable and, if it decides that rule making is not warranted, to develop a record relevant to such a decision.

We therefore affirm the grant of summary judgment, a disposition that leaves appellants free to petition the Secretary for a rule making proceeding on the possible repeal of 7 C.F.R. § 318.7 (c)(4).

It is so ordered.

      . Appellants also requested that all meat products containing nitrites be labeled accordingly. Eight days prior to the petition, the U. S. Department of Agriculture had published a proposed rule requiring such labeling. 37 Fed.Reg.No. 25, at 6. This request was therefore not pursued.

      . 21 U.S.C. § 601(m) (1) states that a product is adulterated “if it bears or contains any poisonous or deleterious substance which may render it injurious to health. ...”

      . Paragraph 4 of the letter noted the creation, within the government, of “a panel of distinguished scientists” to continue earlier government studies of the problem.

      . 9 C.F.R. § 318.7(c) (4). Appellants inadvertently cited the regulation as 318.7 (a) (4).

      . The Statement further noted that “although sodium nitrite was not specifically authorized as an additive to prevent the development of Clostridium Botulinum, it did not seem appropriate to the Department to ban its use when presently available evidence indicated its possible usefulness in preventing botulism and there was a lack of evidence demonstrating that . . . [it] would be dangerous to human health.”

      . We do note, however, the Department’s apparent acceptance, on appeal, of appellant’s assertions that possible beneficial effects are not relevant to a determination whether a product is adulterated, and that the proper standard of proof is whether there is convincing evidence that the product “contains any poisonous or deleterious substance which may render it injurious to health.” 21 U.S. C. § 601 (m) (1) (emphasis added).


text:
    INDEPENDENT BANKERS ASSOCIATION OF AMERICA, and Western Independent Bankers, Appellants, v. BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM.
    No. 73-1420.
    United States Court of Appeals, District of Columbia Circuit.
    Argued June 4, 1974.
    Decided June 28, 1974.

      Peter B. Work, Washington, D.C., with whom James F. Bell, Washington, D.C., was on the brief, for appellants.
    Regina C. McGranery, Asst. U. S. Atty., with whom Harold H. Titus, Jr., U. S. Atty. at the time the brief was filed, John A. Terry and Robert M. Wer-dig, Jr., Asst. U. S. Attys., were on the brief, for appellee. Earl J. Silbert, U. S. Atty., also entered an appearance for ap-pellee.
    Before BAZELON, Chief Judge, and TAMM and LEVENTHAL, Circuit Judges.
   PER CURIAM:

At issue in this case is the validity of Regulation J, adopted by the Board of Governors of the Federal Reserve System on June 21, 1972. This new rule required that all checks cleared through the Federal Reserve System be paid immediately, and it applied to all users of the System’s check cashing service, whether or not members of the System. Prior to this action, only checks cashed by banks within the forty-six cities in which the Federal Reserve has offices were collectible at once. This arrangement gave “country” banks a float, in essence an interest free loan during the period between when the checks were presented by the Federal Reserve for payment and when they were finally collected from the bank. The elimination of that float, which amounts to $2 billion per day nationwide, Joint Appendix 98, prompts this protest of the Inde-pent Bankers, who claim that the action of the Board of Governors in approving Regulation J arbitrarily discriminates against nonmember banks.

The Board of Governors asserts that this court has no authority to review its action in adopting Regulation J, as the establishment and operation of the check clearing apparatus has been committed by Congress wholly to its discretion. We follow Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), however, in requiring that non-reviewability must be established by a clear showing of Congressional intent to preclude review. The use of permissive language, “may” in this case, is not sufficient. Environmental Defense Fund, Inc. v. Hardin, 138 U.S.App.D.C. 391, 396, 428 F.2d 1093, 1098 (1970). We have therefore treated the rule as reviewable under the standard laid down in 5 U.S.C. § 551.

The Federal Reserve Board was authorized by Congress and has undertaken to provide a national check clearing service available to both member and nonmember banks. 12 U.S.C. § 347. Having done so, it is under a responsibility to nonmember banks not to unreasonably jeopardize or prejudice their operations by alterations in the way the service is administered. That nonmembers can choose not to use this service if they wish does not relieve the Board of this obligation, particularly as there remains no comparable alternative in terms of speed and efficiency.

Having said this, however, we find that the Federal Reserve Board did adequately take into account the impact of its actions on nonmember banks. After announcing its proposal that immediate payment be made universal in the interests of accommodating the long term needs of the system, the Board reviewed letters from both member and nonmember banks concerning the impact which such a move would have on their financial condition. On the basis of these submissions, the Board concluded that “there would be only rare instances, if any, in which a bank’s ability to serve its community would be substantially impaired.” Joint Appendix 104. Nor did the Board stop there. It authorized the Federal Reserve to make loans to nonmember banks which might be affected by the action “on substantially the same terms as such funds would be made available to member banks .” Joint Appendix 106. The Independent Bankers complain that nonmember banks were not treated fairly, as they were not granted other concessions which were made to member banks, such as a lowering of reserve limits. Quite aside from the fact that the Federal Reserve has no power to lower the reserve requirements of nonmember banks, which are established by state law, we do not see the duty of the Board as requiring treatment of nonmember banks which is in all respects identical to that accorded member banks.

For these reasons, we conclude that the Board of Governor’s action in promulgating Regulation J was not arbitrary and capricious nor an abuse of discretion, and the District Court’s order granting summary judgment to defendant-appellee is hereby affirmed.


author: SOLOMON, District Judge:

text:
    INTERCOUNTY CONSTRUCTION CORPORATION and Hartford Accident & Indemnity Company v. Noah C. A. WALTER, Deputy Commissioner, U. S. Department of Labor, and Bureau of Employees Compensation, Appellants, Mary Jones, Intervenor.
    No. 73-1569.
    United States Court of Appeals, District of Columbia Circuit.
    Argued April 15, 1974.
    Decided July 3, 1974.

      Leavenworth Colby, Sp. Asst. Atty. Gen., U. S. Dept, of Justice, with whom George M. Lilly, Atty., U. S. Dept, of Labor, was on the brief, for appellant. Harold H. Titus, Jr., U. S. Atty. at the time the record was filed and Ellen Lee Park, Asst. U. S. Atty., also entered appearances for appellant.
    John C. Duncan, III, Washington, D. C., for appellees.
    Maurice C. Goodpasture, Arlington, Va., was on the brief for intervenor.
    Before LEVENTHAL and ROBB, Circuit Judges, and SOLOMON, United States Senior District Judge for the District of Oregon.

       Sitting by designation pursuant to 28 U.S.C. § 294(d).

   SOLOMON, District Judge:

The issue presented in this appeal is whether an injured workman who filed a timely compensation claim and whose employer paid compensation without awaiting an award is barred by Section 22 of the Longshoremen’s and Harbor-workers’ Act (Act), 33 U.S.C. § 922, from seeking additional compensation because he did not file a second claim within one year after his employer stopped paying compensation.

Charles E. Jones (claimant) was injured on July 19, 1960, while working for Intercounty Construction Corporation (employer) in the District of Columbia. On August 12, 1960, he filed a claim for permanent disability under the District of Columbia Compensation Act, 45 Stat. 600, 36 D.C.Code 36 — 501, with the deputy commissioner of the Bureau of Employee Compensation of the Department of Labor. The claim was filed within the period permitted by Section 13 of the Act. The employer’s insurance carrier, Hartford Accident & Indemnity Company (carrier), filed an answer on August 25, 1960, admitting that claimant was injured in the course of his employment but denying that he was permanently disabled to the extent stated in his claim. The carrier also filed a notice that it had started to pay compensation without awaiting an award by the deputy commissioner, a procedure required by Section 14(a) of the Act when liability is not controverted. The claimant was paid $54.00 per week, the amount payable for total disability.

On January 6, 1965, the carrier filed a notice that it was controverting Jones’ claim on the grounds of wages, extent of disability, and unauthorized medical care. On April 27, 1965, the carrier informed the deputy commissioner that it was reducing claimant’s compensation to $27.00 per week, the rate for 50 per cent temporary partial disability. On June 1, 1965, the deputy commissioner notified the claimant that if he wanted to contest the reduction in payments he should see an attorney. On August 26, 1966, a claims examiner held a hearing at which claimant was present. The conference was adjourned without any recommendation on claimant’s renewed claim for total disability benefits.

On January 23, 1968, the carrier stopped paying compensation because it had paid claimant $17,280.00, its maximum liability for any condition other than total permanent disability. On February 11, 1970, claimant requested a hearing on his claim for total permanent disability. Hearings were held on December 21, 1970, and January 14, 1971. On May 24, 1971, Deputy Commissioner Walter entered an order rejecting the claim because the request for a hearing was made more than one year after the carrier’s final payment. He held that the claim was barred by Section 22 of the Act, 33 U.S.C. § 922.

Claimant filed an action in the district court to challenge the decision. Shortly thereafter, the Bureau of Employee Compensation concluded that the deputy commissioner’s decision was incorrect and agreed to a consent decree remanding the case to the deputy commissioner for further proceedings. On February 8, 1972, the deputy commissioner entered an order awarding claimant compensation for permanent total disability.

Both the employer and the carrier brought this action under 33 U.S.C. § 921(b) to enjoin the deputy commissioner from enforcing the order. The district court granted summary judgment against the deputy commissioner. It held that the claim was barred by Section 22 of the Act. The court relied on Strachan Shipping Co. v. Hollis, 460 F.2d 1108 (5th Cir. 1972), cert. denied, sub nom. Lewis v. Strachan Shipping Co., 409 U.S. 887, 93 S.Ct. 114, 34 L.Ed.2d 144 (1972).

The carrier did not request a hearing before the deputy commissioner during the lengthy administrative proceedings, nor did it ask the deputy commissioner to enter a final compensation order. No compensation order was entered prior to Deputy Commissioner Walter’s order of May 24, 1971, which was superseded by his order of February 8,1972.

Deputy Commissioner Walter appealed. Mary Jones, guardian of the incompetent claimant, intervened.

The basic time limitations on the filing of claims are embodied in Section 13 of the Act, which requires filing within a year after injury or after the last payment of compensation, if compensation has been paid without an award. A further time limitation on action by the deputy commissioner is contained in Section 22, which provides:

Modification of Awards
Upon his own initiative, or upon the application of any party in interest, on the ground of a change in conditions or because of a mistake in a determination of fact by the deputy commissioner, the deputy commissioner may, at any time prior to one year after the date of the last payment of compensation, whether or not a compensation order has been issued, or at any time prior to one year after the rejection of a claim, review a compensation case in accordance with the procedure prescribed in respect of claims in section 919 of this title, and in accordance with such section issue a new compensation order. . Such new order shall not affect any compensation previously paid

The parties, like the Fifth Circuit in Strachan Shipping, have focused the issue almost exclusively on Section 22. We will consider the interpretation of Section 22, taking into account its purpose and legislative history. Nevertheless, we think it is important to stress the bearing of Section 13 on that interpretation, and to note that the claim of the injured employee was filed within one year of his injury as prescribed by Section 13. The issue for the court is not merely the meaning of Section 22 taken by itself, but the proper relationship of Sections 13 and 22 as elements of a sensible and coherent pattern of the statute as a whole.

The carrier contends that the order of February 8, 1972, was barred by the “plain language” of Section 22 because claimant did not request additional compensation until more than one year after the carrier stopped making compensation payments. The deputy commissioner contends that the time limitation in Section 22 applies only to the modification of a final order and does not affect his authority to issue an original order for a claim filed within the time permitted by Section 13.

The deputy commissioner’s interpretation of Section 22 as applying only to a modification of a compensation order and not as an additional time limitation on the original filing of a claim is supported by the section’s statutory title, “Modification of Awards”, and by its reference to an order issued under the section as a “new compensation order”.. These clauses indicate that the section applies to eases in which a compensation order has already been entered. Similarly, the inclusion of “a mistake in a determination of fact by the deputy commissioner” as a ground for modification of an award implies that a prior compensation order has been entered, since findings of fact are required only in compensation orders. See 20 C.F.R. §§ 31.12, 31.13 (1972).

Nevertheless, there is language in Section 22 which is directed to a situation in which no prior final order has been entered. The section provides that the deputy commissioner may review a case “at any time prior to one year after the date of the last payment of compensation, whether or not a compensation order has been issued . . . . ” This passage could mean that Section 22 applies even if no compensation order has been entered, or that it applies regardless of whether an order has been entered as of “the date of the last payment of compensation”. The reference to “a change in conditions” as a ground for modification of an award is also ambiguous. It could refer to conditions found by the deputy commissioner to exist in a prior compensation order, or it could mean conditions which . existed when payments were made without awaiting an order.

Since the language of Section 22 is ambiguous, we must look to other sources to determine whether Congress intended the time limitation in Section 22 to apply to cases in which no final order was. made.

Section 22, as enacted in 1927, permitted the deputy commissioner to review an order “at any time during the term of an award and after the compensation order in respect of such award has become final . . . . ” Act of Mar. 4, 1927, c. 509, § 22, 44 Stat. 1437. Because of administrative delays and the Act’s emphasis on voluntary compliance, carriers often not only paid compensation but also completed making payments before an order was entered. The deputy commissioner was unable to change the amount due the claimant because the “term of the award” had expired with the last payment by the carrier. United States Employees’ Compensation Commission, Seventeenth Annual Report, at 18 (1933); Mille v. McManigal, 69 F.2d 644 (2d Cir. 1934); F. Jarka Co., Inc. v. Monahan, 29 F.2d 741 (D.Mass.1928).

In its Seventeenth Annual Report, the United States Employees’ Compensation Commission complained that “Section 22 of the Longshoremen’s Act provides [the deputy commissioner] with less authority to do justice to the parties than is contained in any provision for a similar purpose in any State compensation law.” Swpra at 18. The Commission recommended that Section 22 be amended to read as follows:

Sec. 22 Upon his own initiative, or upon the application of any party in interest, on the ground of a change in conditions, the deputy commissioner may at any time review a compensation order . . . [and] issue a new compensation order . . . ■ , but such new order shall not affect any compensation paid or due under authority of the prior order. The power and jurisdiction of the deputy commissioner over each case shall be continuing, with authority, and after a hearing if applied for, to make such modification or change by a new compensation order whenever he may determine the interests of justice require a modification of an order formerly issued. Supra at 18.

The Commission’s reference to a “new order”, “the prior order”, and “modification of an order formerly issued” indicates that the Commission did not recommend that Section 22 be amended to apply to cases in which no final order had been entered.

In 1934, Congress amended Section 22 “to broaden the grounds on which a deputy commissioner can modify an award and also while strictly limiting the period, extend the time within which such modification may be made.” H.R. Rep. No. 1244, 73d Cong., 2d Sess., April 16, 1934, at 4. The amendment was “in line with the recommendation of the Commission except that it limits to 1 year after the date of the last payment of compensation the time during which such modification may be made.” Id. The amendment deleted the original time limitation and substituted “at any time prior to one year after the date of the last payment of compensation, whether or not a compensation order has been issued.” The phrase “whether or not a compensation order has been issued” was intended to make clear that the deputy commissioner has the authority to modify awards, within the prescribed period, even in cases in which the original compensation order was issued after all payments have been made to the claimant. The amendment did not change the purpose of the section, which, according to the House Report, was to allow deputy commissioners to “modify an award”.

In 1938, Section 22 was amended to permit the deputy commissioner to make an award in a case in which he had originally rejected the claim. Act of June 25, 1938, c. 685, § 10, 52 Stat. 1167. The House Report said that “[t]he purpose of this amendment is to extend to such cases the same provisions which now apply in connection with other cases finally acted upon by the deputy commissioner.” (emphasis supplied) H.R. Rep.No.1945, 75th Cong., 3d Sess., March 14, 1938, at 9.

In our view, the legislative history shows that Congress intended Section 22 to apply only to cases in which the deputy commissioner had “finally acted” by issuing or denying a compensation order. The amendment was not intended to impose an additional time barrier to recovery by claimants who filed within the time permitted by Section 13, and were still awaiting an order on the filed application.

The Fifth Circuit came to the opposite conclusion. A divided panel of that court held in Strachan Shipping Co. v. Hollis, supra, that Section 22 barred timely filed claims which were not refiled within one year after the last payment of compensation, even when no compensation order had been entered. The court did not discuss the legislative history and relied on the “plain language of Section 22”. The Strachan majority said that:

It would not be equitable, in our opinion, for courts to approve the deputy commissioner’s vigorous efforts to secure voluntary compliance with the Act on the part of employers and their insurers while simultaneously approving the deputy commissioner’s refusal to terminate compensation cases, by means of formal orders as envisioned in Section 22 of the Act, when voluntary payments are made.
It may well be that our decision . will make it difficult for injured employees to obtain adequate compensation commensurate with the full extent of their physical disabilities. Should that eventuality occur, it would be for Congress either to lengthen Section 22’s limitations period or to provide other means to postpone the running of the statute of limitations. 460 F.2d at 1116.

We reject the reasoning of the Fifth Circuit. A carrier at any time can compel the deputy commissioner to hold a hearing on a pending claim and determine its liability within twenty days after the hearing. See 33 U.S.C. § 919(c); 5 U.S.C. § 706(1); cf. Atlantic & Gulf Stevedores, Inc. v. Donovan, 274 F.2d 794 (5th Cir. 1960). There is no inequity in continuing pending claims when the carrier can compel a prompt determination.

Here the carrier did not ask for either a formal hearing or the entry of a compensation order, even though such an order would have started the one-year period in which modifications are permitted by Section 22.

The Strachan majority did not follow a long-standing and rational interpretation of the Act by the agency charged with the administration of the Act. The regulation issued under Section 22, promulgated on May 31, 1938, interprets Section 22 as affecting only those cases in which a final order was entered; it does not refer to cases in which an order was not issued. We are unwilling to join the Fifth Circuit in setting aside an agency interpretation that has stood for more than 35 years. See Ainsworth, J., concurring and dissenting in Strachan, supra at 1117; see also Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965).

A timely filed claim remains pending until a compensation order is entered by the deputy commissioner. See Lumber Mutual Casualty Ins. Co. of N.Y. v. Locke, 60 F.2d 35 (2d Cir. 1932); American Mutual Liability Ins. Co. of Boston v. Lowe, 85 F.2d 625 (3d Cir. 1936). Appellant argues that a claim is analogous to a complaint filed under the Federal Rules of Civil Procedure, which remains pending until disposed of by an order of court. We think the analogy has merit. It would be anomalous to require an injured workman to refile a claim in order to preserve his right to compensation when a plaintiff in a civil action does not have to refile his complaint in order to preserve his action. We also believe that such a requirement would contradict the statutory command that the deputy commissioner shall not be bound by “technical or formal rules of procedure” in proceedings under the Act. 33 U.S.C. § 923(a).

The Fifth Circuit’s holding bars timely filed unadjudicated claims unless claimants file new claims within one year after their carriers stop paying compensation. Carriers may find it to their advantage to stop payments frequently in the hope that claimants not familiar with the agency’s regulations would neglect to file another claim.

The Longshoremen’s and Harborwork-ers’ Act “must be liberally construed in conformance with its purpose, and in a way which avoids harsh and incongruous results.” Voris v. Eikel, 346 U.S. 328, 333, 74 S.Ct. 88, 92, 98 L.Ed. 5 (1953); see B & P Steamboat Co. v. Norton, 284 U.S. 408, 52 S.Ct. 18, 76 L.Ed. 366 (1932). It would be harsh and incongruous to force a claimant to refile an unadjudi-cated claim each time his carrier terminated payments to avoid having his right to compensation permanently barred.

We hold that Section 22 applies only to cases in which a final compensation order has been entered or denied. A claimant in order to preserve his claim, is not required by Section 22 to refile his timely filed but unadjudicated claim after a carrier stops paying compensation.

All parties agree that appellees are liable for claimant’s medical expenses.

The judgment of the district court is reversed. The case is remanded for further proceedings consistent with this opinion.

      . The District of Columbia Compensation Act incorporates by reference the Longshoremen’s and Harborworkers’ Act, 33 U. S.C. § 901 et seq., as amended. The deputy commissioners of the Bureau of Employee Compensation of the Department of Labor administer both acts.

      . Section 13(a) provides:

        Time for filing of claims

      Sec. 13. (a) The right to compensation for disability under this chapter shall be barred unless a claim therefor is filed within one year after the injury, . . . except that if payment of compensation has been made without an award on account of such injury or death a claim may be filed within one year after the date of the last payment.

      . The term “carrier” shall include “employer” because in this case the interests of the carrier and the employer are identical.

      . Section 14(a) provides:
      (a) Compensation under this chapter shall be paid periodically, promptly, and directly to the person entitled thereto, without an award, except where liability to pay compensation is controverted by the employer.

      . The change from total permanent to temporary partial disability limited the carrier’s liability. Under the Act the maximum payable for partial disability was $17,280.00. 33 U.S.C. § 914(m) (1960). There is no maximum liability for total permanent disability.

      . Neither the employer nor the carrier were parties to the district court action and neither consented to the remand.

      . An “award” is a payment made under a compensation order. 33 TJ.S.C. § 919(e) (1972).

      . The regulation refers only to “application [s] . . . for modification of an award”. 20 C.F.K. § 31.16(a) (1972).

      . Appellees cite Lowe for the proposition that the one-year limitation in Section 22 applies regardless of whether a compensation order has been issued. The Lowe court said in dicta that a claim would be barred by Section 22, as amended in 1934, “if we assume that the memorandum . . . was a final order within the terms of the statute”. The court did not say that the claim would be barred if no final order had been entered.

      . See letter from John E. Stocker, Assistant Director of the Office of Longshoremen’s and Harborworkers’ Compensation, to Leavenworth Colby, August 6, 1971, appended to the opinion of Ainsworth, J., concurring in part and dissenting in part in Stra-chan, supra at 1117.
      In Strachan the carrier stopped paying compensation four times and stopped paying medical benefits twice during a fourteen-year period. Although the repeated termination of benefits in Straohan may not be typical, it does show that claimants may be forced to refile claims repeatedly if each termination starts the limitations period to run.