Petition — Citronelle-Mobile Gathering, Inc. v. Gulf Oil Corp.

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Supreme Court, U.S. \

riLEep

APR Wy 1979

RODAK, JR., CLERK

IN THE

Supreme Court of the United States

OcTOBER TERM, 1978

CiTRONELLE-MospILE GATHERING, INC.,

Petitioner,

Wie

GuLF OIL CORPORATION and

FEDERAL ENERGY ADMINISTRATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

TEMPORARY EMERGENCY COURT OF APPEALS

Lester M. BripGEMAN

BRIDGEMAN & NERENBERG

1750 New York Avenue, N.W.

Washington, D. C. 20006

(202) 466-2510

Attorneys for Petitioner

Pui B. KuRLAND

Two First National Plaza

Chicago, Illinois 60603

(312) 372-2345

Of Counsel

Press or Byron 8. ADAMS PRINTING, INC., WASHINGTON, D. C.

"i Se en ea

TABLE OF CONTENTS

I. The Decision Below Establishing The Proposi-

tion That TECA Had Exclusive Jurisdiction To

Review All Questions Decided By The Trial

Court Is In Conflict With Decisions Of This

Court And With A Decision Of The United

States Court Of Appeals For The Seventh Cir-

euit. The Jurisdictional Question Is Of Ex-

traordinary Importance To The Business Of

atc easticeceeseess

Il. TECA Decided Other Controlling Jurisdictional

And Substantive Issues Contrary To Statute

And Its Own Prior Decisions. ................

A. TECA’s Jurisdiction, Created By The Eco-

nomic Stabilization Act, But Limited By The

Emergency Petroleum Allocation Act, Never

a Se

B. TECA Overlooked Its Own Prior Decisions

In Concluding That It Had Jurisdiction Of

Matters Arising During The ‘‘Hiatus’’

0 OSs or

EN Ng I ISLES, AEA LO a a

Page

pe ES oe ee il

RG RT EE cn 1

Is Nac eee ce enw ese 2

RI IMI cya t whens asweccwccsceseecnes 2

Statutory Provisions INVOLVED ..................0. 3

EN SEES OE EE 5

Reasons ror GRANTING THE WRIT ................ og

il TABLE OF AUTHORITIES

Cases: Page

Citronelle-Mobile Gathering, Inc. v. Gulf Oil Corp.,

Sa) Fai. 162 CD Ade, POTG) vs os cs dwsia sivas 2,6

Tigo Bue Be 5: el i.) ere eye 2

Houston, E.€W.T. Ry. Co. v. United States, 234 U.S.

UP EUED cna CEUs 6 cg RRAN DE eae haa awe: 10

Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149

CIEE. Nate ad hen hah nee ae Maw eG. Co RS 2, 5, 8, 9, 10, 11

Pasco, Inc. vy. Federal Energy Admunistration, 525

me Gi Be oh ot oe Df Be ere ery 13, 14

St. Mary’s Hospital of East St. Louis, Inc. v. Ogilvie,

GG FF .2et. BSE ETE Ca, TE os ns one cea cievewes 9

Shapp v. Simon, 523 F.2d 1405 (T.E.C.A. 1975), reh.

denied, October 30, 1975, certs denied, 424 U.S.

PEE PANES cies CAFCE SS Ras Ce A 13, 14

Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667

Di) Bea ee Cee AMS eR er RN tree eA pe 9

Texas & Pacific Railway Co. v. Abilene Cotton Oil Co.,

a a ee} ee erry ra eye er 10

Statutory MATERIAL:

Eeonomie Stabilization Act of 1970,

Oe eS NE OD: a Sickie in k wade tales ankes 3, 8, 11

REELS «cies Uae ks a see kk beeen helena enae oes 7

1 Sa R SNS ey Spee teres Star en erin samen ene 9,12

OEE cosa cs oe ee De kolvd belek oc enh nweens Ve 3, 7

TL, gilbert ae eons weneetrerye TAP Me hatne sermon 2

Emergency Petroleum Allocation Act of 1973,

15 U.S.C. §§ 751, et seq.

ON) re ee rrr rer rs treet 2, 4, 5, 8, 12

Emergency Petroleum Allocation Act of 1975,

Pak ee a, MN oe ob aG be VaebRaan 6 hembeaaweee 5

Judicial Code

eRe 8 SEEGD. Sos pandowadeans eee baeey ee 2

Se Mes, MRR oak a was poand ks Cewek REE ceeNa 4

Se BEd. EE 00 ch bWhidwhekaceeenshaanaseeass 4,8

IN THE

Supreme Caurt of the United States

OcToBER TERM, 1978

No.

CITRONELLE-MobILE GATHERING, INC.,

Petitioner,

GuL¥F Orn, CoRPORATION and

FEDERAL ENERGY ADMINISTRATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

TEMPORARY EMERGENCY COURT OF APPEALS

Petitioner respectfully requests that this Court issue

a writ of certiorari to review and reverse the judgment

of the Temporary Emergency Court of Appeals in the

above entitled action.

OPINIONS BELOW

The opinion and judgment of the Temporary Emer-

gency Court of Appeals (TECA) entered 23 January

1979, is unreported and is set out as Appendix A to

this petition; TECA’s denial of the petition for re-

hearing is unreported and is attached hereto as Ap-

pendix B. The opinion fer the Court of Appeals for

the Fifth Circuit is reported at 578 F.2d 1149 (5th

Cir. 1978) and is attached hereto as Appendix C; the

opinion of the District Court for the Southern District

of Alabama is reported at 420 F. Supp. 162 (S.D. Ala.

1976), and is attached hereto as Appendix D.

JURISDICTION

The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1) and § 211(g) of the Eeonomie Stabil-

ization Act of 1970, 12 U.S.C. § 1904, note, as extended

by §$5(a)(1) of the Emergency Petroleum Allocation

Act of 1973, 15 U.S.C. § 754(a)(1). The Temporary

Emergency Court of Appeals entered judgment on 23

January 1979 and denied a timely petition for rehear-

ing on 13 March 1979.

QUESTIONS PRESENTED

1. Is the longstanding rule of this Court ‘‘that a suit

arises under the Constitution and laws of the United

States only when the plaintiff’s statement of his own

eause of action shows that it is based upon those laws

or that Constitution,’’ Louisville & Nashville R. Co. v.

Mottley, 211 U.S. 149, 152 (1908), no longer controll-

ing of the jurisdiction of the federal courts?

2. Does a ease *tarise under’’ a federal law because

that law is asserted as the basis of a defense or coun-

terclaim to a common law contract claim in a diversity

case ?

3. Is the exclusive jurisdiction of the Temporary

Emergeney Court of Appeals limited to cases arising

under the regulation itself, as the governing statute

provides, §5(a)(1) of the Emergency Petroleum Al-

location Act of 1973, as amended, 15 U.S.C. § 754(a)

(1), et seq., or does it extend to cases that do not arise

under any regulation but involve defenses based solely

on construction of the statute itself ?

STATUTORY PROVISIONS INVOLVED

Economic Stabilization Act of 1970, 12 U.S.C. § 1904

note:

**§ 211. Judicial review

yi; Soe

‘*(2) Except as otherwise provided in this section,

the Temporary Emergency Court of Appeals shall

have exclusive jurisdiction of all appeals from the dis-

trict courts of the United States in cases and contro-

versies arising under this title or under regulations or

orders issued thereunder. Such appeals shall be taken

by the filing of a notice of appeal with the Temporary

Emergency Court of Appeals within thirty days of the

entry of judgment by the district court.

‘*(e) In any action commenced under this title in

any district court of the United States in which the

court determines that a substantial constitutional issue

exists, the court shall certify such issue to the Tempo-

rary Emergency Court of Appeals. Upon such certifi-

cation, the Temporary Emergency Court of Appeals

shall determine the appropriate manner of disposition

which may include a determination that the entire ac-

tion be sent to it for consideration or it may, on the

issues certified, give binding instructions and remand

the action to the certifying court for further disposi-

tion.”

Emergency Petroleum Allocation Act, 15 U.S.C. § 754

(a)(1):

‘*Except as provided in paragraph (2), (A) sections

205 through 207 and sections 209 through 211 of the

Eeonomie Stabilization Act of 1970 (as in effect on

November 27, 1973) shall apply to the regulation pro-

mulgated under section 753(a) of this title, to any

order under this chapter, and to any action taken by

the President (or his delegate) under this chapter, as

if such regulation had been promulgated, such order

had been issued, or such action had been taken under

the Economie Stabilization Act of 1970; and (B) see-

tion 212 (other than 212(b)) and 213 of such Act shall

apply to functions under this chapter to the same ex-

tent such sections apply to functions under the Eco-

nomie Stabilization Act of 1970.”

Judicial Code, 28 U.S.C. § 1382:

‘*(a) The district courts shall have original juris-

diction of all civil actions where the matter in contro-

versy exceeds the sum or value of $10,000, exclusive

of interest and costs, and is between—

‘*(1) citizens of different States ;’’

28 U.S.C. § 1331:

‘‘(a) The district courts shall have original juris-

diction of all civil actions wherein the matter in con-

troversy exceeds the sum or value of $10,000, exclusive

of interest and costs, and arises under the Constitu-

tion, laws, or treaties of the United States. ..”’

STATEMENT

This case has placed the Petitioner in a position that

precludes access to its statutory right of appellate re-

view because of the conflict of exclusive jurisdiction

between the Court of Appeals for the Fifth Cireuit

and the Temporary Emergency Court of Appeals. The

latter’s assertion of exclusive jurisdiction depends,

however, on its erroneous position that this Court’s

decision in Louisville & Nashville R. Co. v. Mottley,

211 U.S. 149 (1908), is no longer controlling law.

The pertinent nature of the case may be stated as

follows:

This case was commenced by the complaint of Peti-

tioner (Citmoco) against Respondent, Gulf Oil Cor-

poration (Gulf), seeking damages for Gulf’s failure

to pay the full contract price for crude oil shipments

sold and delivered to Gulf by Citmoco on and after

September 1, 1975. Jurisdiction of the federal court

was invoked because of the diversity of citizenship of

the parties.

Federal oil price control regulations had lapsed on

August 31. The contract provided for Gulf’s payment

of prices higher than the previously controlled price.

Gulf had paid the full contract price for the September

1 delivery, but for no others. Gulf admitted the eon-

tract, delivery of the crude oil shipments, payment in

full for the September 1 shipment and the failure to

pay the contract price for the later shipments; but

raised the affirmative defense that the Emergency Pe-

troleum Allocation Act of 1975, enacted September 29,

1975, reinstated the defunct price control regulation

and retrospectively barred payment of the full contract

price which was higher than that permitted by the

lapsed—and assertedly revived—regulation. Gulf also

counterclaimed for the difference between the contract

price paid to Citmoco for the September 1, 1975, ship-

ment and the lower price allegedly required retro-

actively by the later-enacted statute. Gulf invoked the

provisions of §5(a)(1) of the Emergency Petroleum

Alloeation Act (EPAA), lo U.S.C. § 754(a) (1), as the

jurisdictional basis for its counterclaim. The Federal

Energy Administration, now the Department of En-

ergy, was permitted to intervene as a defendant.

Citmoco contended in the District Court that Con-

gress had merely authorized revival of, but did not re-

enact, the price control regulations that had lapsed on

August 31, 1975; that neither the Congress, the Presi-

dent, nor the Federal Energy Administration (FEA)

had thereafter effectively reinstated any price control

regulations purporting to cover the month of Septem-

ber 1975, and that, had such regulations in fact been

reinstituted, their retroactive application to previously

consummated transactions would be invalid under the

Due Process Clause of the Fifth Amendment. Citmoco

also contended that the statutory provision for a one-

house congressional veto of legislatively authorized

Presidential regulations made unconstitutional the en-

tire 1975 Act that was alleged to have revived the de-

funet regulation.

The District Court found for the defendants on all

issues. [ts opinion is reported at 420 F.Supp. 162 (S.D.

Ala. 1976). Citmoco appealed to the United States

Court of Appeals for the Fifth Cireuit. That Court

held that appeal to it was premature because the Dis-

trict Court had committed an interlocutory error in

concluding that the due process issue, raised by the

Gulf counterclaim, was not a substantial one, and in

failing to certify that substantial issue to TECA pur-

suant to §211(¢) of the Eeonomie Stabilization Act,

12 U.S.C. § 1904 note, which provided that: ‘‘In any

action commenced under this title in any district court

of the United States in which the court determines that

a substantial constitutional issue exists, the court shall

certify such issue to [TECA]’’. The Fifth Circuit

withheld decision on the question of its own jurisdic-

tion and remanded with instructions for certification

to TECA solely of the substantial constitutional issue

raised by the counterclaim, of the due process validity

of retroactive application of price regulations to con-

summated contracts. The Fifth Cireuit did so on the

ground that Gulf’s counterclaim was ‘‘an action com-

menced under’’ the EPAA, whatever the status of the

principal, diversity, case below; that §211(c) of the

Eeonomie Stabilization Act of 1970 had required the

District Court, prior to judgment on any issue, to

certify to TECA the substantial constitutional issue

of due process validity raised by the counterclaim. The

Fifth Cireuit neither considered, nor disposed of, any

other constitutional or non-constitutional issue pre-

sented to it.

Thereafter the District Court certified the single

constitutional issue to TECA. TECA ignored the limits

of the certification as well as the opinion of the United

States Court of Appeals for the Fifth Circuit. It held

that it had exclusive jurisdiction to hear and dispose

of appeal of any issue from the District Court’s de-

cision beeause, in its view the entire case, that raised

by the diversity complaint as well as the federal

counterclaim, ‘‘arose under’”’ the EPAA and hence gave

exclusive appellate jurisdiction to TECA. Economic

Stabilization Act §211(a), 12 U.S.C. § 1904 note, as

modified by 15 U.S.C. § 754(a) (1). Concluding that

the “‘appeal’’ to TECA was untimely filed, it directed

dismissal of the entire matter.

In so deciding, TECA purported to overrule this

Court’s long-standing rule of Louisville & Nashville

R. Co. v. Mottley, 211 U.S. 149 (1908), that a case does

not ‘“‘arise under’’ federal law where, as here, state-

ment of the claim asserted by the complaint does not

require the allegation of facts that would give rise to

federal jurisdiction; and that it is immaterial that a

federal defense is available or even raised. TECA, in

addition, overlooked the fact that its own jurisdiction,

created by the Economic Stabilization Act, but limited

by §5(a)(1) of the Emergency Petroleum Allocation

Act of 1973, as amended, 15 U.S.C. § 754(a) (1), et seq.,

does not extend to this case. That Section extends

TECA’s jurisdiction to matters ‘‘arising” under the

regulation only, but not to cases, such as this, that arise

under the statute itself.

REASONS FOR GRANTING THE WRIT

The Decision Below Establishing the Proposition That TECA Had

Exclusive Jurisdiction To Review All Questions Decided by the

Trial Court is in Conflict With Decisions of This Court and With

a Decision of the United States Court of Appeals for the Seventh

Circuit. The Jurisdictional Question is of Extraordinary Importance

to the Business of the Federal Courts.

This case was commenced by Citmoco’s complaint for

breach of contract, based solely on the diversity juris-

diction. 28 U.S.C. § 1332. That complaint neither al-

leged nor implied any claim based upon a federal cause

of action.

Defendant Gulf’s affirmative defenses and covnter-

claim first asserted that Citmoco’s claim was barred,

and the counterclaim supported, by federal price regu-

lations. Citmoco then asserted the inapplicability and

unconstitutionality of the 1975 statute on which the

allegedly retroactive regulation depended.

This Court’s decision in Louisville & Nashville R.

Co. v. Mottley, 211 U.S. 149 (1908), laid down the rule

that a case does not ‘‘arise under’’ federal law where,

as here. the claim alleged on the face of the complaint

itself does not require the allegation of facts that

would give rise to federal law jurisdiction. It is imma-

terial that a federal law defense is available and raised.

Indeed, in Mottley itself the plaintiff’s breach of con-

tract complaint anticipated the defense provided by

an intervening federal statute. This Court, neverthe-

less, held that the case did not ‘‘arise under” federal

law.

The Mottley doctrine has been the guiding principle

for ‘‘arising under’’ cases ever since. See Skelly Oil

Co. v. Phillips Petroleum Co., 339 U.S. 667 (1950) ; St.

Mary’s Hospital of East St. Louis, Inc. v. Ogilvie, 496

F.2d 1324 (7th Cir. 1974). In Skelly, this Court re-

stated the rule laid down in Mottley. St. Mary’s ex-

plicitly accepted the applicability of Mottley to the

“arising under’’ provision of §.211(b) (2) of the Eeo-

nomic Stabilization Act, incorporated by reference in

EPAA; the provisions involved in this ease. The Sev-

enth Circuit there held that ‘‘the phrase ‘arising un-

der’ [requires] that the allegations of the complaint,

not merely the answer, call for the application of the

Keonomie Stabilization Act to the suit,’’ 496 F.2d, at

1326. TECA’s decision squarely contradicts St. M ary’s

application of Mottley.

TECA disposed of seventy years of the Mottley doc-

trine by a single sentence: ‘‘Mottley was handed down

in 1911 under a completely different background and

context.’ (App. A, p. 7a). Contrary to TECA’s state-

ment, Mottley was handed down in 1908 and was de-

cided under a very similar background and context.

Contrary to TECA’s implication, no material facts dis-

tinguish the two cases.

In Mottley the plaintiffs had sued the defendant

railroad for breach of the railroad’s promise to fur-

nish the plaintiffs free passes for life. The defense

anticipated by the plaintiffs, and ultimately raised by

the defendant, was the 1906 amendment to the Inter-

state Commerce Act. The relatively recently enacted

Interstate Commerce Act presented a background and

context very similar to that of the EPAA. The Com-

meree Act, and its amendments to the time of Mottley,

were designed to remedy the evils created, inter alia,

by the unrestrained pricing and rebating practices of

the railroads. It contained highly detailed price-con-

trol provisions. The purpose of the statute, to control

and limit the pricing and other practices of the rail-

roads, was deemed to be a matter of high national im-

portance. The Mottley decision was handed down by a

Supreme Court unquestionably aware of the great im-

portance that the Congress attributed to the statute ;

and of the significance to the price control scheme

created by the Commerce Act of the continuity of con-

trols and of the uniformity of interpretation of the

statute’s substantive provisions. The Supreme Court’s

contemporaneous decision in Texas & Pacific Railway

Co. v. Abilene Cotton Oil Co., 204 U.S. 426 (1907),

leaves no doubt about that. See also, Houston, E. & W.

T. Railway Co. v. United States, 234 U.S. 342 (1914).

ia .

TECA did not specify, and could not have specified,

any material distinction between this ease and Mottley.

TECA’s conclusion that this case ‘clearly arises

under the EPAA and is, therefore, within the juris-

diction of the TECA alone’? depended upon the most

flagrant kind of post hoe reasoning. It so ‘‘arose,”’ the

Court said, because of the ‘‘compelling interest in the

‘prompt resolution of Stabilization Act questions’, ...

the question of the continuation of price controls dur-

ing the period September 1-29, 1975, and the impor-

tance of assuring ‘uniform interpretation of the sub-

stantive provisions of the stabilization scheme’... .”’

(App. A, p. 8a).

The logical fault is obvious in TECA’s conclusion

that the controversy must ‘‘arise under” the statute

because it would help the statutory scheme if it did.

TECA Decided Other Controlling Jurisdictional and Substantive

Issues Contrary to Statute and Its Own Prior Decisions.

TECA incorrectly decided, sub silentio, and appar-

ently unwittingly, other controlling jurisdictional and

substantive issues. In so doing it misinterpreted the

controlling jurisdictional statute and overlooked the

significance of its own prior decision.

A. TECA’s Jurisdiction, Created By The Economic Stabilization

Act, But Limited by the Emergency Petroleum Allocation Act,

Never Extended To This Case.

TECA correctly noted (App. A, pp. 6a-7a), that the

provisions of the Eeonomie Stabilization Act of 1970

(ESA) that created its jurisdiction, 12 U.S.C.A. § 1904

note, § 211(b), were carried forward by §5(a)(1) of

the 1973 Allocation Act, 15 U.S.C. § 754(a) (1).

TECA failed to recognize, however, that when

§5(a)(1) earried forward the jurisdictional provi-

sions of the ESA, it imposed limits upon that jurisdic-

tion that the ESA had not imposed. Unlike the ESA

itself which granted TECA ‘‘exclusive jurisdiction of

all appeals... arising under this title or under regula-

tions or orders issued thereunder,’’ the later-enacted

Alloeation Act of 1973 limited TECA’s jurisdiction to

cases arising only under ‘‘the regulation promulgated

under”’ that statute or to orders or actions taken under

it. é

This case does not involve any attack upon, or inter-

pretation of, ‘‘the regulation promulgated,”’ or any

order, or any executive action taken, under the Alloca-

tion Act of 1973. The issues presented at all stages

relate only to the validity and applicability of the stat-

ute itself. Citmoeo concedes that, if the statute retro-

actively re-created the regulation and if, as applied, it

suffered from no constitutional infirmity, then neither

the validity, nor the interpretation of the regulation is

disputed.

TECA’s limited jurisdiction is defined by statute.

Its decision here exceeded the scope of its powers pre-

scribed by statute.

B. TECA Overlooked Its Own Prior Decisions In Concluding That

It Had Jurisdiction of Matters Arising During the “Hiatus”

Period.

The Gulf counterclaim, in its entirety, and Citmoco’s

diversity complaint, in part, related to sales made and

consummated in the period September 1-29, 1975. No

price control regulation was in effect when those sales

were consummated. The claims related to the period

September 1-29 could not ‘‘arise under’’ a federal law

which was non-existent during the period, unless the

September 29 statute effectively created retroactive

regulation and did so with constitutional validity.

TECA’s decision apparently assumed the fact, and

validity, of retroactivity without considering or de-

ciding that issue. In so doing, it overlooked the signifi-

cance of its own prior decisions.

In Pasco, Ine. vy. Federal Energy Administration,

et al., 525 F.2d 1391 (T.E.C.A. 1975), TECA eonsid-

ered an appeal from a case unquestionably ‘“‘arising un-

der’’ the EPAA. The appeal was -filed in TECA on

September 5, 1975, after the lapse of federal controls.

TECA decided Pasco on October 14, 1975, some two

weeks after the supposedly retroactive revival. Never-

theless, TECA pointed out in a footnote that was a

necessary jurisdictional holding in that case:

Since the Allocation Act ... expired of its own

time limitations at midnight, August 31, only ap-

peals within the saving clause of the Allocation

Act, §4(g¢)(1), 15 U.S.C. §753(2)(1) (1975

Supp.), or the general saving clause, 1 U.S.C.

§ 109, would have been within our limited juris-

diction on September 5, 1975, when this notice of

appeal was timely filed. This appeal comes within

the Allocation Act’s saving clause, since it provides

that ‘enforcement’ actions, civil or criminal, pend-

ing on the Act’s expiration or based upon acts

committed prior to such expiration, constitute jus-

ticiable controversies which this Court may review.

025 F.2d 1391, at n.5.

Similarly, in Shapp v. Simon, 523 F.2d 1405 (T.E.

C.A. 1975), cert. denied 424 U.S. 911 (1976), TECA

dismissed an appeal on September 17, 1975 on the

ground that

This controversy has now been rendered moot by

the expiration of statutory authority for the en-

tire program of federal control and allocation of

petroleum products.

Following the September 29, 1975 revival of the

control program, Shapp moved for rehearing. Although

TECA, of course, knew on October 30, 1975, that the

control program had been revived, it denied rehearing

on that date.

Shapp, like Pasco, is consistent only with the propo-

sition that TECA had concluded that the statutory

foundation for its jurisdiction was lacking between

September 1 and 29, 1975, and had not been re-created

by the September 29 statute.

In the instant ease the acts complained of occurred

in the very period in which TECA twice previously

determined the statutory foundation for its jurisdic-

tion was lacking. Nevertheless, it found in this case

that the entire case, including specifically the counter-

claim events of September 1-29, 1975, had “arisen

under’’ the statute that was then ineffective.

CONCLUSION

For the foregoing reasons this Court should issue

a writ of certiorari to TECA and reverse the judgment

below in its findings that TECA had exclusive jurisdic-

tion of the subject matter of this entire litigation for

purposes of appeal.

Respectfully submitted,

LesteR M. BripGEMAN

BRIDGEMAN & NERENBERG

1750 New York Avenue, N.W.

Washington, D. C. 20006

(202) 466-2510

Attorneys for Petitioner

Purp B. KurLAnD

Two First National Plaza

Chicago, Lilinois 60603

(312) 372-2345

Of Counsel

APPENDIX

atin

‘APPENDIX A

TEMPORARY EMERGENCY COURT OF APPEALS

OF THE UNITED STATES

No. 5-31

CirroNELLE-Mopite Garuerine, INc.,

Plaintiff-A ppellant,

Vv.

Gutr Om Corporation,

Defendant/Counter-Claimant-A ppellee,

and

FreperaL EnerGy ApMINISTRATION,

Defendant-A ppellee.

Appeal from the United States District Court

for the Southern District of Alabama

(Civil No. 75-483-P)

(Submitted: January 10, 1979 Decided: January 23, 1979)

Lester M. Brinceman, Bridgeman & Nerenberg, Washing-

ton, D.C., with whom Louis T. Urbanezyk of the same firm;

and Philip B. Kurland, Of Counsel, Chicago, Lllinois, were

on the brief for the Plaintiff-Appellant.

StrePHANi£ LacHMAN Go pen, Department of Justice, Wash-

ington, D.C., with whom Barbara Allen Babcock, Assistant

Attorney General and C. Max Vassanelli, were on the brief

for the Defendant-Appellee.

Before Carrer, Estes and Grewin, Judges.

Per Curiam:

All parties to this action have filed pleadings in this

Court seeking dismissal of the above-styled action on the

ground that this Court lacks jurisdiction, but for “entirely

diflerent reasons.” ' The Federal Energy Administration,

now Department of Energy (DOF), filed its “Memorandum

in Support of Federal Defendant’s Motion to Dismiss” on

the ground that this Court lacks jurisdiction to review this

action “since it is clear that where over two years has

elapsed from entry of the final judgment and where plain-

tiff voluntarily withdrew an appeal it originally had filed

with this Court, this Court is without jurisdiction to review

any issues raised by this action at this time.”* Gulf Oil

Corporation (Gulf) adopted the arguments and authorities

set forth in the Memorandum in Support of Federal De-

fendant’s Motion to Disniiss.

The Court is of the opinion that the DOE’s Motion to

Dismiss for lack of jurisdiction should be granted.

‘Memorandum of Citronelle-Mobile Gathe:ing, Ine., in Response -

to Motion to Dismiss of the Federal Energy Administration, now

the Department of Energy (DOE), p. 2:

Those reasons are that this Court did not, in 1976, and does

not now, have jurisdiction. The ease did not ‘arise’ or ‘com-

menee’ under the regulation authorized by the Emergency

Petroleum Alioeation Act of 1973, as amended, 15 U.S.C. § 751,

et seq., (EPAA)....

* Memorandum in Support of Federal Defendant’s Motion to

Dismiss, p. 1.

Section 211(e)(2), Eeonomie Stabilization Act of 1970 (FSA),

12 U.S.C, § 1904 note, incorporated by reference in § 5(a)(1),

Emergeney Petroleum Allvueation Act (EPAA), as amended, 15

U.S.C. § 754, and TECA Rule 15 require a notice of appeal to be

filed with the Clerk of this Court within 30 days of entry of the

District Court’s judgment,

See, Memorandum, supra, at p. 4:

Plaintiff originally did file such a notice within the requisite

time. But plaintiff also knowingly chose to withdraw its ap-

peal. Two years later plaintiff simply is precluded by its own

choice, from seeking review of the district court decision in

this Court.

Stns .

I. Facruat Backerounp

In mid-August, 1975, Citronelle-Mobile Gathering Co.

(Citmoco) and Gulf negotiated a contract which provided

that beginning September 1, 1975, and until further notice

(until any later imposition of price controls, according to

Citmoco), Citmoeco would sell and Gulf would buy erude

oil at $13 per net barrel. On September 1, 1975, Citmoco

delivered and Gulf accepted 313,466.72 barrels of crude

oil. Gulf was invoiced for this crude oil at the rate of $13

per barrel on September 2, 1975 and paid the total amount

of $4,075,067.36 prior to September 29, 1975. On September

9 and 29, 1975, Gulf accepted deliveries from Citmoco of

a total of 337,733.91 barrels of crude oil, for which Gulf was

invoiced at the rate of $13 per barrel. Gulf has not paid the

invoice purchase price for either delivery of erude made on

September 9 or 29, 1975. On October 26, November 22, and

December 14, 1975, Gulf accepted delivery of a total of

691,395.3 barrels of crude oil, for which it paid Citmoco at

the rate of $5.40 per barrel. |

Citmoco filed a complaint in the United States District

Court for the Southern District of Alabama on October 7,

1975, seeking recovery of money damages from Gulf arising

from CGulf’s alleged breach of their contractual agreement.

In its answer, filed October 29, 1975, Gulf asserted the

affirmative defense that the Emergency Petroleum Alloca-

tion Act of 1975 (IEPAA), enacted on September 29, 1975,

extended the authority of the EPAA ef 1973 and that the

FIA regulations, 10 C.F.R. Part 212, prohibited Gulf from

paying Citmoeo and Citmoco from receiving $13 per barrel

for the crude sold and delivered by plaintiff to defendant in

September, 1975. Gulf also asserted a counterclaim for the

amount paid to Citmoco in excess of the maximum lawful

regulatory ceiling price of $5.40 per barrel ($558,583.95).

On January 26, 1975, the FEA filed a motion to intervene

as an additional party defendant in the litigation between

titmoco and Gulf in an effort to defend the regulatory

scheme directly challenged by Citmoco and the agency in-

terpretation of the effect of Congress’ retroactive extension

of the EPAA on crude oil pricing practices during the pe-

riod of September 1-29, 1975. The FEA’s motion was

granted by Judge Pittman on March 11, 1976.

The case was tried before Judge Pittman on June 8,

1976. On August 20, 1976, an opinion and order was en-

tered granting Gulf’s counterclaim in the arount of

$501,077.89 and holding that “the repromulgation of FEA’s

mandatory price and allocation regulations was not neces-

sary in order to reinstate those regulations after August

31, 1975.” 420 F.Supp. 162, 171 (S.D.Ala. 1976). The district

court refused to certify to the TECA as a substantial con-

stitutional question Citmoco’s assertion that the retroactive

application of the regulations violates the Fifth Amend-

ment’s Due Process Clause, the judge finding that measur-

able unfairness in this ease could not be sustained in view

of the compelling public interest in maintaining continuity

in the scheme of regulation.

On August 31, 1976, Citmoco filed with the District Court

an Application for Stay Pending Appeal and a Notice of

Appeal to the United States Court of Appeals for the

Fifth Cireuit. Citmoco’s application for stay pending appeal

was granted on September 1, 1976. On September 20, 1976,

Citmoco filed a Notice of Appeal with the TECA along with

a motion to postpone all procedural deadlines in the

THECA pending appeal to the Fifth Cireuit. This motion was

denied on November 1, 1976, at which time a briefing sched-

ule was established for all parties. On November 16, 1976,

Citmoco filed a motion to dismiss its appeal with the

TECA, which was granted by order of Judges Van Ooster-

hout, Johnson, and Jameson on December 7, 1976.

On Angust 25, 1978, the Fifth Cireuit Court of Appeals

held that the District Court’s determination of insubstan-

tiality of Citmoco’s constitutional claim was in error and

that a substantial constitutional question is involved when

price regulations “are applied retroactively to cover those

portions of an installment contract (1) fully performed on

both sides while no regulations were in effeet or (2) fully

performed by the seller while no regulations were in effect

and fully performed by the buyer during the same period

except for payment of the sum agreed to in the contract.”

578 F.2d 1149, 1155 (5 Cir. 1978). Accordingly, the Court

of Appeals “remanded the case to the district court with

directions that it certify to TECA the substantial constitu-

tional questions raised by Gulf’s counterclaim concerning

due process limits upon retroactivity.” Citronelle, supra,

at 1156.

On August 28, 1978, the District Court certified the ques-

tion to the TECA, pursuant to the Fifth Circuit Court of

Appeals’ direction. Citmoeo’s motion of September 6, 1978,

to postpone procedural dates until November 10, 1978, or

until 30 days after the United States Court of Appeals for

the Fifth Cireuit disposed of Citmoco’s petition for rehear-

ing in that court, whichever occurred last, was granted on

September 12, 1978. Citmoco also sought, on September 6,

1978, vacation of the District Court’s order certifying the

cause to the THECA since the Fifth Cireuit’s mandate had

not yet been issued and premature certification to the

TECA was causing procedural problems before both courts.

This motion was granted by the District Court on Septem-

ber 12, 1978. Citmoco’s motion for rehearing and rehearing

en bane before the Fifth Circuit was denied on October 20,

1978.

On November 16, 1978, Distriet Judge Pittman entered

his “Order Certifying Cause to the Temporary Emergency

Court of Appeals,” which was filed in TECA on November

22, 1978.

On November 21, 1978, the DOE moved to dismiss the

action pursuant to TECA Rules 25(c) and 26 for lack of

jurisdiction. The DOE argues that “where over two years

have elapsed from entry of final judgment and where plain-

tiff voluntarily withdrew an appeal it originally had filed

with this Court, this Court is without jurisdiction to review

any issues raised by this action at this time.” Memorandum

in Support of Federal Defendant's Motion to Dismiss, p.

1. On November 30, 1978, Citmoco filed a motion to dismiss

on the ground that “[t]his case did not ‘arise’ or ‘eom-

mence’ under the regulation authorized by the Emergency

Petroleum Allocation Act. of 1973, as amended, 15 U.S.C.

§ 751, et seq., (HPAA) and hence, this case, in all its aspects,

falls entirely outside the seope of this Court’s limited juris-

diction.” Memorandum of Citronelle-Mobile Gathering, Inc.,

in Response to Motion to Dismiss, p. 2.

II. Jurispicrion

in creating the Temporary Emergency Court of Appeals,

Congress gave the Court “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.” § 211(b) (2), Eeo-

nomic Stabilization Act of 1970 (ESA), 12. U.S.C. 1904 note

(1977 supp.). Section 5(a)(1), Emergency Petroleum Allo-

eation Act (EPAA), as amended, 15 U.S.C. § 754, carries

forward this grant of special jurisdiction:

... [S]eetions 209 through 211 of the Economie Stabi-

lization Act of 1970... shall apply to the regulation

promulgated under section 4(a), to any order under

this Act, and to any action taken by the President (or

his delegate) under this Act, as if such regulation had

been promulgated, such order had been issued, or such

action had been taken under the Economie Stabiliza-

tion Act of 1970.

Plaintiff-appellant, Citmoco, has consistently character-

ized this case as merely involving a breach of contract and,

therefore, as beyond the jurisdiction of this Court. Citmoco

relies extensively on the Supreme Court decision in Louis-

ville & N.R.R. v. Mottley, 211 U.S. 149 (1911), for the prop-

—

Ce EE —

osition that a case or controversy does not arise under the

federal law where, as here, the required element of federal

law is stated as a defense to the action. Citmoco does not

dispute the fact that Gulf’s counterclaim arises under the

PAA, but instead maintains that the presence of a federal

question in the counterclaim is insufficient to invoke the

jurisdiction of this Court. Mottley was handed down in 1911

under a completely different background and context.’

In Mobil Oil Corp. v. Dominion Oil Co. Inc. and James

R. Schlesinger, No. 70-1029 (4 Cir. 1978), a diversity suit

brought by Mobil for the balance of a note, the defendant

raised two counterclaims, one of which asserted that Mobil

had failed to comply with certain orders of the FEA. The

Court of Appeals dismissed the appeal for lack of jurisdie-

tion, relying on Congress’ grant of exclusive jurisdiction to

the TECA in § 211(b)(2), ESA and §5(a), EPAA. In an-

other case presenting a similar issue by way of a counter-

claim, Mountain Fuel Supply Co. v. R. Johnson and John-

son Oil Co., Nos. 77-1410, 77-1432 (10 Cir. 1978), the Court

of Appeals for the Tenth Circuit determined that federal

question jurisdiction did in fact exist and that jurisdiction

was vested in the TECA, despite plaintiff’s characterization

of the suit as one based on breach of contract:

We have previously noted that the issues tried in this

case were those framed by the Johnson Counterclaim.

* The Emergency Petroleum Allocation Act of 1973 was en-

acted . . . against a background of severe shortage of crude

oil and its products. The principal aims of the Act were to

meet the nation’s priority petroleum needs, to distribute the

remaining available products equitably, and at equitable

prices. ...

House Report No. 94-340, quoted in Mapco, Inc. v. Carter et al,

573 F.2d 1268, 1276 (TECA 1978), cert. denied, 98 S.Ct. 3090

(1978). See also, Condor Operating Co. v. Sawhill, 514 F.2d 351

(TECA 1975), cert. denied, 421 U.S. 976 (1975) ; Basin, Inc. v.

PEA, 552 F.2d 931 (TECA 1977) ; Mobil Oil Corp. v. FEA, 566

F.2d 87 (TECA 1977).

The allegations set forth in that counterclaim invoked

and implicated United States laws under the KSA of

1970, 12 U.S.C.A. § 1904 Note (Supp. 77); the EPAA

of 1973, 15 U.S.C.A. §§ 751 et seq., and the implement-

ing regulations duly promulgated thereunder. 6 CFR

§ 150.353 (1974); 10 CFR § 211.63(a) (1977).

Gulf’s counterclaim clearly arises under the EPAA and

is so closely related to Citmoco’s complaint that the resolu-

tion of the litigation in its entirety requires application and

interpretation of the EPAA of 1973, as amended September

29, 1975. Just as the Court of Appeals for the Second Cir-

cuit recognized in M. Spiegel € Sons Oil Corp. v. B. P. Ol

Corp., 531 F.2d 669, 671 (1976), that “construction of the

EPAA ... will control the litigation,” the determination of

the proper price for the crude oil in this case depends on

the retroactive application vel non of the EPAA amend-

ments.

Given the compelling interest in the “prompt resolution

of Stabilization Act questions,” Bray v. U.S., 423 U.S. 73,

(1975), here, the question of the continuation of price con-

trols during the period of September 1-29, 1975, and the

importance of assuring “uniform interpretation of the

substantive provisions of the stabilization scheme,” Bray,

supra, at 75, this controversy clearly arises under the

EPAA and is, therefore, within the jurisdiction of the

TECA alone. The determination by the Fifth Cireuit Court —

of Appeals that the District Court had not followed the

proper certification procedure and had “erred in coneluding

that this case presented no substantial constitutional ques-

tions which required certification to TECA under section

211(c),” Citronelle, supra, at 1154, was an assertion of

jurisdiction which it did not have.

This Court’s decision in United States v. Cooper, 482

F.2d 1393 (1973), thus mandates dismissal of this appeal.

Because the Fifth Cireuit Court of Appeals had no juris-

—--

diction to order the District Court to certify as a substan-

tial constitutional question the issue of the retroactive ap-

plication of the regulations under the EPAA of 1973, the

certification cannot be treated as a valid notice of appeal.

As this court noted in Cooper, supra, at 1400, the filing of

a timely notice of appeal is mandatory and jurisdictional.

See United States v. Robinson, 361 U.S. 220 (1960). Final

judgment was entered in this ease on August 20, 1976. Cit-

moco filed a timely notice of appeal with the TECA on

September 20, 1976, as required by TECA Rule 15 and

§ 211(e)(2), ESA. However, asserting that jurisdiction lay

in the Court of Appeals for the Fifth Cireuit and not in

TECA, Citmoco, on November 1, 1976, moved to voluntarily

withdraw its appeal and was granted leave to do so on

December 7, 1976.

Contrary to Citmoco’s assertion, the TECA had exclusive

jurisdiction over the subject matter of this litigation when

the original notice of appeal was filed. This Court’s juris-

diction terminated upon Citmoco’s voluntary withdrawal of

its appeal, and it does not now have jurisdiction. Citmoco

knowingly elected to pursue its appeal in the Fifth Circuit

Court of Appeals and take the consequences.* Citmoco’s

Memorandum in Support of Motion for Leave to Withdraw

Appeal, page 3, stated:

Appellant ... believes under the circumstances that it

is entitled to pursue this litigation in an orderly man-

ner and as in its judgment it best sees fit, taking cog-

nizance of the risk of an adverse determination by the

*Substitution of the words ‘‘certification’’ and ‘‘on certifica-

tion’’ in the reeord (Appendix) and other papers filed in this

Court for the word ‘‘appeal’’ in those filed in the Fifth Cireuit

Court of Appeals cannot render torpid the expedited appellate

process provided by Congress for controversies so obviously con-

trolled by the mandatory pricing and allocation laws and regula-

tions involved in this case. See Bray v. United States, 423 U.S. 78,

96 S.Ct. 307, 46 L.Ed.2d 215 (1975).

10a

Fifth Cireuit without further recourse to invoke the

jurisdiction of this Court.

It Is OrperED AND Apsupcep that this action be and here-

by is Dismissep for want of jurisdiction.

lla

APPENDIX B

TEMPORARY EMERGENCY COURT OF APPEALS

OF THE UNITED STATES

No. 5-31

CrTROoNELLE-Mosite GATHERING, INC.,

Plaintiff-A ppellant,

Gur Ort Corporation,

Defendant/Counter-Claimant-A ppellee,

FreperaL Energy ADMINISTRATION,

Intervenor-Defendant-A ppellee.

Berore Honoraste JAMes M. Carter, HonoraBle JOE

Ewinc Estes, and Honoraste Water P. Gewin, Judges.

Upon consideration of Appellant’s Petition for Rehear-

ing and Suggestion for Rehearing En Banc,

Ir Is Orperep that said Petition and Suggestion ate

DENIED. .

For THE Court:

Ruth H. Jacobson

Clerk

/s/ by: Donna M. Bowp

Donna M. Bold

Chief Deputy Clerk

March 13, 1979

12a

APPENDIX C

CirroNELLE-MosiLte GaTHERtNG, INc.,

Plaintiff-Appellant,

Gur O1 Corporation,

Defendant-Appellee,

FreperaAL EnerGy ADMINISTRATION,

Defendant Intervenor-Appellee.

No. 76-3712

UNITED STATES COURT OF APPEALS, FIFTH CIRCUIT

August 25, 1978

On Appeal from the United States District Court for the

Southern District of Alabama.

Before Crark, Fay, and Vance, Circuit Judges.

Criark, Cireuit Judge:

This case calls upon us to resolve questions of our ap-

pellate jurisdiction. Pleading only diversity jurisdiction

under 28 U.S.C.A. § 1332, plaintiff, Citronelle-Mobile

Gathering Co. [Citronelle] filed suit against Gulf Oil Co.

[Gulf] for breach of a contract to buy erude oil. Gulf an-

swered and counterclaimed for damages based upon Citro-

nelle’s willful failure to comply with the Emergency Pe-

troleum Allocation Act of 1975 [EPAA of 1975], 15 U.S.C.A.

§ 753 note, and regulations promulgated pursuant to it.

Gulf’s counterclaim invoked the jurisdiction of the district

court under diversity of citizenship and under the EPAA

of 1973, 15 U.S.C.A. § 751 et seq., as amended by the EPAA

of 1975. The Federal Energy Administration [FEA] in-

tervened on the side of the defendant Gulf to defend federal

mandatory price and allocation regulations and rulings un-

der EPAA of 1975. The distriet court ruled in favor of

Gulf and FEA on all issues ineluding the counterclaim.’

‘ Citronelle-Mobile Gathering Co. v. Gulf Oil Corp., 420 F.

Supp. 162 (S.D.Ala. 1976).

ct ates cca

13a

Citronelle appealed to this court. Gulf and FEA assert that

jurisdiction to hear this appeal lies only in the Temporary

Kmergeney Court of Appeals [TECA], while Citronelle

contends that appellate jurisdiction lies only in this circuit.

For the reasons stated, we hold that decision on this ques-

tion of our jurisdiction would be premature at this time

and we remand the case to the district court for the submis-

sion to TECA of substantial constitutional questions in-

volving the MPAA of 1973 and the EPAA of 1975 [eollee-

tively referred to as the Allocation Acts] and the regula-

tions promulgated pursuant to these acts.

The dispute between the parties centers around the effect

of ostensibly retroactive pricing regulations upon an in-

stallment contract made between Gulf and Citronelle, some

installments of which were partially or fully performed dur-

ing the hiatus between the expiration of statutory author-

ity to regulate under the EPAA of 1973 and the restoration

of regulatory authority in the EPAA of 1975, which pur-

ported to apply price regulations retroactively to cover the

gap between the expiration of regulatory authority under

the EPAA of 1978 and resumption of regulatory authority

under the EPAA of 1975. .

The parties do not dispute the material facts in this case.

Citronelle buys erude oil near Mobile, Alabama, and trans-

ports it to Mobile where it stores the oil and holds it for

sale. Gulf regularly buys supplies of oil from companies

such as Citronelle. Prior to September 1, 1975, both Citro-

nelle and Gulf were subject to price regulation of their

crude oil sales pursuant to the EPAA of 1973, 15 U.S.C.A.

§ 751 et seq., and Executive Order 11748, under which regu-

lations were issued providing for the allocation and pricing

of crude oil and certain other petroleum products.’ Prior to

* The opinion of the district court contains a brief history and

description of the regulatory scheme governing crude oil pricing.

420 F.Supp. at 165-68.

14a

its amendment by the KPAA of 1975, the EPAA of 1973

provided that all authority conferred for the regulation of

prices and allocation of crude oil would expire at midnight

on August 31, 1975.

In August of 1975, Gulf contracted with Citronelle to buy

all its available crude oil for $13 per barrel beginning on

September 1, 1975, the date upon which regulatory author-

ity under the EPAA of 1973 lapsed, and continuing until

any later imposition of valid controls on the price of crude

oil. Pursuant to this contract, Gulf accepted crude oil de-

liveries from Citronelle on the following dates in 1975:

September 1, 9, and 29; October 26; November 22; and

December 14.

On September 29, 1975, the President signed into law

the EPAA of 1975, which authorized continuation of the

FEA regulations that had expired on August 31. The

EPAA of 1975 stated:

It is the intent of the Congress that the regulations

promulgated under the Emergency Petroleum Alloca-

tion Act of 1973 shall be effective for the period be-

tween August 31, 1975, and the date of enactment of

this Act.

By the time the EPAA of 1975 became law, Gulf had re-

ceived three installment deliveries from Citronelle under its

°15 U.S.C.A. § 753 note. The FEA administratively construed

this portion of the EPAA of 1975 as mandating that price and

allocations regulations of the FEA apply as though’ they had been

in effect continuously since August 31, 1975:

Persons subject to the regulations should carry out Septem-

ber transactions as though the EPAA of 1975 had been en-

acted prior to September 1, 1975.

FEA Ruling 1975-17, Mandatory Petroleum Price and Allocation

Regulations Application During September 1975, 40 Fed.Reg.

48341 (October 15, 1975).

ius nla

A A ot ee LM A ie tt «

a OR Aint ie

15a

contract and had paid for the September 1 delivery at the

full contract price of $13 per barrel. In response to Citro-

nelle’s demand for payment for the other deliveries made

under the contract, Gulf contended that by the EPAA of

L975 Congress retroactively extended the regulations effee-

tive on August 31, 1975, to cover all transactions occurring

during the hiatus between the August 31 expiration of Teg-

ulatory authority under the EPAA of 1973 and the Septem-

ber 29 extension of regulatory authority under the EPAA

of 1975. Application of the regulations effective on August

31, 1975, to the deliveries made by Citronelle under the con-

tract would limit the price that Gulf could pay for the erude

oil delivered to $5.40 per barrel, instead of the $13 per

barrel specified by the contract. Thus, Gulf contended that

valid retroactive FEA regulations forbade it to pay more

than $5.40 per barrel,

Citronelle filed suit for $9,645,145, the difference between

the price that Gulf agreed to pay under the contract for the

SIX shipments and the price it was willing to pay under its

interpretation of the EPAA of 1975. Gulf admitted all the

material allegations of Citronelle’s suit and conceded that

the $13 per barrel price was fair and reasonable. But, in-

terposing the KPAA of 1973, as amended by the EPAA of

1975, as a defense, Gulf denied liability under the contract

and counterclaimed for $501,077.89, the net amount that it

allegedly overpaid for the first delivery of September 1,

for which it paid Citronelle in September, before passage

of the EPAA of 1975.

Section 5(a) of the EPAA of 1973, 15 U.S.C.A. § 754(a),

expressly incorporates the provisions for review found in

the Keconomic Stabilization Act of 1970, as amended [ESA],

reproduced at 12 U.S.C.A. § 1904 note. Although the ESA

is no longer in effect, pursuant to Section 754, its review

and civil action provisions continue to govern proceedings

under the EPAA of 1973 and the EPAA of 1975. Gulf could

16a

bring its counterclaim under the ESA’s Section 210, which

provides in part,

(a) Any person suffering legal wrong because of any

act or practice arising out of this title, or any order or

regulation issued pursuant thereto, may bring an ac-

tion in a district court of the United States, without re-

gard to the amount in controversy, for appropriate

relief, including an action for a declaratory judgment,

writ for an injunction... and/or damages.

The remaining portions of Section 210 provide for the re-

covery of costs and attorneys’ fees for one who brings a

successful action to challenge an overcharge in violation of

the regulations.

The district judge heard the case without a jury. His

Opinion and Order interpreted the KPAA of 1975 to man-

date that regulations under the Allocation Acts be treated

as having continued in force as if there had been no hiatus

period. Therefore, because the contract between Gulf and

Citronelle would have fallen under the regulations in effect

on August 31 but for the expiration of statutory authority

under the EPAA of 1973, the district court held that, by

law, no installment of the contract could be performed at a

cost-per-barrel ageement above the $5.40 permitted by the

regulations. Citronelle presented two constitutional chal-

lenges to the regulations: first, that retroactive application

of the reguiations to affeet portions of an installment con-

tract fully performed on both sides or fully performed ex-

cept for the duty of the purchasing party to pay for the

installment violates due process; second, that the “one

House veto” provisions of the EPAA of 1973 as amended

by the EPAA of 1975 violate the concept of separation of

powers by according Congress an unconstitutional power

to nullify rapidly the actions of the President. Finding these

questions plainly without merit or foreclosed by prior deci-

sions of the Supreme Court, the district court declined to

certify them to THCA.

———s

17a

The review provisions of the ESA, made applicable to the

Allocation Acts by 15 U.S.C.A. § 754, require the district

court to certify substantial constitutional issues to TECA:

district court of the United States in which the court

determines that a substantial constitutional issue exists,

the court shall certify such issue to the Temporary

Kmergeney Court of Appeals.

Gulf’s counterclaim, which expressly invoked the jurisdie-

tion of the Allocation Acts, clearly constituted an “action

commenced under this title,” within the meaning of the

statute, Section 211(e), 12 U.S.C.A. § 1904 note. This

counterclaim is too closely related to the primary action

to allow the cases to proceed separately, cf. Rules 13(a),

54(b), Fed.R.Civ.P. Therefore, we need not consider

whether certification to TECA would have been a course of

action required of the district court as to the principal

action alone,

Gulf and the IEA assert that Citronelle can appeal the

judgment of the district court only through those portions

of the elaborate provisions for review set forth in the

Keonomie Stabilization Act of 1970, as amended, 12 U.S.

C.A. § 1904 note, which the EPAA of 1973 expressly in-

corporated in Seetion 5(a), 15 U.S.C.A. § 754(a), as the

procedure to be followed in Allocation Acts cases. Citro-

nelle contends that this court has jurisdiction over this ap-

peal as we would over any final decision of a district court

in a diversity case.

At the core of this dispute lies a difference in interpre-

tation of Section 211(b)(2) of the ESA, 12 U.S.C.A,. § 1904

note, which provides:

Icxcept as otherwise provided in this section, the Tem-

porary Emergency Court of Appeals shall have exelu-

sive jurisdiction of all appeals from the district courts

of the United States in cases and controversies arising

18a

under this title or under regulations or orders issued

thereunder. Such appéals shall be taken by the filing of

a notice of appeal with the Temporary [mergency

Court of Appeals within thirty days of the entry of

judgment by the district court.’

The defendants assert that we should treat this appeal as

one in a case or controversy “arising under” the EPAA of

1973, as amended, such that Citronelle can only challenge

the district court’s judgment in the TIHCA. They support

this position by reference to the congressional purpose in

establishing THCA jurisdiction: to centralize and expedite

appeals raising questions of the construction or of the con-

stitutionality of the legislation.’

* However, Section 211(a), 12 U.S.C.A. § 1904 note, provides:

nothing in this subsection or in subsection (h) of this section

affects the power of any court of competent jurisdiction to

consider, hear and determine any issue by way of defense

(other than a defense based on the constitutionality of this

title or the validity of action taken by any ageney under

this title) raised in any proceeding before such court.

Where a defense raises the validity of the Allocation Acts or of

action taken under them, the review provisions of the ESA pro-

vide the action can be removed to a United States district court.

*In 1971, Congress amended the Economie Stabilization Act of

1970 to add the provisions for judicial review that the Allocation

Acts have incorporated. Senate Report No. 92-507 of the Com-

mittee on Banking, Housing, and Urban Affairs had this inter-

pretation of the judicial review provisions in recommending them

for passage :

The judicial review provision has been written with several

important principles in mind: (1) speed and consistency of

decisions in eases arising under the Act, (2) avoidance of

any breaks or stays in the operation of the Stabilization Pro-

gram, and (3) relief for particular persons aggrieved by the

operation of the program,

In order to funnel into one court all the appeals arising out

of the District Courts and thus gain in consistency of deci-

sion, there is created a Temporary Emergency Court of Ap-

i it wii vit ota

eae A hcg ills IA ear EA i Blige che A Pi

19a

To support its position that the appeal is properly dock-

eted here, Citronelle relies on the well-established meaning

of the phrase “arising under” as a term of art in the law

of federal jurisdiction. In Louisville d N.R.R. v. Mottley,

Z1L U.S. 149, 29 S.Ct. 48, 53 Led. 126 (1911), the Supreme

Court interpreted this test as requiring that the reviewing

court examine the initial complaint filed by the plaintiff

to determine whether it required federal law to state a

cause of action. Mottley held that a case or controversy

did not arise under federal law where the requisite element

of federal law was stated only as a defense to the action

or where the complaint merely referred to an anticipated

defense.°

peals similar to the court established for the same purpose in

the wage and price control programs of the World War II

and the Korean conflict.

1971 U.S.Code Cong. & Admin.News, 92d Cong., Ist Sess., pp.

2283, 2292.

“This approach finds support in the Seventh Cireuit’s decision

in St. Mary’s Hospital, Inc. v. Ogilvie, 496 F.2d 1324 (7th Cir.

1974), which held that the words ‘‘arising under’’ in the ESA

review provisions should be construed as the term of art in fed-

eral jurisdiction would be construed; that is, the question should

be determined from an examination of the plaintiff's complaint

rather than from an examination of the issues actually presented

at trial. In construing the Emergency Natural Gas Act, TECA

has held that the words ‘‘arising under’’ as a jurisdictional grant

in an analogous context ‘‘probably’’ conform to the meaning of

the words as they appear in article III of the Constitution. Lo-

Vaca Gathering Co. v. Railroad Com’n of Texas, 565 F.2d 144

(Em.App. 1977), cert. dented, —— U.S. ——, 98 S.Ct. 1245, 55

L.Ed.2d 768 (1978).

In construing the ESA review provisions, the Supreme Court

has left no clue as to what view it would adopt as to the meaning

of ‘‘arising under’’ in the context in which it appears in the case

at bar. The Supreme Court has indicated a willingness to interpret

the review provisions in line with discernible congressional intent.

See Bray v. United States, 423 U.S. 73, 96 S.Ct. 307, 46 L.Ed.2d

215 (1975).

20a

We do not have to choose between these competing in-

terpretations of the ESA to resolve the case at bar, how-

ever, because we find at a puint prior to the docketing of this

appeal and error by the district’court which, by preventing

the issues in this case from being developed in the manner

contemplated by Congress, requires remand for further

proceedings.

The scheme of judicial review which Congress provided

for the Ajloeation Acts contemplates that no question of

their constitutional validity or that of the regulations pro-

mulgated pursuant to them be decided by this court. In fact,

Section 211(g), 12 U.S.C.A. § 1904 note, expressly provides:

The Temporary Emergency Court of Appeals, and the

Supreme Court upon review of judgments and orders

of the Temporary Emergency Court of Appeals, shall

have exclusive jurisdiction to determine the constitu-

tional validity of any provision of this title or of any

regulation or order issued under this title. Except as

provided in this section, no court, Federal or State,

shall have jurisdiction or power to determine the con-

stitutional validity of any provision of this title or of

any such regulation or order....

In this manner, Congress has expressly withdrawn from

us jurisdiction to consider questions of the constitutionality

of the Alloeation Acts and regulations under them.

Consistent with this expressed intent to place the deter-

minations of constitutionality exclusively in TECA or the

Supreme Court, Section 211(c) of the ESA, 12 U.S.C.A.

$1904 note, provides:

In any action commenced under this title in any district

court of the United States in which the court deter-

mines that a substantial constitutional issue exists, the

court shall certify such issue to the Temporary Emer-

gency Court of Appeals. Upon such certification, the

21a

Temporary Kmergeney Court of Appeals shall deter-

mine the appropriate manner of disposition which may

include a determination that the entire action be sent

to it for consideration or it may, on the issues certified,

give binding instructions and remand the action to the

certifying court for further disposition.

It would be improper for this court to reach the merits

of the present appeal because we find that the district court

erred in concluding that this case presented no substantial

constitutional questions which required certification to

TECA under Section 211(¢). Accordingly, we must remand

the case so that proper procedures may be followed.

The district court held constitutionally insubstantial the

issue whether under the circumstances of this case retro-

active application of the Allocation Acts regulations vio-

lated the Due Process Clause of the fifth amendment. We

agree with the district court’s statement of the standard

for a substantial constitutional question under Section

212(g¢). A constitutional issue is not “substantial” if (a) it

is plainly without merit, or (b) Supreme Court or TECA

precedent clearly forecloses the issue raised. Cf. Delaware

Valley Apartment House Owners Ass'n v. United States,

350 F.Supp. 1144 (1.D.Pa.1973), aff'd 482 F.2d 1400 (Em.

App.1973). Our disagreement comes with the district court’s

application of this test.

In its Opinion and Order, the district court itself recog-

nized that “no hard and fast rule has been laid down by

the Supreme Court in determining when a law as applied

retroactively is fair or not.” Rather, the Supreme Court has

looked to the nature and strength of the public interest

served by the statute, the extent to which the statute modi-

fies or abrogates the asserted pre-enforcement rights, and

the nature of the right which the statute alters. Primarily,

the district court’s estimation of the importance of the

entire statutory scheme to regulate crude oil prices led it

22a

to conelude that retroactive enforcement did not violate

due process:

the urgency and importance of the energy issue to the

nation and its economy cannot be doubted. The public

interest in maintaining continuity in the scheme of

regulation is compelling in this case.

We find the district court’s determination of insubstan-

tiality in error because its retroactivity analysis focuses

upon the overall importance of the Allocation Acts rather

than focusing upon the specific instances of retroactive ap-

plication brought into question by this ease. We find a sub-

stantial constitutional question is involved in the determi-

nation of whether, under these cireumstances, due process

is violated where the price regulations in question are ap-

plied retroactively to cover those portions of an install-

ment contract (1) fully performed on both sides while no

regulations were in effeet or (2) fully performed by the

seller while no regulations were in effect and fully per-

formed by the buyer during the same period except for

payment of the sum agreed to in the contract. TECA has

turned down a constitutional challenge to the power of the

FEA, pursuant to regulations promulgated under the Allo-

cation Acts, to regulate the price charged for erude oil in

sales under pre-existing contracts made when no regula-

tions were in effect. Basin, Inc. v. FEA, 552 F.2d 931 (Em.

App.1976). But Basin did not decide whether the FEA may

require retroactive disgorgement of the amount by which

the sales price of crude oil, unregulated at the time of the

completion of the installment, exceeded the price level set

by regulations subsequently put into force, nor did Basin

consider whether retroactivity violates due process where

subsequently imposed regulations become effective after full

completion of delivery by the seller but before the pay-

ment of the agreed-upon price by the buyer.

Nonretroactivity of the regulations under the Allocation

Acts to cover contracts such as those in Basin would have

——————

23a

far more serious consequences for the statutory scheme than

those likely to oceur in the case at bar. Absent retroactive

application in Basin, broad or totally open-ended contracts

entered into while no regulations were in effect could serve

as the springboard for massive unregulated transfers of

oil. The denial of retroactivity to the comparatively small

number of transactions at issue in the case at bar would

have a relatively minor impact upon the scheme of regula-

tions under the Allocation Acts. Here, denial of retroactiv-

ity will affeet only those transactions where the parties coim-

pleted both delivery and payment during the hiatus period

or only those in which the seller fully performed his obli-

gation to deliver and contract completion required only the

payment of money by the buyer. Thus, the balancing an-

alysis, if not the ultimate conclusion, in the case at bar

will necessarily differ greatly from that in Basin. There-

fore, we hold that the district court erred in not certifying

the issue to THCA pursuant to Section 211(¢), 12 U.S.C.A.

§ 1904 note.

Citronelle has raised other constitutional issues in the

case at bar. Llowever, it would be premature to direct certi-

fication of those issues at this time. Under the provisions

of Section 211(e), 12 U.S.C.A. § 1904 note, TECA, on re-

ceipt of a certified Question, may direct that the district

court send it the entire case for disposition, remand the

certified issue for further factual development, or give

binding instructions on the certified issue and remand the

ease to the district court for further disposition. Depend-

ing upon TECA’s determinations, the question whether to

certify these remaining constitutional issues could become

moot.

Because we disagree with the district court’s conclusion

that this case presented no substantial issues of the con-

stitutionality of the regulations under the Allocation Acts,

we remand this case to permit the district court to comply

with its certification duty. By this limited exercise of our

jurisdiction to determine jurisdiction, we do not intend to

24a

intimate or suggest the answer to the question to be certified

or which, if any, of its several options THCA should exer-

cise in determining those matters over which the Allocation

Acts grant it jurisdiction. Cf. Atlantic Las Olas, Inc. v.

Joyner, 466 F.2d 496 (5th Cir. 1972). Of course, TECA is

also free to determine that no substantial constitutional

issues exist in this case.

The cause is remanded to the district court with direc-

tions that it certify to TIHECA the substantial constitutional

questions raised by Gulf’s counterclaim concerning due

process limits upon retroactivity.

REMANDED WitTH DiReEcTIONS.

ee ee ee ery

Bite Sind oe

APPENDIX D

Opinion and Order

(Filed and [Entered August 20, 1976)

The plaintiff is Citronelle-Mobile Gathering, Ine. (Cit-

moco), a corporation organized and existing under the laws

of the State of Delaware and with its principal place of

business in Mobile, Alabama. Citmoco is engaged in busi-

ness in this district of the purchase of crude oil from the

Citronelle field, Citronelle, Mobile County, Alabama. It also

transports such crude oil to a terminal in Mobile, Alabama,

for storage and resale on tidewater in Mobile.

The defendant Gulf Oil Corporation (Gulf) is a corpora-

tion organized and existing under the laws of Pennsylvania

with its principal place of business in Pittsburgh. Gulf is en-

gaged in the business of producing, refining, and selling

erude oil and petroleum products. Gulf is qualified to do,

and is doing, business in Mobile, Alabama. The jurisdiction

of this court is invoked pursuant to the provisions of 28

U.S.C. § 13382(a). The complaint alleges an amount in con-

troversy exceeding $10,000 exclusive of interest and costs.

The venue is in this district pursuant to 28 U.S.C. § 1391 (a),

§ 1392(¢), and § 1893.

Citmoco proceeds on three cause of action. First, they

seek damages in the amount of $4,390,540.83 for an alleged

breach of contract by Gulf with Citmoco for the purchase

of crude oil. Citmoeo sold 337,734 net barrels of Citronelle

crude oil to Gulf at Mobile, Alabama, at an agreed price

of $13.00 a barrel on September 9, and September 29, 1975.

Citronelle claims Gulf on September 30, 1975, repudiated

that contract and refused to pay Citmoco more than $5.40

a barre] on Citronelle crude.

[In the second cause of action Citmoco claims that during

the period of September 29 to December 21, 1975, it sold

691,395.3 additional net barrels of crude oil to Gulf under

the terms of an agreement for $13.00 a barrel, but that

26a

Gulf paid instead $5.40 per net barrel. Citmoco seeks re-

covery of the difference between the $5.40 and $13.00 a

barrel.

Gulf claims that the recovery sought by Citmoco in all

three causes of action is barred by the Emergency Petro-

leum Allocation Act of 1975 (EPAA), P.L. 94-99, Federal

Energy Administration (FEA) Regulations 10 C.F.R., Part

212 and FEA Ruling 1975-17.

Gulf has filed a ecounter-claim in the amount of $558,583.95

for a September 1, 1975, purchase for which Gulf paid Cit-

moco $13.00 per barrel. Under the above regulations Gulf

claims a refund which represents a difference between the

regulated price of $5.40 per barrel and the paid price of

$13.00 per barrel. They have demanded and been refused

the refund by Citmoco.

(iulf invokes jurisdiction of this court pursuant to 15

U.S.C. § 754 as amended by P.L. 94-99 and 28 U.S.C. § 1332

(a). Gulf contends that FEA Regulation 10 C.F.R., Part

212, prohibits Gulf from paying Citmoco more than $5.40

per barrel. Venue is claimed in accordance with 28 U.S.C.

§ 1391.

The Federal Energy Administration (FIA) was per-

mitted to intervene as Intervenor-defendant. FEA took no

position with respect to the total amounts of oil delivered,

the total amount paid, or the total claimed in an alleged

overpayment by Gulf. FEA is an agency and instrumen-

tality of the United States under the Federal Energy Ad-

ministration Aet of 1974, 15 U.S.C., § 761, et seq., and was

established by Executive Order 11790, June 27, 1974.

KicA contends there was a valid ceiling price of $5.40

during the period set out in the complaint and counter-

claim. It also contends that if there were “substantial con-

stitutional issues” during the September 1-29, 1975, period,

thus court is bound to certify the issues to the Temporary

Emergeney Court of Appeals (TECA). FEA further con-

27a

tends that if there are no substantial constitutional issues,

the sales of “old” crude oil could not exceed the Agency's

maximum lawful ceiling price of $5.40 per barrel.

Finpincs or Facr

During the period when the nation’s energy policy was

being hotly debated and before the Regulations expired on

August 31, 1975, Citmoco and Gulf entered into an agree-

ment providing that effective September 1, 1975, and until

any later imposition of valid price controls on the sale of

crude oil, Citmoco would sell, and Gulf would purchase, any

and all Citronelle crude that Citmoco had available for

resale at Mobile, at $13.00 per barrel. On September 1, 1975,

Gulf purchased and accepted delivery from plaintiff of

313,466.72 barrels of Citronelle crude. On September 2,

1975, Gulf was invoiced for this crude oil at the rate of

$13.00 per barrel for a total amount of $4 075,067.36, which

amount was paid to Citmoco prior to September 29, 1975.

On September 9 and 29, 1975, Citmoco sold and delivered

to Gulf a total of 337,733.91 barrels of Citronelle crude for

which Citmoeo invoiced Gulf at the agreed rate of $13.00

ver barrel. Guif has not paid Citmoco the invoiced pur-

chase price for the September 9 and 29 delivery of crude

oil. On October 26, November 22, and December 14, 1975,

Citmoco sold and delivered to Gulf a total of 691,395.3

barrels of Citronelle crude oil for which Gulf paid Citmoco

at the rate of $5.40 per barrel.

As of September 29, 1975, the date of the enactment of

EPAA of 1975, Gulf had not paid Citmoco the charges in-

voiced to Gulf for the September 9 and September 29 pur-

chases of crude oil. Gulf thereafter notified Citmoco that it

could not pay such invoices, asserting that it was prohibited

by reason of the enactment of EPAA of 1975, Citmoco is

also claiming the difference between the $5.40 paid and the

agreed $13.00 per barrel as a balance due for the October,

November, and December 1975 deliveries. This would be a

valid claim based on an agreed price if there were not valid

28a

regulations of the price of crude oil at a lesser price. Cit-

moco claims there were no effective price controls during

this period.

Gulf claims it is prohibited by law from paying more

than the EPAA ceiling of $5.40 per barrel, and has filed a

counter-claim for the excess over $5.40 per barrel paid to

Citmoco ‘for the September 1, 1975 purchase. It claims the

EPAA regulation is retroactive.

Conc.Lusions oF Law

Plaintiff asserts jurisdiction pursuant to the provisions

of Title 28 U.S.C. § 1382(a).

This court has jurisdiction of defendemt Gulf’s counter-

claim under Section 210 of the Economie Stabilization Act

of 1970, as amended 12 U.S.C. § 1904, and as incorporated

into the Emergency Petroleum Allocation Act of 1973, as

amended by P.L. 94-99, 15 U.S.C. § 751, et seq., which in-

corporated Federal Energy Administration, 10 C.F.R. Part

212.

Venue is properly laid in this district under 28 U.S.C.

§ 1391 and § 1393. Under § 210(a) of the Economie Stabili-

zation Act:

“Any person suffering legal wrong because of any act

or practice arising out of [EPAA of 1973, as amended]

... or any order or regulation issued pursuant thereto,

may bring an action in the District Court of the United

States, without regard to the amount in controversy

for appropriate relief... and/or damages.”

The Kmergency Petroleum Allocation Act of 1975 rein-

stated FEA price control (10 C.F.R., Part 212) retroactive

to September 1, 1975.

FEA has been delegated all authority under the Emer-

gency Petroleum Allocation Act of 1973, 15 U.S.C. §§ 751,

et seq., as recently amended by the Energy Policy and Con-

servation Act, 42 U.S.C. § 754, to promulgate and enforce

ST a

29a

price regulations relating to petroleum and _ petroleum

products. The authority to regulate the prices of petroleum

and petroleum products was formerly exercised by the

Cost of Living Council (COLC) pursuant to duly delegated

authority under the Economie Stabilization Act of 1970, as

amended, 12 U.S.C. § 1904, note.

Pursuant to the Economie Stabilization Act, Executive

Orders issued pursuant thereto, and various delegations of

authority, the COLC promulgated “Phase IV Price Regula-

tions” relating to petroleum and petroleum products, shown

as 6 C.F.R. Part 150, Subpart L., § 150.351, et seq., (pro-

mulgated 38 F.R. 22536, August 22, 1973, as amended 38

F’.R. 23794, September 4, 1973).

Pursuant to the KPAA and the delegations of authority

contained in Exeeutive Order 11790, the COLC price regu-

lations relating to petroleum and petroleum products were

re-enacted in substance by the FEA at 10 C.F.R. Part 212,

subpart D, § 212.91, et seq. (39 F.R. 1924, et seq., January

15, 1974). The President was authorized by Section 4(a) of

the EPAA of 1973 to promulgate a “regulation providing

for the mandatory allocation of crude oil and refined petro-

leum products in amounts specified in... and at prices

specified in... such regulation.” 15 U.S.C. § 754(a).

Under FEA price regulations pertaining to the pricing

of crude oil, a two-tier pricing system was adopted. Under

the two-tier pricing system, the Regulations prescribed a

ceiling price on domestic crude oil produced from a given

property when production is at or below the level of pro-

duction from the same property in the same month of 1972

(“old” erude). Crude oil produced in excess of 1972 produc-

tion levels from the same property (“new” crude) was

exempt from price controls and could be so!d at an uncon-

trolled or free market price. During the period January

15, 1974, through August 31, 1975, the ceiling price for old

oil sold by Citmoco to Gulf was $5.40 per barrel.

30a

The Regulations in effect on August 31, 1975 (10 C.F.R.

§ 212.10), provided that no firm or person could charge or

knowingly pay a price for crude oil which exceeded the

price permitted by the Regulations, and that ‘firms or per-

sons which violate the Regulations would be subject to

civil or criminal penalties, as well as private suits for dam-

ages. Both Citmoco and Gulf were subject to the price con-

trols of the Regulations as the same applied to the pur-

chase and sale of domestic crude.

Since its original passage, the Allocation Act has been

extended on four occasions: ?.L. 93-511 (December 5, 1974) ;

P.L. 94-99 (September 29, 1975); P.L. 94-133 (November

14, 1975); P.L. 94-163 (December 22, 1975). The statutory

authorization for price control under the EPAA of 1973,

as extended, expired on August 31, 1975.

Sales of Citronelle crude oil made by Citmoco to Gulf

were subject to such price controls during the months of

September, October, November, and December, 1975.

Citmoco’s demand for payment in excess of the lawful

ceiling price permitted by FEA’s mandatory price regula-

tions should be denied with respect to the above transac-

tions. Citmoco is not entitled to the contract price of $13.00

per barrel for crude oil sold to Gulf to the extent it is in-

consistent with FEA regulations.

Section (a) of 15 U.S.C. § 753, provided that

“(t]he President shall promulgate a regulation provid-

ing for the mandatory allocation of crude oil... in

amounts specified in (or determined in a manner pre-

scribed by) and at prices specified in (or determined in

a manner prescribed by) such regulation ... [s]uch

regulations shall apply to all crude oil... produced

in or imported into the United States.”

Section (g)(1), 15 U.S.C. § 753, of the EPAA of 1973,

as amended February 28, 1975, provided in pertinent part

that:

3la

“The regulation promulgated and made effective under

subsection (a) of this section shall remain in effect

until midnight August 31, 1976, except that ... the

President may exempt crude oil... from such regula-

tion in accordance with paragraph (2) of this subsec-

tion.”

Paragraph (2) of the subsection, 15 U.S.C. § 753(g) (2),

provided that, if the President found application to crude

oil of the regulation authorized by subsection (a) unneces-

sary to carry out the ends of the EPAA of 1973, he might

exempt such oil from regulation for a period of not more

than 90 days, subject to the opportunity for prior Congres-

sional disapproval of the Executive Action.

Congress enacted legislation, S. 1849, on July 31, 1975, on

a substitute bill which would have extended the price con-

trol regulation until March 1, 1976, upon the expiration of

the price controls August 31, 1975. This bill was forwarded

to the President on August 28, 1975, and was vetoed Sep-

tember 9, 1975. Therefore, the price controls without future

action would have expired August 31.

During 1975, Congress, the President, and the public were

engaged in a well-publicized debate on the future direction

of national energy policy. During the course of the legisla-

tive process, the Emergency Petroleum Allocation Act of

1973 expired and was extended on two occasions. There is

no doubt and this court so finds, that Congress was acutely

aware that there was the possibility of a gap between ex-

piration and reinstatement of the price control law and

regulations, therefore, any extension of the EPAA was in-

tended to apply retroactively to August 31, 1975. There is

no doubt that the public as a whole and the oil industry

in particular was well apprised of the ongoing applicability

of the Regulations during any “hiatus” period between the

lapse of the Regulations on August 31, 1975, and the inact-

ment of an extension. Statements by the FEA on August

25 (see atachment “C” to Defendant FEA’s memorandum

32a

in support of its Motion for Summary Judgment, Doc. No.

35), and a press release dated September 29, 1975, (see at-

tachment “D” to Defendant FEA’s memorandum in support

of its Motion for Suunmary Judgment) make it clear that

any extension was to apply the Regulations retroactively in

order that there be no gap in their coverage. Both Gulf

and Citmoco are highly sophisticated corporations with

many years experience in the petroleum industry. There is

little doubt that the intent of Congress and the FEA as to

the retroactive application of any extension of the Regu-

lations was fully known and appreciated by both.

The Regulations lapsed on August 21, 1975, and they were

not extended until September 29, 1975, by P.L. 94-99. The

statutory language indicates that the extension was in-

tended to apply retroactively to September 1, 1975, covering

any hiatus in the application of the Regulations to trans-

actions taking place during that time period.

In that public debate, as in the President’s veto message

of the August 28 bill, it was clear that the President was

committed to removing the ceiling on price controlled do-

mestic oil. It was equally clear that Congress was committed

to the extension of price controls.

In September 1975, Congress passed the Emergency

Petroleum Allocation Act of 1975 which the President signed

on September 29, 1975, more than four weeks after the

expiration of the 1973 Act. The statute is as follows:

“An Act to Extenp THE EmMerRGENCY PerroLtEuM ALLO-

CATION Act or 1973.

Be it enacted by the Senate and House of Represent-

atives of the United States of America in Congress

assembled,

Short Title

Section 1. This Act may be cited as the “Emergency

Petroleum Allocation Act of 1975”.

33a

Extension of Mandatory Allocation Program

Sec. 2. Section 4(g)(1) of the Emergency Petroleum

Allocation Act of 1973 is amended by striking out ‘Au-

gust 31, 1975’, wherever it appear and inserting in lieu

thereof ‘November 15, 1975.’

See. 3. /t is the intent of the Congress that the regu-

lations promulgated under the Emergency Petroleum

Alloeation Act of 1973 shall be effective for the period

between August 31, 1975 and the date of enactment of

this Act.

See. 4. The purpose of this limited extension of the

Kmergeney Petroleum Allocation Act is to provide

Congress and the Executive adequate time and oppor-

tunity to reach mutual agreement on a long-term pe-

troleum pricing policy. During the period of this exten-

sion it is the intent of the Congress that the status quo

shall be maintained and the President shall institute no

major change in petroleum pricing policy under Sec-

tion 4(g)(2) of the Act prior to November 1, 1975, Any

adjustment the President may make in price shall be

in accord with his poicy on inflation impact statements

and economic justification set forth in Executive Order

Numbered 11821 and in Circular Numbered A-107, Jan-

uary 28, 1975, Office of Management and Budget.

Se@5. May Senate resolution to disapprove a Presi-

dential decontrol proposal submitted under section 4

(¢)(2) shall be immediately placed upon the Senate

legislative calendar and any motion by the Majority

Leader or his designee thereafter to proceed to the

consideration of such disapproval resolution shall be

decided without debate and by a majority vote; and

within forty-eight hours after the disapproval resolu-

tion is made the pending business or sooner if other-

wise ordered by the Senate, the Chair shall direct the

Clerk to call the ro!l on the final disposition of the

34a

disapproval resolution without any further debate or

intervening motion, any other rule or provision of law

notwithstanding.” (Emphasis added) .

The plaintiff argues that the expression in the Act of the

intent of Congress expressed only the desire of Congress

that the President reissue the regulations. They further

argued that this was consciously restricted to such a desire

by previous use of the language in other regulations. It is

contended that had Congress intended to make the regula-

tions referred to adopted by this statute, they would have

expressly said so as they did in the Emergency Price Con-

trol Act of 1942, 50 U.S.C.A., Appendix 901(b) by the Price

Control Extension Act of 1946 (PCEA), 50 U.S.C.A., Ap-

pendix 901(z).

The objective of the court in a ease calling for construc-

tion of a statute is to ascertain the Congressional intent

and give effect to legislative will.

Although the language is not as express or clear as it was

in the PCEA of 1946, considering the circumstances of the

debate and the contest of wills between the President and

Congress, it is abundantly clear to this court that Congress

intended to adopt the regulations as part of the Act as if

they had used the same language as that which they used in

the PCEA of 1946.

To hold that Seetion 5, which provided for a Senate reso-

lution to disapprove any Presidential decontrol proposal

expressed an intent of Congress that their language in pre-

vious sections was only advisory to the President would

emasculate those mandatory expressions of intent and

which to this court seems abundantly clear. The court in-

terprets this provision as an announcement to the President

that Congress would not permit any decontrol and provided

a means to rapidly nullify such action should he attempt

such decontrol.

35a

The plaintiff attempts to raise constitutional issues, to

wit, whether the Government may retroactively amend the

terms of a private contract and that Section 5 of the Act

provides for a legislative veto in violation of the President’s

executive action, a violation of the separation of powers

provided by the first three articles of the Constitution. It is

further contended that the retroactive application of the

regulations violates the due process clause of the Fifth

Amendment.

If there are substantial constitutional questions involved,

the Temporary Emergency Court of Appeals (TECA) is

the proper forum. 12 U.S.C. § 1904, note.

Only “substantial” constitutional issues are subject to

certification by a district court to the THCA. A constitu-

tional issue is not “substantial” if (a) it is plainly without

merit, or (b) if Supreme Court or TECA precedent exists to

foreclose the subject raised. National Petroleum Refiners

Association, et al. v. Dunlop, et al., 486 F.2d 1388 (Iam. App.

1973); Delaware Valley Apartment House Owners Ass'n.

v. United States, 350 F.Supp. 144 (.D. Pa. 1973), aff'd,

482 F.2d 1400 (Em. App. 1973).

The Supreme Court has upheld the authority of the fed-

eral government to enact legislation affecting previously

acquired contract rights of individuals. Louisville & Nash-

ville Railroad v. Mottley, 219 U.S. 467 (1911); Norman

v. B. & O. R. Co., 294 U.S. 240 (1935)." The September 1,

1975 sales transaction between the parties which was com-

pleted at the $13.00 per barrel price is subject to being con-

formed to the regulations without violating any constitu-

' As stated in Norman, supra:

‘‘(T}here is no constitutional ground for denying to the Con-

gress the power expressly to prohibit and invalidate contracts

although previously made, when they interfere with carrying

out the policy it is free to adopt.’’

36a

tional prohibition. In Howell Electric Motors Co. v. United

States, 172 F.2d 9538, 954 (6th Cir. 1949), the court stated:

“It is settled law that the retroactive reach of a statute

may constitutionally cover property rights that have

vested . . . and also may cover payments already re-

ceived.”

As to the sales occurring after September 29, 1975, Basin

Inc. v. Federal Energy Administration, et al.,... F.2d...

(Kim App. No. 5-14, April 6, 1976), held that future sales

under pre-existing contracts could validly be precluded.’

Section 3 of the EPAA of 1975 directly expresses the

intent of Congress that said statute is non-penal and Cit-

moco faces no possible consequences from the FEA which

can be deemed criminal in nature. This court finds that Cit-

moco’s allegation that the subject legislation violates the Ex

Post Facto Clause of the United States Constitution is not

well taken. The Supreme Court in Calder v. Bull, 3 U.S. 385

(1898), laid down the basie principal that both of the Ex

Post Facto Clauses only affect laws that are criminal in

nature. Calder, supra, is the leading authority on the ques-

tion and has been followed by practicaly all the courts.

Citmoco’s allegation that the retroactive application of

the regulations, as extended by the September 29, 1975 ex-

tension, contravenes the Fifth Amendment’s Due Process

Clause is without merit and therefore does not rise to the

level of being “substantial” in order that the issues be certi-

fied to the THCA. The due process clause invalidates only

those statutes whose retroactivity results in measurable

unfairness. Porter v. Senderowitz, 158 F.2d 435, cert. den.,

* The court stated :

‘‘By the same token, sales made after the Allocation Act of

September 29, 1975, are not beyond the reach of that legis-

lation merely because they occur in performance of agree-

ments entered into before September 29.’’ At p. 3.

37a

67 S. Ct. L091 (C.C.A. Pa., 1947). Although no hard and

fast rule has been laid down by the Supreme Court in de-

termining when a law as applied retroactively is fair or not

there are three major factors which are to be considered.®

These faetors are: the nature and strength of the public

interest served by the statute, the extent to which the

statute modifies or abrogates the asserted pre-enactment

right, and the nature of the right which the statute alters.

As found by this court, the urgency and importance of

the energy issue to the nation and its economy can not be

doubted. The publie interest in maintaining continuity in

the scheme of regulation is compelling in this ease. A re-

- view of the legislative histery of the passage of the Sep-

tember and November 1975 statutes which extended the

KPAA of 1973 demonstrates the temporary emergency na-

ture of the situation, the strength of the public interest in-

volved, and the full extent of preenactment notice. It seems

the plaintiff cannot claim unfairness or surprise. This court

concludes that the EPAA of 1975 meets the test of funda-

mental fairness and there is supportive case law. It is a

valid retroactive statute and such retroactivity does not

rise to the standard required to be “substantial” requiring

certification.

The Government agrees with the contention that Section

5 is a Congressional veto of Presidential authority raises a

substantial constitutional question but asserts that the.

plaintiff has no standing to raise this question. This court

agrees.

The Government further contends that if it is assumed

that FMA should have repromulgated its recommendations

after enactment of EPAA of 1975, the agency could have

waived the 30 Cay notice, ete., as required by the Adminis-

trative Procedure Act premised upon a “good cause” basis.

’See Hockman, ‘‘The Supreme Court and Constitutionality of

Retroactive Legislation’’, 73 Harvard Law Rev. 692 (1960).

38a

No real purpose would have been served by requiring the

redundant solicitation of public comment. This had already

been previously accorded for exactly the same regulation

in question. The pricing provisions under consideration are

part of a compretiensive regulatory system of price and

allocation control which evolved over a 214 year period

which had been carefully promulgated consistent with the

standards of administrative due process including notice

and opportunity to comment. Repromulgation would have

required the administrative procedures be once more em-

ployed, necessitating delay and a lapse in regulatory en-

forcement. This would have served no useful purpose. The

court considers this is not a substantial constitutional ques-

tion which should be certified to the TECA.

Congress was undoubtedly aware of the delay which

would have been occasioned by a republication of the regu-

lations. This is buttressed by this court’s construction that

Congress intended by the language of the Act to ineorpo-

rate the provisions of the regulations in the EPAA of 1975.

The court therefore finds that the EPAA of 1975 effee-

tively reinstated FIMA’s mandatory price and allocation

regulations by passage of the Act and intended them to be

retroactively applied to the period between August 31, 1975

and September 29, 1975, the date on which the law was

extended by P.L. 94-99.

It is held that the repromulgation of FEA’s mandatory

price and allocation regulations was not necessary in order

to reinstate those regulations after August 31, 1975.

The defendant-counterclaimant is permitted to pay no

more than $5.40 per barrel for each barrel of “old” crude

oil during the months of September, October, November,

and December, 1975. The defendant-countereclaimant is en-

titled to a refund in the amount of $501,077.89, which

amount has been agreed upon in the event the court finds

as it has in this case.

39a

It is therefore Orperep, Ab. upGep, and Decreep that the

defendant-counterclaimant Gulf Oil Corporation have and

recover on its counter-claim against the defendant Citro-

nelle-Mobile Gathering, Inc., $501,077.89 together with costs,

and for the defendant Gulf on the plaintiff’s claim.

Done, this the 20th day of August, 1976.

Vinci PirrMan

United States District Judge

40a

IN THE UNITED STATES DISTRICT COURT FOR

THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

Civil Action No. 75-483-P

CirrRONELLE-MosiLe GatHerine, Inc., Plaintiff,

Gur Ow Corporation, Defendant/Counterclaimant,

and

FreperaL Enercy Apministration, Defendant.

Judgment

(Filed and Entered August 20, 1976)

The court having heretofore entered its Findings of Fact

and Conclusions of Law in favor of the defendant/counter-

claimant and against the plaintiff, Citronelle-Mobile

Gathering, Inc.;

It is Ordered, Adjudged, and Decreed that the defendant/

counter-claimant, Gulf Oil Corporation do have and recover

on its counter-claim against defendant Citronelle-Mobile

Gathering, Inc., $501,077.89 together with costs, and for

defendant Gulf on plaintiff's claim.

Done, this the 20th day of August, 1976.

Vircit PrrrMan

United States District Judge

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