IN RE DEPT. OF ENERGY STRIPPER WELL EXEMPTION LITIGATION
| Decision Date | 27 March 1995 |
| Docket Number | M.D.L. 378. Civ. A. No. 79-1258. |
| Parties | In re The DEPARTMENT OF ENERGY STRIPPER WELL EXEMPTION LITIGATION. W.R. MURFIN d/b/a Murfin Drilling Co. and Champlin Petroleum Company, Plaintiffs, v. UNITED STATES DEPARTMENT OF ENERGY, et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
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Miller & Chevalier, Chartered, Washington, DC, by Donald B. Craven, James P. Tuite, Daniel M. Flores, and Morris, Laing, Evans, Brock & Kennedy, Chartered, Wichita, KS, by Joseph W. Kennedy, Dennis M. Feeney, for plaintiff Union Pacific Resources Co.
Paul Michael, Edward P. Levy, Judicial Litigation Div., Economic Regulatory Admin., U.S. Dept. of Energy, Washington, DC, for U.S. Dept. of Energy.
This matter is before the court on cross motions for summary judgment. Defendant Department of Energy (DOE) has moved for summary judgment on its counterclaim against plaintiff Union Pacific Resources Company, formerly Champlin Petroleum Company (UPRC). DOE requests that the court enter an order requiring UPRC to deposit into the escrow account established by the court the sum of $3,882,321 plus additional prejudgment interest accruing after December 31, 1993. Doc. 2229 (). UPRC opposes DOE's motion and seeks summary judgment in its favor on DOE's counterclaim. Doc. 2155. The court heard oral argument on the motions, has considered the voluminous briefs and is now prepared to rule.
This action began in 1976 with the filing of the first action by an oil producer seeking to enjoin the Federal Energy Administration, now the DOE, from enforcing Ruling 1974-29. This Ruling, and the regulations it interpreted, required the exclusion of injection wells from the well count in calculating the average daily production per well for qualification for the stripper well exemption from price controls. This court enjoined enforcement of the regulations in question, but ordered the plaintiff oil producers to deposit into escrow the difference between the stripper well price and the controlled price of crude oil affected by the injunction.
In response to the DOE's position that it would continue to enforce Ruling 1974-29 against oil producers who were not parties to the original action and who did not have the benefit of this court's injunction, other oil producers filed suit in this and other federal district courts. Similar injunction and escrow orders were entered, allowing the oil producers to charge the stripper well price and ordering the price differential escrowed. In July 1979, these cases were consolidated by the Judicial Panel on Multidistrict Litigation and were assigned to this court as M.D.L. 378. This court has presided over these consolidated cases since that time.
The Temporary Emergency Court of Appeals (TECA) upheld the validity of the regulations and Ruling 1974-29 in In re: The Department of Energy Stripper Well Exemption Litigation, 690 F.2d 1375 (TECA 1982), cert. denied sub nom. Energy Reserves Group, Inc. v. Hodel, 459 U.S. 1127, 103 S.Ct. 763, 74 L.Ed.2d 978 (1983). Pursuant to TECA's mandate, the court entered judgment for DOE. At that point, the court considered the action to be, in effect, a government enforcement action under § 209 of the Economic Stabilization Act, 12 U.S.C. § 1904 note, in which the fact of overcharge had been determined and the court was faced with effecting restitution among the myriad of users of petroleum products during the relevant time period who had paid a portion of the overcharges. See In re: The Department of Energy Stripper Well Exemption Litigation, 578 F.Supp. 586, 593 (D.Kan. 1983).
Following hearings and negotiations among the parties as to the proper distribution of the escrowed overcharge funds, the parties reached a settlement. The court approved the Final Settlement Agreement (FSA) on July 7, 1986. See In re: The Department of Energy Stripper Well Exemption Litigation, 653 F.Supp. 108 (D.Kan. 1986). Since the entry of the FSA, the court has issued numerous opinions adjudicating disputes among various signatories to the FSA regarding the interpretation of the FSA. The court has overseen the distribution of multi-billions in escrowed overcharges to the thousands of participants in the FSA, including oil refiners and resellers, gasoline retailers, airlines, land and water carriers, farm cooperatives, utility companies, the states and territories, and the federal government.
The FSA did not resolve the issue of any remaining liability of the parties for payment of overcharge funds into escrow. The parties to M.D.L. 378 specifically reserved their rights to litigate the issue of remaining liability for overcharges. FSA § II.A.6. A number of parties settled their liability for overcharges with DOE and have paid funds into the court's escrow for distribution via the mechanism set up by the FSA.
In September 1988, the United States of America filed a counterclaim on behalf of DOE against the remaining parties, pursuant to §§ 209 and 211 of the Economic Stabilization Act (ESA), 12 U.S.C. § 1904 note, as incorporated into section 5(a)(1) of the Emergency Petroleum Allocation Act (EPAA), 15 U.S.C. § 754(a)(1). The DOE's counterclaim alleges that the remaining parties have not deposited sufficient funds into the court's escrow to satisfy their overcharge liability. In previous opinions, the court has granted judgment in favor of the DOE against other oil producers. See In re: The Department of Energy Stripper Well Exemption Litigation (Sun Company, Inc. and Oryx Energy Company v. Department of Energy), 752 F.Supp. 1527 (D.Kan.1990), aff'd, 944 F.2d 918 (TECA 1991); In re: The Department of Energy Stripper Well Exemption Litigation (Chevron U.S.A., Inc. v. Department of Energy), 746 F.Supp. 1452 (D.Kan.1990), aff'd in part, 944 F.2d 914 (TECA 1991) (); In re: The Department of Energy Stripper Well Litigation (Mobil Oil Corp. v. Department of Energy), 722 F.Supp. 649 (D.Kan.1989), on reconsideration, 739 F.Supp. 1446 (1990) (imposing operator liability).
UPRC's predecessor Champlin was the operator of, and owned a working interest in, the Arch Unit in Sweetwater County, Wyoming. The principal working interest owners were Sun Oil Company and Coastal States Oil and Gas Company. Sun and Coastal each took their production in kind and each also marketed production on behalf of other interest owners. DOE seeks to hold UPRC liable for escrow account deficiencies attributable to Arch Unit production taken in kind and sold by Sun and Coastal.
The court is familiar with the standards governing the consideration of a motion for summary judgment. The Federal Rules of Civil Procedure provide that summary judgment is appropriate when the documentary evidence filed with the motion "shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A principal purpose "of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses...." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The court's inquiry is to determine "whether there is the need for a trial — whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).
The burden at the summary judgment stage is similar to the burden of proof at trial. The court must enter summary judgment, "after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. at 2552. The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact on its claim. Rule 56, however, imposes no requirement on the moving party to "support its motion with affidavits or other similar materials negating the opponent's claim." Id. at 323, 106 S.Ct. at 2553 (emphasis in original). Once the moving party has properly supported its motion for summary judgment, the nonmoving party may not rest upon mere allegations or denials contained in the nonmoving party's pleadings, but must set forth specific facts showing a genuine issue for trial, relying upon the types of evidentiary materials contemplated by Rule 56. Fed.R.Civ.P. 56(e). Each party must demonstrate to the court the existence of contested facts on each claim it will have to prove at trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. The court reviews the evidence on summary judgment under the substantive law and based on the evidentiary burden the party will face at trial on the particular claim. Anderson, 477 U.S. at 254, 106 S.Ct. at 2513.
At the summary judgment stage, the judge's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249, 106 S.Ct. at 2510-11. Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are functions of the finder of fact, not the functions of the judge when ruling on a motion for summary judgment. The evidence of the nonmoving party is to be believed. All justifiable inferences are to be drawn in favor of the nonmovant. Id. at 255, 106 S.Ct. at 2513-14.
The following facts have been set forth by UPRC and are uncontroverted unless otherwise noted.
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