Consolidated Edison Co. New York v. Richardson

• Decision Date: 29 November 2000
• Citation: 233 F.3d 1376
• Parties: (Fed. Cir. 2000) CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., LONG ISLAND LIGHTING COMPANY, ORANGE AND ROCKLAND UTILITIES, INC., SOUTHERN CALIFORNIA EDISON COMPANY, PACIFIC GAS & ELECTRIC COMPANY, SAN DIEGO GAS & ELECTRIC COMPANY, INTERNATIONAL PAPER COMPANY, FEDERAL PAPER BOARD COMPANY INC., CHAMPION INTERNATIONAL CORPORATION, and WEYERHAUSER COMPANY, Plaintiffs-Appellants, v. Bill Richardson, SECRETARY OF ENERGY, and George B. Breznay, DIRECTOR, OFFICE OF HEARINGS AND APPEALS, DEPARTMENT OF ENERGY, Defendants-Appellees. 99-1436 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1376

233 F.3d 1376 (Fed. Cir. 2000)

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., LONG ISLAND LIGHTING COMPANY, ORANGE AND ROCKLAND UTILITIES, INC., SOUTHERN CALIFORNIA EDISON COMPANY, PACIFIC GAS & ELECTRIC COMPANY, SAN DIEGO GAS & ELECTRIC COMPANY, INTERNATIONAL PAPER COMPANY, FEDERAL PAPER BOARD COMPANY INC., CHAMPION INTERNATIONAL CORPORATION, and WEYERHAUSER COMPANY, Plaintiffs-Appellants, v. Bill Richardson, SECRETARY OF ENERGY, and George B. Breznay, DIRECTOR, OFFICE OF HEARINGS AND APPEALS, DEPARTMENT OF ENERGY, Defendants-Appellees.

99-1436

United States Court of Appeals for the Federal Circuit

DECIDED: November 29, 2000

Appealed from: United States District Court for the District of Columbia Judge Emmet G. Sullivan

[Copyrighted Material Omitted]

Philip P. Kalodner, Gladwyne, Pennsylvania, argued for plaintiffs-appellants.

Thomas H. Kemp, Attorney, Office of General Counsel, U.S. Department of Energy, of Washington, DC, argued for defendants-appellees.

Before NEWMAN, Circuit Judge, SKELTON, Senior Circuit Judge, and PLAGER, Circuit Judge.

PLAGER, Circuit Judge.

This is a further chapter in the long-running story of how to divide up the billions of dollars recovered by the Government as a result of the price controls on petroleum products enacted by Congress in the 1970s. Consolidated Edison Co. of New York, Inc. and a group of other companies (collectively "Plaintiffs") challenge an award made by the Department of Energy ("DOE") to Chesebrough Pond's USA Co. ("Chesebrough"). The award is a refund of overcharges paid by Chesebrough for crude oil supplies, and is to be paid from monies the Government collected from the producers/suppliers of the crude oil.

The United States District Court for the District of Columbia held for the Government, dismissing the suit under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction, on the grounds that Plaintiffs lacked standing to challenge the award to a third party. The trial court also denied Plaintiffs' request for certification as a class action. SeeConsol. Edison Co. of N.Y. v. Pena, Civil Action No. 97-2213 (D.D.C. Mar. 31, 1999). Plaintiffs appeal that dismissal to this court, pursuant to 28 U.S.C. § 1295(a)(11), (12) (1994), this court's inherited Temporary Emergency Court of Appeals ("TECA") jurisdiction. Because the district court erred in dismissing the action, we reverse, and remand for further proceedings.

BACKGROUND

The history and consequences of Congress's attempt in 1973 to control petroleum prices through the medium of the then-existing Economic Stabilization Act are set out in detail in this court's 1997 opinion, Consolidated Edison Co. of New York v. O'Leary, 117 F.3d 538 (Fed. Cir. 1997) (Con Ed I). See also Consol. Edison Co. of N.Y. v. O'Leary, 131 F.3d 1475 (Fed. Cir. 1997) (Con Ed II). Briefly, this case revolves around application of the Economic Stabilization Act Amendments of 1971, Pub. L. No. 92-210, 85 Stat. 743 (codified at 12 U.S.C. § 1904 note (1976)) ("ESA"),¹ as incorporated into the Emergency Petroleum Allocation Act of 1973, Pub. L. No. 93-159, 87 Stat. 627 (codified at 15 U.S.C. §§ 751-760h (1982)) ("EPAA"). The EPAA placed price controls on petroleum products, both refined and crude, during the 1970s. The EPAA authorized DOE to collect overcharge amounts from petroleum producers/suppliers who overcharged customers for petroleum products while the price controls were in effect, and to provide refunds of these monies to those harmed by the overcharges. See 15 U.S.C. § 754(a)(1) (incorporating ESA § 209). The pool of money collected has turned out to be quite substantial--more than enough to fight over.

Once monies are acquired by DOE from a producer who has violated the price controls, the monies are allocated among several fund pools pursuant to established percentages. There are separate pools for individual claimants and for state and federal governments; the individual claimant pools are further differentiated between crude oil consumers and refined petroleum product consumers. All of this is governed by a rather complex scheme administered by the DOE Office of Hearings and Appeals ("OHA").

The formula for distributing monies from the pools for individual claimants is a volumetric formula. In a volumetric formula, the total amount of money in the pool constitutes the numerator of the formula, while the total volume of U.S. consumption of the petroleum product during the period of price controls is the denominator. The resulting fraction is then multiplied by the individual claimant's volumetric consumption to produce the resulting refund. As a consequence, any decrease in the size of the pool (for example, because some of it is paid to another claimant) directly reduces the share of each claimant.² At present, there appear to be some 90,000 companies or groups with claims to the pool. Plaintiffs here have, in aggregate, verified claims to approximately 10% of the pool.

This case arose when, in July 1997, DOE awarded Chesebrough $930,603 from the pool allocated for crude oil claimants. Plaintiffs appealed the award to the district court, claiming that the amount was excessive and not supported by the evidence of record. Plaintiffs asserted that they had standing to challenge the award to Chesebrough because the volumetric formula under which the refund pool is administered means that any award to Chesebrough will necessarily reduce the award to all other claimants to the pool, including Plaintiffs. Plaintiffs also alleged that they represented a class consisting of all those entitled to a part of the pool for crude oil claimants, other than Chesebrough, and requested certification of this class.

The district court declined to certify the case as a class action, and subsequently dismissed the case for lack of standing. The refusal to certify is set forth in a single document, which appears to be a modified version of an order supplied by Plaintiffs in which "GRANT" is replaced by "DENY." As such, it provides no discussion of the reasons for the denial.

On the merits, the district court looked to the precedents involving these same plaintiffs, which without exception had found reasons why Plaintiffs' claims were properly dismissed. The court concluded that, consistent with those precedents, Plaintiffs lacked standing to challenge an award to a third party. The district court therefore dismissed the case for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1). Plaintiffs appeal the rulings of the district court.

DISCUSSION

I.

Dismissal for lack of standing is a question of law, and we therefore review the holding of the trial court on this issue without deference. See Tex. Am. Oil Co. v. Dep't of Energy, 44 F.3d 1557, 1566 (Fed. Cir. 1995). We review a denial of class certification for abuse of discretion. Califano v. Yamasaki, 442 U.S. 682, 703 (1978); Adashunas v. Negley, 626 F.2d 600, 605 (7th Cir. 1980).

II.

To put the present case into perspective, we must first review the history of four prior cases, the four cases that lie at the heart of the parties' arguments. In the first case, DOE in 1992 entered into a settlement with Texaco, a producer, under which the agency recovered a substantial sum of money. The settlement included an understanding as to how the monies were to be allocated between funds for claimants who purchased crude oil and those who purchased refined petroleum products. That allocation scheme was challenged in a suit brought by a group of gasoline retailers seeking to protect the refined products pool. The district court dismissed the suit. On appeal to TECA, that court held the allocation scheme was subject to judicial review, and the question of whether the scheme was lawful was remanded to the district court. Mullins v. United States Dep't of Energy, 964 F.2d 1149, 1150 (Temp. Emer. Ct. App. 1992) (Mullins I). Neither the plaintiffs nor the Government had raised a question of the plaintiffs' standing to bring the suit.

In the second case, in a subsequent appeal to this court (which had by then succeeded to TECA's jurisdiction) after the remand, we upheld, over the gasoline retailers' objections, the allocation arrived at by DOE. We concluded that the allocation, reached as part of the Government's settlement with Texaco, was a litigation judgment call by the Government that we, like the trial court, would not second-guess. Mullins v. United States Dep't of Energy, 50 F.3d 990, 992-93 (Fed. Cir. 1995) (Mullins II). Again, standing of the retailers to challenge the settlement's allocation was not questioned.

The third case was decided two years later. In Consolidated Edison Co. of New York v. O'Leary, 117 F.3d 538 (Fed. Cir. 1997) (Con Ed I), we reviewed DOE's allocation of recovered funds between, on the one hand, individual claims (including both refined and crude pools), and, on the other, reimbursements to state and federal governments. DOE had determined, following the settlement in the Stripper Wells litigation (In re Dep't of Energy Stripper Well Exemption Litig., 653 F. Supp. 108 (D. Kan. 1986)), that 20% of recovered monies should be allocated for the individual claims, and 80% for government claims (split evenly between the federal government and state governments). The allocation was challenged by a group of companies, essentially the same ones as are before us today, with an interest in protecting the fund for individual claimants.

The district court dismissed the complaints for lack of standing. We upheld the district court's judgment for the Government, but chose not to rest our decision on standing. Instead, we held that ESA § 210, the private attorney-general provision, did not authorize plaintiffs to state a private cause of action on which relief could be granted with regard to the overall allocation of funds recovered under § 209, the public enforcement section. Con Ed I, 117 F.3d at 544. We further held that, pursuant...