465 F.Supp. 913 (E.D.Pa. 1979), Civ. A. 77-3113, Gulf Oil Corp. v. Schlesinger

Docket Nº:Civ. A. 77-3113
Citation:465 F.Supp. 913
Party Name:Gulf Oil Corp. v. Schlesinger
Case Date:January 17, 1979
Court:United States District Courts, 3th Circuit, Eastern District of Pennsylvania

Page 913

465 F.Supp. 913 (E.D.Pa. 1979)



James R. SCHLESINGER et al.

Civ. A. No. 77-3113.

United States District Court, E.D. Pennsylvania.

Jan. 17, 1979

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[Copyrighted Material Omitted]

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Donald B. Craven, Craig D. Miller, Martha C. Brand of Miller & Chevalier, Washington, D. C., John E. Bailey, Catherine C. McCulley, Houston, Tex., Hoyt H. Harmon, Jr., Bala Cynwyd, Pa., for Gulf Oil.

Robert S. Forster, Jr., Asst. U. S. Atty., Philadelphia, Pa., Mark Kreitman, David A. Engels and Thomas Patton, Dept. of Energy, Washington, D. C., for defendants.


JOSEPH S. LORD, III, Chief Judge.

In this action for declaratory and injunctive relief brought by Gulf Oil Corporation ("Gulf") against the Federal Energy Administration ("FEA") and two FEA officials, 1 Gulf is challenging the validity of FEA Ruling 1977-5, as well as that of a Decision and Order and Revised Remedial Order of the FEA, all issued pursuant to the FEA's authority to regulate the price of petroleum.

Ruling 1977-5 2 is an interpretation of the term "transaction" as that term is used in the petroleum price regulations. Those regulations define "transaction" as a "binding contract", 3 a definition originally adopted in 1973 by the Cost of Living Council ("CLC") and carried forward without change by the FEA. The Ruling purports to interpret the "transaction" definition in a manner consistent with the original CLC definition. Gulf, however, arguing that the CLC intended the phrase "binding contract" to apply to variable-price contracts, contends that the Ruling in reality Amended the original "transaction" definition by excluding variable-price contracts from the meaning of "binding contract". This amended definition, Gulf says, was detrimentally and retroactively applied to it by the FEA in the challenged Orders.

Unfortunately, when the CLC issued its regulation defining "transaction" as a "binding contract", it published no contemporaneous statement explaining whether or not the definition was meant to include variable-price contracts. In seeking to fill this administrative vacuum, Gulf noticed the depositions of Ottie Vipperman, a former official of the CLC, the Federal Energy Office ("FEO"), 4 and the FEA, and of William Walker, former General Counsel of the CLC and the FEO and former Acting Deputy Director of the CLC.

The defendants moved for a protective order, claiming that Gulf was not permitted to probe the thought processes of agency decision-makers, and that judicial review in this case is limited to the administrative record developed in connection with the challenged FEA Orders. On November 9, 1978, we denied the defendants' motion for a protective order, and on November 14, 1978, Gulf attempted to depose Mr. Vipperman. Gulf's efforts were largely frustrated by counsel for defendants, who objected to, and instructed Mr. Vipperman not to answer, questions relating to the "transaction" definition and whether or not the CLC had intended the definition to include variable-price contracts. A similar fate befell Gulf when it deposed Mr. Walker on November 16, 1978.

Gulf has now moved for orders compelling discovery and specifically ordering Mr. Vipperman and Mr. Walker to respond to those questions to which defendants objected at the depositions. We have heard oral argument on these motions, and for the following reasons, we will grant them.

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I. Relevance of the CLC regulation outweighs the privilege for the agency decisional process.

When we denied the defendants' motion for a protective order we did not write an accompanying memorandum, assuming it obvious that our denial of the motion indicated our recognition of the fact that no absolute privilege attaches to the administrative decision-making process, and that the matters...

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