Consolidated Edison Co. of New York v. Breznay
| Decision Date | 14 March 1989 |
| Docket Number | No. DC-108.,DC-108. |
| Parties | CONSOLIDATED EDISON CO. OF NEW YORK, INC., Long Island Lighting Co., Orange and Rockland Utilities, Inc., Southern California Edison Co., Pacific Gas and Electric Co., San Diego Gas and Electric Co., Appellants, v. George B. BREZNAY, Director, and Thomas L. Wieker, Deputy Director, Office of Hearings and Appeals, U.S. Department of Energy, Appellees. |
| Court | U.S. Temporary Emergency Court of Appeals Court of Appeals |
Philip P. Kalodner, Philadelphia, Pa., was on the brief, for Consolidated Edison Co. of New York, et al., appellants.
Don W. Crockett, Judicial Litigation Div., Economic Regulatory Admin., U.S. Dept. of Energy, with whom John L. Gurney of the same office, and John R. Bolton, Asst. Atty. Gen., Civ. Div., Dept. of Justice, Washington, D.C., were on the brief, for appellees.
Before Chief Judge GARZA,* Judges WILLIAM H. BECKER and THORNBERRY.*
This action was commenced on June 18, 1987, by the filing of a complaint in the United States District Court for the District of Columbia. R. 5-17. The complaint was filed by the appellant utilities, Consolidated Edison Company of New York (Consolidated Edison), and others against the appellees Breznay, Director, and Wieker, Deputy Director, of the Office of Hearings and Appeals (OHA) of the U.S. Department of Energy (DOE).
In their complaint the appellant utilities sought an injunction "(i) requiring the defendants to grant party status to plaintiffs, and (ii) prohibiting the defendants from rendering their decision in HRO-0285, `overcharge proceeding before OHA of DOE,' (against Cities Service Oil and Gas Corporation) until and after, consideration of the Memorandum previously submitted by plaintiffs, and the oral argument of plaintiff's counsel." Jurisdiction of the District Court was invoked pursuant to 28 U.S.C. § 1331 and 1361.
The complaint contained the following principal and material allegations; that the Economic Regulatory Administration (ERA) of the DOE had issued to Cities Service Oil & Gas Corporation (Cities Service) a Proposed Remedial Order (PRO) alleging violations by Cities Service of the Mandatory Petroleum Pricing Regulations previously issued by DOE, and finding an aggregate overcharge of $257,530,553.15 which, with interest, would require Cities Service to make a refund in excess of $500,000; that on May 10, 1985, Philadelphia Electric Company (PECO) acting with certain other transportation end users of electricity filed a Request to participate as a party in the proceedings; that PECO identified itself as a utility using oil for the generation of electricity, and sought intervention on behalf of and to represent the interest of all electric utilities "burning" oil to generate electricity, a use representing 8% of the consumption of oil in the United States during the relevant period.
The complaint further stated that the appellee Wieker, Deputy Director of OHA, had by letter granted the request of counsel for PECO to participate and, under the criteria set forth in 10 C.F.R. 205.194, to represent each of the other four appellant utilities, including PECO; that thereafter PECO, and the three transportation end users with whom it acted, filed joint pleadings and participated in the proceedings before OHA by filing joint pleadings, and inter alia by filing a Response to the Statement, Supplemental Objections, and to various motions of Objections by Cities Service.
The complaint further stated that thereafter by petition filed on October 17, 1986, PECO and the three other transportation end users petitioned OHA for permission to withdraw from the proceedings individually, and as representatives of the utility and surface transportation classes of end users, explaining that they were required to withdraw from individual participation because they were "signatory parties" to a certain Final Settlement Agreement in In Re: The Department of Energy Stripper Well Exemption Agreement Litigation, M.D.L. 378,1 stating that "approval of such withdrawal should in no way prejudice the right of other members of the classes, which they sought to represent ... who may have relied on the participation of PECO...."
The complaint further stated that, by letter of October 24, 1986, appellee Wieker for OHA "in response to the petition of PECO et al, and of a request ... filed by Cities seeking dismissal of PECO et al. on the same basis" that "it had been determined that members of the PECO group should be dismissed from this proceeding" ... and are dismissed as potential aggrieved parties in this Cities Service case; that in a document filed on March 30, 1987 "plaintiffs herein, together with certain other shipping companies and certain paper manufacturers requested the opportunity to participate in these proceedings in place of prior participants, including PECO for the specific purpose" to advance the positions on the liability issues previously articulated by PECO, requesting limited participation "in the form of filed an attached Memorandum in Support of the Issuance of Remedial Order and to participate in oral argument" scheduled and postponed several times and to be rescheduled; that by letter of April 9, 1986, appellees Wieker, on behalf of OHA, and Breznay "denied in all respects the Request to Participate filed by these plaintiffs and others" on two grounds: (i) failure by plaintiffs to seek participation at an earlier date; and (ii) that arguments in the memorandum they sought to file "concerns the legal issue whether Cities Service transactions were a means to circumvent the Entitlements Program (and) we have previously held that the issue has not been presented for adjudication in this proceeding"; that by letter of April 16, 1987 to appellee Wieker the ERA protested that it was "asserting that the subject Cities Service transactions circumvented and contravened the Entitlements Program"; that ERA expressed no comment "on the other ground for rejection to the application of plaintiffs to participate, namely, the "untimeliness" of the application; that by letter of April 22, 1988, appellee Wieker characterized the position of ERA in its letter of April 16 as a "request (for) reconsideration of a January 13, 1986 Decision and Order" and advised ERA that its submission of April 16, 1986 "was not timely filed and should be dismissed"; that by letter of April 21, 1987 plaintiffs and the other shippers and manufacturers sought reconsideration of the earlier rejected Request to Participate, which was by letter of April 27, 1987 of appellee Wieker on behalf of OHA denied; that OHA from July 2, 1985 until April 10, 1987 by published Statement of Restitutionary Policy in 50 Fed.Reg. 27,400 and Statements of Modified Restitutionary Policy in 41 Fed.Reg. 27,899 and 51 Fed.Reg. 29,689 it was the policy of DOE to deny any right on the part of utility end users and other end users to recover such refunds sought as are sought in the current proceedings against Cities"; that "it was not until April 10, 1987, one day subsequent to the rejection of the Request to Participate of these plaintiffs that OHA confirmed the right of utilities in general and accordingly of these plaintiffs in particular, to recover any refunds obtained in the Cities and similar proceedings their pro rata share of refunds; that accordingly it is probable that any request to participate by the plaintiffs during much or all of the period from July 2, 1985 through early April 1987 would have been rejected by OHA because (i) during most of the period until October 15, 1986 their interest was being represented by participation by PECO and associated transporters, and (ii) until early April 1987 their right to recover any refunds was in doubt; that the earlier interim decisions of OHA in the Cities matter, as interpreted by Wieker in rejecting plaintiffs' request to participate on April 9, 1987 and the rejection of the belated effort of ERA of April 22, 1987 to support the arguments of PECO raise a substantial doubt that OHA will "(i) fail to order refunds in full amount justified by law, or (ii) employ a theory of violation which will be insupportable on appeal to the Federal Regulatory Commission and the courts"; that neither ERA nor the States who have been granted party status by appellee Wieker are advocating the theory of violation that PECO and these plaintiffs advocate."
In the portion of the complaint herein designated plaintiffs assert a right to participate as parties to the Cities Service proceeding HRO-0285 pending before appellees because: "(a) they have an interest relating to any fund recovered arising pursuant to the Settlement Agreement in MDL 378, citing Section 209 of the Economic Stabilization Act of 1970, 12 U.S.C. § 1904 note, and the Petroleum Overcharge Distribution Act of 1986, Pub.L. No. 99-509, 15 U.S.C. § 4501 et seq.; (b) the disposition of the action may impair their ability to protect their interest because (i) in the event of a disposition in favor of Cities, in whole or in part, it is unlikely that plaintiffs or ERA would have a right to appeal to the Federal Energy Regulatory Commission (FERC) or to the courts, and (ii) to the extent any decision ordering Cities to make restitution is based on `unsustainable grounds the order of restitution may not be sustainable on appeal'; (c) plaintiffs interests is not adequately represented by existing parties; (d) the application for intervention was timely; that the denial of appellant plaintiffs Request to Participate was an abuse of the discretion, which they may have to determining who is to be granted the right to intervene; that unless relief is granted in the form of the requested injunctions plaintiffs will suffer irreparable harm."
On August 13, 1987 the defendants Wieker and Breznay, of OHA of the DOE, appellees herein, filed their...
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