United States v. Armada Petroleum Corp.

• Decision Date: 26 January 1983
• Docket Number: No. 5-86,5-87.,5-86
• Citation: 700 F.2d 706
• Parties: The UNITED STATES of America and Department of Energy Audit Director, James Louthan, Petitioners-Appellants and Cross-Appellees, v. ARMADA PETROLEUM CORPORATION and Anthony Wright, Respondents-Appellees and Cross-Appellants.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

700 F.2d 706

The UNITED STATES of America and Department of Energy Audit Director, James Louthan, Petitioners-Appellants and Cross-Appellees, v. ARMADA PETROLEUM CORPORATION and Anthony Wright, Respondents-Appellees and Cross-Appellants.

Nos. 5-86, 5-87.

Temporary Emergency Court of Appeals.

Argued January 6, 1983.

Decided January 26, 1983.

Judgment Entered February 7, 1983.

Rehearing Denied March 30, 1983.

Arthur R. Goldberg, Atty., C.D., Dept. of Justice, Washington, D.C., with whom J. Paul McGrath, Asst. Atty. Gen., David J. Anderson and Lawrence A.G. Moloney, Attys., C.D., Dept. of Justice, Washington, D.C., were on brief for petitioners-appellants and cross-appellees.

Bruce R. Coulombe and Frank B. Davis, Andrews & Kurth, Houston, Tex., for respondents-appellees and cross-appellants.

Robert L. Weinberg, Williams & Connolly, Washington, D.C., with whom Robert P. Watkins, Kendra E. Heymann and Stuart L. Gasner, Washington, D.C., of the same firm were on brief, for amicus curiae, The Crude Co.

Before METZNER, BONSAL and LACEY, Judges.

METZNER, Judge.

The Department of Energy (DOE) appeals from an order deferring, until completion of criminal proceedings, a ruling on its petition to enforce a subpoena duces tecum directed to the respondents. Respondents, Armada Petroleum Corporation (Armada) and Anthony Wright, vice president of Armada (Wright), cross appeal from an order denying their motion for discovery. Wright was named as a respondent below because the subpoena was directed to him.

In 1978 the Office of Special Investigations (OSI) of DOE conducted an investigation of transactions involving Armada. OSI subsequently referred the matter to the Department of Justice, which obtained two indictments. On March 7, 1979, an indictment was filed charging UNI Oil, Inc. and several individual defendants, including James E. Fisher, an officer and director of UNI Oil, Inc., with conspiring to violate the price control provisions of the Emergency Petroleum Allocation Act (EPAA) for the period August 1975 to December 1977. 15 U.S.C. § 751, et seq. (1976). Fisher was also president and part owner of Armada. Armada was not, however, named as a defendant in this indictment, although it may be an unindicted co-conspirator.

A second indictment was filed on October 10, 1979, charging Armada, Fisher, and other individuals, with violating the price control provisions of EPAA covering the period August 1974 to June 1976. Wright is not a named defendant in this indictment.

Subsequently, OSI instituted a second investigation of Armada regarding transactions during the year 1978. As a result of this investigation, the matter was referred to the Department of Justice in 1980, and it is still pending in the Department.

OSI began a third investigation in April 1980 of transactions by Armada, but delayed referral to the Department of Justice pending the securing of more records.

In the fall of 1980 DOE decided to conduct an audit of Armada. On February 6, 1981, the subpoena involved in this litigation was issued in connection with the audit. The subpoena was for documents covering the period February 1976 through January 1981. Upon Armada's failure to produce the requested records, DOE, on August 12, 1981, filed a petition to enforce the subpoena.

The court below fully reviewed the issues raised and came to the conclusion that application of the reasoning of the court in Securities and Exchange Commission v. Dresser Industries, Inc., 628 F.2d 1368 (D.C. Cir.), cert. denied, 449 U.S. 993, 101 S.Ct. 529, 66 L.Ed.2d 289 (1980), called for staying of the subpoena enforcement proceeding until completion of the criminal proceedings. The only question before this court is whether the court below abused its discretion in staying the proceedings. At the outset we are met with an objection that the order is not appealable. We turn to the collateral order doctrine enunciated in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). In that case the Court held that an appeal may be taken when the order constitutes a final determination of a claim of right and the claimed right is too independent of the case itself to require that appellate consideration be deferred until the whole case is adjudicated. This court in Marine Petroleum v. Champlin Petroleum Co., 657 F.2d 1231, 1237-42 (Em. App.1980), held that the Cohen test was satisfied when the claim of right consisted of DOE's assertion of its right to be free of the burden of discovery. Therefore, the court found that the order denying the motion by DOE for judgment on the pleadings was appealable.

In this case the claimed right of DOE is to proceed with a civil investigation which parallels a criminal prosecution. See United States v. Kordel, 397 U.S. 1, 11, 90 S.Ct. 763, 769, 25 L.Ed.2d 1 (1970). The claimed right would be effectively unreviewable on appeal from the final judgment on the merits.¹

We turn now to the substance of this appeal. In the Dresser case, supra, the court said:

"Other than where there is specific evidence of

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