United States v. Gulf Oil Corp.

• Court: U.S. District Court — Eastern District of Pennsylvania
• Writing for the Court: SNYDER
• Citation: United States v. Gulf Oil Corp., 408 F.Supp. 450 (E.D. Pa. 1975)
• Decision Date: 29 December 1975
• Docket Number: Crim. A. No. 75-231.
• Parties: UNITED STATES of America v. GULF OIL CORPORATION et al.

408 F. Supp. 450

UNITED STATES of America v. GULF OIL CORPORATION et al.

Crim. A. No. 75-231.

United States District Court, W. D. Pennsylvania.

December 29, 1975.

COPYRIGHT MATERIAL OMITTED

Craig McKay, Asst. U. S. Atty., Pittsburgh, Pa., Stuart Bluestone, Federal Energy Administration, Washington, D. C., for plaintiff.

Frank L. Seamans, Eckert, Seamans, Cherin & Mellott, Pittsburgh, Pa., Leo T. Kissam, Kissam & Halpin, New York City, for defendants.

OPINION AND ORDER

SNYDER, District Judge.

I. THE MOTION TO DISMISS.

This Indictment seeks to impose a criminal fine upon Gulf Oil Corporation, Gulf Oil Company-U.S., and Gulf's President, Z. D. Bonner, based upon the failure of Gulf for the first five days of February, 1975, to pay its competitors $3,878,465.00 for "Entitlements" under the Federal Energy Administration Program (FEA) established in the Federal Register on December 4, 1974 (39 Fed. Reg. 42246-50). This program, unlike the typical allocation regulation, required the transfer of money among refiners to equalize the impact of the high cost of foreign produced oil.¹

The Defendants point to the language of Federal Rules 12(b)(1) and (4) of Criminal Procedure,² which provide:

"(1) Defenses and Objections Which May Be Raised. Any defense or objection which is capable of determination without the trial of the general issue may be raised before trial by motion."

* * * * * *

"(4) Hearing On Motion. A motion before trial raising defenses or objections shall be determined before trial unless the court orders that it be deferred for determination at the trial of the general issue. An issue of fact shall be tried by a jury if a jury trial is required under the Constitution or an act of Congress. All other issues of fact shall be determined by the court with or without a jury or on affidavits or in such other manner as the court may direct."

The Defendants then urge that the Court dismiss the Indictment for the following reasons:

"(1) Fundamental principles of due process of law and equal protection preclude the Government from criminally prosecuting defendants as a result of their decision to delay Gulf's compliance with the FEA's entitlements program pending a judicial determination sought by Gulf of the validity of the very FEA regulations under which the Government now seeks to impose criminal sanctions;

(2) Throughout the February 1-5, 1975 period enforcement of the FEA entitlement regulations which defendants are accused of willfully violating had been stayed by the Temporary Emergency Court of Appeals (`TECA');

(3) The Government is estopped from seeking to impose criminal sanctions for the alleged violations of the FEA entitlement regulations due to representations made to defendants prior to and during the February 1-5, 1975 period that the FEA would refrain from initiating legal proceedings based upon a failure of Gulf to purchase entitlements if Gulf promptly initiated judicial proceedings to test the validity of said regulations;

(4) As a matter of law the Government is precluded from seeking to impose criminal sanctions for the alleged violations of the FEA entitlement regulations since defendants' decision to suspend the purchase of entitlement payments was also made upon reliance on the advice of its counsel;

(5) Gulf was not required under the FEA entitlement regulations to purchase entitlements during the February 1-5 period since January 31, 1975 was merely the date for voluntary compliance;

(6) The Government has already sought to impose civil penalties upon Gulf with regard to its decision not to purchase entitlements during the February 1-5, 1975 period in the action currently pending before this Court at Civil Action No. 75-157 and thus the Government's seeking to impose criminal penalties with regard to the same acts in this action is without statutory authority under the EPAA and constitutes an attempt to increase unlawfully the maximum statutory penalty per violation from $5,000 to $7,500 also placing defendants in double jeopardy.

(7) The FEA entitlement regulations upon which the Indictments are based are illegal, unauthorized, arbitrary, capricious, confiscatory and contrary to both the EPAA and the Fifth Amendment to the Constitution of the United States; and

(8) The Indictment against Gulf Oil Company-U.S. is null and void since that defendant is a division of Gulf and, accordingly, not capable of an independent violation of the FEA entitlement regulations."³

Defendant Bonner also moves to dismiss on the basis that he is not a "person" who can be charged with the offense defined in the statute. In opposition, the Government filed a Motion to Strike; in the Alternative to Defer Argument and Ruling until Trial of the General Issue.

The problem of the extent of the subject matter which may be considered by a court prior to a criminal trial is not without difficulty. In United States v. Covington, 395 U.S. 57, 89 S.Ct. 1559, 23 L.Ed.2d 94 (1969), the Supreme Court considered whether, in an indictment charging the defendant with obtaining marihuana without having paid the transfer tax,⁴ a court can entertain a motion to dismiss the indictment on the ground that the defendant's privilege against self-incrimination would necessarily provide a complete defense. The Court initially noted (395 U.S. at p. 60, 89 S.Ct. at p. 1561, 23 L.Ed.2d at p. 99):

"Federal Rule of Criminal Procedure 12(b)(1) states that: `Any defense or objection which is capable of determination without the trial of the general issue may be raised before trial by motion.' A defense is thus `capable of determination' if trial of the facts surrounding the commission of the alleged offense would be of no assistance in determining the validity of the defense. Rule 12(b)(4) allows the District Court in its discretion to postpone determination of the motion to trial, and permits factual hearing prior to trial if necessary to resolve issues of fact peculiar to the motion." Emphasis supplied Footnote omitted

The Court noted that compliance with 26 U.S.C. § 4741(a) would unquestionably run a substantial risk of incrimination, and thus affirmed the lower court's dismissal of the indictment. Here, the defenses raised require the consideration of facts presented in affidavit form, and we must determine if the trial of the general issue would resolve the issues peculiar to the Motion.

Several cases have considered the propriety of a Rule 12(b) Motion grounded in the defense of double jeopardy. Judge Will in United States v. American Honda Motor Company, 273 F.Supp. 810 (N.D.Ill.1967), an anti-trust case, stated (at pp. 814-815):

"Rule 12(b) provides that any defense or objection which is capable of determination without the trial of the general issue may be raised before trial by motion and, further, that issues of fact on such motions shall be determined by the court with or without a jury or on affidavits or in such other manner as the court may direct unless jury trial is required under the Constitution or by any Act of Congress.

In United States v. H. E. Koontz Creamery, Inc., 232 F.Supp. 312 (D.Md. 1964), the court, citing Rule 12(b), carefully reviewed the procedure concerning a pre-trial double jeopardy motion like the one here involved. Rejecting a government contention that the double jeopardy issue (unless determinable as a matter of law), must be submitted to the jury along with the general issue, the court ordered a pre-trial evidentiary hearing without a jury . . ..

This court is of the opinion that such procedure is proper . . .."

Special pleas in bar (and their modern counterparts, Rule 12(b) Motions) based upon the defense of the statute of limitations have been brought with varying results. In the early case of United States v. Barber, 219 U.S. 72, 31 S.Ct. 209, 55 L.Ed. 99 (1911), the Supreme Court noted with approval a statement of government counsel (219 U.S. at p. 78, 31 S.Ct. at p. 211, 55 L.Ed. at p. 101):

"`. . . the plea of the statute of limitation does not question the validity of the indictment, but is directed to the merits of the case; . . ..'"

See also, United States v. Cook, 84 U.S. (17 Wall.) 168, 21 L.Ed. 538 (1872), where it was held that the statute of limitations could not be raised by demurrer but could be by special plea. Yet, the Barber Court recognized that where the indictment charged a continuing conspiracy expressly alleged to have continued until trial, the statute could only be put in issue by a plea of the general issue, citing United States v. Kissel, 218 U.S. 601, 31 S.Ct. 124, 54 L.Ed. 1168 (1910).

However, in United States v. J. R. Watkins Company, 16 F.R.D. 229 (D.Minn.1954), a prosecution for knowingly and falsely representing that alcohol used in the manufacture of linament for internal uses had been used in the manufacture of linament for external use only, the Court determined that it could consider the defense under a Rule 12(b) Motion, stating (at pp. 232-233):

"It seems apparent that in the case at bar the defense based upon the statute of limitations is capable of determination without the trial of the general issue and therefore should, under Rule 12(b)(1), be triable upon this motion. Further, it seems to have been the intention of the committee which drafted the rules that the statute of limitations could be raised at the option of the accused either before or at the trial of the general issue. See 18 U.S.C.A. Rule 12, Notes to Subdivision (b)(1) and (2). And see Official Form No. 19, Appendix of Forms, 18 U.S.C.A. which includes as part of the motion to dismiss the indictment the allegation that it was not found within three years next after the alleged offense was committed. The same has been the understanding of commentators on the rule, although none cite cases for their conclusion. See 11 Cyclopedia of Federal Procedure § 42.170 (Smith, ed., 1952); McInerny, Proceedings Between Indictment and Trial, 5 F.R.D. 156, 159.

Although consideration of

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