US v. Metropolitan Petroleum Co., Inc.

• Decision Date: 30 March 1990
• Docket Number: No. 89-0802-CIV.,89-0802-CIV.
• Citation: 743 F. Supp. 820
• Court: U.S. District Court — Southern District of Florida
• Parties: UNITED STATES of America, Plaintiff, v. METROPOLITAN PETROLEUM CO., INC. and Metropolitan Fuel Oil Co., Defendants.

743 F. Supp. 820

UNITED STATES of America, Plaintiff, v. METROPOLITAN PETROLEUM CO., INC. and Metropolitan Fuel Oil Co., Defendants.

No. 89-0802-CIV.

United States District Court, S.D. Florida.

March 30, 1990.

Robert K. Senior, Asst. U.S. Atty., Miami, Fla., for plaintiff.

Jerry K. Kern, Delray Beach, Fla., William L. Taylor, Alexandria, Va., for defendants.

ORDER GRANTING SUMMARY JUDGMENT

NESBITT, District Judge.

This cause comes before the Court upon Plaintiff's Motion for Summary Judgment, filed December 28, 1989, Defendants' Motion to Remand or for Partial Summary Judgment, filed January 22, 1990, and Plaintiff's Motion to Strike, filed February 20, 1990. After due consideration, it is hereby ORDERED and ADJUDGED that Plaintiff's Motion for Summary Judgment is GRANTED.

FACTS AND PROCEDURAL HISTORY

Plaintiff United States of America brings this action for restitution against Defendants Metropolitan Petroleum Co. and Metropolitan Fuel Oil Co. pursuant to § 209 of the Economic Stabilization Act of 1970. Plaintiff seeks enforcement of a June 3, 1986 Department of Energy ("DOE") Remedial Order. The Remedial Order found that Defendants had violated Mandatory Petroleum Price and Allocation Regulations, and it ordered them to remit the resulting overcharges in the amount of $173,239.09 plus interest from the date of the violation. The Court has jurisdiction pursuant to §§ 209 and 211 of the Economic Stabilization Act, 12 U.S.C. § 1904 note, §§ 209 and 211, as incorporated into § 5(a)(1) of the Emergency Petroleum Allocation Act, 15 U.S.C. § 754(a)(1), and § 301(a) of the Department of Energy Organization Act ("DOEOA"), 42 U.S.C. § 7151(a).

The lengthy administrative process in this case began with an audit by the Economic Regulatory Administration ("ERA") of the records of Defendants to determine whether it had sold motor gasoline in excess of the maximum lawful selling price allowed under 10 C.F.R. Part 212, Subpart F of the Mandatory Petroleum Price Regulations. Following a review of the audit results, ERA issued a Proposed Remedial Order ("PRO") in early 1982. The PRO alleged that Defendants' actions during a five-month period in 1979 resulted in approximately $173,000 in overcharges. Defendants filed a Statement of Objections to the PRO.

On June 3, 1986, over four years after the PRO was issued, and after a review of the PRO, Defendants' Objections, and DOE's response, the Office of Hearings and Appeals of DOE issued a Remedial Order affirming the PRO. The Order required Metropolitan to remit to the DOE $173,239.09 in overcharges, plus interest from the date of the violation.

Defendants timely appealed the Remedial Order to the Federal Energy Regulatory Commission ("FERC"), as provided in § 503 of the DOEOA, 42 U.S.C. § 7193(b)-(c). Both Defendants and the DOE filed briefs, and Defendants also filed reply comments on findings of fact and conclusions of law. Neither party requested an oral hearing before the FERC.

On July 2, 1987, the FERC issued a final order affirming the Remedial Order. As provided in 42 U.S.C. § 7193(c), this order constituted a "final agency action" for the purposes of judicial review. Thus, pursuant to 15 U.S.C. § 4504(e), Defendants had sixty days in which to seek review of the FERC's order. However, despite having been through approximately six years of administrative proceedings and appeals, Defendants failed to seek such review either within sixty days or during the nearly two years that elapsed between the issuance of the final order and the filing of this enforcement action by Plaintiff.

On October 26, 1987, an official of the Economic Regulatory Administration sent a letter requesting payment pursuant to the terms set out in the Remedial Order. In the over two and one half years that have elapsed since the FERC issued its final order, Defendants have never made any payment to the DOE.

Plaintiff now seeks enforcement of the Remedial Order. As of December 31, 1989, interest on the overcharges totaled $410,551.97, and it accrues at $167.83 per day. In addition, because of Defendants' failure to comply with the Remedial Order, Plaintiff seeks civil penalties pursuant to 15 U.S.C. § 754(a)(3)(A) and 10 C.F.R. §§ 205.203(a) and (b).

In their answer, Defendants have asserted several affirmative defenses challenging the rulemaking procedures of the DOE and the substantive conclusions of the FERC. Among other things, Defendants contend that the DOE, without providing advance notice and an opportunity for comment, issued a new interpretation of its regulations and unlawfully applied this new interpretation retroactively against Defendants. Defendants assert that they acted with the good-faith belief that their prices were in substantial compliance with then-existing applicable regulations, and that they have acted in good faith throughout the administrative process.

DISCUSSION

Federal Rule of Civil Procedure 56(c) provides that summary judgment shall be granted if "there is no genuine issue as to any material fact and if the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Rule 56(c) mandates summary judgment against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). Further, there is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party. If the evidence is merely colorable or is not significantly probative, summary judgment may be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986).

Plaintiff seeks summary judgment as to both the restitution and the civil penalty claims. Plaintiff's motion for summary judgment on the restitution claim is based entirely on the assertion that Defendants' failure to seek review of the FERC's order within sixty days of its issuance, as required by 15 U.S.C. § 4504(e), bars any review of the agency order by this Court. Plaintiff therefore asserts that it is entitled to summary enforcement of the Remedial Order. Plaintiff also claims that there exists no genuine issue of material fact which would preclude the Court from resolving the civil penalty issue at this stage of the litigation.

Defendants oppose Plaintiff's motion essentially on four grounds: (1) § 4504(e) does not apply to this action; (2) even if § 4504(e) is applicable, Defendants' challenge to the scope of the DOE's authority in not precluded by the statute of limitations; (3) genuine issues of material fact exists concerning the remedial order; and (4) genuine issues of material fact exist regarding the assessment of civil penalties. The Court shall address each of these arguments.

A. Restitution

In late 1986, Congress enacted the Petroleum Overcharge Distribution and Restitution Act of 1986 ("PODRA"). Section 3005(e)(1) of this Act, codified at 15 U.S.C. § 4504(e), governs the time within which a party may initiate review of a DOE order. § 4504(e) provides that "Any review of a final agency action determined under section 503 or 504 of the Department of Energy Organization Act may not be initiated in any court by any party subject to such action after ... 60 days after the effective date of that action." 15 U.S.C. § 4504(e) (emphasis added). The July 2, 1987 decision of the FERC affirming the Remedial Order constitutes "final agency action" for the purposes of § 4504(e). See 42 U.S.C. § 7193(c). The statute of limitations for initiating judicial review of the FERC order therefore expired in early September, 1987.

The only reported case interpreting § 4504(e) is ICG Petroleum, Inc. v. United States Department of Energy, 883 F.2d 80 (Em.App.1989). In ICG, the plaintiff petroleum company had instituted the action nearly 10 months after the PODRA statute of limitations had expired. The Emergency Court of Appeals,¹ relying on § 4504(e), affirmed the district court's dismissal of an action seeking judicial review of a FERC order denying exemption from various regulations.

In rejecting the petroleum company's arguments, the Emergency Court of Appeals broadly read the statute of limitations. Relying on the maxims that the ordinary meaning of a statute's language must usually be regarded as conclusive and that limitations provisions in statutes must be strictly construed, the court emphasized that the express language of the statute states that it applies to "any review of a final agency action." Id. at 81 (emphasis in original). The court also declined to hold that a district court has the equitable power to toll the running of the statute. Id. at 81-82.

Defendants attempt to distinguish ICG by arguing that Congress intended to foreclose belated review of agency actions only in suits initiated by the party seeking such review. Defendants state that the limitations statute should not apply because, unlike the petroleum company in ICG, they are not the plaintiffs in this case, and thus their attempt to initiate review of the Remedial Order has not delayed the commencement of this civil enforcement action. Defendants also claim that 42 U.S.C. § 7192(b) provides that, notwithstanding the statute of limitations, this Court may review an agency action where the initiation of review is sought by way of defense to an enforcement action, provided that the party seeking review has timely notified the DOE of its intention to appeal the issuance of the Remedial Order to the FERC.

PODRA's main focus is the creation of mechanisms for the speedy resolution of government civil enforcement proceedings. See ICG Petroleum, 883 F.2d at 81. In § 4504(c), entitled "Expression of Intent," the statute indicates that Congress was concerned that the commencement of civil enforcement actions not be unnecessarily delayed....