Stertz v. Gulf Oil Corp.

• Decision Date: 25 March 1981
• Docket Number: 2-28.,No. 2-27,2-27
• Citation: 685 F.2d 1367
• Parties: Joseph STERTZ and Louis De Nicola, Plaintiffs-Appellees, v. GULF OIL CORPORATION, Defendant-Appellee, and Charles W. Duncan, Jr., Secretary of the Department of Energy, Stakeholder-Appellant. Jeffrey A. WEINER, Plaintiff-Appellee, v. GULF OIL CORPORATION, Defendant-Appellee, and Charles W. Duncan, Jr., Stakeholder-Appellant.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

685 F.2d 1367

Joseph STERTZ and Louis De Nicola, Plaintiffs-Appellees, v. GULF OIL CORPORATION, Defendant-Appellee, and Charles W. Duncan, Jr., Secretary of the Department of Energy, Stakeholder-Appellant.

Jeffrey A. WEINER, Plaintiff-Appellee, v. GULF OIL CORPORATION, Defendant-Appellee, and Charles W. Duncan, Jr., Stakeholder-Appellant.

Nos. 2-27, 2-28.

Temporary Emergency Court of Appeals.

Argued November 14, 1980.

Decided March 25, 1981.

Ben Wiles, Asst. U. S. Atty., Dept. of Justice, Brooklyn, N. Y., with whom Edward R. Korman, U. S. Atty., E. D. N. Y. and Harvey M. Stone, Asst. U. S. Atty., Brooklyn, N. Y., David A. Engels, Dept. of Energy, Washington, D. C., and Paul M. Geier and Dean S. Cooper, Sp. Counsel, Dept. of Energy, Washington, D. C., were on the brief, for appellant.

Douglas P. Null, Null & Null, P. C., Garden City, N. Y., with whom Miriam P. Null, Garden City, N. Y., was on the brief, for appellees (Stertz and De Nicola).

John W. Castles, 3d, Michael J. Murphy and Banks Brown, Lord, Day & Lord, New York City, were on the brief, for appellee (Gulf Oil Corp.).

Before GIGNOUX, METZNER and LACEY, Judges.

GIGNOUX, Judge.

The Secretary of the Department of Energy (DOE) appeals from that part of an order of the United States District Court for the Eastern District of New York which denied DOE's motion for judgment on the pleadings in an action brought by plaintiffs Joseph Stertz and Louis DeNicola against Gulf Oil Corporation (Gulf) and DOE under Section 210 of the Economic Stabilization Act of 1970, as amended, 12 U.S.C. § 1904 note, incorporated into the Emergency Petroleum Allocation Act of 1973, 15 U.S.C. § 751 et seq., by Section 754 of that Act.¹ Because this Court lacks jurisdiction to entertain this appeal, the appeal must be dismissed.

I

On July 26, 1978, DOE and Gulf entered into a consent order to settle allegations by DOE that Gulf, in violation of 10 C.F.R. § 212.84, had overstated its costs for imported crude oil by approximately $79 million (later reduced to $73.9 million) in the period October 1973 through May 1975. Without conceding such violations, Gulf agreed to pay $42.24 million to the Government in settlement of DOE's enforcement action, and DOE agreed to assume administrative responsibility for establishing and implementing a program to refund the $42.24 million to those persons who may have been overcharged by Gulf.

On August 18, 1978, fifteen days after notice of the consent order appeared in the Federal Register, plaintiffs Stertz and DeNicola, as representatives of purchasers of Gulf products who were overcharged by Gulf as the result of the alleged violations settled by the consent order, filed in the Eastern District of New York this class action against Gulf for overcharges pursuant to Section 210 of the Economic Stabilization Act.² Plaintiffs also sued DOE, alleging that under the consent order the Secretary acts as "stakeholder" of the $42.24 million consent order fund, "which is properly the property of plaintiffs in partial payment of their cause of action." They request that the Secretary be required "to pay over the Registry of this Court the fund he now holds on behalf of plaintiffs."

The development of this action in the district court is intertwined with DOE's efforts to devise a refund procedure under the July 26, 1978 consent order. Between August 1978 and August 1979, DOE proposed three different refund procedures for distribution of the $42.24 million, to each of which Gulf has registered strenuous objection. The first proposed plan was promulgated by DOE's Office of Hearings and Appeals (OHA) on August 28, 1978. Gulf objected to the proposed refund procedure, because it allegedly would subject Gulf to the risk of "double liability" by permitting indirect purchasers to be among those who would have first claim to the $42.24 million. Gulf contended that the fund was intended to satisfy the claims of direct purchasers, those purchasers who might have a judicial remedy against Gulf under Section 210, before payment could be made to indirect purchasers, those purchasers who could not sue Gulf.³ On March 13, 1979, DOE issued a second proposed refund procedure, which, in Gulf's view, failed to cure the deficiencies in the first proposal. After extended negotiations between DOE and Gulf, DOE unveiled its final proposed refund procedure on July 13, 1979. The proposal was again unsatisfactory to Gulf, since it allegedly still could subject Gulf to double liability by permitting a substantial portion of the $42.24 million to be paid to persons who were not direct purchasers and could not sue Gulf, thereby depleting the amount available to pay the claims of direct purchasers who recovered judgments under Section 210.

In the meantime, several months after the first proposed refund plan was promulgated, on December 8, 1978, DOE filed a motion to dismiss the pending district court action against it, or alternatively to stay the action pending completion of distribution of the consent order fund. On March 5, 1979, Gulf filed a motion for leave to amend its answer to assert cross-claims against DOE challenging DOE's implementation of the consent order, and a motion for a preliminary injunction enjoining DOE from distributing funds pursuant to its proposed refund procedure until the issues raised by Gulf's cross-claims could be resolved.⁴ On March 23, 1979, DOE responded by filing pursuant to Fed.R.Civ.P. 12(c) a motion for judgment on the pleadings dismissing the action as against DOE for failure to state a claim upon which relief can be granted.

On March 6, 1980, the district court issued a memorandum and order which denied DOE's motions for dismissal or a stay, and for judgment on the pleadings, and which granted Gulf's motions for leave to amend its answer and for a preliminary injunction. 528 F.Supp. 735. The order implementing this decision was entered May 7, 1980, and on June 6, 1980, DOE filed a notice of appeal which was expressly limited to that part of the district court's order which denied DOE's motion for judgment on the pleadings seeking dismissal of the complaint as to it. DOE has not appealed those parts of the May 7, 1980 order which granted Gulf leave to amend its answer to assert cross-claims against DOE and which preliminarily enjoined DOE from implementing the July 26, 1978 consent order.⁵

II

Section 211(b)(1) of the Economic Stabilization Act vests this Court with "the powers of a circuit court of appeals" with respect to the jurisdiction conferred on it by the Act. 12 U.S.C. § 1904 note. Under 28 U.S.C. § 1291, the appellate jurisdiction of courts of appeals is limited to "final decisions of the district courts . . . except where a direct review may be had in the Supreme Court." Ordinarily, therefore, this Court is without jurisdiction to hear an appeal from an interlocutory order of a district court unless the district court has certified the order for appeal pursuant to 28 U.S.C. § 1292(b). See Marine Petroleum Co. v. Champlin Petroleum Co., 29 Fed.R. Serv.2d 522, 529 (Em.App.1980). It is elementary that the denial of a motion for judgment on the pleadings seeking dismissal of an action is an interlocutory order; it is not a final judgment and generally is not immediately appealable. Catlin v. United States, 324 U.S. 229, 233, 236, 65 S.Ct. 631, 633, 635, 89 L.Ed. 911 (1945); Paplisky v. Berndt, 503 F.2d 554, 555 (2d Cir.), cert. denied, 419 U.S. 1048, 95 S.Ct. 624, 42 L.Ed.2d 643 (1974); 9 Moore's Federal Practice ¶ 110.081 at 113 (2d ed. 1980); 5 Wright & Miller, Federal Practice and Procedure: Civil § 1372 (1969).

DOE argues that this appeal falls within the collateral order exception to the final judgment rule enunciated in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), as applied by this Court in Marine Petroleum Co. v. Champlin Petroleum Co., supra. In Cohen, the Supreme Court recognized a "narrow exception" to the final judgment rule, Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374, 101 S.Ct. 669, 673, 66 L.Ed.2d 571 (1981), and held that an appeal may be taken from a district court order that is not a final judgment when the order constitutes a final determination of a claim of right; the claim of right is "separable from, and collateral to," the merits of the main action, and "too important to be denied review"; and the claimed right is "too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." Cohen, supra at 546, 69 S.Ct. at 1225. More recently, the Court has defined this "small class," id., of appealable collateral orders in these terms: "`The order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment.'" Firestone Tire & Rubber Co. v. Risjord, supra (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351 (1978)).

Marine Petroleum involved an action brought by Marine Petroleum Co. under Section 210 of the Economic Stabilization Act for alleged overcharges...