Sun Oil Co. of Pa. v. Federal Energy Admin.

• Decision Date: 21 March 1978
• Docket Number: No. 5-27.,5-27.
• Citation: 572 F.2d 867
• Parties: SUN OIL COMPANY OF PENNSYLVANIA, Plaintiff-Appellant, v. FEDERAL ENERGY ADMINISTRATION and Frank G. Zarb, Administrator, FEA and N. Allen Anderson, Regional Administrator, Federal Energy Administration, Region V, Defendants-Appellees, and Oskey Gasoline and Oil Company, Intervenor-Appellee.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

572 F.2d 867

SUN OIL COMPANY OF PENNSYLVANIA, Plaintiff-Appellant, v. FEDERAL ENERGY ADMINISTRATION and Frank G. Zarb, Administrator, FEA and N. Allen Anderson, Regional Administrator, Federal Energy Administration, Region V, Defendants-Appellees, and Oskey Gasoline and Oil Company, Intervenor-Appellee.

No. 5-27.

Temporary Emergency Court of Appeals.

Argued January 6, 1978.

Decided March 21, 1978.

Jon A. Baughman, Pepper, Hamilton & Scheetz, Philadelphia, Pa., with whom Amelia H. Boss, Philadelphia, Pa., of the same firm and David Bland, Barrow, Bland & Rehmet, Houston, Tex., and Dean H. Hasseman, Philadelphia, Pa., Sun Oil Co. of Pennsylvania, were on the brief for plaintiff-appellant.

John Hanson, Dept. of Justice, Washington, D. C., with whom Barbara Allen Babcock, Asst. Atty. Gen. and Dennis G. Linder, Marvin L. Coan, Washington, D. C., were on the brief for defendants-appellees.

Robert A. Schwartzbauer, Dorsey, Windhorst, Hannaford, Whitney & Halladay, Minneapolis, Minn., with whom George Eck, Minneapolis, Minn. of the same firm, was on the brief for intervenor-appellee.

Before HOFFMAN, INGRAHAM and GEWIN, JJ.

GEWIN, Judge:

This appeal follows a series of Federal Energy Administration (FEA) and district court orders arising from a request by Oskey Gasoline & Oil Co. (Oskey), the intervenor-appellee, for termination of its relationships with its base period suppliers and the assignment of new, permanent suppliers. We vacate the stay order below and remand the case for a determination of Sun's claims on the merits.

We briefly summarize the history of the case. On September 24, 1974, FEA Region V issued an order terminating Oskey's relationships with its base period suppliers (Farmland, OKC, and Century) on the basis that they were "unworkable." On September 26, 1974, Region V ordered Sun and other refiners to supply Oskey its base period allocation. Sun appealed from the September 26 order to the FEA Office of Exceptions and Appeals, which on February 20, 1975, invalidated the September 26 order. Sun Oil Co. v. Oskey Gasoline and Oil Co., 2 CCH Fed.Energy Guidelines ¶ 80,535. Similar appeals filed by Texaco, Champlin, Mobil, Shell, and Union were granted. Texaco, Inc. v. Oskey Gasoline and Oil Co., 2 CCH Fed.Energy Guidelines ¶ 80,564 (Apr. 8, 1975); Shell Oil Co. v. Oskey Gasoline & Oil Co., 2 CCH Fed.Energy Guidelines ¶ 80,565 (Apr. 8, 1975). On February 28, 1975, Region V reestablished Farmland, OKC, and Century as Oskey's suppliers.

Oskey, now essentially back in its former position, filed an Application for Exception requesting a permanent assignment of new suppliers other than its base period suppliers. On April 9, 1975, FEA granted Oskey's Application for Exception in modified form. Oskey Gasoline and Oil Co., 2 CCH Fed.Energy Guidelines ¶ 83,114. Both Farmland and Sun, among others, were assigned to supply Oskey under a Region V order of April 30, 1975, pursuant to the April 9 decision.

Meanwhile, on March 11, 1975, Farmland filed an action in the United States District Court for the District of Kansas challenging the validity of FEA's February 20, 1975 order and seeking a stay of Region V's February 28, 1975 order under which Farmland was to supply Oskey some 6.77 million gallons of motor gasoline during 1975. On May 2, 1975, the Kansas court issued a temporary injunction restraining enforcement of FEA's order of February 20, 1975, and subsequent orders based thereon. Farmland Industries, Inc. v. Goldstein, Civ.No. 75-57-C2 (D.Kan. May 2, 1975). FEA decided not to appeal the Kansas court's decision and Region V rescinded its assignment orders of February 28 and April 30, 1975.

On June 19, 1975, FEA Region V issued a Notice of Temporary Assignment directing Sun to supply a portion of Oskey's base period allocation, setting forth a proposed permanent assignment order to Sun, and soliciting Sun's comments, pursuant to 10 C.F.R. § 205.33. On July 21, 1975, Sun filed written comments on the proposed permanent assignment order, contending that the proposed assignment would be improper because FEA was attempting to bind Sun to the decision in the Kansas litigation, although Sun was not a party to that action. On August 1, 1975, Region V issued an assignment order making permanent Sun's assignment to provide Oskey over 18 million gallons of motor gasoline per year. On October 14, 1975, the FEA Office of Exceptions and Appeals denied Sun's appeal from the August 1 order. 2 CCH Fed.Energy Guidelines ¶ 80,705.

On August 21, 1975, the present action was filed in the United States District Court for the Southern District of Texas. Sun contended that the August 1 order was not supported by substantial evidence and that the order violated due process. Oskey was permitted to intervene. On December 11, 1975, Sun filed a motion for judgment on the pleadings. After the Kansas court denied a motion by Oskey to join Sun as a party in the Kansas action,¹ Oskey, on December 10, 1976, moved the Texas court to transfer the Texas action to Kansas or, in the alternative, to stay the proceedings in Texas. In its Memorandum and Order of August 29, 1977, the Texas court denied Oskey's motion to transfer and granted Oskey's motion to stay, pending resolution of the Kansas action. The Texas court did not reach the merits of Sun's motion for judgment on the pleadings.

FEA and Oskey contend that the decision of the Texas court is not conclusive or final within the meaning of 28 U.S.C. § 1291.² Oskey points out that the Texas court has merely deferred Sun's motion pending the Kansas decision, and asserts that the case is pending on the Kansas court's docket, to be tried when it is reached on the court's calendar. After the Kansas court makes a final determination of the validity of the February 20, 1975 order, the argument goes, Sun may seek review of the August 1, 1975 order in the court below.

The problem with this argument is that no party to the Kansas action shows any interest in challenging the temporary injunction issued May 2, 1975. The assignment orders of February 28, 1975, and April 30, 1975, were withdrawn after the injunction issued. FEA did not appeal from the Kansas court's decision and has adopted it by conforming its August 1, 1975 assignment order to the injunction. Oskey is pleased with the August 1 assignment order (as is Farmland, we presume), and Sun is not a party to the Kansas action. The result is that the temporary injunction issued by the Kansas court has been in effect nearly three years.

We believe the Texas court's order staying the proceedings pending a determination by the Kansas court effectively terminated the action below. A number of courts of appeals have recognized that a stay of proceedings may have a terminal effect and have pragmatically addressed themselves to the problem. In Hines v. D'Artois, 531 F.2d 726 (5th Cir. 1976), where the district court order stayed a civil rights action until plaintiff initiated and completed an EEOC proceeding which might take from eighteen months to five years, the court treated the stay order as appealable under section 1291:

A "practical" construction requires that when a plaintiff's action is effectively dead, the order which killed it must be viewed as final. Effective death should be understood to comprehend any extended state of suspended animation.

531 F.2d at 730.

The decision in Hines invoked the Supreme Court's command in Cohen v. Beneficial Industry Loan Co., 337 U.S. 541, 546, 69 S.Ct. 1221, 1226, 93 L.Ed. 1528, 1536 (1949), that the requirement of finality is to be given a "practical rather than a technical construction." The Hines court also took note of the decisions in Gillespie v. United States Steel Corp., 379 U.S. 148, 85 S.Ct. 308, 13 L.Ed.2d 199 (1964), and Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 82 S.Ct. 1294, 8 L.Ed.2d 794 (1962), where a stay order in effect directing the parties to go to state court, institute an action, and obtain a ruling on the state law was held appealable as a final order under 28 U.S.C. § 1291. The courts in Amdur v. Lizars, 372 F.2d 103, 105-06 (4th Cir. 1967), and In re Grand Jury Proceedings, 525 F.2d 151, 155 (3d Cir. 1975), similarly held appealable indefinite stays which had the practical effect of a dismissal of the proceedings. See generally Wright, Miller & Cooper, 15 Fed. Practice and Procedure § 3914, at 564. See also Kelley v. Metropolitan County Board of Education, 436 F.2d 856, 862 (6th Cir. 1970), cert. denied 409 U.S. 1001, 93 S.Ct. 322, 34 L.Ed.2d 262 (1972); McSurely v. McClellan, 138 U.S.App.D.C. 187, 194, 426 F.2d 664, 671 n. 47 (1970) ("There is undoubted appellate jurisdiction to review the grant of an indefinite stay in a civil proceeding.")

Neither of the cases cited by FEA is controlling. In Rodgers v. United States Steel Corp., 508 F.2d 152, 159 (3d Cir. 1975), the stay was not appealable as a final order under section 1291 because it was by its terms tentative, the district...