FORT PIERCE UTILITIES, ETC. v. Department of Energy, Civ. A. No. 80-1006.

• Citation: 503 F. Supp. 1014
• Decision Date: 18 November 1980
• Docket Number: Civ. A. No. 80-1006.
• Parties: The FORT PIERCE UTILITIES AUTHORITY OF the CITY OF FORT PIERCE et al., Plaintiffs, v. DEPARTMENT OF ENERGY et al., Defendants.
• Court: U.S. District Court — District of Columbia

503 F. Supp. 1014

The FORT PIERCE UTILITIES AUTHORITY OF the CITY OF FORT PIERCE et al., Plaintiffs, v. DEPARTMENT OF ENERGY et al., Defendants.

Civ. A. No. 80-1006.

United States District Court, District of Columbia.

November 18, 1980.

COPYRIGHT MATERIAL OMITTED

Bonnie S. Blair, Cynthia S. Bogorad, Marta A. Manildi, Spiegel & McDiarmid, Washington, D. C., for plaintiffs.

Nancy C. Crisman, Janice A. Alperin, Dept. of Energy, Barbara Weller, Federal Energy Regulatory Commission, Washington, D. C., for defendants.

OPINION

HAROLD H. GREENE, District Judge.

Plaintiffs who, as municipalities, are consumers of oil and oil products, are seeking the reversal of orders of the Department of Energy (DOE) which denied them the right to participate in overcharge proceedings pending in that department against seven major oil companies.¹ The action is before the Court on motions for summary judgment by all the parties, and on motion to dismiss of the Federal Energy Regulatory Commission (FERC).² For the reasons stated below, the Court grants summary judgment to the plaintiffs.³

I

Plaintiffs, known as "Public Systems," are nine municipalities (or related authorities) which own and operate electric systems for the benefit of their citizens or ratepayers. In the course of their business, they purchase oil or oil products for the generation of electricity (or they buy electricity on a wholesale basis from a generating utility that itself purchases oil or oil products).

On May 1, 1979, the Department of Energy's Office of Special Counsel for Compliance (OSC)⁴ issued so-called Proposed Remedial Orders (PROs) to seven major crude oil producers,⁵ charging them with price violations with respect to the sale of crude oil, amounting to 1.7 billion dollars worth of overcharges. On June 13, 1979, the Department of Energy's Office of Hearings and Appeals (OHA) published a notice in the Federal Register (44 F.R. 33952) advising persons wishing to participate in the proceedings to file appropriate requests. The nine members of Public Systems did file such requests the following month, but OHA denied them participation as a full party⁶ allowing them only to file briefs on the appropriate remedy if and when a violation and the amount thereof had been established in the course of the proceedings. Upon a petition for reconsideration, OHA, in an order dated October 5, 1980, again denied party status to Public Systems, on a similar basis, without expanding upon its reasons for limiting the participation.⁷ The October 5 order did, however, grant party status to the Exxon Corporation⁸ in its capacity as a consumer or purchaser of crude oil.⁹

On November 5, 1979, Public Systems filed an appeal and a request for expedited relief from the OHA order with the Federal Energy Regulatory Commission. FERC rejected Public Systems' appeal on grounds of lack of jurisdiction under section 503 and 504 of the Department of Energy Organization Act, 42 U.S.C. §§ 7193 and 7194. The agency denied Public Systems' petition for rehearing on February 20, 1980, and this complaint¹⁰ followed.¹¹

II

In this Circuit, at least, a person has a right to intervene in agency proceedings if he would have standing in court to challenge or enforce a final action resulting from such proceedings. Koniag Inc., Village of Uyak v. Andrus, 580 F.2d 601, 606 (D.C.Cir.1978); Martin-Trigona v. Federal Reserve Board, 509 F.2d 363 (D.C.Cir.1975); National Welfare Rights Organization v. Finch, 429 F.2d 725 (D.C.Cir.1970); Office of Communication of the United Church of Christ v. FCC, 359 F.2d 994, 1000 n. 8 (D.C.Cir.1966).¹² Thus, the basic determinant of the legality of the refusal of the Department of Energy to permit these plaintiffs to participate in the administrative overcharge proceedings is whether plaintiffs would have standing eventually to participate in court challenges to the decisions made at the conclusion of those proceedings. If they would have such standing, they may participate in the administrative proceedings themselves; if they would not, DOE acted properly in excluding them. These general rules have been held applicable even in those situations where standing for the purposes of judicial review of the agency action did not flow from any express statutory grant. National Welfare Rights Organization, supra. As the court there said (429 F.2d at 736),

the right of judicial review cannot be taken as fully realized ... if appellants are excluded from participating in the proceeding to be reviewed."¹³

It is clear that under the standards set forth in decisions such as Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972) and Association of Data Processing Organizations v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970), plaintiffs clearly would have standing to appeal final agency action in the oil overcharge proceedings, for they meet both of the traditional standing tests.

First. Public Systems have a substantial interest in the outcome of the DOE proceedings, in that actions by DOE could cause them or the consumers they represent the requisite "injury in fact." The Public Systems utilities themselves have been injured in their ability to compete with other electric utilities, with capabilities to generate electricity from fuels other than oil, to the extent that oil overcharges have occurred. Further, the 400,000 consumers in the municipalities served by Public Systems would have been injured by illegal oil overcharges, to the extent that they have occurred, by having had to pay higher electric bills.¹⁴ Nor are these interests limited solely to the remedy stage, for the fair fashioning of a remedy can occur only if the underlying determination of liability takes the perspective of consumers into account. Indeed, since DOE and the oil companies have the authority at any time to settle the administrative proceedings,¹⁵ the remedy interests of the consumers can effectively be protected only if they are allowed to participate also in the liability stage of the proceedings. See p. 1024 infra.

Second. Public Systems' interests in the proceedings fall "arguably within the zone of interests to be protected" by the relevant statutes. See Sierra Club v. Morton, supra, 405 U.S. at 733, 92 S.Ct. at 1365. The Emergency Petroleum Allocation Act (EPAA)¹⁶ and the Department of Energy Organization Act (DOEOA)¹⁷ were designed to foster a competitive market in the supply of energy, to maintain a viable system of public utilities to serve the public's energy needs, and to promote the interests and participation of consumers in national energy programs.¹⁸

In short, plaintiffs possess strong and concrete interests in the outcome of the oil overcharge proceedings, and their interests with respect thereto were intended to be within the scope of statutory protection. It follows that, in application of the tests established by the above-cited decisions, they would have standing in court to challenge a final agency action; hence they also have standing to participate in the agency proceedings.

DOE argues that, notwithstanding these general principles, Public Systems are precluded from intervening in the administrative process for a number of specific statutory and regulatory reasons. These will now be examined seriatim.

III

DOE contends that any right to appeal Public Systems might otherwise have is precluded by statute. Section 503(a) of the DOEOA authorizes the Secretary to issue a remedial order to any person violating certain regulations; subsection (b) of the same section provides that such an order shall be deemed a final order, unreviewable by any court or agency (unless the person involved notifies the Secretary that he intends to contest it within thirty days); and subsection (c) provides for review of the remedial order by FERC should the recipient decide to contest it. 42 U.S.C. § 7193(a)-(c). From this scheme, DOE concludes that the only party entitled to appeal a DOE action concerning a remedial order is the person or entity to whom the order is issued, and that, since no order has been issued to plaintiffs, they have no right to appeal.

The flaw in this argument is that it would reverse what is the presumption that in effect arises from the general standing doctrine discussed in Part II supra. The law is not that a person with standing has a right to review only if relevant statutes additionally and explicitly grant him such right. To the contrary, if a person has standing under the Association of Data Processing Organizations test, he is deemed to have a right to judicial review unless a statute denies him that right either in express terms or by necessary implication from the legislative history. As will be seen infra, the statutes upon which DOE relies can at best be said to be silent on the judicial review issue insofar as it may affect consumers; they do not affirmatively deny such review rights.

In the National Welfare Rights Organization case, supra, organizations of welfare recipients requested status as parties in hearings which the Department of Health, Education and Welfare held to determine whether certain state welfare laws conformed with the Social Security Act. The Act specifically provided for judicial review only at the behest of "any state which is dissatisfied with a final act of the Secretary" (42 U.S.C. § 1316(a)(3)), and it was argued that this language necessarily excluded review rights of all others, including welfare recipients. But the court held to the contrary. In its view, when a plaintiff meets the tests set forth in Association of Data Processing Organizations v. FCC, supra, he has the right to judicial review of HEW action (and thus a right to intervene in the hearings) unless "Congress has in express or implied terms precluded judicial review" so as to exclude him. 429 F.2d at 735. Finding no express language in the Social Security Act prohibiting review, and no implied prohibition in the legislative...