Getty Oil Co. v. Department of Energy

• Decision Date: 14 October 1988
• Docket Number: No. 3-52.,3-52.
• Citation: 865 F.2d 270
• Parties: GETTY OIL COMPANY v. DEPARTMENT OF ENERGY, et al.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

865 F.2d 270

GETTY OIL COMPANY v. DEPARTMENT OF ENERGY, et al.

No. 3-52.

Temporary Emergency Court of Appeals.

Argued May 4, 1988.

Decided October 14, 1988.

Phillip P. Kalodner, Philadelphia, Pa., was on the brief for Appellants Utilities, Transporters and Manufacturers.

Andrew P. Miller, Dickstein, Shapiro and Morin, Washington, D.C., with whom Milton B. Whitfield and J. Bradley Ortins of the same firm, were on the brief for Appellee States Delaware, Iowa, Louisiana, North Dakota, Rhode Island and West Virginia.

Neil F. Hartigan, Atty. Gen., and Michael J. Hayes, Deputy Atty. Gen., Chicago, Ill., were on the brief for Appellee State of Ill.

Dave Frohnmayer, Atty. Gen., and Donald C. Arnold, Chief Counsel, Dept. of Justice, Salem, Or., were on the brief for Appellee State of Or.

LeRoy S. Zimmerman, Atty. Gen., and Eugene F. Waye, Deputy Atty. Gen., Harrisburg, Pa., were on the brief for Appellee Commonwealth of Pa.

Bernard Nash, Edward G. Modell and Eileen P. Shannon, Nash, Railsback & Plesser, Washington, D.C., were on the brief for Appellee States Hawaii, Ill., Kan., Neb., Nev., N.C., Guam and the Virgin Islands.

James F. Flug and Paula Dinerstein, Lobel, Novins, Lamont & Flug, Washington, D.C., were on the brief for Appellee States Ala., Cal., Conn., Idaho, Ind., Md., Mich., Miss., Mont., Ohio, S.D., Vt., Wis. and Wyo.

John Van de Kamp, Atty. Gen., and Yeoryios C. Apallas, Deputy Atty. Gen., San Francisco, Cal., were on the brief for Appellee State Cal.

Gilbert T. Renaut, Office of Judicial Litigation, Economic Regulatory Admin., U.S. Dept. of Energy, Washington, D.C., with whom Theodore A. Miles, Don W. Crockett and Paul M. Geier of the same office, were on the brief for Appellee U.S. Dept. of Energy.

Before GRANT, PECK and METZNER, Judges.

GRANT, Judge.

Before this court is an appeal from a denial of intervention in Getty Oil Company v. United States Department of Energy by the United States District Court for the District of Delaware. Appellants have challenged the court's determination that the requirements for intervention of right under Rule 24(a)(2) of the Federal Rules of Civil Procedure have not been met. For the following reasons we affirm the district court's judgment.

I. Background

Appellants are a group of six electric utility companies, fourteen shipping companies and four paper manufacturers (Utilities, Transporters and Manufacturers) ¹ who filed a motion to intervene in the district court proceeding reviewing the Department of Energy's (DOE) decision concerning restitution of crude oil overcharges from Getty Oil Company (Getty). Appellants sought intervention limited to the issue of the proper distribution of the overcharges. The district court denied both intervention of right and permissive intervention.

The circumstances underlying DOE's restitutionary remedy, described in detail in the district court's opinion, Getty Oil Co. v. United States Department of Energy, 117 F.R.D. 540 (D.Del.1987), grew out of agreements made in May of 1973 between Getty and Standard Oil to buy and sell crude oil. The Federal Energy Administration, which preceded DOE, found violations of certain price ceiling regulations and issued a Remedial Order on August 12, 1976. The Office of Hearings and Appeals (OHA) affirmed the order, including its calculation of petroleum overcharges, and further assessed prejudgment interest against Getty.

After determining that it was impossible to identify by reasonable means the persons who were adversely affected by the Getty overcharges, OHA adopted a remedy of remitting the entire amount of the overcharges directly to the United States Treasury. The district court affirmed DOE's plan as to all major issues.² This appellate court likewise affirmed Getty's liability and upheld the restitutionary policy proposed by OHA.³ However, it rejected the proposed transfer directly to the federal government.⁴ Rather, it directed the district court to establish an account for the overcharge funds pending final distribution, and directed DOE to reconsider the proper remedial disposition of the monies, taking into account the rights that any party, including proposed intervenors, may have. That escrowed account, which held almost $180 million as of June 30, 1987, is called the "$180 Million Fund."

DOE, which had been drafting regulatory procedures for curing the many violations of oil price control legislation, established Subpart V regulations to provide petroleum overcharge victims with a method of claiming entitlement to refunds. The TECA mandate that DOE attempt to identify those overcharge victims, and the pending distribution of a multi-billion dollar overcharge fund in the Stripper Well Exemption Litigation, M.D.L. 378 (Stripper Well), led to the development of more refined restitutionary procedures for distribution to individual victims. After years of negotiations leading ultimately to a settlement among the federal government, the state governments, and many private petroleum purchasers in Stripper Well, the Kansas district court approved a Final Settlement Agreement on July 7, 1986. That Agreement contained two provisions affecting the Getty case before us today. The first was a declaration that DOE would publish a Modified Policy concerning pending and future overcharge distributions to private claimants, based upon the procedures established pursuant to the existing Subpart V refund regulations. Stripper Well Agreement at IV.B.1. The second provision stated that DOE's modified restitutionary policy would be applied to the Getty overcharge refund as well as to the Stripper Well funds.

The matters in Getty Oil Co., OHA Case No. HRR-0074 (and related cases), concerning the yet undermined issues of liability remanded by the District Court in Getty Oil Co. v. DOE, C.A. No. 77-434 (D.Del.), are excluded from this Agreement, provided, however, that to the extent the funds arising out of such matters are determined to be Alleged Crude Oil Violations funds, the provisions of paragraph IV.B. hereof shall apply.

Stripper Well Agreement at III.B.6.

On August 20, 1986, DOE issued an Order implementing its Modified Statement of Restitutionary Policy, which would be applied to all pending and future Subpart V cases. The policy established the apportionment of an overcharge fund: 20% would be reserved for private claims and 80% would be divided equally between the federal government and the States.

During this same time period, Congress enacted the Petroleum Overcharge Distribution and Restitution Act (PODRA), 15 U.S.C. §§ 4501-07, which affected any funds recovered for violations of the Emergency Petroleum Allocation Act (EPAA) and the Economic Stabilization Act (ESA). However, the Act explicitly excluded the Stripper Well settlement funds from its control. ⁵ 15 U.S.C. § 4501(c)(2).

During this period of general policymaking concerning overcharge refunding, the Getty case was pending. While reconsidering its restitutionary policy in this case, DOE received comments from private parties and permitted some individual utility, transporting and manufacturing companies to intervene in its administrative process. On July 17, 1986, DOE issued its decision concerning distribution of the $180 Million Fund. 14 DOE ¶ 83,033 (1986). Applying the procedures and allocations developed in the Stripper Well Agreement, it gave individual injured claimants the opportunity to file under the Subpart V regulations for a refund out of the 20% of the Fund reserved for private restitution.

Appellants Utilities, Transporters and Manufacturers were neither parties nor participants in the district court Getty decisions, the DOE administrative proceeding herein, or the Stripper Well Agreement. They sought to intervene in the district court's review of the DOE plan of distribution so that they could place two concerns before the court: first, that the 20% reserve for private claimants may be insufficient; and second, that their claims should cover all overcharges they sustained.

II. The District Court's Decision

On August 21, 1987, Chief Judge Schwartz of the District Court for the District of Delaware denied the motion of Utilities, Transporters and Manufacturers for intervention, but granted their motion to file briefs as amici curiae. 117 F.R.D. at 550.

In its thorough Memorandum Opinion, the court held that appellants did not have a "legally cognizable interest" under section 209 of the ESA, under PODRA, or under the Stripper Well Agreement, that would entitle them to intervention of right. Id. at 547-49. Nor was the court willing to permit intervention in its discretion. It noted that, since individual claims have not yet been considered, these proposed intervenors have only an attenuated interest now. However, the court recognized that amicus briefs reflecting appellants' position on the remedial issue would offer an additional view to aid the court's review of DOE's decision. Accordingly, it granted their motion to appear as amici curiae.

III. Issues on Appeal

We are asked to consider whether the district court erred in denying intervention of right to Utilities, Transporters and Manufacturers. Appellants assert that the district court should allow intervention just as OHA permitted the intervention of private claimants in the administrative process. According to appellants, TECA case law does not mandate nonintervention: and that, although previous TECA decisions have affirmed the denial of intervention to challenge a consent order which denied the proposed intervenors' right to restitutionary funds, this court has never refused intervention in a settlement in which intervenors seek to protect a right to funds recognized by OHA. Furthermore, they contend, TECA's ruling in Getty I that the district court consider the possible "rights" to restitution of all parties, including intervenors, was based upon the section 209 mandate of restitution, the exact section upon which the...