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

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Supreme Court, US A}

FILED |

| MAT 16 1979

IN THE ere

Supreme Court of the United States

OcToBER TERM, 1978

No. a8- ] 724

CITRONELLE-MOBILE GATHERING, INC.,

Petitioner,

Vv.

GuLF O11 CorPoRATION and

FEDERAL ENERGY ADMINISTRATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI AND

ALTERNATIVE PETITION FOR A WRIT OF

MANDAMUS TO THE UNITED STATES COURT OF

APPEALS FOR THE FIFTH CIRCUIT

LESTER M. BripDGEMAN

BRIDGEMAN & NERENBERG

1750 New York Avenue, N.W.

Washington, D.C. 20006

(202) 466-2510

Attorneys for Petitioner

Pui B. KurRLAND

Two First National Plaza

Chieago, Illinois 60603

(312) 372-2345

Of Counsel

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

ee ee

TABLE OF CONTENTS

Page

TN Be LESS ee OnE 2

ES Rg LENT Ls Ge tee nee 2

Questions PRESENTED ...............05: Pieeeens ck<s 3

SratuTory Provisions INVOLVED ..... 31 Ee ae ol Pe us 4

ee eu ceeaaweeecwace 5

REASONS FOR GRANTING A Writ oF CERTIORARI OR, IN THE

ALTERNATIVE, A WrIT OF MANDAMUS ............ ae

I. Tue Orver Erroneousty Denyine PetirionEeR

ANY APPELLATE Review oF THE District Court

JUDGMENT, IN CONTRADICTION TO TH1s CouRT’s

RuuinGs, Ratses J uRispicTionau Issues or Ex-

TRAORDINARY IMPORTANCE TO THE BUSINESS OF

THE FEepERAL CouRTs ............. ears Sk Ges 10

Il. Tue Decision Betow, Yretpinc to TECA

I.xCLUSIVE JURISDICTION TO REVIEW ALL QUEs-

TIONS Deciwep By THE TriAL Court, ConFLicts

Witru an Unsroken Line or Decisions or

Turis Court, aNnp Wiru a Decision oF THE

Unitrep States Court or APPEALS FOR THE

SEVENTH CIRCUIT ...... Cee as oe aA a eae 12

III. Tae Fretu Crecurr’s Rerusau to TAKE JurRIs-

DICTION OF CritTmMoco’s APPEAL NECESSARILY

DepeNDED Upon a MISINTERPRETATION OF THE

CONTROLLING JURISDICTIONAL STATUTE ...... 15

fe hte ee, ae Dr A eee 17

ii TABLE OF AUTHORITIES

Page

CASES:

Associated General Contractors of America v. Laborers

International Union, 489 F.2d 749 (T.E.C.A. 1973) 13

Bray v. United States, 423 U.S. 73 (1975) ............ 13

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

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

ee SU MP ROTO) vc cars adacscesavcs 2

SE We TEE CCUM eas BETO) cova sccasccceaeses 2

In Re Hohorst, 150 U.S. 653 (1893) ..... ack oat dacgs a 3

La Buy v. Howes Leather Company, Inc., 352 U.S. 249

SY Ree ee emia ds cay dau bens wowd,e 0 3

Louisville € Nashville Railway Co. v. Mottley, 211 U.S.

PER Clie in Siren oran we bin ncaa bao oo 3, 12, 14, 15

Mobil Oil Corp. v. Dominion Oil, Inc., (4th Cir., No.

78-1029, decided May 24, 1978) ................. 15

Mountain Fuel Supply v. R. Johnson & Johnson Oil

Co., 586 F.2d 1375 (10th Cir. 1978) .............. 15

Phillips Petroleum Co. v. Texaco, 415 U.S. 125 (1974) . 14

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

496 F.20 1526 (Tth Cit. 1974) . 20... . ccc ccc ces 15

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

SG TU C Reus wean Sh GokeS balsa seucveu 14

Spinetti v. Atlantic Richfield Company, 552 F.2d 1401

CE NL Linas bie eck peau ies 6sueecbieaa'ees 13

Thermtron Products v. Hermansdorfer, 423 U.S. 336

CN See tthe ee we Ed Rn ARN TK bs dues She ace 3, 10

Toll v. Moreno, —— U.S. ——, 47 U.S.L.W. 4483

SE Ns EE oo nOe ei Ns 404464 oo vai wack’ 9, 12

United States v. Cooper, 482 F.2d 1393 (T.E.C.A. 1973) 13

Table of Authorities Continued iii

Sratutory MATERIAL:

Economic Stabilization Act of 1970,

12 U.S.C. § 1904 note ...... eee eee eerie 4, 14,15

ROATERD so os es cepenedcsdsserscaseneseesieas 9

QBVU(D) one cccececccsccncespecccccceseresees 5, 15

BGRTIGD oo cick cs ewehceks cabbie. seneveenee de 5, 7, 8, 16

Emergency Petroleum Allocation Act of 1973, 15 U.S.C.

§§ 751, et seq., §754(a)(1) ..... eee ee ees 4, 6, 8, 9, 16

Emergency Petroleum Allocation Act of 1975, Pub. L.

No. 94-99 (September 29, 1975) ......---00++eees

Judicial Code

98 U.S.C. §1254(1) 2... cece cece eee eee teens 2, 10

OB U.S.C. $1881 2... ccc cece cece ccccccceescccces 4

98 U.S.C. $1332 ... cc ccccccccccscccccccscccces 4,13

98 U.S.C. § 1651(a) 21... cee eee eee eee eee eeees 2

IN THE

Supreme Court of the United States

Ocroser TERM, 1978

—_——————-

No.

CITRONELLE-MOBILE GATHERING, INC.,

Petitioner,

GuLF O1 Corporation and

FEDERAL ENERGY ADMINISTRATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI AND

ALTERNATIVE PETITION FOR A WRIT OF

MANDAMUS TO THE UNITED STATES COURT OF

APPEALS FOR THE FIFTH CIRCUIT

Petitioner respectfully requests that this Court issue

a writ of certiorari to review and reverse the judg-

ment of the United States Court of Appeals for the

Fifth Cireuit entered in the above-entitled action on

April 20, 1979.

In the event that this Court should conclude that that

order of the United States Court of Appeals for the

Fifth Circuit is not appropriate for review on writ of

certiorari, Petitioner respectfully requests that this

Court treat this petition as one for a writ of mandamus

to direct the United States Court of Appeals for the

Fifth Cireuit and the Judges of the deciding panel of

that Court to show cause why a writ of mandamus

should not issue directing the said Court and its Judges

to take jurisdiction of, hear and decide the appeal of

Petitioner from the United States District Court for

the Southern District of Alabama.

OPINIONS BELOW

The final order of the United States Court of Appeals

for the Fifth Cireuit entered April 20, 1979 is unre-

ported, and is set out as Appendix A-1 to this peti-

tion. The prior opinion of the Court of Appeals for the

Fifth Circuit is reported at 578 F.2d 1149 and is at-

tached hereto as Appendix B. The related opinion and

judgment of the Temporary Emergency Court of Ap-

peals (TECA), entered January 23, 1979, is reported

at 591 F.2d 711 and is set out as Appendix C.’ The

opinion of the District Court for the Southern District

of Alabama is reported at 420 F.Supp. 162 and is

attached hereto as Appendix D.

JURISDICTION

The certiorari jurisdiction of this Court is invoked

under 28 U.S.C. § 1254(1).

The alternative mandamus jurisdiction of this Court

is‘invoked pursuant to 28 U.S.C. § 1651(a).

The following decisions sustain the power and juris-

diction of this Court to review the order of which re-

*On April 12, 1979, Citronelle-Mobile Gathering, Inc., petitioner

here, filed a petition in this Court, No. 78-1562, for a writ of

certiorari to TECA, to review and reverse the judgment of that

Court set out in Appendix C hereto.

view is sought by Petitioner’s Alternative Petition For

Writ of Mandamus: In Re Hohorst, 150 U.S. 653

(1893), La Buy v. Howes Leather Company, Inc., et

al., 352 U.S. 249 (1957), Thermtron Products v. Her-

mansdorfer, 423 U.S. 336 (1976).

The special and unusual circumstances which war-

rant exercise by this Court of its discretionary power

to issue the writ of mandamus as alternatively re-

quested in this petition are set forth under the heading

‘*Reasons for Granting the Writ’’ (infra, pp. 10-17).

The United States Court of Appeals for the Fifth

Circuit entered its order on April 20, 1979.

QUESTIONS PRESENTED

1. May a Court of Appeals refuse to take jurisdic-

tion of an appeal from a District Court’s judgment in

a diversity action, and thereby deny Petitioner the

right of appellate review of important issues of con-

stitutional interpretation and statutory construction ?

2. May an appellate court refuse to follow the long-

standing rule, laid down by this Court in Louisville

& Nashville Railway Co. v. Mottley, 211 U.S. 149

(1908), that a case does not ‘‘arise under”’ federal law

where federal law is irrelevant to plaintiff’s claim, but

is asserted by defendant either as defense or counter-

claim ?

3. Does a ease ‘‘arise under’’ a federal law merely

because that law is asserted as the basis of a defense

or counterclaim to a common law claim in a diversity

case ?

STATUTORY PROVISIONS INVOLVED

Judicial Code, 28 U.S.C. § 1332:

‘*(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 W.8.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 Constitution,

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

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

Keonomie 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 Economic Stabilization Act of 1970; and (B) sec-

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-

nomic Stabilization Act of 1970.’’

)

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

note:

**§ 211. Judicial review

ek ee

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

the Temporary Emergency Court of Appeals shall have

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. Such appeals shall be taken by the

filing of a notice of appeal with the Temporary Emer-

gency Court of Appeals within thirty days of the entry

of judgment by the district court.

‘*(ec) 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.”

STATEMENT OF THE CASE

This is a companion case to Citronelle-Mobile

Gathering, Inc. v. Gulf Oil Corp., et al., No. 78-1562,

now pending before this Court on petition for certi-

orari. The sole issues presented in both cases are con-

cerned with the jurisdiction of TECA and of the Court

of Appeals for the Fifth Circuit, neither of which re-

solved any of the substantive issues of the litigation.

This case was commenced by the complaint of Peti-

tioner, Citronelle-Mobile Gathering, Inc. (Citmoco)

against Respondent, Gulf Oil Corporation (Gulf),

steking damages for Gulf’s failure to pay the full con-

tract price for a number of crude oil shipments that

Citmoco sold and delivered to Gulf on and after Sep-

tember 1, 1975. Jurisdiction of the Federal District

Court was invoked because of the diversity of citizen-

ship of the parties.

The parties’ contract had provided for Gulf’s pay-

inent of prices higher than the previously controlled

price, under Federal oil price controls which had lapsed

on August 31, 1975. Gulf had paid the full contract

price for the September 1 delivery, but for no others.

Gulf admitted the contract, delivery of the crude oil

shipments, payment in full for the September 1 ship-

ment, and the failure to pay the contract price for the

later shipments. Gulf also raised the affirmative de-

fense that the Emergency Petroleum Allocation Act

of 1975 (the ‘‘1975 Act’’) enacted September 29, 1975,

retroactively reinstated the defunct price control regu-

lation and retrospectively barred payment of the full

contract price. Gulf counterclaimed for the difference

between the contract price paid to Citmoco for the

September 1 shipment and the lower price allegedly

retroactively imposed by the later-enacted statute. Gulf

invoked the provisions of §5(a)(1) of the Emerency

Petroleum Allocation Act (EPAA), 15 U.S.C. § 754

(a) (1), as the jurisdictional basis for its counterclaim.

The Federal Energy Administration, now the De-

partment of Energy, was permitted to intervene as a

defendant.

Citmoco contended in the District Court that Con-

gress did not re-enact the lapsed price control regula-

tions; that neither the Congress, the President, nor the

Federal Energy Administration (FEA) had thereafter

effectively reinstated any price control regulations pur-

porting retroactively to cover the month of September

1975, and that, any supposed retroactive application

of price controls to previously consummated transac-

tions would be invalid under the Due Process Clause

of the Fifth Amendment. Citmoco further contended

that the statutory provisions for a one-house Congres-

sional veto of legislatively authorized Presidential reg-

ulations rendered unconstitutional the entire 1975 Act

on which Gulf’s affirmative defense and counterclaim

depended.

The District Court found for the defendants on all

issues. (Appendix D).

Citmoco appealed to the United States Court of Ap-

peals for the Fifth Cireuit. That Court, in an opinion

handed down in August 1978, refused to take jurisdic-

tion of the appeal (Appendix B). It held that the Dis-

trict Court had committed an interlocutory error in

concluding that the due process issue raised by the

Gulf counterclaim (as well as by the Complaint and

answer) was not a substantial one. The Fifth Circuit

held that because Gulf’s counterclaim had ‘‘commenced

under’’ the EPAA, § 211(c) of the Economic Stabili-

zation Act, (E.S.A.) 12 U.S.C. § 1904 note, governed.

That statute, partly incorporated by reference in the

Emergency Petroleum Allocation Act* provides that:

“In any action commenced under this title in any dis-

trict court . . . in which the court determines that a

substantial constitutional issue exists, the court shall

certify such issue to [TECA].”’

Ignoring the nature of Citmoco’s diversity com-

plaint, the Fifth Cireuit decided that the District Court

should have certified to TECA prior to judgment on

any issue, pursuant to § 211(¢), the single substantial

issue of due process raised by the counterclaim. It

withheld decision on its own jurisdiction, and remanded

to the District Court with instructions to certify to

TECA solely the substantial constitutional issue, raised

by the counterclaim, whether the due process clause

condoned retroactive application of price regulations

to consummated contracts.

The Fifth Cireuit neither considered nor disposed

of any substantive constitutional or non-constitutional

issue presented to it at that time (Appendix B). Since

the Fifth Circuit’s disposition was interlocutory and

appeared to affect only the locus of argument rather

than any other issue presented to it, Citmoco sought no

review of that decision here. It did, however, unsuc-

cessfully seek rehearing en banc, presciently pointing

out that ‘‘the Court’s decision to reject while assum-

ing, and to assert while denying the assertion of, juris-

diction creates unnecessary problems of exceptional

importance for the parties and the courts, while resolv-

ing none.’’

The District Court then certified the single consti-

tutional issue to TECA. Citmoco challenged TECA’s

*§5(a)(1), 15 U.S.C. § 754(a) (1).

jurisdiction. The parties briefed the merits only of

the jurisdictional and due process issues. TECA ig-

nored the limits of the certification as wl: as the opin-

ion of the Fifth Cireuit. It held that it tad had exelu-

sive plenary appellate jurisdiction because, in its view,

the entire case, the diversity complaint as well as the

federal counterclaim, ‘‘arose under’? the EPAA and

hence gave exclusive appellate jurisdiction to TECA.

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

note, as modified by 15 U.S.C. § 754(a) (1). Coneluding

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

directed dismissal of the entire appeal (Appendix C).

Petitioner has sought certiorari from this judgment;

see n. 1, p. 2, supra,

Because TECA’s seizure of plenary jurisdiction con-

flicted with the Fifth Cireuit’s earlier stated view of

TECA’s limited jurisdiction in this case (Appendix

B) and beeause TECA had refused to decide the certi-

fied question, as submitted, Citmoco then moved the

Fifth Cireuit to reopen, reinstate and decide the ap-

peal.’ The procedure adopted by Petitioner in the

Fifth Cireuit followed that used in this Court after it

had certified a question of state law to a state court. See

Toll v. Moreno, USS. , 47 U.S.L.W. 4483

(April 30, 1979). Petitioner’s motion suggested to the

Fifth Cireuit that that Court had jurisdiction to de-

termine its own jurisdiction as well as jurisdiction to

decide the case, and that the Fifth Circuit’s acquies-

eence in TECA’s decision in this diversity case was, in

any event, flatly contradictory to a long and unbroken

line of decisions of this Court. The Fifth Circuit there-

after entered the one-sentence order that is the subject

® Appendix A-2.

of this Petition, denying Petitioner’s motion, and re-

fusing to assume and exercise its appellate jurisdiction

(Appendix A-1).

REASONS FOR GRANTING A WRIT OF CERTIORARI

OR, IN THE ALTERNATIVE, A WRIT OF MANDAMUS

The decision of the United States Court of Appeals

for the Fifth Circuit, set out in Appendix A-l, is a

final disposition of an appeal to that Court that is ap-

propriate for review by this Court on petition for certi-

orari, 28 U.S.C. § 1254(1). Should this Court conelude,

however, that a petition for certiorari is not appropri-

ate in the premises, Petitioner respectfully requests

this Court to consider this petition, alternatively, as

one for a writ in the nature of mandamus.

It is clear from the decisions of this Court that man-

damus is the proper remedy to compel a lower Federal

Court to exercise jurisdiction that it has improperly

rejected. See, e.g., Thermtron Products v. Hermans-

dorfer, 423 U.S. 336 (1976), at 352.

The reasons for granting the petition for writ of cer-

tiorari are no different from those that support a grant

of the alternative petition for a writ of mandamus.

Those reasons are set out below:

The Order Erroneously Denying Petitioner Any Appellate Review

Of The District Court Judgment, In Contradiction To This

Court’s Rulings, Raises Jurisdictional Issues Of Extraordinary

Importance To The Business Of The Federal Courts.

Citmoco’s original complaint in the District Court

invoked that Court’s diversity jurisdiction. Following

entry of judgment against it in the District Court,

titmoeo, in due course, filed its notice of appeal in the

Fifth Cireuit, and the case was briefed and argued

there. By its decision of August 25, 1978, the Court

of Appeals for the Fifth Circuit, in practical effect,

refused to decide any of the issues presented. The Fifth

Circuit did not then suggest that it lacked jurisdiction

to hear an appeal from the District Court’s disposition

of Citmoco’s diversity complaint. It concluded merely

that it was premature to act on the appeal because a

substantial constitutional issue was raised by the count-

erclaim and it was incumbent on the trial court to

certify that issue to TECA. The Fifth Circuit there-

fore withheld any disposition until that preliminary

issue had been disposed of by TECA. When TECA

was presented with the single certified constitutional

issue raised by Gulf’s counterclaim, it seized upon that

limited issue as a basis for assertion of plenary juris-

diction to dispose of the entire case (Appendix C).

That TECA decision implicitly, but sharply, con-

flicted with the Fifth Circuit’s decision of August

1978. The Fifth Circuit’s decision had clearly held that

only a limited aspect of the case, in its opinion, had

‘‘eommenced under’’ the Allocation Act. TECA held,

on the other hand, that the entire case had ‘‘arisen

under” the Act and was subject to its plenary juris-

diction.‘

Because TECA exceeded the scope of its limited stat-

utory jurisdiction, as well as the scope of the Fifth

Cirecuit’s earlier indicated opinion of the limited mat-

*N.B. that neither of the appellate courts considered the anomaly

presented by their reliance upon the conclusion that the case had

‘‘eommenced’’ or ‘‘arisen’’ under a statute, the very existence

and application of which, at the time the claim arose, was one of

the dispositive issues in the case.

ters open to TECA’s review, Citmoco moved the Fifth

Circuit to exercise its jurisdiction to consider Citmoco’s

diversity case appeal from the District Court’s deci-

sion. Compare, Toll v. Moreno, supra. The challenged

order of the Fifth Circuit, entered April 20, 1979, sim-

ply and summarily refused to grant Petitioner’s mo-

tion, and thereby refused, without any statement of

reasons, to reopen and decide Citmoco’s appeal from

the District Court’s judgment on its diversity claim.

No appellate court has heard and decided the merits

of any substantive issue raised in Citmoco’s appeal.

The confusion created by the disparate views of the

Fifth Circuit and of TECA concerning their respective

jurisdictional limits, established by the Economie Stab-

ilization Act as limited by the Emergency Petroleum

Allocation Act and affected by this Court’s decision in

Mottley, has resulted in the failure and refusal of anv

court to dispose of the merits of Citmoco’s appeal. That

jurisdictional confusion is endemic in the federal ap-

pellate system (see pp. ““ below). It has thrown

into substantial doubt not only the division of jurisdic-

tion as between the courts of appeals of the various

circuits and TECA, but the continued viability of this

Court’s Mottley doctrine.

The Decision Below, Yielding To TECA Exclusive Jurisdiction To

Review All Questions Decided By The Trial Court Conflicts

With An Unbroken Line Of Decisions Of This Court, And

With A Decision Of The United States Court Of Appeals

The Seventh Circuit. a

This case was commenced by Citmoco’s complaint

for breach of contract, based solely on the diversity

* Louisville & Nashville R.Co. v. Mottley, 211 U.S. 149 (1908).

jurisdiction. 28 U.S.C. § 1332. That complaint neither

alleged nor implied any claim based upon a federal

cause of action. Gulf’s affirmative defenses and coun-

terclaim first asserted that Citmoco’s claim was barred,

and the counterclaim supported, by federal price regu-

lations.

Although the one sentence order of the Fifth Cir-

euit, of which review is sought, provides no rationale

for its disposition of the case, the nature and effect

of that disposition are clear: The Fifth Circuit re-

fused to consider or decide the merits of Citmoco’s

appeal and abandoned to TECA all jurisdiction of the

ease,

The Fifth Cireuit’s earlier decision implicitly con-

ceded that there were at least some diversity issues

raised by Citmoco’s appeal to it and, indeed, there

clearly were such issues. By its later order, challenged

here, the Fifth Circuit simply refused to assume juris-

diction to hear and decide an appeal from a District

Court judgment in a diversity case. Whether its laconic

order be interpreted as meaning that Court deemed it-

self bound by TECA’s decision, or that it made its own

independent determination that it lacked jurisdiction

in the premises, it is clear that it abandoned to TECA

the jurisdiction that it had. TECA’s own jurisdiction

is a limited one, carved out of the general jurisdiction

of the courts of appeals for the circuits. Bray v. United

States, 423 U.S. 73 (1975), United States v. Cooper, —

482 F.2d 1393 (TECA, 1973), Associated General Con-

tractors of America v. Laborers International Union,

489 F.2d 749 (TECA, 1973) ; Spinetti v. Atlantic Rich-

field Company, 522 F.2d 1401 (TECA, 1975).

TECA’s jurisdiction was originally created by the

Keonomie Stabilization Act of 1970. The broadest view

of its exclusive jurisdiction can extend no further than

to ‘‘cases and controversies arising under’’ ESA (page

5, supra) as that statute was made applicable, in part,

to petroleum price controls by the Allocation Acts

(page 4, supra). Unless this case “arose under’’ the

statute (but see Part III, infra, and n. 4, supra),

TECA’s jurisdiction, if any, could not have been ex-

clusive, and the Court of Appeals for the Fifth Circuit

retained jurisdiction to hear and decide the appeal.

The Fifth Cireuit’s declination of jurisdiction neces-

sarily implies the conclusion that the entire case ‘‘arose

under’’ the Allocation Acts. That conclusion, however,

flies in the face of this Court’s decision in Louisville

& Nashville R. Co. v. Mottley, supra. Mottley 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 does not require the allegation of facts that

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

material that a federal law defense is available and

raised. Indeed, in Mottley itself, the Plaintiffs’ breach

of contract complaint anticipated the defense provided

by an intervening federal statute. This Court, never-

theless, held that the ease did not ‘‘arise under’’ fed-

eral 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 (1959),

where this Court restated the rule laid down in Mottley.

This Court more recently emphatically reiterated the

continued validity of the Mottley rule in Phillips Pe-

troleum Co. v. Texaco, 415 U.S. 125 (1974).

In St. Mary’s Hospital of East St. Louis, Inc. Vv.

Ogilvie, 496 F.2d 1324 (1974), the Court of Appeals

for the Seventh Cireuit explicitly aecepted the appli-

eability of Mottley to the “arising under” provision

of §211(b)(2) of the Economic Stabilization Aet,

which is incorporated by reference by the Allocation

Act. The Seventh Circuit there held that ‘‘the phrase

‘arising under’ [requires] that the allegations of the

complaint, not merely the answer, call for the applica-

tion of the Eeonomie Stabilization Act to the suit,”

496 F.2d, at 1326. The Court of Appeals for the Fourth

Cireuit, without express consideration of St. Mary’s

Hospital or Mottley, reached an apparently contrary

conclusion in its unpublished decision in Mobil Oul

Corp. ¥. Dominion Oil, Inc., (No. 78-1029, decided May

24, 1978); and the decision of the Tenth Circuit in

Mountain Fuel Supply v. R. Johnson & Johnson Oil

Co., 586 F.2d 1375 (10th Cir. 1978), like the Fifth Cir-

cuit’s original decision in this case, ambiguously sug-

gested its unwillingness fully to follow the Mottley

rule. The Fifth Cireuit’s later decision in issue here

squarely contradicts St. Mary’s application of Mottley.

Ill.

The Fifth Circuit’s Refusal To Take Jurisdiction Of Citmoco’s

Appeal Necessarily Depended Upon A Misinterpretation Of

The Controlling Jurisdictional Statute.

So far as pertinent here the jurisdiction of the cir-

cuit courts of appeals is plenary except in so far as

TECA’s limited jurisdiction is carved out by statute.

The original statutory provision carving out TECA’s

limited jurisdiction was the Economie Stabilization Act

of 1970, 12 U.S.C.A. § 1904 note. Section 211(b) of that

statute removed from the other Courts of Appeals,

and granted to TECA exclusively, jurisdiction over all

appeals “arising under this title or under regulations

or orders issued thereunder’’; and § 211(¢c) authorized

pre-judgment certification by district courts to TECA

of substantial constitutional issues in actions “com-

menced under this title.’’

Those jurisdictional provisions were carried forward

with modifications and remain in effect today only by

virtue of §5(a)(1) of the Emergency Petroleum Allo-

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

The Fifth Circuit failed to recognize, however, that

when § 5(a) (1) carried forward the jurisdictional pro-

vision of the ESA, it imposed limits upon TECA’s

jurisdiction that the ESA had not imposed. Unlike the

KSA itself which granted TECA ‘‘exclusive jurisdic-

tion of all appeals... arising under this title or under

regulations or orders issued thereunder,’’ the later-

enacted Allocation Act of 1973 limited TECA’s juris-

diction to cases arising only under ‘‘the regulation pro-

mulgated under’’ that statute, or under orders or ac-

tions taken under it.

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 re-

lated only to the validity and applicability of the stat-

ute itself. Citmoco conceded below, as:it does here, that,

if the statute retroactively re-created the regulation

and if, as applied, it suffered from no constitutional

infirmity, then neither the validity, nor the interpre-

tation of the regulation is disputed.

The validity of the Fifth Cireuit’s refusal to take

jurisdiction is dependent entirely upon the quoted

statutes. Those statutes do not authorize or permit the

courts of appeals for the circuits to abandon their ap-

pellate jurisdiction to TECA in cases such as this which,

even assuming that it had ‘‘arisen under’’ the statute,

certainly did not arise under the regulation.

CONCLUSION

For the foregoing reasons, this Court should issue a

writ of certiorari or in the alternative, a writ of man-

damus to the United States Court of Appeals for the

Fifth Circuit and reverse the disposition below to re-

quire that Court to consider and decide the issues raised

by Petitioner on appeal from the United States District

Court for the Southern District of Alabama.

Respectfully submitted,

Lester M. BripGEMAN

BrinGEMAN & NERENBERG

1750 New York Avenue, N.W.

Washington, D.C. 20006

Attorneys for Petitioner

Puitie B. KURLAND

Two First National Plaza

Chicago, Illinois 60603

Of Counsel

APPENDIX

APPENDIX Al

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 76-3712

CrrroneLLe-MosiLe GATHERING, INnc., Plaintiff-Appellant,

versus

Gutr Om Corporation, Defendant-Appellee,

FreperaL EXNercy ADMINISTRATION,

Defendant Intervenor-Appellee.

Appeal from the United States District Court for the

Southern District of Alabama

Filed April 20, 1979

Before Cuark, Fay and Vance, Circuit Judges.

By tHE Court:

Ir Is Orpverep that appellant’s motion to reopen, reinstate

and decide appeal is denied.

APPENDIX A2

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 76-3712

CiTRONELLE-Mopsite Gatuerina, Inc., Plaintiff-Appellant,

Gutr Or Corporation, Defendant-Appellee,

FrperRAL EXNercy ADMINISTRATION,

Defendant Intervenor-Appellee.

Motion of Appellant Citronelle-Mobile Gathering, Inc.

To Reopen, Reinstate and Decide Appeal

Appellant Citronelle-Mobile Gathering, Ine. (Citmoco)

moves the Court to reopen and reinstate and, on reopen-

ing, to consider and dispose of the merits of this appeal.

On August 25, 1978, two years after, the appeal to this

Court was filed, this Court entered an order in this case

directing the District Court to certify to TECA, for resolu-

tion, a substantial constitutional question raised by the

counterclaim; 578 F.2d 1149. On November 16, 1978, the

District Court issued the certificate to TECA (Appendix

A). On January 23, 1979, TECA, treating the certification

as if it were an appeal of an earlier judgment, dismissed

the “appeal” for want of jurisdiction (Appendix B), and

thereafter denied rehearing by Order of March 13, 1979

(Appendix C), thereby restoring the case to the condition

it was in when this Court stayed its own hand pending the

decision by TECA on the certified question. Since TECA

will not answer the certified question, this Court must now

proceed to decide the merits of this controversy on the

written briefs and oral arguments already submitted to it.’

ARGUMENT

THis Court Has, aNnpD SHOULD EXERCISE, JURISDICTION

To DreTERMINE THE Merits or THis Case

I, THIS COURT HAS JURISDICTION TO DECIDE

ITS OWN JURISDICTION,

This Court, of course, has jurisdiction to determine its

own jurisdiction in this ease.

“Jurisdiction to determine jurisdiction’ refers to the

power of a court to determine whether it has jurisdic-

tion over the parties to and subject matter of a suit.

If the jurisdiction of a federal court is questioned, the

court has the power, subject to a review, to determine

the jurisdictional issue.” Wright, Law of Federal

Courts § 16, at 50 (2nd ed. 1970).

This Court has previously indicated its agreement with that

view; see, e.g., Atlantic Las Olas, Inc. v. Joyner, 466 F.2d

496 (5th Cir. 1972).

Certainly TICA’s decision does not foreclose this Court’s

own judgment on the issue of its jurisdiction. In this very

ease TECA held itself not bound by this Court’s judgment.

In United States v. Cooper, 482 F.2d 1393 (T.E.C.A. 1973),

at 1400, TECA took the Ninth Circuit to task for what, in

TECA’s view, was an erroneous decision that a case was in

1 Because of the conflicts between the decision of TECA, on the

one hand and the decisions cf this Court and the Supreme Court,

on the other, Citmoco will file a petition for certiorari to review

the TECA decision; and will then request the Supreme Court to

withhold its disposition of that petition to afford, so far as possible,

the opportunity for this Court to consider and dispose of the issues

presented here.

TECA’s exelusive jurisdiction. See also, Associaton of Gen-

eral Contractors of America y. Laborers International

Union of North America, 489 F.2d 749 (T.F.C.A. 1973) ;

Condor Operating Co. v. Sawhill, 514 F.2d 351 (T.E.C.A.

1975).

This Court has, and should assume, jurisdiction to decide

the merits of this appeal.

IL. TECA'’S DECISION ARROGATING TO ITSELF EXCLUSIVE JURIS-

DICTION OF THE ENTIRE CASE WAS PATENTLY ERRONEOUS,

TECA handed down its summary decision without regard

to the fact that this Court’s decision, TECA’s own prior

decisions, and overriding decisions of the Supreme Court

were in sharp conflict with TIHCA’s ruling that it had ex-

clusive jurisdiction over all the issues in this case.

A. TECA’s Jurisdictional Decision Conflicts With That

Of This Court.

This Court was careful to distinguish between Citmoco’s

diversity complaint on the one hand, and, on the other, the

counterclaim that, this Court had concluded, “commenced

under” EPAA. This Court did not hold that it lacked ju-

risdiction of Citmoco’s appeal. Rather it withheld a juris-

dictional decision as to any aspect of the case pending dis-

position of the certified issue. It decided that the case pre-

sented substantial constitutional questions, but TECA

should first have the opportunity to dispose of the single

substantial constitutional issue raised by the counterclaim.

The TECA decision conflicts with this Court’s determina-

tion in so far as TECA purports to overrule the proposition

that the case presented a substantial federal question re-

quiring certification, and to disregard the distinction care-

fully observed by this Court between the diversity com-

plaint and the counterclaim. Only the latter was found by

this Court to have “commenced under” HPAA.?

B. The TECA Decision Flatly Coniradicts The Supreme

Court's Decision In Mottley and Its Progeny.

The Supreme Court’s decision in Louisville and Nashville

R.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 jurisdiction. It is immaterial that a federal de-

fense is available and raised. Indeed, in Mottley itself the

plaintiffs’ breach of contract complaint anticipated the de-

fense provided by an intervening federal statute. The Su-

preme Court, nevertheless, held that the case did not “arise

under” federal law.

The Mottley doctrine has been the guiding principle of

“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 v. Ogilvie, 496 F.2d 1324 (7th

Cir. 1974). In Skelly, the Supreme Court restated the rule

laid down in Mottley. St. Mary’s explicitly accented the ap-

plicability of Mottley to the “arising under” provision of

§ 211(b)(2)° of the Economie Stabilization Act of 1970, as

?Citmoco takes the position that the counterclaim, as ancillary

to the diversity complaint, did not itself ‘‘ecommence under’’ the

statute. It does not argue that issue here, however. Its motion seeks

only to have this Court dispose, on the basis of its own prior

decision and the previously submitted briefs and oral argument

of the parties, of the issues that remain for decision by it.

12 U.S.C, § 1904 note:

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

porary Emergency Court of Appeals shall have 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. Such

amended, incorporated by reference in the EPAA. The Sev-

enth Cireuit held there that “the phrase ‘arising under’

[requires] that the allegations of the complaint, not merely

the answer, call for the application of the Keonomic Sta-

bilization Act to the suit,” 496 F.2d, at 1326.*

TECA’s decision squarely contradicts the St. Mary’s ap-

plication of Mottley. TECA disposed of 70 years of the

Supreme Court’s Mottley doctrine in a single sentence:

“Mottley was handed down in 1911 under a completely

different background and context.” (Slip Op., at 7).

Contrary to TECA’s statement, Mottley was handed down

in 1908 and was decided under a very similar background

and context. Contrary to TECA’s implication, no material

facts distinguish the two cases.

In Mottley the plaintiffs had sued the defendant railroad

for breach of the railroad’s promise to furnish the plaintiffs

free passes for life. The defense anticipated by the plain-

tiffs, and ultimately raised by the defendant, was the 1906

amendment to the Interstate Commerce Act. The [then]

relatively recently enacted Interstate Commerce Act pre-

sented a background and context very similar to that of

the EPAA. The Commerce Act, and its amendments to the

time of Mottley, were designed to remedy, inter alia, the

unrestrained pricing and rebating practices of the rail-

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.’’

*TECA relied for an assertedly contrary view on an unreported

4th Circuit decision, Mobil Oil Corporation v. Dominion Oil Com-

pany, Inc., No. 78-1029 (4th Cir., decided May 24, 1978) and

Mountain Fuel Supply Co. v. R. Johnson & Johnson Oil Co., 586

F.2d 1375 (10th Cir. 1978). Both cases began in the trial court

with non-federal complaints, which were, however, disposed of at

the trial court level and not appealed, so that the issues presented

to the appellate court arose only out of counterclaims under EPAA.

roads. That Act contained highly detailed price control pro-

visions. The purpose of the statute, to control and limit fhe

pricing and other practices of the railroads, was deemed to

be a matter ot high national importance. The Mottley deci-

" sion was handed down by a Supreme Court unquestionably

aware of the great importance to the American economy

that the Congress attributed to the statute; and it clearly

understood the significance to the price control scheme

created by the Commerce Act, of the continuity of controls

and of the uniformity of interpretation of the statute’s sub-

stantive provisions. The Supreme Court’s contemporane-

ous decision in Texas and 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).

TECA did not specify, and could not have specified, any

material distinction between this case and Mottley.°

*TECA’s conclusion that this case ‘‘clearly arises under the

EPAA and is, therefore, within the jurisdiction of the TECA

alone’’ depended upon the most flagrant kind of post hoc reason-

ing. It so ‘‘arose,’’ that Court said, because of the ‘‘compelling

interest in the ‘prompt resolution of Stabilization Act questions,’

.. . the question of the continuation of price controls during the

period September 1-29, 1975, and the importance of assuring ‘uni-

form interpretation of the substantive provisions of the stabiliza-

tion scheme’... .’’ (Slip Op., at 8).

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. It would have been equally sound

logie “or the Supreme Court to have said that Mottley ‘‘arose

under’’ federal law because construction cf the Interstate Com-

meree Act would control the litigation and ‘‘uniform interpretation

of the substantive provisions’’ of that statute should bootstrap

the case into the federal jurisdiction.

C. TECA Decided Other Controlling Jurisdictional And

Substantive Issues Contrary To Statute And The

Supreme Court’s And Its Own Prior Decisions.

TECA incorrectly decided, sub silentio, and apparently

unwittingly, other controlling jurisdictional and substan-

tive issues. In so doing it overlooked or misapprehended

the controlling jurisdictional statute and the significance of

its own prior decisions.

1. TECA Overlooked the Fact That Its Jurisdiction,

Created by the Economie Stabilization Act, But Lim-

ited by the Emergency Petroleum Allocation Act,

Never Extended to this Case.

TECA correctly noted (Appendix B, at 6, 7) that the

provisions of the Economic 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 EPAA of

1973, 15 U.S.C. § 754(a)(1). The latter statute provides, in

pertinent part, that the jurisdictional provisions of the

ESA

“shall apply to the regulation promulgated under § 4

(a) [of the Emergency Petroleum Allocation Act], to

any order under [the EPA] 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 heen issued, or such action had been taken

under the Economic Stabilization Act of 1970.” (Em-

phasis added.)

TECA failed to recognize, however, that when § 5(a) (1)

of the EPAA of 1973 carried forward the jurisdictional pro-

visions of the ESA, it imposed limits upon TECA’s juris-

diction that ESA had not imposed. Unlike the ESA itself

which granted TECA “exclusive jurisdiction of all appeals

... arising under this title or under regulations or orders

issued thereunder,” the later-enacted EPAA limited

TECA’s jurisdiction only to cases arising under “the regu-

lation promulgated under §4(a)” or to orders or actions

taken under the Act.

It was precisely this distinction between appellate juris-

diction of matters arising under the statute versus matters

arising under the regulations or orders issued thereunder

that the Supreme Court recognized in the landmark cases

involving the predecessor statute of EPAA and ESA, the

Emergency Price Control Act of 1942, as amended, 56 Stat.

23, 765, et seq. Under § 204(d) of that statute “exclusive

jurisdiction to determine the validity of any regulation or

order” was granted only to the Emergency Court of Ap-

peals and the Supreme Court. The Supreme Court had no

doubt, in interpreting that provision, that Congress meant

precisely what it said; that exclusive jurisdiction to deter-

mine the validity of regulations reposed solely in the Emer-

gency Court of Appeals and the Supreme Court, but that

jurisdiction to determine issues of the validity of the statute

was not exclusive. Yakus v. United States, 321 U.S. 414

(1944), at 429-431; and in Bowles v. Willingham, 321 U.S.

503 (1944), at 512, n.7, the Supreme Court again noted that

distinction.

Here, as in those cases, the Congress must be assumed to

have meant what it said. If any exclusive jurisdiction re-

sides in TECA, it is exclusive jurisdiction to deal with

issues arising under the regulation rather than under the

statute.

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

tation of, “the regulation promulgated under 4 4(a),” or

of any order, or any executive action taken under the

EPAA. The issues presented at all stages relate only to

the validity and applicability of the statute itself. Citmoco

concedes that, if the statute retroactively re-created the reg-

ulation and, as applied, suffered from no constitutional in-

firmity, then neither the validity, nor the interpretation, of

the regulation is disputed.

10a

2. TECA Overlooked Or Misapprehended Its Own Prior

Decisions In Erroneously Concluding That It Had

Jurisdiction Of Matters Arising During The “Hiatus”

Period.

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

versity complaint, in part, related to sales made and con-

summated in the period September 1-29, 1975. No price con-

trol regulation was in effect when those sales were con-

summated. If no regulation was in effect, then the claims

related to the period September 1-29 could not “arise

under” the federal law which was non-existent during the

period, unless the September 29 statute effectively created

retroactive regulation and did so with constitutional va-

lidity.

TECA’s decision apparently assumed the fact, and va-

lidity, of retroactivity without considering or deciding that

issue. In so doing, it overlooked the significance of its own

prior decision.

In Pasco, Inc. v. Federal Energy Administration, 525

F.2d 1391 (1975), TECA considered an appeal from a case

unquestionably “arising under” the EPAA. The appeal was

filed there 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, however,

a necessary jurisdictional holding in that case:

“Since the Allocation Act ... expired of its own time

limitations at midnight, August 31, 1975, only appeals

within the saving clause of the Allocation Act, § 4(g)

(1), 15 U.S.C. § 753(g) (1) (1975 Supp.), or the general

saving clause, 1 U.S.C. § 109, would have been within

our limited jurisdiction on September 5, 1975, when

this notice of appeal was timely filed. This appeal comes

within the Allocation Act’s saving clause, since it pro-

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

lla

ing on the Act’s expiration or based upon acts com-

mitted prior to such expiration, constitute justiciable

controversies which this Court may review.” 525 F.2d,

at 1393-1394, n. 5, ;

Similarly, in Shapp v. Simon, 523 F.2d 1404 (T.E.C.A.

1975) reh. denied, October 30, 1975, cert. denied, 424 U.S.

911 (1976), TECA dismissed an appeal as moot on Septem-

ber 7, 1975. The court said there:

“This controversy has now been rendered moot by the

expiration of statutory authority for the entire pro-

gram of federal control and allocation of petroleum

products.

“The District Court dismissed the complaint on the

ground that the plaintiff lacked standing. However on

this appeal from that decision, supervening mootness

prevents us from reviewing the issue of standing.”

(Emphasis supplied.)

Following the September 29, 1975 revival of the control

program, the appellant moved for rehearing. Although

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

trol program had been revived, purportedly retroactively,

it denied rehearing.

Shapp, like Pasco, is consistent only with the proposition

that THCA, which derives its jurisdiction from the EPAA

and the regulation promulgated thereunder, had concluded

that the statutory foundation for that jurisdiction was lack-

ing between September 1 and 29, 1975, and had not been

revived by the September 29 statute.

In the instant case the acts complained of occurred in the

very period in which TECA twice previously determined

the statutory foundation for its jurisdiction was lacking.

Nevertheless, it found in this case that the entire case, in-

cluding specifically the counterclaim events of September

1-29, 1975, had “arisen under” the statute that was then

ineffective.

l2a

Ill. THIS COURT SHOULD ASSUME AND EXERCISE ITS APPELLATE

JURISDICTION IN THIS CASE,

This Court should now decide its jurisdiction and the

merits of this appeal. This case presents important issues

of statutory interpretation and constitutional construction.

This Court has recognized at least one of the constitutional

issues involved as “substantial.” Certainly the parties are

entitled to a disposition of those issues on their merits and

to have that disposition without the kind of circuitous rout-

ing into, through and around the courts of the United

States, that has characterized this case to date.

The consumption of time has already been inordinate, and

the cost to the litigants substantial. A disposition by this

Court on the merits now, would significantly reduce the fu-

ture consumption of judicial time and effort, and the time,

effort and money of the parties.

Respectfully submitted,

/s/ Lester M. BringeMan

Lester M. Bridgeman

/s/ Louis T. Ursanczyk

Louis T. Urbanezyk

BrivgemMan & NERENBERG

1750 New York Ave., N.W.

Washington, D.C. 20006

Attorneys for Citronelle-Mobile

Gathering, Inc.

Of Counsel:

Puiuie B. Kurtanp

Two First National Plaza

Chicago, Ilinois 60603

APPENDIX B

Crrronevie-Mosite GaTHErRine, INC.,

Plaintiff-Appellant,

Guutr Ow Corporation,

Defendant-A ppellee,

FreperaL Enercy 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 Ciark, Fay, and Vance, Circuit Judges.

Crark, 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 [KPAA 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 RPAA

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 EKPAA of 1975. The district court ruled in favor of

(Giulf and FEA on all issues including the counterclaim.’

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

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

l4a

Citronelle appealed to this court. Gulf and FEA assert that

jurisdiction to hear this appeal lies only in the Temporary

Imergency 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 EPAA of 1973 and the EPAA of 1975 [collec-

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 1973 and resumption of regulatory authority

under the MPAA of 1975.

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

Citronelle buys crude 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.

15a

its amendment by the EPAA 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 KPAA 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 IKPAA 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-

ecived 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).

l6a

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

1975 Congress retroactively extended the regulations effec-

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

during the hiatus between the August 31 expiration of reg-

ulatory authority under the HKPAA of 1973 and the Septem-

her 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 crude

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

barrel specified by the contract. Thus, Gulf contended that

valid retroactive FMA 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 te 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 counterelaimed 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 KEPAA of 1975.

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

expressly incorporates the provisions for review found in

the Economie 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

l7a

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 EPAA 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 failen under the regulations in effect

on August 31 but for the expiration of statutory authority

under the MPAA 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 regulations to affect 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

hy 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 TECA.

18a

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:

(ec) In any action commenced under this title in any

distriet 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

Emergency Court of Appeals.

Gulf’s counterclaim, which expressly invoked the jurisdic-

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 FEA 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

Economie 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:

IXxeept as otherwise provided in this section, the Tem-

porary Emergency Court of Appeals shall have exclu-

sive jurisdiction of all appeals from the district courts

of the United States in cases and controversies arising

19a

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 [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 TECA. 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 agency 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 Economic 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 cases 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-

20a

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 & N.R.R. v. Mottley,

211 U.S. 149, 29 S.Ct. 43, 53 L.Ed. 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 Circuit’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. denied, —— 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.dd.2d

215 (1975).

2la

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 point 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 Allocation 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 Allocation 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

22a

Temporary Emergency 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 (.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 publie 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

23a

to conclude 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 case. We find a sub-

stantial constitutional question is involved in the determi-

nation of whether, under these circumstances, 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 effect 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 crude 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

24a

far more serious consequences for the statutory scheme than

those likely to occur 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 affect only those transactions where the parties com-

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. However, it would be premature to direct certi-

fication of those issues at this time. Under the provisions

of Section 211(c), 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

case 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

intimate or suggest the answer to the question to be certified

or which, if any, of its several options TECA 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 TECA the substantial constitutional!

questions raised by Gulf’s counterclaim concerning due

process limits upon retroactivity.

ReMANDED WitnH Directions.

27a

APPENDIX C

TEMPORAL.Y EMERGENCY COURT OF APPEALS

OF THE UNITED STATES

No. 5-31

CITRONELLE-MosiLt GATHERING, INC.,

Plaintiff-A ppellant,

Gute Oi Corporation,

Defendant/Counter-Claimant-A ppellee,

and

FreperaL Energy AbMINISTRATION,

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. Brivceman, Bridgeman & Nerenberg, Washing-

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

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

on the brief for the Vlaintiff-Appellant.

SrepHANte LacHMAN GoLpen, 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 (DOK), 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 Dismiss.

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

Dismiss for lack of jurisdiction should be granted.

‘Memorandum of Citronelle-Mobile Gathering, Inc., 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 case did not ‘arise’ or ‘com-

mence’ under the regulation authorized by the Emergency

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

et seq., (PAA). ...

* Memorandum in Support of Federal Defendant's Motion to

Dismiss, p. 1.

Section 211(e)(2), Eeonomie Stabilization Aet of 1970 (ESA),

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

Emergency Petroleum Allocation 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

choiee, from seeking review of the district court decision in

this Court.

?9a

I. Facruat BackGrounp

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

(Citmoeco) and Gulf negotiated a contraet which provided

that beginning September 1, 1975, and until further notice

(until any later imposition of price controls, according to

Citmoeo), Citmoco would sell and Gulf would buy crude

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

delivered and Gulf aecepted 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 crude made on

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

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

691,395.3 barrels of erude 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 Gulf’s alleged breach of their contractual agreement.

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

affirmative defense that the Hmergency Petroleum Alloca-

tion Aet of 1975 (EPAA), enacted on September 29, 1975,

extended the authority of the EPAA of 1973 and that the

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

paying Citmoco and Citmoco from receiving $13 per barrel

for the crude sold and delivered by plaintiff to defendant in

September, 1975. Gulf also asserted a counterciaim 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

Citmoco and Gulf in an effort to defend the regulatory

30a

scheme directly challenged by Citmoco and the agency in-

terpretation of the effeet of Congress’ retroactive extension

of the PAA on erude 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 amount 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 certif: .o the TECA as a substantial con-

stitutional question ¢ oco's assertion that the retroactive

application of the vations violates the Fifth Amend-

nent’s Due Process use, the judge finding that measur-

able unfairness in this case 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

TECA 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 fled «a motion to dismiss its appeal with the

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

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

On August 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

es ie FE

Sla

price regulations “are applied retroactively to cover those

portions of an installment contract (1) fully performed on

hoth sides while no regulations were in effect 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. Citmoco’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 TECA since the Fifth Circuit’s mandate had

not yet been issued and premature certification to the

TECA was causing procedural problems before both courts.

This natok wa 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, District Judge Pittman entered

his “Order Certifying Cause to the Temporary Emergency

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

22, 1978.

Qn 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-

32a

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 ‘com-

mence’ under the regulation authorized by the Emergency

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

§ 751, et seq., (EPAA) and hence, this ease, in all its aspects,

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

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

in Response to Motion to Dismiss, p. 2.

TI. 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:

... [SJections 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 Economic 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-

+ ena

33a

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

EPAA, 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 jurisdic-

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

ease were those framed by the Johnson Counterclaim.

3 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.

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

F.2d 87 (TECA 1977).

j4a

The allegations set forth in that counterclaim invoked

and implicated United States laws under the ESA 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 KPAA 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

20, 1975. Just as the Court of Appeals for the Second Cir-

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

Corp., 53t I°.2d 669, 671 (1976), that “construction of the

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

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

the retroactive application vel non of the EKPAA 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

MPAA 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 concluding

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-

wo et:

St ORE I ai eT 4 wb

jDa

dietion 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 ISPAA 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 case on August 20, 1976. Cit-

moco filed a timely notice of appeal with the TIHECA on

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

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

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

THCA, Citmoeo, 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 ‘‘certifieation’’ and ‘‘on certifica-

tion’’ in the record (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).

Fifth Circuit without further recourse to invoke the

jurisdiction of this Court.

Iv Is OnperReED AND Apsguvaep that this action be and here-

by is Dismissep for want of jurisdiction.

ee ae ——T

ova

APPENDIX D

Opinion and Order

(Filed and [ntered 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 erude 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. § 1832(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(e), and § 1393.

Citmoeco proceeds on three cause of action. First, they

seek damages in the amount of $4,890,540.83 for an alleged

breach of contract by Gulf with Citmoco for the purchase

of crude oil. Citmoco 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 Citmoeco more than $5.40

a barrel 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

38a

Giulf paid instead $5.40 per net barrel. Citinoco seeks re-

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

barrel,

(iulf claims that the recovery sought by Citmoco in all

three causes of action is barred by the Emergeney Petro-

leum Allocation Aet of 1975 (IKPAA), P.L. 94-99, Federal

nergy Administration (FMA) Regulations 10 C.F.R., Part

212 and FKA Ruling 1975-17.

Gulf has filed a eounter-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 4.40 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 (FEA) 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 Act of 1974, 15 ULS.C., § 761, et seq., and was

established by Executive Order 11790, June 27, 1974.

MIiMA 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

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

ak ote

en eee ns

s ~~

39a

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.

Kinpines oF Fact

During the period when the nation’s energy policy way

being hotly debated and before the Regulations expired o

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 Citmoeco invoiced Gulf at the agreed rate of $13.00

per barrel. Gulf 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 erude oil. Gulf thereafter notified Citmoco that it

could not pay such invoices, asserting that it was prohibited

by reason of the enactment of EKPAA 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

40a

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

moco claims there were no effective price controls during

this period.

Giulf 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.

ConcLusions oF Law

Plaintiff asserts jurisdiction pursuant to the provisions

of Title 28 U.S.C. § 1332(a).

This court has jurisdiction of defendant 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 Emergency Petroleum Allocation Act of 1975 rein-

stated FIA 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. 4 754, to promulgate and enforce

OS Sate Hie es

4la

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 Economic 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 EPAA and the delegations of authority

contained in Executive Order 11790, the COLC price regu-

lations relating to petroleum and petroleum products were

re-enacted in substance by the FHA 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 KPAA 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 sold 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.

42a

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

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

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

Pitot on Ain phn P.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 1s 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 erude 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 ... [sJuch

regulations shall apply to all erude 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:

eso hale eee Ce

PEE me ne ll de 2 —

43a

“The regulation promulgated and made effective under

subsection (a) of this section shall remain in effect

until midnight August 31, 1975, 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 mighi

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 publie 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

1°73 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

44a

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 Summary 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 31, 1975, and they were

not extended until September 29, 1975, by /’.u. 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. [t 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 EMerceNcy PetroLeum 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”.

45a

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.’

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

lations promulgated under the Emergency Petroleum

Allocation Act of 1973 shall be effective for the period

between August 31, 1975 and the date of enactment of

this Act.

Sec. 4. The purpose of this limited extension of the |

Emergency 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

mm accord with his poicy on inflation impact statements

and economic justification set forth in Executive Order

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

uary 28, 1975, Office of Management and Budget.

Sec. 5. Any Senate resolution to disapprove a Presi-

dential decontrol proposal submitted under section 4

(g)(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 roll on the final disposition of the

46a

disapproval resolution without any further debate or

intervening motion, any other rule or provision of law

notwithstanding.” (Mmphasis 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 case calling for construc-

tion of a statute is to ascertain the Congressional intent

and give effeet 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 PCKA of 1946.

To hold that Section 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 mendatory 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.

es — See aay

472.

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 TIECA. 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 (Em. App.

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

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

482 I.2d 1400 (lm. 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 Iailroad v. Mottley, 219 U.S. 467 (1911); Norman

v. B. d O. R. Co., 294 U.S. 240 (1935). The September i,

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.’’

48a

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

States, 172 F.2d 953, 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...

(Mim App. No. 5-14, April 6, 1976), held that future amer

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 basic 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 atid 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 TTECA. 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.

49u

67S. Ct. LO9L (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 factors 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 public interest in maintaining continuity in

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

view of the legislative history 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 ease 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

9 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 day notice, ete., as required by the Adminis-

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

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

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

50a

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 comprehensive regulatory system of price and

allocation control which evolved over a 2%, year period

which had been carefully promulgated consistent with the

standards of adiministrative 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 incorpo-

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

The court therefore finds that the EPAA of 1975 effee-

tively reinstated FIA’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-counterclaimant 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.

Dla

It is therefore Orperep, Avs upcep, 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

52a

IN THE UNITED STATES DISTRICT COURT FOR

THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

Civil Action No. 75-483-P

CirrRoNELLE-MosiLe GatuHerine, Inc., Plaintiff,

Gur O1w Corporation, Defendant/Counterclaimant,

and

FrperaL 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 PrrTMan

United States District Judge

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