694 F.2d 258 (D.C. Cir. 1982), 81-2171, United States v. Hill

Docket Nº:81-2171, 82-1204 and 82-1205.
Citation:694 F.2d 258
Party Name:UNITED STATES of America v. Andrew E. HILL and J.E. Pinkerton, Appellants. UNITED STATES of America v. Dennis JUREN, Appellant. UNITED STATES of America v. Edward W. CROMEY, Appellant.
Case Date:November 09, 1982
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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Page 258

694 F.2d 258 (D.C. Cir. 1982)

UNITED STATES of America

v.

Andrew E. HILL and J.E. Pinkerton, Appellants.

UNITED STATES of America

v.

Dennis JUREN, Appellant.

UNITED STATES of America

v.

Edward W. CROMEY, Appellant.

Nos. 81-2171, 82-1204 and 82-1205.

United States Court of Appeals, District of Columbia Circuit

November 9, 1982

John D. Taurman, Washington, D.C., was on the petition for rehearing and suggestion for rehearing en banc for appellants in No. 81-2171.

Robert E. Montgomery, Jr. and Peter Buscemi, Washington, D.C., were on the petition for rehearing and suggestion for rehearing en banc for appellant in No. 82-1204.

William E. Nelson and Sherlee S. Nelson, Washington, D.C., were on the petition for rehearing and suggestion for rehearing en banc for appellant in No. 82-1205.

Stanley S. Harris, U.S. Atty., David L. Anderson, and Charles L. Cope, Attys., Dept. of Energy, Washington, D.C., were on the response to the petition for rehearing and suggestion for rehearing en banc for appellees.

Page 259

Before WALD and EDWARDS, Circuit Judges, and WILLIAM J. JAMESON, [*] United States District Judge for the District of Montana.

Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.

On Petition for Rehearing

HARRY T. EDWARDS, Circuit Judge:

These three appeals involve challenges to District Court orders enforcing investigatory subpoenas issued by the Department of Energy ("DOE"). Because the appellants present a common question concerning the jurisdiction of the District Court, we resolve all three appeals in this opinion. For the reasons set forth below, we hold that section 645 of the Department of Energy Organization Act ("DOEOA"), 42 U.S.C. Sec. 7255 (Supp. IV 1980), does not confer on the District Court subject matter jurisdiction or the power of extraterritorial service of process in DOE subpoena enforcement proceedings and, accordingly, that the District Court lacked jurisdiction to enforce the subpoenas issued to the appellants.

I. BACKGROUND

Each of these cases stems from an investigation of industry compliance with the DOE's Mandatory Petroleum Price and Allocation Regulations, 10 C.F.R. pts. 205, 210-12 (1982). Andrew E. Hill and J.E. Pinkerton, appellants in No. 81-2171, are officers of the Hill Petroleum Company, a Texas corporation. On May 11, 1981, the DOE issued subpoenas ad testificandum directing Hill and Pinkerton to appear at the DOE office in Houston, Texas and to testify concerning "purchases, sales, exchanges and processing of crude oil and the purchase and sale of its refined product[s]" by Hill Petroleum Company and Goldberg Refining, Ltd. When Hill and Pinkerton declined to comply with the subpoenas, the Government sought enforcement in the District Court for the District of Columbia, which effected extraterritorial service of process. The Government alleged that the District Court had jurisdiction to enforce the subpoenas under section 645 of the DOEOA, 1 section 13(e) of the Federal Energy Administration Act ("FEAA"), 2 and section 206 of the Economic Stabilization Act ("ESA"). 3 The District Court rejected appellants' several attacks on the validity of the subpoenas and ordered their enforcement, basing its jurisdiction solely on section 645 of the DOEOA. United States v. Hill, 525 F.Supp. 621 (D.D.C.1981). 4

Dennis Juren, appellant in No. 82-1204, and Edward W. Cromey, appellant in No. 82-1205, are both officers of the Tesoro Petroleum Company, a Texas corporation. On July 17, 1981, the DOE issued subpoenas ad testificandum directing them to appear at the DOE office in Washington, D.C. and to testify concerning transactions between their company and several other petroleum companies. Juren and Cromey refused to comply, and the Government sought enforcement of the subpoenas in the District Court for the District of Columbia. The court's process was served extraterritorially, and the Government asserted the same jurisdictional grounds as it had in Hill. As in Hill, the District Court rejected appellants' challenges to the subpoenas and ordered their enforcement, again basing its jurisdiction solely on section 645 of the DOEOA. United States v. Juren, Misc. No. 82-15 (D.D.C. Feb. 17, 1982); United States v. Cromey, Misc. No. 82-16 (D.D.C. Feb. 17, 1982); see Transcript of February 16, 1982 Hearing at 41-42, reprinted in Juren Appendix at 21-22.

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The four respondents to the subpoena enforcement actions appealed the three District Court orders to this court, which originally affirmed by order. United States v. Hill, 684 F.2d 1033 (D.C.Cir.1982) (speaking order). The cases are now before the court on appellants' petition for rehearing. This court has jurisdiction to review the final orders of the District Court pursuant to 28 U.S.C. Sec. 1291 (1976). FTC v. Texaco, Inc., 555 F.2d 862, 873 n. 21 (D.C.Cir.) (en banc), cert. denied, 431 U.S. 974, 97 S.Ct. 2940, 53 L.Ed.2d 1072 (1977); see Cobbledick v. United States, 309 U.S. 323, 330, 60 S.Ct. 540, 543, 84 L.Ed. 783 (1940). 5

II. JURISDICTION OF THE DISTRICT COURT

  1. General Principles

    1. Subject Matter Jurisdiction

    We begin our analysis of the District Court's authority to enforce subpoenas issued by the DOE with the accepted premise that federal courts must "scrupulously confine their own jurisdiction to the precise limits which [a federal] statute has defined." Victory Carriers, Inc. v. Law, 404 U.S. 202, 212, 92 S.Ct. 418, 425, 30 L.Ed.2d 383 (1971) (quoting Healy v. Ratta, 292 U.S. 263, 270, 54 S.Ct. 700, 703, 78 L.Ed. 1248 (1934)).

    It is a principle of first importance that the federal courts are courts of limited jurisdiction.... They are empowered to hear only those cases that (1) are within the judicial power ..., and (2) that have been entrusted to them by a jurisdictional grant by the Congress.

    .. The presumption is that a federal court lacks jurisdiction in a particular case until it has been demonstrated that jurisdiction over the subject matter exists.

    13 C. WRIGHT, A. MILLER & E. COOPER, FEDERAL PRACTICE AND PROCEDURE Sec. 3522 (1975) (footnotes omitted). It is clear, moreover,

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    that "[t]he fact that Congress has legislated in a specific area, without more, does not empower a federal court to adjudicate matters arising from or requiring an interpretation of that legislation. Rather, a specific grant of subject matter jurisdiction must exist before a federal tribunal may so act." Murray v. Murray, 621 F.2d 103, 107 (5th Cir.1980). Unless district courts have been accorded subject matter jurisdiction to enforce DOE subpoenas under section 645 of the DOEOA, the trial court was without authority to act as it did in these cases.

    2. Personal Jurisdiction

    Even if the District Court possessed subject matter jurisdiction under section 645 or some other statutory provision, see Part II.D.1. infra, that would not end our inquiry. The court must also have had personal jurisdiction over the appellants to enforce the DOE subpoenas against them. On this latter point, there is no doubt that "[a]part from specific exceptions created by Congress the jurisdiction of the district courts is territorial." Georgia v. Pennsylvania Railroad, 324 U.S. 439, 467, 65 S.Ct. 716, 731, 89 L.Ed. 1051 (1945). Personal jurisdiction in a civil suit implies, among other things, either voluntary appearance by the defendant or valid service of process on him at the place where he may be found. See Robertson v. Railroad Labor Board, 268 U.S. 619, 622, 45 S.Ct. 621, 622, 69 L.Ed. 111 (1925).

    Congress, of course, could authorize suits under federal law in any inferior federal tribunal, id. at 622, 45 S.Ct. at 622; Hanes Supply Co. v. Valley Evaporating Co., 261 F.2d 29, 34 (5th Cir.1958); see U.S. CONST. art. III, Sec. 1, and provide that the process of every district court shall run into every part of the United States, United States v. Union Pacific Railroad, 98 U.S. 569, 604, 25 L.Ed. 143 (1878); Toland v. Sprague, 37 U.S. (12 Pet.) 300, 328, 9 L.Ed. 1093 (1838). But where Congress has not done so, rule 4(f) of the Federal Rules of Civil Procedure normally confines the geographical area in which a district court's process can be served to "the territorial limits of the state in which the district court is held," FED.R.CIV.P. 4(f); service outside the state is permitted only "when authorized by a statute of the United States" or by some other specific provision of the Federal Rules, id.; see Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 444-46, 66 S.Ct. 242, 245-46, 90 L.Ed. 185 (1946). 6

    To assess the propriety of the District Court's exercise of enforcement jurisdiction on the basis of extraterritorial service of process, therefore, we must determine whether Congress has created a "specific exception" to the usual rule. 7 Such exceptions may be created either explicitly 8 or implicitly. In FTC v. Browning, 435 F.2d 96 (D.C.Cir.1970), for example, this court held that the third paragraph of section 9 of the Federal Trade Commission Act ("FTC Act"), 9 impliedly authorized extraterritorial service of process in proceedings to enforce investigative subpoenas issued by the Federal Trade Commission ("FTC" or

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    "Commission"). 10 But if no exception can be found in the statute under which the District Court acted, its service of process on appellants was invalid, and it lacked personal jurisdiction to enforce the DOE's subpoenas. 11

  2. Section 645

    In each of these cases, the District Court relied solely on section 645 of the DOEOA as the statutory basis for both subject matter and personal jurisdiction. That section grants the Secretary of Energy the same power to issue subpoenas as the FTC possesses under section 9 of its enabling legislation. Section 645...

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