Citronelle-Mobile Gathering, Inc. v. Watkins

• Decision Date: 27 June 1991
• Docket Number: Nos. 90-7191,CITRONELLE-MOBILE,90-7375,s. 90-7191
• Citation: 934 F.2d 1180
• Parties: , 33 Soc.Sec.Rep.Ser. 521, Unempl.Ins.Rep. CCH 16184A GATHERING, INC., Citmoco Services, Inc., Plaintiffs-Counterclaim-Defendants, Bart B. Chamberlain, Jr., Plaintiff-Counterclaim-Defendant-Appellant, v. James D. WATKINS, etc., et al., Defendants-Appellees, United States of America, Defendant-Counterclaim-Plaintiff-Appellee, Douglas Oil Purchasing Company, Inc., Counterclaim-Defendant-Appellant (two cases).
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1180

934 F.2d 1180

20 Fed.R.Serv.3d 284, 33 Soc.Sec.Rep.Ser. 521,

Unempl.Ins.Rep. CCH 16184A

CITRONELLE-MOBILE GATHERING, INC., Citmoco Services, Inc. Plaintiffs-Counterclaim-Defendants Bart B. Chamberlain, Jr., Plaintiff-Counterclaim-Defendant-Appellant, v. James D. WATKINS, etc., et al., Defendants-Appellees United States of America, Defendant-Counterclaim-Plaintiff-Appellee Douglas Oil Purchasing Company, Inc., Counterclaim-Defendant-Appellant (two cases).

Nos. 90-7191, 90-7375.

United States Court of Appeals, Eleventh Circuit.

June 27, 1991.

Victor T. Hudson, William W. Watts, Reams, Vollmer, Philips, Killion, Brooks & Schell, P.C., Mobile, Ala., for appellants.

Bart B. Chamberlain, Jr., pro se.

Gilbert T. Renaut, Office of Chief Counsel for Enforcement, Economic Regulatory Admin., Dept. of Energy--RG-33, Washington, D.C., for Dept. of Energy.

Ruth A. Harvey, U.S. Dept. of Justice, Washington, D.C., J.B. Sessions, U.S. Atty., Mobile, Ala. for U.S.

William Gray Schaffer, Preston Gates Ellis & Rouvelas, Meeds, Washington, D.C., for Intevenors Howard Pack and Susan Rosenkranz.

Appeal from the United States District Court for the Southern District of Alabama.

Before KRAVITCH and ANDERSON, Circuit Judges, and LYNNE ^*, Senior District Judge.

LYNNE, Senior District Judge:

This appeal considers issues raised in two separate actions, 90-7191, and 90-7375, resulting from the entering of two orders by the District Court for the Southern District of Alabama. The first order appealed from established a permanent receivership over appellants' assets and the second allowed garnishment of one of the bank accounts of the individual appellant. Since each of the cases arises from the same set of facts, the issues on appeal are considered together. Appellants' consolidated appeal asks this court to determine its jurisdiction and then to review four decisions of the district court: (1) whether this court rather than the Temporary Emergency Court of Appeals, properly has jurisdiction over this appeal; (2) whether the district court-appointed receiver may reach appellants' assets located abroad; (3) whether the court's appointment of the receiver was proper as a procedural matter; (4) whether the court's appointment of the receiver was proper regarding the substance of the powers granted him; and (5) whether the district court erred in allowing the garnishment of certain funds held in a bank account in the name of appellant Chamberlain. We find that this court has jurisdiction over this appeal, and we affirm each decision of the district court.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Between December of 1973 and April of 1974, during the Arab oil embargo, Bart B. Chamberlain, one of the appellants in this case, agreed to sell nearly a million barrels of crude oil consisting of four separate shipments to one "PETCO," the wholly-owned Bahamian subsidiary of an American corporation, "NEPCO," for $13 and $14 per barrel at a time when price controls would have set a maximum price for this oil at $4.10 to $5.10 per barrel. Export license regulations established by the Department of Commerce in response to the embargo, 15 C.F.R. Sec. 377.6(b)(i), required Chamberlain's companies, appellants Citronelle-Mobile Gathering, Inc. ("Citronelle"), 90% owned by Chamberlain, and Citmoco-Mobile Services, Inc. ("Citmoco"), 87.5% owned by Chamberlain, to certify that the total quantity or quality of petroleum available to the United States would not be reduced by its sales to PETCO. Appellants complied by submitting affidavits stating that all the oil being shipped to the Bahamas was to be purchased by NEPCO and exported back to the United States. The licenses were granted.

The Department of Energy investigated these Bahamian oil sales, prompting appellants to bring an action for a declaratory judgment to enjoin the investigation. Appellants argued that the sales at issue were exports subject to an exception (under 10 C.F.R. Sec. 211.1 and Sec. 212.53) from the rigid sales and pricing regulations set on domestic oil sales pursuant to the Emergency Petroleum Allocation Act, 15 U.S.C. Sec. 751, et seq. The district court trying the declaratory judgment action disagreed, and that court found violations of price control regulations 6 C.F.R. Part 150 and 10 C.F.R. Part 212, and ordered restitution. Citronelle-Mobile Gathering, Inc. v. O'Leary, 499 F.Supp. 871, 881-888 (1980).

Chamberlain, Citronelle, and Citmoco appealed the district court decision to the Temporary Emergency Court of Appeals. That court affirmed the lower court's holding that appellants' oil sales to the Bahamian buyer were not export sales and thus were not exempt from the regulations fixing ceilings on oil prices. Citronelle-Mobile Gathering, Inc. v. Edwards, 669 F.2d 717, 719-721 (Temp.Emer.Ct.App.1982). The court also remanded to the district court to determine the amount of restitution and to establish a plan to distribute those funds to buyers who were overcharged. Id. at 723.

On remand the district court decided that the amount of restitution owed by appellants should be reduced by the amount of state and federal taxes paid, and also that Chamberlain's personal liability should be limited to the amount of money he actually received from the oil sales. Both sides appealed this determination to the Temporary Emergency Court of Appeals.

On that appeal, the Temporary Emergency Court held that the district court erred in three ways: (1) by subtracting from the restitutionary amount the state and federal taxes paid by appellants; (2) by applying a flat 6% interest rate on the restitutionary amount instead of a schedule of quarterly interest rates beginning in 1974 which more accurately reflected the value of the money during the time held by Chamberlain, Citronelle, and Citmoco; and (3) by not holding Chamberlain personally liable for the full amount of restitution ordered. Citronelle-Mobile Gathering, Inc. v. Herrington, 826 F.2d 16 (Temp.Emer.Ct.App.1987), cert. denied, 484 U.S. 943, 108 S.Ct. 327, 98 L.Ed.2d 355 (1987). The court remanded to the district court once again to oversee the distribution of the restitutionary amount, totaling over $25 million.

Appellees encountered difficulty in collecting the judgment amount, and upon post-judgment discovery pursuant to Rule 69, appellees learned that Chamberlain had transferred assets from Citronelle and Citmoco, rendering them mere shells, to the previously dormant "Douglas Oil", a subchapter S corporation 100% owned by Chamberlain, and also that Chamberlain had funnelled millions of dollars out of the United States through the Bahamian corporation owned by Chamberlain and his wife, "Douglas Trading". Appellees moved for a temporary restraining order to prevent further impairment of assets out of which the judgment could be satisfied and also moved for leave to amend their complaint to include Douglas Oil and Douglas Trading under the theories of alter ego, piercing the corporate veil, or successor liability. The district court granted the TRO on September 28, 1989, against Chamberlain, Citronelle, Citmoco, Douglas Oil and Douglas Trading. On October 30, 1989, appellees filed a motion to compel the return of assets and to appoint a receiver to control the assets of Chamberlain, Citronelle, Citmoco, and Douglas Trading and to operate the business of Douglas Oil. On December 27, 1989, the court appointed an interim receiver over the assets of Chamberlain, Citronelle, and Citmoco. On February 14, 1990, the district court ordered the appointment of a permanent receiver over all the assets of Chamberlain, Citronelle, Citmoco, and Douglas Trading, as well as Chamberlain's 100% stock ownership of Douglas Oil. These are the essential facts of the case on appeal numbered 90-7191.

In addition to the collection actions taken in 90-7191, appellees have also sought recovery of the judgment against Chamberlain individually. In October, 1989, appellees initiated garnishment proceedings against Chamberlain's accounts at Southtrust Bank of Mobile. The court entered judgment on April 25, 1990, in favor of appellees, in the amount of $63,901.46. This outlines the essential facts of appeal numbered 90-7375.

II. ISSUES AND ANALYSIS

A. Jurisdiction

The government argues that the Temporary Emergency Court of Appeals has exclusive jurisdiction over this appeal since the case arises under the Economic Stabilization Act, 12 U.S.C. Sec. 1904. Section 211(b)(2) of that act provides:

Except as otherwise provided in this section, the Temporary Emergency Court of Appeals shall have exclusive jurisdiction of all appeals from the district courts of the United States in cases and controversies arising under this title or under regulations or orders issued thereunder.

The TECA's exclusive jurisdiction is limited to issues arising under the ESA or the EPAA: the issue on appeal must involve the construction, application, or effect of either the Economic Stabilization Act ("ESA") or the Emergency Petroleum Allocation Act ("EPAA"), and that construction, application or effect must have been determinative. Atlantic Richfield Co. v. U.S. Department of Energy, 769 F.2d 771, 778-779 (D.C.Cir.1984). The Temporary Emergency Court of Appeals has similarly decided that its appellate jurisdiction must be focused on the nature of the "issue presented" as opposed to the "nature of the case or controversy presented below." MPGC, Inc. v. Department of Energy, 673 F.2d 1277, 1281 (Temp.Em.Ct.App.1982).

Following the accepted rule that the nature of the issue(s) on appeal must be the focal point of analysis of TECA's appellate jurisdiction under 12 U.S.C. Sec. 1904 note Section 211(c), the question becomes whether or not the appellants' challenges of the appointment of the receiver and of the extent of his power over their assets are independent of the underlying ESA and EPAA violations which formed the basis of this suit.

Appellees...