Atlantic Richfield Company v. FTC, Civ. A. No. 75-H-884.

Decision Date08 July 1975
Docket NumberCiv. A. No. 75-H-884.
Citation398 F. Supp. 1
PartiesATLANTIC RICHFIELD COMPANY, Plaintiff, v. FEDERAL TRADE COMMISSION et al., Defendants.
CourtU.S. District Court — Southern District of Texas

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Michael R. Waller, Childs, Fortenbach, Beck & Guyton, Houston, Tex., for plaintiff.

Robert E. Duncan, Washington, D. C., for defendant Federal Trade Commission.

Robert Craft, Houston, Tex., for defendant Continental Oil Co.

Russell H. Smith, Tulsa, Okl., for defendant Cities Service Co.

Cloy D. Monzingo and Jack L. Brandon, Houston, Tex., for defendant Getty Oil Co.

MEMORANDUM AND OPINION

CARL O. BUE, Jr., District Judge.

I. INTRODUCTION

Plaintiff has filed suit in this Court seeking to enjoin the defendant Federal Trade Commission ("FTC") and defendant members of the Commission from attempting to enforce a subpoena duces tecum issued to plaintiff pursuant to an investigation of the natural gas industry being conducted by the FTC. Plaintiff also seeks to enjoin three other corporations, defendants Getty Oil Company ("Getty"), Continental Oil Company ("Conoco") and Cities Service Company ("Citgo"), from complying with similar FTC subpoenas issued to them which arise out of the same investigation. Plaintiff and the three corporate defendants are joint venturers in "CAGC", a joint venture formed for the purpose of conducting offshore explorations for natural gas and oil.

For the reasons stated herein, the Court concludes that no justiciable case or controversy is presented between plaintiff and the corporate defendants. As to the controversy between plaintiff and the FTC, to the extent that the issues are now ripe for adjudication on the merits, the equities clearly preponderate in favor of the FTC. The plaintiff's motions for preliminary injunction and declaratory relief are therefore denied.

II. FACTS

Plaintiff is a respondent in an adjudicative proceeding1 now pending before an Administrative Law Judge. In the Matter of Exxon Corporation, FTC Docket No. 8934 (July 17, 1973) ("Exxon proceeding"). The proceeding was initiated by the FTC against plaintiff and seven other major oil producing companies in the United States on July 17, 1973. The complaint filed by the FTC alleges violations by the respondents of Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a),2 in that the respondents are allegedly: (1) performing acts or practices which constitute a combination or agreement to monopolize the refining of crude oil into petroleum products; (2) maintaining monopoly power over the refining of crude oil into petroleum products; and (3) restraining trade and maintaining a noncompetitive market structure in the refining of crude oil into petroleum products. The relevant market includes the northeastern, southeastern and southwestern United States. Plaintiff's Complaint for Declaratory and Injunctive Relief at 4 (June 3, 1975).

Subsequent to initiating this adjudicative proceeding, the FTC undertook a study of the conduct, performance and structure of the natural gas industry on April 16, 1974. FTC File 741 0019. The study was commenced at the direction of the Congress, pursuant to P.L. 93-135, in order to supplement an ongoing study previously limited to the petroleum industry and to document the impact of the effects of decisions by government departments and agencies on the price and supply of energy. H.R. No. 93-520, 93rd Cong., 1st Sess. (September 20, 1973). The Congressional mandate authorized an appropriation for the study, and the FTC was directed to report its findings at the earliest practicable time to the Congress. Id. at 24.

On March 13, 1975, the staff conducting the FTC investigation issued subpoenas duces tecum to plaintiff and the three corporate defendants, as joint venturers in CAGC, a sample entity doing business in the energy industry, to require disclosure of the manner in which joint venturers explore for, develop, produce and sell natural gas. Plaintiff moved to quash the subpoenas duces tecum on several grounds on April 11, 1975, but the defendant members of the Commission denied the motion by order of May 12, 1975,3 and established June 9, 1975, as the deadline for compliance with the subpoenas.4 Plaintiff filed suit in this Court on June 3, 1975, to avoid having to comply with its subpoena.

III. JURISDICTION

The Court turns first to the question of subject matter jurisdiction. Plaintiff alleges that jurisdiction is conferred on this Court by 28 U.S.C. §§ 1331, 1337, 1346, 1361, and 5 U.S.C. § 704. The matter in controversy allegedly exceeds the sum of $10,000, and declaratory relief thus is rested upon 28 U.S.C. § 2201. Plaintiff further contends that the action is brought to remedy alleged violations of the Fifth Amendment, the Administrative Procedure Act ("APA"), 5 U.S.C. § 551 et seq., and the Federal Trade Commission Act, 15 U.S.C. § 41 et seq., and its rules of procedure, 16 C.F. R. Parts 0-4 (1975).

As this Court views these contentions, jurisdiction is not proper under 28 U.S.C. § 1346 because the United States is not a party to this action. Furthermore, jurisdiction is not proper under 28 U.S.C. § 1361. That statute confers jurisdiction on courts of the United States outside of the District of Columbia to hear a suit against a federal officer on a writ of mandamus to command him to perform a ministerial duty owed to plaintiff. E. g., Jarrett v. Resor, 426 F.2d 213 (9th Cir. 1970). Section 1361 was not meant to confer authority in the instant situation. Plaintiff points to no "ministerial" duty owed to it, but rather alleges that its own rights before an administrative law judge may conceivably be violated. Prairie Band of Potawatomie Tribe of Indians v. Udall, 355 F.2d 364, 367 (10th Cir. 1966); Davis, Administrative Law Treatise, § 23.10 at 805-06 (1970 Supp.). But cf. Byse and Fiocca, Section 1361 of the Mandamus and Venue Act of 1962 and "Nonstatutory" Judicial Review of Federal Administrative Action, 81 Harv. L.Rev. 308 (1967).

Based on the allegations contained in plaintiff's complaint, Phillips Petroleum Co. v. Texaco, Inc., 415 U.S. 125, 94 S.Ct. 1002, 39 L.Ed.2d 209 (1974), jurisdiction is not proper under 28 U.S.C. § 1337. Plaintiff's allegations relate to defects in procedure which allegedly violate rules and regulations required to be promulgated under the APA. The suit as framed does not arise under the Federal Trade Commission Act, 15 U.S.C. § 45, and jurisdiction therefore cannot rest on 28 U.S.C. § 1337.

Plaintiff's allegations do state a cause of action which arises under the Constitution and laws of the United States. The Court therefore views jurisdiction as proper under 28 U.S.C. § 1331. 13 Wright, Miller & Cooper, Federal Practice and Procedure: Civil § 3562 (1975).5

IV. JUSTICIABILITY: CASE OR CONTROVERSY

This Court's jurisdiction extends only to the adjudication of cases or controversies. In this case, there is a serious question as to whether a proper case or controversy is presented between plaintiff and the three corporate defendants. These defendants were served by the FTC with investigative subpoenas similar to the one issued to plaintiff. Aside from its Fifth Amendment due process contention, plaintiff also objects to the subpoenas on the grounds of irrelevancy, overbreadth and confidentiality of material requested. The Court also notes that the FTC resolution authorizing the instant investigation pursuant to Congressional mandate explicitly recites that any information received during the investigation may be utilized by the FTC to conduct investigations of possible violations of the Clayton Antitrust Act, 15 U.S.C. § 21, and the Federal Trade Commission Act, 15 U.S.C. § 45.

Within the confines of this suit, plaintiff seeks to put distance between itself and the other joint venturers by pointing out their presumably dissimilar positions. Their interests allegedly are adverse to plaintiff's solely because they are not respondents as is plaintiff in the Exxon proceeding, and because their possible compliance with the investigative subpoenas could result in a disclosure of information damaging to plaintiff, since they possess some information which duplicates that which is in plaintiff's files.

The Court concludes that the interests of plaintiff and the corporate defendants in the instant suit are not sufficiently adverse so as to give rise to a justiciable case or controversy. Plaintiff asserts on the one hand that the corporate defendants will comply with the subpoenas issued by the FTC, but plaintiff also has succeeded in gaining stipulations from them whereby they agree to withhold compliance until plaintiff can obtain a ruling from this Court resolving the matters at issue. The three corporate defendants have filed no brief or otherwise indicated any opposition to plaintiff's position. Realistically, their positions cannot be viewed as inconsistent with the arguments advanced by plaintiff to the FTC in April, especially with respect to the contention that the investigative subpoenas are irrelevant, overbroad, or request confidential information. Certainly, compliance with allegedly irrelevant and overbroad subpoenas would prove just as burdensome to Getty, Conoco and Citgo as to plaintiff. Additionally, it simply cannot be assumed that these three joint venturers are more anxious than plaintiff to submit information which may prompt an investigative agency to spearhead further inquiries into possible statutory violations.

In short, this Court concludes, as has the United States Supreme Court in another context, Moore v. Charlotte-Mecklenburg Board of Education, 402 U.S. 47, 91 S.Ct. 1292, 28 L.Ed.2d 590 (1971), that both plaintiff and the corporate defendants seek the same or a similar result from this litigation. There is, therefore, no present case or controversy between them, and for that reason the...

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