Wesreco v. United States Dept. Of Interior

• Decision Date: 12 April 1985
• Docket Number: No. C 84-0126J.,C 84-0126J.
• Citation: 618 F. Supp. 562
• Court: U.S. District Court — District of Utah
• Parties: WESRECO, INC., dba Western Refining Company, Industrial Energy Partners, Ltd., MM & S Partners, and Anna W. Drake, Trustee in Bankruptcy for Western Oil Marketing Company, Plaintiffs, v. UNITED STATES DEPARTMENT OF the INTERIOR, and William Clark, Secretary of the Interior, Defendants.

618 F. Supp. 562

WESRECO, INC., dba Western Refining Company, Industrial Energy Partners, Ltd., MM & S Partners, and Anna W. Drake, Trustee in Bankruptcy for Western Oil Marketing Company, Plaintiffs, v. UNITED STATES DEPARTMENT OF the INTERIOR, and William Clark, Secretary of the Interior, Defendants.

No. C 84-0126J.

United States District Court, D. Utah, C.D.

April 12, 1985.

COPYRIGHT MATERIAL OMITTED

Brent V. Manning, Salt Lake City, Utah, Wm. H. Bode & John E. Varnum, Washington, D.C., Spriggs, Bode & Hollingsworth, Anna M. Drake, Salt Lake City, Utah, for plaintiffs.

Leslie K. Dillon, Geoffrey R. Heath & Stephen Hart, Dept. of Justice, Washington, D.C., Peter Stirba, Asst. U.S. Atty., Salt Lake City, Utah, for defendants.

MEMORANDUM OPINION and ORDER

JENKINS, Chief Judge.

Plaintiffs filed their complaint in this action on February 17, 1984, seeking primarily money damages based on the United States' sale to them of royalty crude oil between June, 1976 and January, 1981. The sales are alleged to have been in violation of mandatory price regulations established pursuant to the Emergency Petroleum Allocation Act of 1973 (EPAA), 15 U.S.C. § 751 et seq. Defendants move for Summary Judgment or the ground that plaintiffs cannot recover damages from the United States because Congress has not waived sovereign immunity from the asserted claims. Alternatively, defendants move for partial summary judgment on the ground that state statutes of limitation are applicable and, thus, bar some of plaintiffs' claims for damages.

Following briefing and oral argument on the motion, the court took the matter under advisement.¹ After careful consideration of the pleadings, memoranda, argument and supplemental case law submitted on behalf of the parties, the court issues the following Memorandum Opinion and finds that 1) Congress has waived sovereign immunity for claims against the government of the type before this court, 2) plaintiffs have stated a claim upon which relief can be granted, 3) this court has proper subject matter jurisdiction to entertain this suit, and 4) the applicable statute of limitations provision is 28 U.S.C. § 2401(a).

I. FACTUAL BACKGROUND

Plaintiffs in this action include Wesreco, Inc., dba Western Refining Co., Industrial Energy Partners, Ltd., MM & S Partners and Anna Drake, Trustee in bankruptcy for Western Oil Marketing Company (Western).² Defendants are the United States Department of the Interior (DOI) and William Clark, Secretary of the DOI.

Western purchased some six million barrels of federal royalty crude oil³ from the United States Geological Survey (USGS), a sub-agency of the DOI, between June, 1976 and January 1981. During that period, the Emergency Petroleum Allocation Act of 1973 (EPAA), 15 U.S.C. § 751 et seq. was in effect. The EPAA empowered the President to fix the price of all sales of domestic crude oil. 15 U.S.C. § 753(a). Pursuant to the EPAA, the Department of Energy (DOE)⁴ promulgated regulations that established a "two-tier" price structure for the sale of domestic crude. 10 C.F.R. Part 212, Subpart D. Under the two-tier price structure, "new crude" could be sold at the free-market or "upper-tier" price, but "old crude" was limited to a maximum "lower-tier" price. 39 Federal Register 1924 (Jan. 15, 1974); 41 Federal Register 4931 (Feb. 3, 1976.) The regulations also required each oil "producer" to certify to its purchasers the amount and kind of oil it was selling in each price category. The certification was required to be in writing and furnished to the buyer within two months of the month of production and sale. If certifications were not timely or in proper form, regulations required the oil to be deemed "old oil" which, of course, could only be sold at the lower-tier price. 10 C.F.R. § 212.131(a)(6).

Plaintiffs contend that the DOI was expressly subject to the price regulations when it sold royalty crude oil to Western. Western alleges that the DOI consciously and deliberately violated the price regulations when it refused to properly and timely certify the royalty crude it sold to Western, but, nonetheless, charged Western the upper-tier, market level price for the oil instead of the lower-tier, limited price which it should have charged in accordance with the regulations. Western also asserts that the DOI improperly calculated some of the charges and collected administration fees that were in violation of the EPAA regulations. Western seeks, among other things,⁵ recovery of the alleged overcharges and unlawful administrative fees. The amounts in controversy for actual damages exceed $32,000,000.⁶

Western invokes the jurisdiction of this court under sections 210 and 211 of the Economic Stabilization Act of 1970 (ESA), 12 U.S.C. § 1904, which is incorporated in § 5(A)(1) of the EPAA, 15 U.S.C. § 754(a)(1) (hereafter referred to as § 210 and § 211.) Section 210(a) is the private right of action provision that grants "any person suffering legal wrong because of any act or practice arising out of the EPAA" a right to bring a cause of action in the United States District Courts for damages, declaratory judgment or injunctive relief. Section 210(b) expressly contemplates claims for "overcharges". Section 211 vests the United States Districts Courts with exclusive jurisdiction, without regard to amount in controversy, of any action arising under the EPAA.

For purposes of this Motion, there are no material factual disputes and this court can decide the issues raised as a matter of law.

II. DISCUSSION

This court notes initially that this is an action against the United States. Although plaintiffs' have named the DOI and Secretary Clark in his official capacity, whether a particular action is one against the United States "is determined not by the party named as the defendant, but by the issues presented and the effect of the judgment." State of New Mexico v. Donald T. Regan, 745 F.2d 1318, 1320 (10th Cir.1984); Transwestern Pipeline Company v. Kerr-McGee Corporation, 492 F.2d 878, 884 (10th Cir.1974), cert. denied, 419 U.S. 1097, 95 S.Ct. 691, 42 L.Ed.2d 689 (1975). Here, the DOI and the Secretary were clearly acting in an official capacity when they undertook to sell royalty crude oil to Western. The manner in which the crude oil sales were accomplished may have been in violation of certain regulations, but it is not alleged that defendants were acting beyond the scope of their delegated powers in undertaking to sell the crude. For that reason and because the types of relief sought here would necessarily operate against the United States, the present action must be deemed as one against the sovereign. See Hawaii v. Gordon, 373 U.S. 57, 58, 83 S.Ct. 1052, 10 L.Ed.2d 191 (1963).

Having determined that this is an action against the sovereign, the sole issue remaining is whether Western can maintain the present action in this court. Resolving that issue, however, is not at all a simple matter. The very fact that the United States is a party defendant to this suit means that the mysterious and, more often than not, confused doctrine of sovereign immunity is inextricably intertwined within every facet of the analysis.⁷ The doctrine of sovereign immunity, reduced to its simplest form, prohibits suits against the United States without express Congressional consent.⁸United States v. Mitchell, 463 U.S. 206, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983). But the doctrine of sovereign immunity has been construed to mean far more than mere Congressional consent. Congress can also delineate the precise terms and conditions under which the United States can be sued, including the relief that may be granted and the forum in which the claim may be heard. Minnesota v. United States, 305 U.S. 382, 388, 59 S.Ct. 292, 295, 83 L.Ed. 235 (1939); Jesko v. United States, 3 Cl.Ct. 730 (1983).

Because of the pervasive nature of the doctrine of sovereign immunity, the parties here, either expressly or impliedly, have raised questions concerning jurisdiction over the "person" of the United States, questions going to the nature and substance of the asserted claims, questions regarding the subject matter jurisdiction of this court, and questions as to what is the proper period of time in which the plaintiff is allowed to bring its claims against the United States.⁹ To determine whether Western can maintain its present action, therefore, this court will address each of the following sub-issues:

a) Whether Congress has consented to a damage claim against the United States for the DOI's alleged violations of the EPAA regulations;

b) Whether Western has demonstrated that the source of substantive law it relies on, § 210, can be interpreted as requiring money damages from the United States;

c) Whether Congress has vested subject matter jurisdiction in the United States District Courts to hear Western's damage claims against the United States for amounts in controversy that exceed $10,000; and

d) What did Congress intend to be the applicable period of limitations for Western's damage claims against the United States.

A. CONSENT TO DAMAGE CLAIM

As noted earlier, the traditional doctrine of sovereign immunity requires Congressional consent before the United States can be sued. Congressional consent must be express and unambiguous. United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 1502, 23 L.Ed.2d 52 (1969). To find express consent to Western's' present claims against the United States, both Western and the DOI focus this court's attention solely on § 210, the private right of action section of the EPAA. Western contends that § 210 supplies the necessary waiver of sovereign immunity and cites several cases in support of its contention. The DOI argues that no express waiver of sovereign immunity can be found in § 210 and relies on a different line of cases to support its argument.

After careful review of the parties' arguments and the cases cited in support of each, it appears that the parties...