Duncan v. Theis

• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals
• Writing for the Court: CHRISTENSEN, BECKER and ZIRPOLI
• Citation: Duncan v. Theis, 613 F.2d 305 (Temp. Emer. Ct. App. 1979)
• Decision Date: 27 December 1979
• Docket Number: No. 10-22.,10-22.
• Parties: Charles W. DUNCAN, Secretary of Energy, and the United States Department of Energy, Petitioners, v. The Honorable Frank G. THEIS, Chief Judge of the United States District Court for the District of Kansas, Respondent.

613 F.2d 305

Charles W. DUNCAN, Secretary of Energy, and the United States Department of Energy, Petitioners, v. The Honorable Frank G. THEIS, Chief Judge of the United States District Court for the District of Kansas, Respondent.

No. 10-22.

Temporary Emergency Court of Appeals.

Argued November 6, 1979.

Decided December 27, 1979.

John P. McKenna, Washington, D. C., with whom Nancy C. Crisman and Haywood Torrence, Jr., Dept. of Energy, Washington, D. C., and Barbara Gordon, Dept. of Justice, Washington, D. C., were on the brief for petitioners.

Joseph W. Kennedy, Morris, Laing, Evans, Brock & Kennedy, Wichita, Kan. (Robert I. Guenthner, Wichita, Kan., on the brief), Daniel Joseph, Akin, Gump, Hauer & Feld, Washington, D. C. (Warren E. Connelly, Washington, D. C., with him on the brief), and John E. Sparks, Brobeck, Phleger & Harrison, San. Francisco, Cal. (G. Stewart Stone, Jr., San Francisco, Cal., on the brief), with whom A. B. Conant, Jr. and Charles W. Pauly, Shank, Irwin, Conant, Williamson & Grevelle, Dallas, Tex., Richard L. Bohanon, Bohanon & Barth, Oklahoma City, Okl., Thomas Brown, Brown & Fox, Kansas City, Mo., John R. Cope and Arthur M. Meyer, Jr., Bracewell & Patterson, Washington, D. C., David J. Beck and Ronald D. Secrest, Fulbright & Jaworski, John L. Carter, Vinson & Elkins, Houston, Tex., and George G. Olsen and Forbes Maner, Williams & Jensen, P. C., Washington, D. C., were on the briefs for respondents.

Before CHRISTENSEN, BECKER and ZIRPOLI, Judges.

CHRISTENSEN, Judge.

The United States Department of Energy and the Secretary of Energy have petitioned this court for a writ of mandamus, pursuant to 28 U.S.C. § 1651 and Rule 21 of the Federal Rules of Appellate Procedure, for the purpose of directing the Honorable Frank G. Theis, Chief Judge of the United States District Court for the District of Kansas to execute the mandate of this court in accordance with its decision in Energy Reserves Group, Inc. v. Department of Energy, 589 F.2d 1082 (Em.App.1978).¹ Petitioners assert that the respondent Judge has declined to give effect to the court's decision and judgment and has treated as subject to relitigation upon remand issues that have been settled conclusively by this court. It is particularly charged that the district court has refused to dissolve a preliminary injunction entered in violation of our decision, thus continuing to restrain the Department of Energy from enforcing its ruling and regulations and permitting the plaintiffs before the lower court to avoid with impunity valid price controls and to thereby compound the current escalation of energy costs of the consuming public, has entered additional preliminary injunctions with the same effect and has ordered extensive discovery on the very points resolved as matters of law by this court.²

The plaintiffs in the district court, responding to the petition, take the position that this court's decision on appeal settled only the "procedural validity" of the administrative ruling in question, but that the "substantive validity" of such ruling and that of the regulation which it interpreted has not been ruled upon, and that the proceedings in the lower court after remand have been confined to the issues not decided by this court.³

Judge Becker's prevailing opinion together with Judge Zirpoli's dissenting opinion in Energy Reserves Group, supra, have so comprehensively and accurately outlined the history of the statutory stripper well exemption and related administrative regulations and rulings as to render any further restatement here unnecessary. But apparently it will be helpful to review briefly the issue initially presented to this court, the dimensions of our consideration of that issue and what was decisively agreed upon in the opinions in arriving at the judgment and mandate of this court.

Prior to the district court's initial ruling, the parties had entered into a stipulation consolidating the three Kansas cases for a ruling of the district court on three issues:

1. Whether Ruling 1974-29 . . . . is arbitrary, unreasonable or in conflict with the Trans-Alaska Pipeline Authorization Act, 43 U.S.C. §§ 1651 et seq. and the Emergency Petroleum Allocation Act of 1973 as amended, 15 U.S.C. §§ 751 et seq.

2. Whether Ruling 1974-29 was issued in compliance with the APA, 5 U.S.C. § 553.

3. If Ruling 1974-29 is valid, whether the ruling may be applied to the plaintiffs' sales of crude oil prior to December 24, 1974, the date on which the ruling was issued by the FEA.

The district court's memorandum decision, Energy Reserves Group, Inc. v. Department of Energy, 447 F.Supp. 1135 (D.Kan.1978), was confined to a determination of the issue of procedural legality of the ruling. The court expressly stated that in view of its conclusion that the ruling was void for want of rule making procedures under the APA, it "will not rule upon the issue of whether Ruling 1974-29, even if it were legally enacted, would be arbitrary, unreasonable, or in conflict with its statutory authority." 447 F.Supp. at 1150. It was also stated: "Having found Ruling 1974-29 void and ineffective to affect the rights of plaintiffs herein, the Court need not address plaintiffs' third principal contention as to retroactive application of such Ruling." 447 F.Supp. at 1151.

The ultimate issue on appeal was appropriately defined by Judge Becker, 589 F.2d at 1085, as follows:

Whether the District Court erred in holding that Federal Energy Administration ("FEA") Ruling 1974-29 (39 F.R. 44414, Dec. 24, 1974), which interpreted the stripper well exemption as excluding injection wells from the "well count" for purposes of applying the exemption, is null and void and without effect because it was published without utilizing the notice and comment provisions of the Administrative Procedure Act ("APA"), 5 U.S.C. § 553(b).

The prevailing opinion then comprehensively analyzed and discussed all aspects of this problem, including statutory underpinnings, reasonableness of the ruling in question and its conformance to the duly noticed and issued regulations of which it purported to be an interpretation, and concluded, among other things, that the ruling had no significant impact to render it legislative in character, if indeed the rule of impact bore upon this problem, because the regulation and the interpretation said essentially the same thing.

The prevailing opinion of this court concluded: "In each of these actions the judgment is reversed and the action remanded for further proceedings consistent with this opinion." 589 F.2d at 1101.

Judge Christensen concurred "in the result reached above and with most of Judge Becker's analysis and reasoning", specified the points of Judge Becker's analysis and reasoning concerning which he was "troubled", none of which involved any question touching upon Judge Becker's view that the basic regulation itself limited the well count to wells which directly produced or yielded petroleum, specifically agreed with Judge Becker that there was no significant impact operating against the ruling in question, and restated with the same effect that the administrative ruling was interpretive and not legislative in view of the same meaning reflected in the duly noticed regulation on which the interpretation was based.

Judge Zirpoli dissented on the ground that the ruling in question, as distinguished from the regulation which it purported to interpret, was legislative in character and had such significant impact as to mandate compliance with § 553(b) of the APA, and that is all that he decided.

While the unsuccessful appellees requested extensions of time to seek rehearing and rehearing en banc, presumably preliminary to a petition for certiorari, their request was withdrawn and they elected not to seek review in the Supreme Court by certiorari.

In sum, the present situation is that the consistency of Ruling 1974-29 with the APA has been finally established and, in connection with the ruling on the issue before the court and particularly in dealing with the question of substantial impact, both judges concurring in the result clearly indicated the majority view that the ruling in question did not represent any substantial departure from the meaning of the regulation, and for this reason had no substantial impact as an interpretive ruling.⁴ Whether the regulation itself was within the authority of the FEA to promulgate, despite its conceded procedural regularity, or whether it was arbitrary or capricious does not so clearly appear from a consideration of the decision as a whole.⁵

The unjustified unwillingness of the government on the one hand to acknowledge this differentiation in its effort to block all further proceedings before Judge Theis by way of discovery or otherwise, and on the other hand the mistaken position of some of the plaintiffs that our decision essentially settled nothing, or at most only the issue of "procedural validity" as affecting the parties involved in the appeal, may account in some measure for the difficulties the lower court and the parties now profess to see within our mandate. Yet, it was rendered clear during the oral argument on the petition for mandamus now before us that the decision of this court set at rest the question of the compliance of the ruling in question with the APA because it was simply a restatement of the meaning and effect of the regulation on which it was based.⁶ It may well be beyond the issues thus clearly resolved by this court's decision on appeal that in line with Judge Becker's persuasive analysis and reasoning and as he has suggested, 589 F.2d at 1092, the administrative regulation and its interpretation constituted not only a reasonable construction of the statute as well, but in addition "may be the construction ultimately preferred by the courts." But since our decision did not definitely resolve any statutory problem, there is presently no basis to cut off further proceedings in the...