Consolidated Edison Co. of New York v. O'Leary
| Decision Date | 19 June 1997 |
| Docket Number | 96-1257,Nos. 96-1248,s. 96-1248 |
| Citation | 117 F.3d 538 |
| Parties | CONSOLIDATED EDISON COMPANY OF NEW YORK, Long Island Lighting Company, Orange and Rockland Utilities, Pacific Gas and Electric Company, San Diego Gas and Electric Company, Southern California Edison Company, Champion International Corporation, Federal Paper Board Company, Inc., International Paper Company, and Weyerhauser Company, Plaintiffs-Appellants, v. Hazel R. O'LEARY, Secretary of Energy, and George B. Breznay, Director, Office of Hearings and Appeals, Department of Energy, Defendants-Appellees, and States of Alabama, California, Connecticut, Idaho, Indiana, Maryland, Michigan, Mississippi, Montana, Ohio, South Dakota, Vermont, Wisconsin, and Wyoming, Defendants-Appellees, and States of Delaware, Hawaii, Illinois, Kansas, Nebraska, Nevada, North Carolina, Rhode Island, and West Virginia, Territory of Guam and The Virgin Islands, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Federal Circuit |
Philip P. Kalodner, Gladwyne, PA, argued, for plaintiffs-appellants Consolidated Edison Company of New York, et al.
Thomas H. Kemp, Office of the General Counsel, U.S. Department of Energy, Washington, DC, argued, for defendants-appellees, Hazel R. O'Leary, Secretary of Energy, et al.
James F. Flug, Ingersoll and Bloch, Chartered, Washington, DC, argued, for defendants-appellees States of Alabama, et al. With him on the brief were Daniel E. Lungren, Attorney General and Yeoryios C. Apallas, Deputy Attorney General, San Francisco, CA, for defendant-appellee State of California.
Andrew P. Miller, Dickstein, Shapiro & Morin, L.L.P, Washington, DC, argued, for defendants-appellees States of Delaware, et al. With him on the brief were Alan R. Jenkins, and Bernard Nash, for defendants-appellees States of Delaware, Rhode Island, and West Virginia.
Before MICHEL, PLAGER and BRYSON, Circuit Judges.
At issue in this appeal from judgments of the United States District Court for the District of Columbia 1 is entitlement to a portion of some $2.9 billion recovered by the United States. The money was recovered from producers and resellers of crude oil pursuant to a statutory scheme authorizing such recoveries. See Economic Stabilization Act Amendments of 1971, Section 209, Pub.L. No. 92-210, 85 Stat. 743 (1971). Plaintiffs, a group of utilities and other large crude oil consumers, are entitled to share in the proceeds under the formula established by the Government, but complain that the share they are receiving is insufficient. In two separate suits, consolidated by the district court and here, they sued the United States, through the Department of Energy, and a group of The district court dismissed both complaints, and the plaintiffs brought their appeals here. The two questions presented are whether the appeals are properly lodged in this court, and whether the district court correctly gave judgment for the defendants. They are, and it did. Affirmed.
states, all of whom are, under the formula, competing claimants for the fund.
The Economic Stabilization Act (hereafter "the Act" or "ESA"), first enacted in 1970 and amended in substantial ways in 1971, authorized the President to issue orders and regulations to stabilize prices, rents, wages, and salaries. The Executive actions taken under the Act resulted in lengthy and enduring litigation. This is one of those suits.
Under the initial Act, the method of enforcement was by injunction or fine. See Economic Stabilization Act, Pub.L. No. 91-379, 84 Stat. 799 (1970). In 1971 Congress amended the Act, inter alia, to permit district courts, in enforcement suits brought by the Attorney General of the United States, to order "restitution of moneys received in violation" of these price controls. Economic Stabilization Act Amendments of 1971, Section 209, Pub.L. No. 92-210, 85 Stat. 743 (1971).
The amended Act, in separate section 210, also provided for a private cause of action for persons "suffering legal wrong because of any act or practice arising out of this title" in violation of the price controls. This "private attorney general" provision allowed private litigants to recover money damages (including treble damages and attorneys fees in some cases) in addition to obtaining injunctive relief. Id.
A few years later, in response to the oil embargo by the Organization of Petroleum Exporting Countries (known as "OPEC"), Congress passed the Emergency Petroleum Allocation Act of 1973 ("EPAA"), Pub.L. No. 93-159, 87 Stat. 627, codified at 15 U.S.C. §§ 751-760h (1982), to ensure that petroleum supplies would be available at "equitable prices." EPAA § 4(b)(1)(F), 15 U.S.C. § 753(b)(1)(F) (1982). Petroleum price regulations were subsequently promulgated by the Department of Energy (then called the Federal Energy Office). See 39 Fed.Reg.1924 (Jan. 15, 1974). Section 5(a)(1) of the EPAA expressly incorporates Section 209 of the ESA, thereby authorizing the President to enforce the petroleum price controls by seeking restitution of illegal overcharges. See 15 U.S.C. § 754(a)(1) (1982).
Thus a comprehensive regulatory scheme was established pursuant to the EPAA and enforced under Section 209 of the ESA. In due course the implementation and enforcement of this scheme produced huge recoveries for crude oil overcharges. Not surprisingly, there was an ensuing struggle over how this money would be distributed. This struggle came to a head in the multi-district litigation entitled In re The Department of Energy Stripper Well Exemption Litigation, conducted in the District Court of Kansas. See generally In re The Dept. of Energy Stripper Well Exemption Litigation, 653 F.Supp. 108 (D.Kan.1986) (Stripper Well ). As the district court judge noted in that case, "Like flies to honey, claimants are quickly drawn by a fund containing over one billion dollars." Stripper Well, 578 F.Supp. 586, 589 (D.Kan.1984). The particular violations involved in that case are not directly relevant to the present case. What is relevant, however, is the resulting DOE distribution policy that flowed therefrom.
Patterned after the eventual settlement in Stripper Well, DOE established a policy for allocating all crude oil overcharges recovered pursuant to Section 209 of the ESA. That policy established that 20% of the overcharges would be retained by DOE to pay individual claims. The remaining 80% was to be allocated half to the United States treasury and half divided evenly among affected states to be used to fund approved energy-related programs that are designed to benefit consumers of petroleum products within the states. See Statement of Modified Restitutionary Policy In Crude Oil Cases, 51 Fed.Reg. 11,737, 11,739 (Aug. 20, 1986). This was essentially the same allocation formula arrived at in the Stripper Well settlement. As DOE stated in its policy statement, the "settlement negotiations provided The 20% portion of crude oil overcharges to be distributed to individual claimants was to be apportioned according to a system administered by DOE. This system is known as "Subpart V" after the corresponding DOE regulations. See 10 C.F.R. Part 205, Subpart V. In this system, claimants are entitled to a refund proportional to their volume of crude oil consumption. Stated simply, under this method, known as the "volumetric method," the allocations of overcharges is made by dividing the crude oil overcharge moneys (the "numerator") by the total volume of U.S. consumption of petroleum products during the period of price controls (the "denominator"). This resulting fraction is then multiplied by the individual's volumetric consumption to produce the resulting refund. See Notice Explaining Procedures for Processing Refund Applications in Crude Oil Refund Proceedings Under 10 C.F.R. Part 205, Subpart V, 52 Fed.Reg. 11,737, 11,740 (April 10, 1987). Included in the numerator, for purposes of calculating claims, is an additional amount of some $985 million equal to the amount distributed in Stripper Well, in order to bring claimants into "full parity" with those who recovered under Stripper Well. 51 Fed.Reg. at 11,739.
an appropriate vehicle for exploring the resolution of those issues in all crude oil cases." 51 Fed.Reg. at 11,738.
As noted, appellants in this consolidated appeal are a group of utility companies and pulp and paper companies (hereafter referred to collectively as "plaintiffs"). 2 They are among some 85,000 individual claimants seeking to share in that portion of the fund allocated to such individual claimants under the Subpart V program. Because of the volume of their purchases of crude oil, the ten plaintiffs receive, pursuant to the formula, approximately 14% of the moneys distributed to all 85,000 claimants. The utility companies, which receive more than three-quarters of the refunds to the ten plaintiffs, are obligated to pass the funds through to their customers.
Plaintiffs filed two complaints in the district court for the District of Columbia. In their first complaint, No. 95-CV-698, they sought a declaratory judgment that the 20% limit imposed by DOE should not be used to limit claims under the Subpart V program. 3 In the second complaint, No. 96-CV-225, they challenged the allocation of $275 million received from a settlement of overcharges by Occidental Petroleum Corporation (OXY). They sought a preliminary injunction to preclude DOE from distributing 80% of the available OXY refunds to state and federal governments. The district court denied the requested preliminary injunction and dismissed both complaints on the grounds that plaintiffs did not have standing to assert their claims.
Plaintiffs brought their appeals here, but also filed protective appeals in the Court of Appeals for the District of Columbia Circuit. Unopposed motions were filed in, and granted by, that court, deferring briefing until this court...
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