Deference, however, is proper only if the agency's interpretation is reasonable. "[A]n agency's interpretation of its own regulations must be given effect `so long as the interpretation sensibly conforms to the purpose and wording of the regulations.'" Southern Cal. Edison Co. v. United States, 226 F.3d 1349, 1356 (Fed. Cir. 2000) (quoting Martin v. Occupational Safety and Health Review Comm'n, 499 U.S. 144, 150, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991)). The Court's deference is particularly appropriate when
Moreover, because technological constraints made it difficult for Commerce to select the most similar model in prior reviews, it is within Commerce's expertise and discretion to update its methodology for both increased accuracy and ease of use. See S. Cal. Edison Co. v. United States, 226 F.3d 1349, 1357 (Fed. Cir. 2000) ("Deference is particularly appropriate when the agency is applying its regulations to a complex or changing circumstance, thus requiring the agency to bring to bear its unique expertise and policy-making prerogatives."). The fact that the model matching task in the original investigation was assigned to the respondents, and not performed by Commerce, supports Commerce's stance that it did not have the technological resources to employ a most similar model matching method when the family method was created.
While "`an agency does not act rationally when it chooses and implements one policy and decides to consider the merits of a potentially inconsistent policy in the very near future,'" Transcom, Inc. v. United States, 24 CIT ___, ___, 123 F. Supp.2d 1372, 1381 (2000) (quoting ITT World Communications, Inc. v. FCC, 725 F.2d 732, 754 (D.C. Cir. 1984)), Commerce, in view of the rapidly-changing world of global trade and Commerce's limited resources, should be able to rely on its "unique expertise and policy-making prerogatives." Southern Cal. Edison Co. v. United States, 226 F.3d 1349, 1357 (Fed. Cir. 2000). "`The power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy. . . .'" Chevron 467 U.S. at 843, 104 S.Ct. 2778 (quoting Morton v. Ruiz, 415 U.S. 199, 231, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974)).
Similarly, "an agency's interpretation of its own regulation[s] is entitled to deference" when the language of the regulation is ambiguous or the regulation is silent about the issue at hand. Christensen v. Harris County, 529 U.S. 576, 588, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) (citing Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997)); Southern Cal. Edison Co. v. United States, 226 F.3d 1349, 1356 (Fed. Cir. 2000) (detailing the test and quoting Martin v. Occupational Safety and Health Review Comm'n, 499 U.S. 144, 151, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991)). When the regulation is not ambiguous, however, to defer to a different agency's position would be to permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation.
Subsequent decisions have reaffirmed this position. See Southern Cal. Edison Co. v. United States, 226 F.3d 1349, 1355-56 (Fed. Cir. 2000); Bowser, Inc. v. United States, 420 F.2d 1057, 1062-63 (Ct.Cl. 1970); Christy Corp. v. United States, 387 F.2d 395, 397-98 (Ct.Cl. 1967); Seaboard Sur. Co. v. United States, 144 Ct. Cl. 686, cert. denied, 359 U.S. 1001 (1959). Section 114 of Title 41 states, in pertinent part:
latory Policies Act of 1978, Pub.L. No. 95-617, 92 Stat. 3117 (codified at 16 U.S.C. §§ 2601 , et seq. (2000); the Energy Policy Act of 1992, Pub.L. No. 102-486, 106 Stat. 2776 (codified at 16 U.S.C. §§ 824, et seq. (2000); the jurisdiction of Federal Energy Regulatory Commission ("FERC"); and the impact of FERC Order No. 888); United States v. City of Fulton, 475 U.S. 657, 659-64 (1986) (discussing the history of the Flood Control Act of 1944, ch. 665, 58 Stat. 887 (codified at 16 U.S.C. § 460d (2000), 33 U.S.C. §§ 701-09 (2000), 43 U.S.C. § 390 (2000)); and the United States Department of Energy, Organization Act of 1977 ("DOE Organization Act"), Pub.L. No. 95-91, 91 Stat. 565 (codified at 42 U.S.C. §§ 7101, et seq. (2000))); Otter Tail Power Co. v. United States, 410 U.S. 366 (1972) (discussing the Federal Power Act of 1935, 49 Stat. 838, and its relationship to federal antitrust laws); Detroit Edison Co. v. FERC, 334 F.3d 48, 50-51 (D.C. Cir. 2003) (discussing FERC Order No. 888); S. Cal. Edison Co. v. United States, 226 F.3d 1349, 1351-54 (Fed. Cir. 2000) (discussing the Boulder Canyon Project Act of 1928, Pub.L. No. 70-642, 45 Stat. 1057 (codified at 43 U.S.C. §§ 617- 617v (2000)) and the Boulder Canyon Project Adjustment Act of 1940, Pub.L. No. 76-756, 54 Stat. 774 (codified at 43 U.S.C. §§ 618- 618p (2000)); United States v . Tex-La Elec. Coop., Inc., 693 F.2d 392, 395-97 (5th Cir. 1982) (also discussing the Flood Control Act of 1944). To understand the context of this contractual dispute, a summary review of the labyrinth of laws enacted by Congress that regulate virtually all aspects of the electric utility industry is required.
Courts do not defer to an agency's "'convenient litigating position' or 'post hoc rationalization advanced' to 'defend past agency action against attack.'" Id. (quoting Christopher, 567 U.S. at 155); see also S. Cal. Edison Co. v. United States, 226 F.3d 1349, 1357 (Fed. Cir. 2000) (noting that affording deference to agency interpretations of contract provisions "could lead the courts to endorse self-serving post-hoc reinterpretations of contracts that an agency might offer in the context of a litigation," especially when the agency is a party to the contract (citing National Fuel Gas Supply v. Federal Energy Reg. Comm'n, 258 U.S. App. D.C. 374, 811 F.2d 1563, 1571 (D.C. Cir. 1987))). No deference is due to the agency's interpretation adopted here in response to Feuer's allegations in the present controversy.
Id. (emphasis added). By contrast, in Southern California Edison Co. v. United States, 226 F.3d 1349 (Fed. Cir. 2000), we explained that the contracts-in-suit did incorporate the terms and conditions of certain regulations by specifically referring to the regulations (the text of which was attached to the contract as an exhibit) "as fully and completely as though set forth herein [i.e., in the contract] in length," id. at 1353. We have also noted that "[o]ne common way to incorporate extrinsic evidence is through an integration clause that expressly incorporates the extrinsic evidence."
A remand order is appealable, however, "when a court determines that an agency's statutory or regulatory interpretation is unreasonable or contrary to law, and remands the matter to the agency to implement the court's alternative interpretation." Southern Cal. Edison Co. v. United States, 226 F.3d 1349, 1355 (Fed. Cir. 2000) (citing Travelstead v. Derwinski, 978 F.2d 1244, 1248-49 (Fed. Cir. 1992)). That is precisely the basis on which the Court of Federal Claims remanded to the Bureau in this case.
We held that when confronted with a question regarding the IRS's interpretation of its own Revenue Procedure that "substantial deference is paid to an agency's interpretations reflected in informal rulings." Id. at 1382-83 (citing Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997); Cleveland Indians Baseball Co., 121 S.Ct. at 1445; So. Calif. Edison Co. v. United States, 226 F.3d 1349, 1356-57 (Fed. Cir. 2000)). In other contexts we have even deferred to the PTO's interpretation of its own regulations.