Department of Energy v. Hunt
| Decision Date | 16 July 1986 |
| Docket Number | 5-102.,No. 5-101,5-101 |
| Citation | 798 F.2d 1421 |
| Parties | DEPARTMENT OF ENERGY and Donald Paul Hodel, Secretary of Energy, Defendants-Appellants, v. Ray L. HUNT, Independent Executor of the Estate of H.L. Hunt, Plaintiff-Appellee, The States of Arkansas, Connecticut, Delaware, Hawaii, Indiana, Iowa, Kansas, Louisiana, Minnesota, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, West Virginia, Wisconsin, and Wyoming, the Territory of Guam and the Virgin Islands, Intervenors-Appellants, Cities Service Company, Intervenor-Appellee. |
| Court | U.S. Temporary Emergency Court of Appeals Court of Appeals |
Thomas C. Newkirk, with whom Larry P. Ellsworth, David A. Engels, and Marcia K. Sowles, Dept. of Energy, Washington, D.C., were on brief, for defendants-appellants.
Edward G. Modell, with whom Bernard Nash, Blum, Nash and Railsback, Thomas W. Mack and Andrew P. Miller, Dickstein, Shapiro and Morin, James F. Flug, Lobel, Novins and Lamont, Washington, D.C., Hubert H. Humphrey, III, Atty. Gen., St. Paul, Minn., Paul Bardacke, Atty. Gen., Santa Fe, N.M., David Frohnmayer, Atty. Gen., Salem, Or., and Gerald L. Baliles, Atty. Gen., Richmond, Va., were on brief for intervenors-appellants States.
Philip P. Kalodner, Attorney for National Freight, Inc., RJG Cab Co., and Geraldine H. Sweeney, Philadelphia, Pa., Harold E. Kohn and Joseph C. Kohn, Kohn, Savett, Marion and Graf, P.C., Attorneys for Philadelphia Elec. Co., were on brief, for amici curiae.
Brett A. Ringle, with whom Karen S. Bedell, Shank, Irwin and Conant, Dallas, Tex., were on brief, for plaintiff-appellee, Ray L. Hunt.
John M. Simpson, with whom Keith A. Jones, James F. Moriarty, Fulbright and Jaworski, Washington, D.C., and Darrel A. Kelsey and Gerald H. Barnes, Cities Service Oil and Gas Corp., Tulsa, Okl., were on brief, for intervenor-appellee, Cities Services Co.
Before BECKER,* DAUGHERTY and THORNBERRY, Judges.
Rehearing and Rehearing En Banc Denied August 26, 1986.
This appeal presents a narrow issue: whether the district court abused its discretion in holding that the Department of Energy (DOE) failed to demonstrate a change in core circumstances requiring remand of a lawful remedial order to the agency for reconsideration. We are not asked to determine the district court's power or duty to fashion a restitutionary remedy. Compare United States v. Exxon Corp., 773 F.2d 1240, 1280-87 (Temp.Emer.Ct.App.1985); Citronelle-Mobile Gathering, Inc. v. Edwards, 669 F.2d 717, 723 (Temp.Emer.Ct.App.), cert. denied, 459 U.S. 877, 103 S.Ct. 172, 74 L.Ed.2d 141 (1982). Because we find that the district court did not abuse its discretion in denying DOE's motion to remand, we affirm its order.
DOE issued the remedial order with which we are concerned in November 1977. The order required the Estate of H.L. Hunt (Hunt) to refund crude oil overcharges of $316,960.91 plus interest to Cities Service Co. (Cities Service), the first purchaser from Hunt. After exhausting its administrative remedies, Hunt filed suit in federal district court for the Northern District of Texas, seeking judicial review of the stripper well regulation on which the remedial order was based, DOE's interpretation of the regulation in Rulings 1974-29 and 1975-12, and the remedial order itself. In 1979 the district court issued a preliminary injunction restraining DOE from enforcing the stripper well regulation against Hunt. At the same time, the court ordered Hunt to pay an amount equal to the alleged overcharges into an interest-bearing escrow account.
This Court upheld the stripper well regulation in 1982. In re Department of Energy Stripper Well Exemption Litigation, 690 F.2d 1375 (Temp.Emer.Ct.App.1982), cert. denied, 459 U.S. 1127, 103 S.Ct. 763, 74 L.Ed.2d 978 (1983). Soon afterward DOE filed a motion for summary judgment and for remand of the part of the remedial order that required Hunt to refund the overcharges to Cities Service. DOE sought the remand on grounds that the decontrol of oil prices in 1981 constituted a change in circumstances that undermined the agency's purpose in ordering the refund. The district court granted DOE's summary judgment motion, Prosper Energy Corp. v. Department of Energy, 549 F.Supp. 300 (N.D.Tex.1982), but subsequently denied its motion for partial remand. DOE and the intervenor States1 appeal the district court's order denying partial remand.2
This Court's review of the district court's order is limited. The decision whether to grant an agency's motion to remand for changed circumstances is committed to the sound discretion of the court hearing the motion. Cf. Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 171-72, 83 S.Ct. 239, 247-48, 9 L.Ed.2d 207 (1962) (). Thus, this Court may reverse a district court's order denying a motion to remand only if we find that the district court has abused its discretion.
DOE relies on a line of cases that favor remand "where there has been a change in circumstances, subsequent to administrative decision and prior to court decision, that is not merely `material' but rises to the level of a change in `core' circumstances, the kind of change that goes to the very heart of the case." Greater Boston Television Corp. v. Federal Communications Commission, 463 F.2d 268, 283 (D.C.Cir.1971), cert. denied, 406 U.S. 950, 92 S.Ct. 2042, 32 L.Ed.2d 338 (1972). DOE argues that decontrol of the oil industry in 1981 changed the "core circumstances" in this case. Before decontrol, a first purchaser-refiner such as Cities Service, upon receiving a refund from its crude oil supplier, would have been required either to reduce its maximum lawful selling price or to draw upon its "bank" of unrecouped costs.3 In either case, the refiner might have been forced to lower the price it charged its customers for refined products. Ultimately, DOE contends, this price reduction would have been passed through the marketing chain to the consumer. In this manner the refund would have found its way to those who bore the brunt of the overcharge. After decontrol, by contrast, the first purchaser-refiner can simply pocket any refund it receives for overcharges; no pass-through is required.4
Cities Service offers two principal counterarguments. First, it notes that by early 1979 DOE had exempted from price controls between fifty and sixty percent of all refined products by volume. Refiners were not required to pass through cost reductions properly allocated to these products. Second, the price regulations established a maximum lawful selling price. According to Cities Service, market conditions held the actual selling prices below the maximum price throughout the period between issuance of the remedial order and decontrol. Consequently, had Cities Service received the refund before decontrol, its maximum lawful selling price would have decreased slightly, but its actual selling price would not have changed. At most, Cities Service argues, its bank of unrecouped costs would have shrunk somewhat, a matter of little significance given the small amount of the refund. Thus, Cities Service's use of the refund before decontrol would have been no more limited as a practical matter than its use after decontrol; in neither case would the refund have been passed through for the consumer's benefit.
DOE has not attempted to disprove Cities Service's contentions, either before this Court or before the district court. Instead, it argues that the accuracy of those contentions should be determined in the first instance by DOE on remand.5 In effect, therefore, the agency asserts not that a change in core circumstances justifies remand in this case, but that remand is necessary to determine whether core circumstances have changed. This view reflects a fundamental misunderstanding. As proponent of the remand motion, DOE bears the burden of demonstrating a change in core circumstances. The agency cannot sustain its motion merely by asserting that changed circumstances might appear upon further inquiry after remand.
Considerations of administrative and judicial finality justify placing the burden of proof on the party seeking remand.6 The proceedings in this case demonstrate the strength of this interest. DOE issued its remedial order to Hunt in 1977. Hunt sought judicial review in 1978. The order was upheld in 1982. Eight years have passed since DOE issued the order. DOE asks us to remand to the agency for another round of adjudication, to be followed inevitably by further review in the district court, in this Court, and possibly in the Supreme Court. Surely it is appropriate to require the party seeking to invoke administrative and judicial process for further consideration of a concededly lawful order to show good reason for doing so. See Solar v. Pension Benefit Guaranty Corp., 504 F.Supp. 1116, 1123-24 (S.D.N.Y.) (), aff'd per curiam, 666 F.2d 28 (2d Cir.1981); see also United States v. Texas Energy Petroleum Corp., 719 F.2d 394, 398 (Temp.Emer.Ct.App.1983) (); Rossi v. Mobil Oil Corp., 710 F.2d 821, 827 (Temp.Emer.Ct.App.1983) ( ).
In light of these concerns, we hold that the district court did not abuse its discretion in finding that DOE failed to sustain its burden of showing a change in core circumstances.7 This does not mean, of course, that we would necessarily have decided the...
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