U.S. v. Uni Oil, Inc., MID-ATLANTIC
| Decision Date | 19 May 1981 |
| Docket Number | 79-3082,MID-ATLANTIC,Nos. 79-2488,s. 79-2488 |
| Citation | 646 F.2d 946 |
| Parties | UNITED STATES of America, Plaintiff-Appellant, v. UNI OIL, INC., Thomas M. "Mick" Hajecate, Thomas H. "Tom" Hajecate, James E. Fisher, Charles R. Akin, Charles Goss and Ball Marketing Enterprise, Defendants-Appellees. UNITED STATES of America, Plaintiff-Appellant, v.PETROLEUM COMPANY, LTD., et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
J. A. Tony Canales, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., Richard A. Sauber, Sp. Atty., Washington, D. C., for the U. S.
Charles N. Wooten, Sr., Charles Brandt, Lafayette, La., Thano Dameris, Houston, Tex., for Uni Oil, Hajecate, Hajecate, Akin, Goss and Ball Marketing.
Dan Ryan, Houston, Tex., for Fisher.
Vincent J. Fuller, Judith A. Miller, Scott Blake Harris, Washington, D. C., Edward B. McDonough, Jr., Houston, Tex., Robert L. Weinberg, Washington, D. C., for Crude Co. and Masek.
Appeals from the United States District Court for the Southern District of Texas.
Before HILL, RUBIN and ANDERSON, Circuit Judges.
Under regulations adopted by the Department of Energy, see 10 C.F.R. §§ 212.1 -212.188 (1980), 1 vendors of domestic crude oil operate subject to various price controls. This appeal is a consolidation of two cases in which appellee oil dealers were indicted for various fraudulent schemes and practices which allegedly enabled them to sell domestic crude oil for prices in excess of legal maxima. 2 See 10 C.F.R. § 212.131 (1980).
Although the indictments exclusively charge Title 18 offenses, both the indictments and the defenses thereto make use of the Emergency Petroleum Allocation Act (EPAA) 15 U.S.C. § 751 et seq. and its regulations. The tension between Title 18 and the EPAA poses difficult questions regarding our jurisdiction and the sufficiency of the indictments. The district court dismissed both indictments. For the reasons set out below, we conclude that we have jurisdiction to consider this appeal and that both indictments are sufficient. Therefore, we reverse and remand to the district court.
On March 7, 1979 a grand jury in Houston, Texas returned an eighty-four count indictment against Uni Oil, Ball Marketing Enterprise and five named individual defendants, Thomas "Mick" Hajecate, Thomas "Tom" Hajecate, James Fisher, Charles Akin, and Charlie Goss. United States v. Uni Oil, Inc., No. 79-2488 (hereinafter Uni Oil ). The indictment charged that the defendants conspired to violate the Racketeer Influenced and Corrupt Organizations (RICO) statute in order to miscertify and sell oil that was properly considered "old" oil as "new" oil, 18 U.S.C. § 1962(d) (Count 1), conducted the affairs of an enterprise, Uni Oil, through a pattern of racketeering activity which included mail fraud and commercial bribery, 18 U.S.C. § 1962(c) (Count 2), furthered a scheme and artifice to defraud the United States and its agencies through mailings which fraudulently certified "old" oil as "new" oil, 18 U.S.C. § 1341 (Counts 3-34), engaged in wire fraud to further the same scheme and artifice, 18 U.S.C. § 1343 (Counts 35-59), and made false and fraudulent representations regarding the origin of oil in records caused to be prepared and submitted pursuant to government regulation. 18 U.S.C. § 1001 (Counts 60-84).
The appellees challenged the indictment on numerous grounds. After extensive briefing, a hearing was held before the Honorable Ross N. Sterling of the United States District Court for the Southern District of Texas on May 29, 1979. At the close of argument, Judge Sterling announced that the appellees' motions to dismiss were granted. One week later the judge issued a one sentence order dismissing the indictment. Despite the complexity of the issues, the order was not accompanied by a memorandum or by any other analysis by the district judge.
On April 30, 1979 a grand jury in Houston, Texas returned a twenty-nine count indictment against the Mid-Atlantic Petroleum Company, Ltd., The Crude Company, Uni Oil, Inc., H.C. Iran, Ltd. and five named individuals, John Allen Masek, Thomas "Tom" Hajecate, Thomas "Mick" Hajecate, Charles R. Akin, and R. Stanley Corbitt. United States v. Mid Atlantic Petroleum Co., Ltd., No. 79-3082 (hereinafter Mapco). The indictment charged that the defendants conspired to conduct the affairs of an enterprise, Uni Oil, through a pattern of racketeering activity in order to disguise oil that was properly to be considered "old" oil as "new" oil, 18 U.S.C. § 1962(d) (Count 1), conducted the affairs of Uni Oil through a pattern of racketeering activity, 18 U.S.C. § 1962(c) (Count 2), caused false and fraudulent invoices and certificates to be placed in the mail 18 U.S.C. § 1341 (Counts 3-23), and knowingly made false and fraudulent representations in a matter within the jurisdiction of the Federal Energy Administration, i. e., falsely certifying domestic crude oil, 18 U.S.C. § 1001 (Counts 24-29).
As in Uni Oil, the appellees challenged the indictment on numerous grounds. After extensive briefing, oral argument was held before the Honorable Ross N. Sterling of the United States District Court for the Southern District of Texas. From the bench, Judge Sterling ordered dismissal of the indictment for "the reasons stated in the Defendants' briefs." On July 25, 1979, Judge Sterling issued a written order granting the motions to dismiss "for the reasons set out in the Defendants' briefs."
The threshold question is whether we have jurisdiction to consider this appeal. Section 211(b)(2) of the Economic Stabilization Act of 1970 provides that the Temporary Emergency Court of Appeals shall have "exclusive jurisdiction of all appeals from the district courts of the United States in cases and controversies arising under this title or under regulations or orders issued thereunder." 12 U.S.C. § 1904 note (West Supp.1977). Section 5(a)(1) of the Emergency Petroleum Allocation Act, as amended, 15 U.S.C. § 754, incorporates and carries forward this grant of special jurisdiction. Accordingly, if the district court adjudicated an EPAA issue we lack jurisdiction. Coastal States Marketing, Inc. v. New England Petroleum Corp., 604 F.2d 179, 187 (2d Cir. 1979).
We begin by noting that an EPAA issue is not raised simply because the indictments "included an explanation of the EPAA regulations proscribing miscertification and that such regulations provided a convenient format for defendants' (alleged) scheme of fraud and criminal enterprise," United States v. Zang, 645 F.2d 999 at 1003 (Em.App. 1981). However, the thrust of appellees' argument is not that the indictment arose under the EPAA. Rather, they contend that two EPAA issues were raised in defense to the indictment. See Coastal States Marketing, Inc. v. New England Petroleum Corp., 604 F.2d 179 (2d Cir. 1979). First, they argue that the EPAA regulations "upon which the charges were predicated" are unconstitutionally vague. Second, they argue that the EPAA preempted certain Title 18 provisions as they might have otherwise applied to the allegations in the indictment. See Post Argument Brief of Appellees The Crude Company and Masek at 2. Appellees urge that the above issues require a constitutional construction of the EPAA; hence, both the letter and spirit of § 211(b)(2) are served by transferring this case to TECA. See United States v. Wickland, 619 F.2d 75 (Em.App.1980). Appellees excellent briefs present a forceful argument. Nonetheless, a close examination of the character of the issues presented reveals that none of them arise under the EPAA.
An analysis of the appellees' defenses can not be conducted without reference to the indictments. Considering the indictments themselves, not the ones the defendants seek for us to imagine in their stead, there is no charge of a violation of EPAA regulations. The crimes charged vary with each count, but Count 3 of No. 79-2488 will serve as an example. The issue under Count 3 is whether Invoice $ 147, mailed to Mid-Atlantic Petroleum Company from one of the co-defendants, Uni Oil, on July 22, 1976, contained untrue representations, made knowingly and with intent to defraud, as part of the scheme alleged in the indictment. In the absence of the existence of the EPA or of any EPAA regulations, it would presumably be a criminal act to use the mails as part of a scheme to defraud by falsely certifying facts relating to the provenance of oil knowingly and with intent to defraud. What makes the act criminal is not the regulation, but the use of the mails to carry an untrue document fabricated with fraudulent purpose.
If the description of "old" and "new" oil, wherever set forth, whether in regulations or technical literature, is so vague that no one can tell one from the other (or if, as put by the defendants, they do not provide "fair notice" of that difference between "old" and "new" oil), evidence to that effect and the arguments of counsel might persuade a jury that the defendants did not knowingly make a false statement or lacked intent to defraud or otherwise did not violate the statute upon which the indictment is based. On appeal, the defendants phrase this issue as "whether the regulations are unconstitutionally vague." Thus, they assert, the constitutionality of the regulations is at issue and only TECA has jurisdiction.
This contention is subtly different from their contention in the district court. Below they contended that "FEA's Crude Oil Certification Regulations Cannot be the Basis for Criminal Prosecution Unless they Provided 'Fair Notice' of What Conduct was Required." "Because of this lack of fair notice, the Due Process Clause prohibits criminal prosecution of the defendants for violating the certification regulations." This was not an...
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