# Petition — Exxon Corp. v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1809%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1980 - **Citation:** 445 U.S. 925 ## Text Po .. 79-1384 _ No » = = IN THE a Supreme Court of the United States OCTOBER TERM, 1979 EXXON CORPORATION, Petitioner Vv. UNITED STATES OF AMERICA PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT MILLER & CHEVALIER DONALD B. CRAVEN MARK L. EVANS GERALD B. FLEMING 1700 Pennsylvania Ave., N.W. Washington, D.C. 20006 (202) 393-5660 Of Counsel D. JOSEPH POTVIN Exxon Company, U.S.A. Post Office Box 2180 Houston, Texas 77001 (713) 656-6417 WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON. D.C. 20001 Nee a acisadamasinennuaseseensiemmianenecion 1 Nee a ouniscsevdantcmewcevananennsonmeses 1 QUESTIONS PRESENTED. ...................-.-...-..-.---------+--+- 2 STATUTES AND REGULATIONS INVOLVED ........ 2 RE ERE SN CT Oe eT 2 1. The Petroleum Marketing Practices Act .......... 3 2. The Exxon Subpoena and Administrative Nee ic sscicesancennemponnssreia 4 3. District Court Proceedings ................----.----------- 5 4. Decision of the Court of Appeals ..................------ 6 REASONS FOR GRANTING THE WRIT .................. 8 A. Congress Deliberately Withheld Subpoena Power for Purposes of the Title III Study.... 9 B. The Secretary’s Subordinate Improperly Ig- nored DOE Regulations Governing Administra- tive Review of Subpoenas ...................---------------+- 16 Neen eee nn ein sctsnscncectnnancynencessccssnenseses 20 Neen np epennnanbdcntesneccnnecnsenscoes la Ea 23a Neen on. centacnseencenrecensencsunbonceens 25a EC 27a EES EE 29a EES EN 37a Neen ac acadnadcseneirnsodanesnanceueweees 4la Neen ene ee eo oad sasieeecdisinbenneunecuecsoens 42a Neen ee ee ssinccesiananavspaendccnccehnanes 47a Neen a iencsnastvansvacseeennenenceoss 86a EE 95a i: oe oe : iL il CITATIONS Cases: Page Brown v. General Services Administration, 425 a el a ieee beanies 16 Comet Electronics, Inc. v. United States, 381 RE eile | Seen 20 Cudahy Packing Co. v. Holland, 315 U.S. 357 ........ 9,11 Davies Warehouse Co. Vv. Bowles, 321 U.S. 144...... 18 FTC v. Baltimore Grain Cw., 284 F. 886 -............... 16 Harriman V. ICC, 238 U.S. 407 ..........................00000 9 Morton Vv. Mancari, 417 U.S. 5865 .............................. 16 NLRB v. Drivers Local Union, 362 U.S. 274 .......... 16 Oklahome Press Publishing Co. v. Walling, 327 Be a waieseonbative 10 Piper v. Chris-Craft Industries, Inc., 480 U.S. 1.... 17 Reisman V. Caplin, 875 U.S. 440 ..........................0... 9,19 See v. City of. Seattle, 887 U.S. 5411 .................0........ 10 Service Vv. Dulles, 354 U.S. 368 .................................- 17 Simpson Vv. United States, 485 U.S. 6 2.000000... 16 Skidmore v. Swift & Co., 828 U.S. 184 .....00000000000.... 17 SP a IG IY IIR Secs ccectsnascnuncsassencconse a United States v. Bisceglia, 420 U.S. 141 ..0.000.... 15 United States v. Exxon, 4 CCH Energy Manage- Ea IRIE: lice MINER AN SURE EAL ae 1 United States v. Humble Oil & Refining Co., 488 ACEI SER APO cs eT eT atc LA Oe CO 16 United States v. Morton Salt Co., 338 U.S. 6382 ...... 9,19 Vitarellt v. Seaton, 359 U.S. 586 .......... a. 17 Yellin v. United States, 374 U.S. 109 .00000 0. 16 Statutes: Department of Energy Organization Act Ry Ae Seas NI vis ccsesseti sdminnen cds scuicnais 2, 6, 15 § 645, 42 U.S.C. §§ 7254, 7256(a), 7259 (a).... 15 Emergency Energy Conservation Act of 1979 fe ee ee ee 11 iii CITATIONS—Continued Page Petroleum Marketing Practices Act § 203 (a) (e), 15 U.S.C. § 2823 (a) (e) 2.0000... 2, 3, 10 Sk Oe I coca csc diccenecsce ccdncececcncen 2,3 § 301(a), 15 U.S.C. § 2841 (a) ...... i... 3 § 801(c), 15 U.S.C. § 2841 (¢) -...00.. ec... 4,10 § 301(d) (1), 15 U.S.C. § 2841(d) (1) 000... 3 Powerplant and Industrial Fuel Use Act of 1978 § Zil (a), 42 U.S.C. § 842) ........... Sst mance ll rie as scinabainebensheaensinetundsernedeaneaotionens 15 i RS get RAC an ee area RA 2 Bs I TN ID eieseecccscse ptr dn anand dacdaensedecckcceeinines 8 Regulations: Re ie 19 I ie 16, 19 Be ie in I CUD oroivceccccccncesenccecdcstcrsescnss 2,5,17,18 Te 16 I ees ee a 19 I er en 19 Be ee a 19 ey ear Oe 19 pc EN 5 AIS a cee ean eee ke 19 es ee DOOD oc 19 eek MR 5 ANA ae eae 19 RE aera a ae ee ee aaa 19 Ie a ee 19 oe 19 eR Ns | ee eee aaa aE 19 We Mra neice crema neice ncanedeecocseeerce 19 en 19 Me ee RI oso cccicsecsshcesdecenecesececcccoeosspececccccsccac 13 Ar, a Ue tl 19 ne el 19 Miscellaneous: 39 Fed. Reg. 25602 (July 11, 1974) 0. 18 41 Fed. Reg. 55322, 55323 (December 20, 1976)... 18 ee iv i IN THE CITATIONS—Continued | — | Supreme Court of the United States 44 Fed. Reg. 3548, 3552 (January 17, 1979) .......... 4 OcToBER TERM, 1979 44 Fed. Reg. 23201, 23202 (April 19, 1979) .......... 17 124 Cong. Rec. H 5002 (Daily ed., June 6, 1978)... 16 124 Cong. Rec. S 7149-7158 (Daily ed., May 9, | | a enoee Gn tetas We A 4, 11, 12, 18, 14 No S. Rep. No. 95-731, 95th Cong., 2nd Sess. 13-15 . f§ .. Seabee tres venisiiiiaitatimiaee eases ane 1l EXXON CORPORATION, ‘ Petitioner UNITED STATES OF AMERICs PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT Exxon Corporation petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the District of Columbia Circuit in this case. OPINIONS BELOW The opinion of the Court of Appeals (App. A, pp. ’ la-22a)* is not yet reported. The opinion of the District Court (App. E, pp. 29a-36a) is not officially reported; it is unofficially reported at 4 CCH Energy Management 7 26,181. JURISDICTION The judgment of the Court of Appeals (App. B, pp. 23a-24a) was entered on February 26, 1980. The juris- Ae 1“App.” refers to the appendix to this petition. 2 diction of this Court is invoked under 28 U.S.C. § 1254(1). QUESTIONS PRESENTED 1. Whether the Secretary of Energy has authority to issue a subpoena to obtain information for a study of motor fuel marketing subsidization under Title III of the Petroleum Marketing Practices Act. 2. Whether, in issuing a subpoena to obtain such in- formation, the Secretary’s subordinate employee may properly refuse to follow Department of Energy regu- lations governing administrative review and supervision of the exercise of delegated subpoena power. STATUTES AND REGULATIONS INVOLVED Section 203(a) and (e) and Section 301 of the Petro- leum Marketing Practices Act, 15 U.S.C. §8§ 2823(a) and (e) and 2841, Section 645 of the Department of Energy Organization Act, 42 U.S.C. § 7255, and Section 205.8 of the Department of Energy’s regulations are set forth in Appendix K, p. 95a-101a. STATEMENT A divided panel of the Court of Appeals (Chief Judge Wright, Senior Judge Bazelon; Judge Wilkey dissenting) affirmed the District Court’s summary enforcement of an administrative subpoena issued to petitioner Exxon Cor- poration by a Department of Energy employee. The pur- pose of the subpoena was to obtain information for a study required by Title III of the Petroleum Marketing Practices Act. Exxon contends that the subpoena is invalid and un- enforceable for two reasons. First, Congress deliberately withheld from the Secretary of Energy the power to 3 issue compulsory process for purposes of the Title III study. Second, the employee who purported to issue the subpoena in this case unlawfully refused to submit to the Department’s established administrative procedure for reviewing and supervising the use of delegated subpoena power. 1. The Petroleum Marketing Practices Act. Title III of the Petroleum Marketing Practices Act (“PMPA”), Pub. L. No. 95-297, 92 Stat. 337, 15 U.S.C. § 2841, was adopted on the floor of the Senate as a sub- stitute for a controversial version that had been narrowly approved by the Senate Committee on Energy and Na- tural Resources. As enacted in June 1978, Title III directed the Secretary of Energy to “conduct a study of the extent to which producers, refiners, and other sup- pliers of motor fuel subsidize the sale of such motor fuel at retail or wholesale with profits obtained from other operations.” § 301(a), 15 U.S.C. § 2841(a). The Act instructed the Secretary to submit a report to Con- gress on the results of his study, together with any legis- lative recommendations, by December 19, 1979. § 301(d) (1), 15 U.S.C. § 2841 (d) (1).? In Title II of the same Act, Congress established re- quirements for the testing, certification, and posting of gasoline octane ratings; it authorized the Federal Trade Commission to enforce compliance with those require- ments; and it expressly empowered the FTC “to require the filing of reports, the production of documents, and the appearance of witnesses, as though the applicable terms and conditions of the Federal Trade Commission Act were part of this title.” § 203(a), 15 U.S.C. § 2823 2The Secretary has not yet submitted a report to Congress. The Department of Energy employee responsible for conducting the study stated in affidavits filed with the District Court and the Court of Appeals that he has unilaterally extended the deadline twice and now proposes to submit a report by April 30, 1980. 4 (a). In Title III, by contrast, Congress did not empower the Secretary of Energy to obtain information for his study by compulsory process. The Act provided, instead, that “the Secretary shall give appropriate notice and afford interested persons an opportunity to present writ- ten and oral data, views and arguments concerning such study.” § 301(c), 15 U.S.C. § 2841(c). The author of Title III, Senator Bumpers, told his colleagues on the floor of the Senate that the Secretary “wll not have the right to get the information under subpena powers ** *” 124 Cong. Rec. S 7155 (Daily ed., May 9, 1978) (reproduced at App. I, p. 75a). 2. The Exxon Subpoena and Administrative Proceedings. In January 1979, the Department of Energy published a proposed “study plan” in which it stated that it would attempt to issue subpoenas selectively to nine unnamed companies to obtain “internal, corporate planning docu- ments” for the Title III study. 44 Fed. Reg. 3548, 3552 (January 17, 1979). The notice cited no statutory auth- ority for the use of compulsory process, and it made no attempt to reconcile the use of subpoenas with Title III’s language and legislative history. A few days later, the Director of the Office of Competition, a sub-unit of the Department’s Office of Policy and Evaluation, signed and mailed a subpoena purporting to direct the Chief Execu- tive Officer of Exxon Corporation to appear and to pro- duce for examination documents responsive to 12 broad specifications. App. H, pp. 42a-46a. The subpoena covered a nine-year period (January 1, 1970, through January 22, 1979). Id. at 44a. Although it invoked the authority of the Department of Energy Organization Act and the Federal Energy Administration Act, its sole stated purpose was to obtain “information for use in the preparation of a study required by Title III of the Petroleum Marketing Practices Act.” Jd. at 42a. 5 Exxon filed an application to quash or modify the sub- poena.* The application challenged the agency’s statutory authority to issue the subpoena, sought to narrow the subpoena’s scope and to clarify its terms, and requested adequate protective measures to prevent improper dis- closure of the wide range of highly confidential and com- petitively sensitive internal documents demanded by the subpoena. One month later, the employee who had signed the subpoena sent Exxon a four-sentence letter rejecting the application to quash. The letter stated in its entirety (App. G, p. 41a): I have received the “Application to Quash or Modify Subpoena” filed on March 20, 1979. There are no provisions in the DOE rules providing for such motions. I am, moreover, unpersuaded by your arguments. Since we have been unable to reach a satisfactory agreement regarding document production,-I am turning this matter over to the Office of the General Counsel. 3. District Court Proceedings. In June 1979, the United States filed in the United States District Court for the District of Columbia a petition to enforce the administrative subpoena issued to Exxon. J.A. 83-86.4 Six months later, in Decem- ber 1979, the District Court granted the government’s % Department of Energy regulations provided for a three-stage process for administrative review of the exercise of delegated subpoena power. 10 C.F.R. § 205.8 (1978) (reproduced at App. K, pp. 98a-101la). *The government simultaneously filed a petition to enforce an identical subpoena that had been issued to Shell Oil Company. J.A. 87-90. It filed a petition to enforce the subpoena issued to Marathon Oil Company in October 1979. J.A. 108-111. “J.A.” refers to the Joint Appendix in the Court of Appeals, a copy of which has been lodged with the Clerk of this Court. 6 petition and directed Exxon to produce documents re- sponsive to the subpoena upon not less than 10 days’ notice. App. D, pp. 27a-28a.° In a supporting memorandum entered a month later, the Court reasoned that the Secretary has broad subpoena power under the Department of Energy Or- ganization Act (“DOE Act”) and that “nothing in the PMPA or its legislative history * * * suggests that * * * Congress acted to limit or prohibit the use of subpoenas” for purposes of the Title III study. App. E, p. 32a. The Court also held that the agency was free to bypass its own regulations governing administrative review of sub- poenas because the Title III study did not fall within the categories of “proceedings” to which the C.F.R. Part containing those regulations expressly applied. App. E, pp. 34a-35a.° 4. Decision of the Court of Appeals. On consolidated appeals, a divided panel of the Court of Appeals affirmed the District Court’s orders subject to a “protective order.” App. A, pp. la-22a. The panel’s majority (Chief Judge Wright, Senior Judge Bazelon) concluded that, despite the language and legislative history of Title III itself, the Secretary could properly issue the subpoenas in this case by invoking his general power of compulsory process under Section 645 of the DOE Act, 42 U.S.C. § 7255. According to the Court, “Congress would have had to build into Title III a clear withdrawal of subpoena power if it did not want DOE to issue subpoenas for the Title III study.” App. A, p. 6a. The majority concluded that Congress had not satisfied that standard. 5 The District Court entered identical orders in the Shell and Marathon cases. * The District Court stayed its own orders pending an expedited appeal to the Court of Appeals. App. F, pp. 37a-40a. 7 The panel acknowledged that “Senator Bumpers [Title IIl’s author] thought there would be no subpoena power under Title III * * *.” Jd. at 8a. But the court dis- counted the Senator’s repeated assertions to that effect— assertions that it characterized as “stray remark;s] in the legislative history” (id. at 10a)—because in its view the Senator’s “assumption that DOE would have no sub- poena power * * * was simply not centrally relevant to the debate.” Jd. at 8a. The Court saw no significance in the fact that Title II, unlike Title III, contains an explicit grant of subpoena power to the FTC. The majority stated that “Congress may have felt a need to spell out the FTC’s enforcement powers in some detail” but (notwithstanding the remarks of Senator Bumpers) “may reasonably have understood Title III to incorporate DOE’s general enforcement pow- a***. te om. Finally, the panel held that the employee who issued the subpoena could properly refuse to submit to the agen- cy’s established administrative review procedure—and could thereby force the parties directly into court—be- cause the “scope” section of the C.F.R. Part in which the regulations are codified did not expressly mention sub- poenas issued under the Petroleum Marketing Practices Act. Id. .: 12a. The Court acknowledged that its read- ing of the regulations “may not be obvious”: it rested its conclusion, however, on the principle that “an agency is entitled to very broad deference when it construes its own regulations, Udall v. Tallman, 380 US. 1, 16 (1965) * * *.” App. A, p. 12a. The Court pointed to no agency “construction” of the relevant regulation apart from the four-sentence letter written by the employee who signed the subpoena. See p. 5, supra.” 7In affirming the District Court’s order, the Court of Appeals modified the subpoenas to incorporate some of the confidentiality provisions that were contained in settlement agreements that the 8 Judge Wilkey dissented. In his view, the Secretary cannot use his general subpoena power to conduct the Title III study because Congress deliberately withheld subpoena power in connection with that study. Judge Wilkey stated: “On the face of the statute there is no subpoena power under Title III, there is admittedly not one word in the legislative history implying there is such a power, and there are words from two of the legislators most active on this statute saying flatly that no subpoena power exists for the Title III study, a repeated assertion which was repeatedly uncontradicted.” App. A, p. 22a.° REASONS FOR GRANTING THE WRIT The Court of Appeals has given the Secretary of Energy a coercive power that Congress, in a meticulously crafted legislative compromise, deliberately withheld. The Court was able to reach that result only by belittling the extraordinarily explicit statements of Title III’s author and by turning on its head this Court’s traditional rule that administrative subpoena power will be inferred only on the strength of unmistakable legislative intent. The Court’s frustration of the Congressional will takes on added significance when coupled with its abandon- ment of the historic relationship between court and agency in subpoena enforcement cases. The foundation of the summary enforcement procedure has always been Department of Energy had entered into with other companies. App. A, pp. 14a-2la. The Court’s modification of the subpoenas does not affect in any way the legal issues presented by this petition. The invalidity of the administrative subpoenas here cannot be cured by the addition of provisions dealing with the confidentiality of documents. * The Court of Appeals granted motions for a stay pending certiorari, and it stayed the issuance of its mandate until March 10, 1980. App. C, p. 25a. This petition was filed on or before that date. Under Rule 41(b) of the Federal Rules of Appellate Procedure, the stay will remain in effect until final disposition by this Court. 9 the availability of an administrative review mechanism by which the agency supervises the exercise of delegated subpoena power, and through which issues are narrowed, facts are developed, and disputes sometimes are resolved. See United States v. Morton Salt Co., 338 U.S. 632, 653- 654 (1950); Reisman v. Caplin, 375 U.S. 440, 445-449 (1964). In sanctioning the Department of Energy’s re- fusal to apply its published review procedure in this case; the Court of Appeals has given agencies a green light to force subpoena litigation directly into the courts without supervising the exercise of delegated subpoena power and without providing an avenue for pre-enforce- ment dispute resolution. These issues are important; they warrant plenary consideration by this Court. A. Congress Deliberately Withheld Subpoena Power for Purposes of the Title ITI Study. 1. Mr. Justice Holmes, writing for the Court in Har- riman v. ICC, 211 U.S. 407, 421 (1908), warned that compulsory process is an “autocratic power,” the sweep of which, in the hands of an administrator, must ot be expanded “on the strength of other than explicit and unmistakable words * * *.” The Court struck the same chord in Cudahy Packing Co. v. Holland, 315 U.S. 357 (1942), where it refused to infer a Congressional intent to give the Wage and Hour Administrator “unrestricted authority to delegate the subpoena power” when the stat- ute’s terms granted the power “only to the responsible head of the agency.” ZJd. at 364. The Court stated (id. at 363) : Unlimited authority of an administrative officer to delegate the exercise of the subpoena power is not lightly to be inferred. It is a power capable of oppressive use, especially when it may be in- discriminately delegated and the subpoena is not returnable before a judicial officer. 10 Even in Oklahoma Press Publishing Co. v. Walling, 827 U.S. 186 (1946)—where the Court upheld an ad- ministrator’s subpoena authority in the face of “ ‘the most explicit language’ which leaves no room for ques- tioning Congress’ intent” (id. at 201)—the Court em- phasized that “the interests of men to be free from of- ficious intermeddling” (id. at 213) dictate a cautious approach to the existence of administrative subpoena power.? The Court of Appeals has inverted this Court’s long- standing presumption. Instead of insisting on an ex- plicit grant of subpoena power for Title III, the ma- jority below held that “Congress would have had to build into Title III a clear withdrawal of subpoena power if it did not want DOE to issue subpoenas for the Title III study.” App. A, p. 6a (emphasis added). 2. The Court not only asked the wrong question but also gave the wrong answer. Even under the majority’s inverted standard, the language and legislative history of PMPA do reflect “a clear withdrawal of subpoena power * * *.” Ibid. The face of the statute itself strongly implies an in- tention to withhold the power of compulsory process. Congress gave the FTC explicit subpoena power in Title II; in Title III, by contrast, it merely directed the Secre- tary of Energy to give the public an opportunity to par- ticipate in the subsidization study. Compare § 203(a) 15 U.S.C. § 2823(a), with § 301(c), 15 U.S.C. § 2841 (e). When the legislature confers a power in one portion of an Act but omits any mention of that power in an ad- jacent portion of the same Act, one may reasonably ? ® These principles are founded in the Constitution. “[W]hen an administrative agency subpoenas corporate books or records,” the Fourth Amendment limits the agency to such “reasonable inspec- tions” as are “contemplated by statute.” See v. City of Seattle, 387 U.S. 541, 544, 545 (1967). 11 infer that the omission reflects an intention to withhold the power.’® 3. The legislative history corroborates with uncommon clarity what the text of the Act implies. As it emerged from Committee, Title III would have prohibited subsidization of motor fuel marketing opera- tions with funds or services derived from other petroleum- related operations. See S. Rep. No. 95-731, 95th Cong., 2nd Sess. 13-15 (1978). By the time the bill reached the Senate floor, however, Senator Domenici, a principal author of the Committee’s version of Title III, acknowl- edged that the bill would be defeated unless Title III were eliminated or amended. 124 Cong. Rec. S 7151 (Daily ed., May 9, 1978) (App. 58a, 55a). Senator 10The majority below answered this argument with a non sequitur—that Title II differs from Title III because the former is “a directive to private parties” while the latter is “a directive to a government agency” (App. A, p. 9a; emphasis in original). We cannot fathom the significance of that distinction. It therefore merely begs the question to say that “Congress may have felt a need to spell out the FTC’s enforcement powers in some detail but “may reasonably have understood Title III to incorporate DOE’s general enforcement powers from the [DOE Act].” Jbid. The panel advanced no explanation of why Congress should have felt a differ- ent need in Title II than in Title IIT. The majority was also unable to explain away the explicit sub- poena power conferred by the same Congress in subsequent legis- lation enacted only a few months later. Section 71l(a) of the Powerplant and Industrial Fuel Use Act of 1978, Pub. L. No. 95-620, 42 U.S.C. § 8421; see also Section 251 of the Emergency Energy Conservation Act of 1979, Pub. L. No. 96-102. If, as the majority asserted, the later grants of subpoena power were a product of un- certainty and a desire to avoid litigation (App. A, p. 9a), why did those concerns not lead to the same explicit grant of power in the PMPA? The situation here is similar to that in Cudahy Packing Co. Vv. Holland, supra, where the Court inferred “a Congressional purpose that the subpoena power shall be delegable only when an authority to delegate is expressly granted” (315 U.S. at 366). There, as here, Congress had spoken clearly in other st: ates when it wished to grant the relevant authority. Jd. at 365-366. The Senate debate on Title III is reproduced at App. I, pp. 47a-85a. 12 Bumpers, one of the Committee members who had op- posed the entire bill because of Title III, offered an amendment that he described as ‘“‘a compromise on the issue of Title III” (id. at 7150; App. 48a). His amend- ment was ultimately approved by the Senate and enacted into law as Title III of PMPA. Senator Bumpers consciously fashioned his amendment to exclude the power of compulsory process. This much is vividly revealed by the floor debate on an amendment offered by Senator Kennedy. Senator Kennedy’s proposal would have compelled the Secretary of Energy to make available to other federal agencies any energy information he acquired in connec- tion with the subsidization study called for by the Bump- ers amendment. Jd. at 7152; App. 61la-62a. Senator Bumpers strongly opposed the Kennedy amendment. He said that requiring the Secretary of Energy to share the information he collected for the study would ensure that the industry would refuse to furnish information volun- tarily to the Secretary: If you want to make sure that the Secretary of Energy gets no cooperation in carrying out the terms of this [%.e., the Bumpers] amendment, just adopt the amendment of the Senator from Massachusetts, and I promise vou that hell will freeze over before they will voluntarily give one ounce of information, because they know it is going to be disseminated to a under the shining Sun. [Jd. at 7153; App. 65a. Senators Durkin and Kennedy, arguing in favor of the Kennedy amendment, implied that it would ensure access to more information than the Bumpers proposal. Senator Durkin asked: “Why in God’s name is this body so afraid of information? * * * Why insist that we be blindfolded?” Id. at 7155; App. 74a. Senator Kennedy ridiculed the suggestion of Senator Bumpers that the oil companies “will give us all the information we want.” Jd. at 7155; App. 75a. 13 Senator Bumpers responded vigorously, rejecting the suggestion that the Kennedy amendment would in any way increase the amount of information available to the government. He stated: Just so no one is deceived by what we are talking about, from what the Senator from Massachusetts just said one would infer that if his amendment is adopted they could go into the oil companies and they would have to cough up the information. That is not the case. His amendment has nothing to do with what kind of energy information they will get. They will get no more information under his amend- ment than under mine. They will not have the right to get the information under subpena powers either way. The only thing the Kennedy amendment re- quires is the sharing of the information it gets. It does not give the Secretary one iota of authority to get the information. It does not require the oil companies to divulge one iota of information they do not want to give. What we are talking about is who they will give it to after they get it. That is all the [Kennedy] amendment goes to. [J/d. at 7155; App. 75a-76a (emphasis added).] To reinforce his point, Senator Bumpers contrasted the nature of the Secretary’s authority in preparing the sub- sidization study called for by his amendment with the compulsory process available to the Department of Jus- tice: The Justice Department has subpena powers. If they are sure that something is going on that is wrong among major oil companies, they can subpoena the information. They do not have to request it. They do not have to ask for their cooperation. Here we do. [Id. at 7155; App. 74a (emphasis added) .] No one, not even Senator Kennedy or Senator Durkin, contradicted Senator Bumpers’s statement that for pur- poses of his amendment the Secretary would have no 14 power of compulsory process and would have to proceed solely by seeking voluntary cooperation. It was on the basis of this understanding, which Senator Bumpers obvi- ously believed was important to secure passage of the bill,** that the Senate voted to reject Senator Kennedy’s amendment and to approve the Bumpers amendment. One could hardly ask for a clearer expression of Congressional purpose with respect to the subpoena issue." 12 Senator Bumpers knew that expedition was an important ele- ment of his compromise. Senator Domenici, spokesman for those who had favored the Committee’s version of Title III, joined as a co-sponsor of the Bumpers amendment. 124 Cong. Rec. S 7150; App. 48a. His remarks demonstrated both that his support of the compromise depended upon the expeditious schedule set for the Title III study (id. at 7151; App. 55a), and that he was sensitive to the inevitable delays that would result from the use of sub- poenas. Jd. at 7150; App. 52a. Senator Bumpers, too, knew that efforts to use compulsory process to obtain sensitive corporate documents had been “tied up in court for years * * *.” Jd. at 7154; App. 71a. Since “we are in a time constraint of 18 months for the study” (id. at 7154; App. 72a), Senator Bumpers concluded that the best way to proceed was to rely on information already available and data that the industry would provide voluntarily. 13 The Congressional intent was later confirmed on the floor of the House when that body approved the Senate amendment. Con- gressmen Dingell and Brown, Chairman and ranking minority member of the House Subcommittee on Energy and Power, ex- changed observations for the obvious purpose of creating legislative history concerning the understandings on which the legislation would rest. Concerned about imposing unduly burdensome or ex- tensive reporting requirements on members of the public, Congress- man Brown had met with the Deputy Secretary of Energy to discuss the means by which the Department proposed to collect the information for the Title III study. Congressman Brown reported: * * * T met yesterday at some length with officials of the Department of Energy, including Mr. John O’Leary, who have advised me that it is the plan of the Department of Energy to use the existing EIA P-302 and 306 forms by which they gather information from refineries, plus revised Bureau of Labor Statistics and Census surveys, in order to give them sufficient information regarding supply and price and market distribution to meet the minimum statutory requirements of 15 Against this background, we are mystified by the Court of Appeals’ statement that the position of Senator Bump- ers on the subpoena issue “was simply not centrally rele- vant to the debate.” App. A, p. 8a. On the contrary, the entire debate turned on that issue. Had Senator Kennedy been able to say that the Secretary of Energy would have subpoena power for purposes of Title III, Senator Bump- ers’s opposition to the Kennedy amendment would have collapsed. Honoring the Congressional purpose in Title III does not lead to a “repeal or amendment by implication” of any other statute. App. A, p. 10a. In the first place, the DOE Act, upon which the majority below relied, does not authorize the Secretary to issue subpoenas for the Title III study.“ In any event, the controlling principle here the legislation under consideration at this point. [124 Cong. Rec. H 5002 (Daily ed., June 6, 1978) (App. J, p. 92a).] Thus, like the Senate, the House voted to approve the PMPA on the understanding that the Secretary of Energy would not use compulsory process to conduct the study called for under Title III. Rather, as the Department of Energy confirmed at the time, the Secretary would rely only on existing data-gathering forms and on the voluntary cooperation of the industry. 14 Section 645 of the DOE Act, 42 U.S.C. § 7255, provides that, “(flor the purpose of carrying owt. the provisions of this Act,” the Secretary shall have the same subpoena power that the FTC has under 15 U.S.C. § 49 “with respect to all functions vested in, or transferred or delegated to, the Secretary * * * by this Act.” The subpoena here, however, was issued to carry out the provisions of the PMPA, not the provisions of the DOE Act, and the subpoena itself so states. App. H, p. 42a. Similarly, the Title III study is a function vested in the Secretary by PM ’A, not by the DOE Act. Adjacent sections of the DOE Act—which refer to functions “now or hereafter” vested in the Secretary, 42 U.S.C. §§ 7254, 7256(a), 7259 (a)—show that Congress meant what is said when it limited the Secretary’s subpoena power to functions vested “by this Act.” Finally, by incorporating the FTC’s subpoena authority, Congress limited the use of subpoenas to ‘“matter[s] under investigation.” 15 U.S.C. § 49. The courts have long recognized, in connection with administrative subpoenas, a “distinction between an investigative and a more general exploratory purpose * * *.” United States v. 16 is that Congressional intent underlying a specific stat- ute prevails over the terms of a more general statute that deals with the same subject matter, particularly where, as here, the more specific statute is also the later one. See, e.g., Simpson v. United States, 435 U.S. 6, 15 (1978) ; Brown v. General Services Administration, 425 U.S. 820, 827-829 (1976); Morton v. Mancari, 417 U.S. 535, 550-551 (1974) ; NLRB v. Drivers Local Union, 362 U.S. 274, 291-292 (1960). B. The Secretary’s Subordinate Improperly Ignored DOE Regulations Governing Administrative Review of Subpoenas. When Exxon filed with the agency its application to quash the subpoena, Department of Energy regulations provided for a three-stage process for the administrative review of such an application. 10 C.F.R. § 205.8 (h) (1978) (set forth at App. K, pp. 100a-101la).° The DOE employee who signed the subpoena flagrantly ignored the terms of the regulations. In response to Exxon’s lengthy application, he sent a four-sentence letter asserting that “{t]here are no provisions in the DOE rules providing for such motions,” that he was “unpersuaded by [Exxon’s] arguments,” and that he was “turning this matter over to the Office of the General Counsel” (App. G, p. 41a). The agency, however, is not free to sidestep applicable administrative procedures in this manner. E.g., Yellin v. United States, 374 U.S. 109, 114-121 (1963) (a subpoena not issued in compliance with the procedural rules of the Bisceglia, 420 U.S. 141, 152 (1975) (concurring opinion of Mr. Justice Blackmun). See also United States v. Humble Oil & Refining Co., 488 F.2d 953 (5th Cir. 1974), vacated, 421 U.S. 943, on remand, 518 F.2d 747 (1975); FTC v. Baltimore Grain Co., 284 F. 886 (D. Md. 1922), affirmed per curiam, 267 U.S. 586 (1925). The Title III study is not a “matter under investigation” for purposes of the statute. 15 The procedure was amended in April 1979. 44 Fed. Reg. 23201- 23202 (April 19, 1979). ae ee A dbase erene 17 House of Representatives was invalid) ; Vitarelli v. Sea- ton, 359 U.S. 585, 540-545 (1959); Service v. Dulles, 354 U.S. 363, 382-389 (1957). The Court of Appeals excused the agency’s failure to follow its rules in this case on the basis of a restrictive reading of Part 205’s “purpose and scope” provision. It provides: “This part establishes the procedures to be utilized and identifies the sanctions that are available in proceedings before [FEA} * * *, in accordance with Parts 209 through 214 of this chapter.” 10 C.F.R. § 205.1. The panel below accepted the agency’s argument that, since the subpoena in this case was not issued in a pro- ceeding under Parts 209 through 214, the administrative review procedures of Section 205.8 are inapplicable. That conclusion is unsound for four reasons. First, the Court of Appeals, admitting that its read- ing of the regulations “may not be obvious” (App. A, p. 12a), resolved the issue by invoking the principle that “an agency is entitled to very broad deference when it construes its own regulations, Udall v. Tallman, 380 U.S. 1, 16 (1965) * * *.” App. A, p. 12a. But the only utterance of the agency itself, as contrasted with coun- sel’s post hoc arguments, is the letter from the very employee who refused to submit to the review procedure. And his “construction” amounted to this: “There are no provisions in the DOE rules providing for such mo- tions.” App. G, p. 41a. Udall v. Tallman neither requires nor justifies judicial deference to a middle-level employee’s unreasoned ipse dixit that “was no sooner made than challenged.” Davies Warehouse Co. v. Bowles, 321 U.S. 144, 156 (1944). Even when “an agency has rendered binding, consistent, official interpretations * * * over a long period of time,” Piper v. Chris-Craft Industries, Inc., 480 U.S. 1, 41 n. 27 (1977), this Court has always said that the “weight” given to the agency’s judgment “will depend upon the 18 thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and al] those factors which give it pow- er to persuade, if lacking power to control.” Skidmore v. Swift & Co., 323 U.S. 1384, 140 (1944). Under that standard, the agency’s judgment here is entitled to no weight at all. Second, the agency itself quite plainly intended the Section 205.8 procedures to apply to the review of all subpoenas, not simply those issued in proceedings under Parts 209 through 214. Neither in the original Notice of Proposed Rulemaking nor in any subsequent notice involving Section 205.8 did the agency give any hint that those salutary procedures would be inapplicable to certain categories of subpoenas. See, e.g., 839 Fed. Reg. 25602 (July 11, 1974); 41 Fed. Reg. 55322 (December 20, 1976) .*¢ Third, even within the four corners of Part 205 there is ample evidence that the “purpose and scope” provision of Section 205.1 is meant to be inclusive, not exclusive.” 16 On the contrary, it quite properly recognized, in terms plainly applicable to all subpoenas, that administrative review is an im- portant and effective way to avoid needless litigation: FEA believes that an administrative review procedure offers a fair, prompt and less formal means [than court litigation] of evaluating application[s] to quash or modify * * * subpoenas. It is intended that this administrative review will provide adequate redress for most applicants. Of course, an applicant may seek judicial intervention if aggrieved by the decision reached at the conclusion of the FEA administrative process. [41 Fed. Reg. 55323 (December 20, 1976).] 17 For example, Section 205.15(d) makes availavle for inspection and copying in a public docket room all information “required by statute to be made available * * *.” Sections 205.90-.98 apply by their terms to the filing of applications and other pleadings required or permitted under the entire chapter (Parts 200-699) of Title 10. Similarly, Sections 205.200-.220 establish procedures applicable to investigations under the entire chapter. If, as the Court of Appeals believed, Section 205.1 was meant to be exclusionary rather than inclusionary, these broadly applicable provisions would make no sense. 19 Fourth, and most important, under the Court of Ap- peals’ theory the Department of Energy has no procedure available for the administrative review of the subpoena in this case. If so, that agency apparently would stand alone.*® Moreover, this is the first case, as far as we know, in which a Court of Appeals has sanctioned summary enforcement of an administrative subpoena when the agency refused to furnish an avenue for administrative review. The precedent is out of harmony with this Court’s decisions and stands as a dangerous invitation to agencies to abandon their traditional screening func- tion and to force subpoena recipients directly into court. The summary subpoena enforcement procedure de- pends for its speed and fairness upon the availability of a meaningful opportunity for administrative review be- fore the issuing agency. See United States v. Morton Salt Co., 388 U.S. 632, 653-654 (1950); Reisman Vv. Caplin, 375 U.S. 440, 445-449 (1964). The courts rely 18 Qur research has uncovered no other example of an agency that has subpoena power but precludes administrative review of its exercise. Most agencies have published regulations specifically governing such review. E.g., 6 C.F.R. §§ 704.11-.13 (Council on Wage and Price Stability); 12 C.F.R. § 19.12(b) (Comptroller of the Currency); 12 C.F.R. § 263.7(b) (Federal Reserve System) ; 13 C.F.R. § 109.16(b), (d) (Small Business Administration); 14 C.F.R. § 302.19(f) (Civil Aeronautics Board); 16 C.F.R. § 3.34(c) (Federal Trade Commission); 16 C.F.R. § 1025.38(g) (Consumer Product Safety Commission); 17 C.F.R. § 10.68(c) (Commodity Futures Trading Commission); 17 C.F.R. § 201.14(b)(2) (Securi- ties and Exchange Commission); 25 C.F.R. § 503.24(b) (Indian Claims Commission) ; 46 C.F.R. § 201.124 (Maritime Administra- tion): 46 C.F.R. § 502.132 (Federal Maritime Commission); 47 C.F.R. § 1.334 (Federal Communications Commission); 49 C.F.R. § 510.4 (National Highway Traffic Safety Administration). Even an agency that has no specific regulations for administra- tive review of subpoenas will entertain motions to quash. See, e.g., Comet Electronics, Inc. v. United States, 381 F. Supp. 1233, 1236 (W.D. Mo. 1974), affirmed per curiam, 420 U.S. 999 (1975) (Interstate Commerce Commission). 20 on the agency te evelop a record, to narrow and refine the factual and iegal issues, and to resolve disputes be- fore they even reach the courts. Thus, as this Court stated in Morton Salt, “[blefore the courts will hold an order seeking information reports to be arbitrarily excessive, they may expect the supplicant to have made reasonable efforts before the Commission itself to obtain reasonable conditions.” 338 U.S. at 653. Even if, as the Court of Appeals assumed, an agency would be free deliberately to foreclose administrative re- view of subpoenas, that result should not be inferred upon less than the clearest indication of agency purpose. It would take a far stronger showing than what the Court of Appeals accepted to justify so significant a de- parture from the traditional relationship between court and agency in subpoena enforcement cases. Appendices The question is of enormous practical importance to courts, government agencies, and the public. This Court should give it plenary consideration. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted, Of Counsel MILLER & CHEVALIER DONALD B. CRAVEN MARK L. EVANS GERALD B. FLEMING 1700 Pennsylvania Ave., N.W. Washington, D.C. 20006 (202) 393-5660 D. JOSEPH POTVIN Exxon Company, U.S.A. Post Office Box 2180 Houston, Texas 77001 (713) 656-6417 March 7, 1980 ie la APPENDIX A UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 80-1002 UNITED STATES OF AMERICA Vi, EXXON CORPORATION, a Corporation, APPELLANT No. 80-1003 UNITED STATES OF AMERICA Wa SHELL OIL COMPANY, a Corporation, APPELLANT No. 80-1018 UNITED STATES OF AMERICA v. MARATHON OIL COMPANY, a Corporation, APPELLANT 2a Appeals from the United States District Court for the District of Columbia (D.C. Miscellaneous Nos. 79-0149, 79-0150, & 79-0217) Argued February 13, 1980 Decided February 25, 1980 Donald B. Craven, with whom Mark L. Evans was on the brief, for appellant Exxon Corporation. A. M. Min- ott? entered an appearance for appellant Exxon Corpora- tion. [Sic.] Robert W. Steele, with whom J. Wallace Adair and Robert E. Hebda were on the brief, for appellant Shell Oil Company. Daniel Joseph, with whom Warren E. Connelly and William M. Berenson were on the brief, for appellant Marathon Oil Company. Thomas R. Kline and Ann F. Cohen, Attorneys, De- partment of Justice, with whom Alice Daniel, Assistant Attorney General, Charles F. C. Ruff, United States At- torney, and William G. Kanter, Attorney, Department of Justice, were on the brief, for appellee. H. Robert Field, Attorney, Office of Competition, Department of Energy, also entered an appearance for appellee. Before WRIGHT, Chief Judge, BAZELON, Senior Circuit Judge, and WILKEY, Circuit Judge. Opinion for the court per curiam. Dissenting opinion filed by Circuit Judge WILKEY. PER CURIAM: These are appeals from a District Court order of December 19, 1979 enforcing identical adminis- 32. trative subpoenas duces tecum against three oil com- panies: Exxon Corporation, Shell Oil Company, and Marathon Oil Company. We affirm the District Court’s enforcement of the subpoenas, subject to a protective order as discussed below. On May 9, 1978 Congress passed the Petroleum Mar- keting Practices Act (PMPA), 15 U.S.C. § 2801 ef seq. (Supp. 1979), Title III of which directs the Secretary of Energy, in consultation with the Federal Trade Com- mission (FTC), the Justice Department, and other ap- propriate agencies, to conduct a study of subsidization of wholesale and retail motor fuel sales by vertically inte- grated oil companies. Id. § 2841.1 The Secretary dele- gated to the Director of the Office of Competition of the Department of Energy (DOE) his purported power to issue subpoenas to obtain information for the Title IIT study, and on January 22, 1979 the Director served on these appellants subpoenas for a broad range of docu- ments related to subsidization.” 1The Title III study, which was to be completed within 18 months of enactment, is to cover the following subjects: (1) the role of vertically integrated operations in facilitating subsidization of sales of motor fuel at whole- sale or retail; (2) the extent to which such subsidization is preda- tory and presents a threat to competition; (3) the profitability of various segments of the petro- leum industry; (4) the impact of prohibiting such subsidization on the competitive viability of various segments of the petroleum industry, on prices of motor fuel to consumers and on the health and structure of the petroleum indus- try as a whole; and (5) such other matters as the Secretary considers appropriate. 15 U.S.C.A. § 2841(b) (Supp. 1979). 2 The subpoenas are set out in the Joint Appendix at 24-38. 4a Appellants have challenged the subpoenas on several grounds, most notably: (1) DOE’s subpoena power under Title III can derive only from Title III itself, the lan- guage of which is silent on subpoena power, and the legis- lative history of which demonstrates congressional intent that DOE have no subpoena power for the Title III study. (2) The general grants of subpoena power to DOE in the Department of Energy Organization Act (DOEOA), 42 U.S.C. § 7101 et seg. (Supp. I 1977), and the Federal Energy Administration Act (FEAA), 15 U.S.C. § 761 et seg. (Supp. I 1977), cannot provide sub- poena power for an agency function which, like the subsidization study, stands outside and was mandated subsequent to these general acts. (3) Even if the general grant of subpoena power under the DOEOA, 42 U.S.C. § 7255 (Supp. I 1977), could apply to a later-mandated agency function, that section, which incorporates the subpoena power granted the FTC under 15 U.S.C. § 49 (1976), applies only to narrowly focused agency in- vestigations of specific legal violations, not open-ended studies. (4) In denying administrative review of the subpoenas, DOE violated its own regulations, the Ad- ministrative Procedure Act, and the due process clause. (5) The subpoenas are too broad and burdensome to meet the demands of legitimate purpose and relevancy. Judge Penn rejected the oil companies’ claims, hold- ing that DOE had subpoena power for the Title III study under DOEOA. We agree. Title III of PMPA rather obviously makes no provision for subpoena power for the subsidization study.* Our analysis of DOEOA, however, reveals that DOE did not need a special grant of sub- poena power for this specific study. Rather, Title III 8 On the other hand, Title II of PMPA, which sets standards for accurate disclosure of motor fuel octane ratings, does expressly grant subpoena power to the FTC. 15 U.S.C.A. § 2823(a) (Supp. 1979). 5a specifically instructs DOE to conduct a study which the agency would in any event be permitted to conduct un- der its broad general DOEOA mandate. Thus, DOE can rely on the subpoena power in Section 7255.4 We address this issue first, because it lays the premise for our analysis of the oil companies’ legislative history argu- ment. DOEOA provides in 42 U.S.C. § 7255: For the purpose of carrying out the provisions of this chapter, the Secretary, or his duly authorized agent or agents, shall have the same powers and authorities as the Federal Trade Commission under Section 49 of Title 15 [the FTC’s subpoena power] with respect to all functions vested in, or trans- ferred or delegated to, the Secretary or such agents by this chapter. In creating DOE, Congress expressly sought to achieve effective management of energy resources, promote con- sumer interests by ensuring an ample and reasonably priced supply of energy, and foster the economic health of small businesses engaged in energy production. Id. § 7112. The statute mandates appointment of e.ght Assistant Secretaries with such responsibilities as pro- moting competition and setting regulations for consumer protection. Jd. § 71383(a) (7). The Secretary must create an Energy Information Administration (EIA) for carrying out a central, comprehensive, and unified data and information program which will collect, evaluate, assemble, analyze, and disseminate data and information which is relevant to energy re- *So holding, we agree with the District Court that there is thus no need to answer the somewhat more involved ques- tion whether FEAA provides yet another source of this subpoena power. 6a source reserves, energy production, demzad, and tech- nology, and related economic and statistical informa- tion, or which is relevant to the adequacy of energy resources to meet demands in the near and longer term future for the Nation’s economic and social needs. Id. § 7185(a) (2). The statute also vests the EIA Ad- ministrator with the very broad duties the FEAA had assigned to the Administrator of the Office of Energy Information Administration under 15 U.S.C. § 790 et seq. (Supp. I 1977), including the task of maintaining infor- mation on the economic structure of energy supply sys- tems. Id. § 790a(b). Finally, the DOEOA requires the Secretary to make an annual report on the effectiveness of competitive and regulatory practices of government and private entities. 42 U.S.C. § 7267(5) (Supp. I 1977). The specific study required by Title III falls well within the range of administrative inquiry which these provisions of DOEOA place within DOE’s power. We find no reason why the phrase “by this chapter” in Sec- tion 7255 cannot include an agency function lying with- in the powers granted by that chapter, but reinforced by a specific subsequent legislative mandate. Thus, DOE’s performance of the Title III study is a legitimate means of “carrying out the provisions of this chapter” within the meaning of Section 7255. Since DOE thus already possessed subpoena power for a general study of subsidization when Congress passed Title III, that statute’s silence on subpoena power would seem to be of no consequence; Congress would have had to build into Title III a clear withdrawal of subpoena power if it did not want DOE to issue subpoenas for the Title III study. The oil companies point to the legisla- tive history of Title III and to grants of subpoena power in related legislation to argue that Congress intended to do just that. We disagree. Ta The heart of the legislative history argument is a pair of remarks by Senator Bumpers, the sponsor of Title III. The remarks arose during debate on a _ proposed amendment to Title III offered by Senator Kennedy. That amendment, incorporating the confidentiality section of the Energy Supply and Coordination Act, 15 U.S.C. § 796(d) (Supp. I 1977), would have barred disclosure of certain information DOE obtained from the oil com- panies as confidential, except for requiring disclosure upon request to the Justice Department, the FTC, and other listed agencies. Senator Bumpers objected vigor- onsly to the Kennedy amendment, apparently construing it as giving these other agencies access which they would otherwise lack to DOE-obtained information. Senator Bumpers believed that the oil companies’ fear of adverse use of such information by the other agencies would chill their willingness to voluntarily comply with DOE requests for Title III information. Apparently, he felt that such voluntary compliance was crucial because he assumed that DOE would have no subpoena power under Title III. See 124 Conc. Rec. S¥155 (daily ed. May 9, 1978) .° 5 Senator Bumpers’ key remarks were as follows: * * * The Justice Department has subpena powers. If they are sure that something is going on that is wrong among major oil companies, they can subpena the infor- mation. They do not have to request it. They do not have to ask for their cooperation. Here we do. * * * x * + 7 * * * [Kennedy’s] amendment has nothing to do with what kind of energy information [the other agencies] will get. They will get no more information under his amendment than under mine. Chey will not have the right to get the information under subpena powers either way. * * * 124 ConG. REc. $7155, cols. 1, 2 (daily ed. May 9, 1978). 8a The debate on the Kennedy amendment is clouded by confusion on both sides as to what changes the amend- ment would make in the status quo. Despite this con- fusion, it does appear clear that Senator Bumpers thought there would be no subpoena power under Title III. Nevertheless, we do not see how Senator Bumpers’ express or implied view can alter our own view of DOE’s general subpoena power here. First, “(t]he re- marks of a single legislator, even the sponsor, are not controlling in analyzing legislative history.” Chrysler Corp. v. Brown, 441 U.S. 281, 311 (1979). Second, even if Senator Bumpers did believe that DOE would have no subpoena power under Title III, that belief was really unnecessary to his argument against the Kennedy amend- ment. Senator Bumpers wanted to encourage voluntary compliance with Title III. Under the severe time con- straints Title III was to impose on DOE, voluntary com- pliance would be extremely desirable, even if DOE re- tained a fall-back subpoena power. Therefore, the con- text of Senator Bumpers’ remarks weakens their sig- nificance as evidence of intent on the subpoena issue. Moreover, the fact that his assumption that DOE would have no subpoena power was unnecessary to his position on the Kennedy amendment may explain why no Senators rose to challenge that assumption; it was simply not cen- trally relevant to the debate. In fact, so far from pe- lieving the goal of voluntary compliance and the presence of a residual subpoena power inconsistent, Congress may well have thought the two complementary. Since the fo- cus of the Title III study is the possibility of preda- tory subsidization of motor fuel sales by the oil com- panies, Congress may have assumed the residual sub- poena power to be necessary to encourage agreements effecting voluntary compliance. Without the brooding threat of such subpoena power, Congress might reasonably have feared that the oil companies’ willingness to par- ticipate in the study would be less than overwhelming. 9a The oil companies nevertheless invoke the hoary prin- ciple of expressio unius est exclusio alterius to buttress their view of congressional intent. First, whereas Title III of PMPA never mentions subpoena power, Title II, which requires accurate disclosures of motor fuel octane ratings, expressly grants subpoena power to the FTC. 15 -U.S.C.A. § 2823(a) (Supp. 1979). Second, Congress expressly gave subpoena power to the DOE itself in such other specific statutes as the Powerplant and Industrial Fuel Use Act, 42 U.S.C.A. § 301 et seg. (Supp. 1979), and the Emergency Energy Conservation Act of 1979, Pub. L. No. 96-102. These congressional actions might, among many other factors, provide some evidence on the issue of con- gressional intent, but they are hardly decisive. The struc- ture of Title II differs markedly from that of Title III. Title II is primarily a directive to private parties to fulfill general reporting requirements imposed by the Act. Title II, however, secondarily establishes the FTC as the enforcing agency, and Congress may have felt a need to spell out the FTC’s enforcement powers in some detail. Title III, in contrast, is primarily a directive to a government agency, the Department of Energy, and Congress may reasonably have understood Title III to incorporate DOE’s general enforcement powers from the DOEOA. As for the Powerplant and Energy Conservation Acts, the grants of subpoena power there may well have been the product of “uncertainty, understandable caution, and a desire to avoid litigation.” Natl Petroleum Refiners Ass’n v. FTC, 482 F.2d 672, 696 (D.C. Cir. 1973). The oil companies’ expressio unius argument remains highly speculative. Moreover, since Section 7255 had already given DOE subpoena power for a study like that di- rected in Title III, for us to accept the oil companies’ argument we would have to read the combination of their 10a legislative history and expressio wnius theories as proof of repeal or amendment by implication. The Supreme Court has cast grave doubt on such inferences,. TVA v. Hill, 4837 U.S. 158, 189-190 (1978), and its suspicions would be especially justified here where the inference would be based not on any language in Title III itself, but on a stray remark in the legislative history and questionable reference to other statutes. The oil companies nevertheless argue that 15 U.S.C. § 49 (1976), the FTC Act provision on which the Section 7255 subpoena power is based, allows the agency to issue subpoenas only as part of narrowly focused investiga- tions of specific parties suspected of specific legal viola- tions, and not as part of broad inquiries into the possi- bility of legal violations throughout an industry or into industry conduct not currently illegal which might war- rant fresh administrative or legislative action. We find nothing in the FTC Act or in the judicial history of Sec- tion 49 or Section 7255 to support this distinction. The key provision in the FTC Act states: For the purposes of this subchapter the Commis- sion, or its duly authorized agent or agents, shall at all reasonable times have access to, for the purpose of examination, and the right to copy any docu- mentary evidence of any person, partnership, or cor- poration being investigated or proceeded against; and the Commission shall have power to require by sub- poena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter under investigation. * * * 15 U.S.C. § 49 (1976). Although the section might put some limit on FTC orders of access, the rather laconic phrase “relating to any matter under investigation” de- scribing the scope of the subpoena power hardly suggests the study-investigation distinction argued by the oil com- panies. Moreover, the language of other related sections lla of the FTC Act argues directly against this distinction. Section 46, in granting substantive powers to the FTC, clearly uses the verb “investigate” to describe broad ad- ministrative functions involving studies or inquiries which logic would force the oil companies to place on the “study” rather than on the “investigation” side of their distinction. See id. § 46(a), (h). Moreover, of the numerous cases cited by the oil com- panies to support their distinction, none is on point. Some involve judicial construction of the very particular terms of a wholly different statute, like the Internal Revenue Code. United States v. Bisceglia, 420 U.S. 141 (1975) ; United States v. Humble Oil & Refining Co., 488 F.2d 953 (5th Cir. 1974), vacated, 421 U.S. 943 (1975), re- instated on remand, 518 F.2d 747 (5th Cir. 1975). Other | cited cases simply uphold subpoenas issued pursuant to — law enforcement investigations without judging the valid- ity of subpoenas issued for other purposes. United States v. Bell, 564 F.2d 9538 (TECA 1977); United States v. Empire Gas Corp., 547 F.2d 1147 (TECA 1976), cert. denied, 480 U.S. 915 (1977). And FTC v. Baltimore Grain Co., 284 F. 886 (D. Md. 1922), aff'd per curiam, 267 U.S. 586 (1925), involved not a subpoena, but an order of access. ; To the extent that these cases might accumulate into some amorphous general congressional belief in the study- investigation distinction, they are easily offset by num- erous cases cited by DOE which suggest, at least gen- erally, the absence of such a distinction. With no con- trolling precedent, we revert to the language and scheme of the FTC Act, and find no grounds for the oil com- panies’ theory.® 6 Appellants also rely on our recent decision in United States v. Iannone, 610 F.2d 948 (D.C. Cir. 1979), as support for limiting DOE’s general subpoera powers. We find the case easily distinguishable. In Jannone, Congress had given ; 12a The oil companies’ procedural objections to the subpoena merit little attention. Appellants claim that under the DOE regulations for review of agency subpoenas, 10 C.F.R. § 205.8 (1979), DOE was required to entertain their motion to quash. DOE points in response to Section 205.1 of the regulations, which purportedly limits the subpoena review regulations to subpoenas issued as part of the specific agency functions described in 10 C.F.R. §§ 209-214 (1979), into none of which categories falls the subsidization study. Whether the reference to Sec- tions 209-214 in Section 205.1 is inclusive or exclusive may not be obvious, but an agency is entitled to very broad deference when it construes its own regulations, Udall v. Tallman, 380 U.S. 1, 16 (1965), and we see no reason to disagree with DOE here. As for other procedural arguments, the oil companies offer no sound authority for their view that either the Administrative Procedure Act or due process requires the agency to promulgate review regulations for all agency subpoenas. See United States v. Firestone Tire & Rubber the Inspector General of DOE express power to subpoena documents but was silent on his power to subpoena live testi- mony. We held that grant of power to subpoena documents to be exclusive. There, however, we had a clear and focused expression of congressional intent with respect to the sub- poena powers of a particular official. Moreover, our concern lay not with the general scope of DOE’s subpoena power, but with problems of delegation of that power to that particular official. First, the Inspector General is supposed to be an independent officer within DOE, not an “agent” of the Secre- tary within the meaning of 42 U.S.C. § 7255. 610 F.2d at 946. Second, Congress has sought to create a comprehensive sys- tem of Inspectors General throughout the government, all with identical powers. Varying grants of subpoena authority to Inspectors General from agency heads would disrupt such a system. Plainly, none of the considerations in Jannone bear on this case. WD AK Bot re REDE de 13a Co., 455 F.Supp. 1072, 1080 (D. D.C. 1978). Northern ‘California Power Agency v. Morton, 396 F.Supp. 1187 (D. D.C. 1975), on which the oil companies rely, did not involve subpoenas, but complex ratemaking matters which, in the court’s view, required regulations to help the parties obtain review of massive technical data. Moreover, in that case court review would be limited to the agency record, which the court thought would be enhanced by new regulations. In a subpoena enforcement, by con- trast, the District Court can inquire into all relevant matters, unlimited by the scope of the agency’s own in- quiry; if any. In any event, we find no evidence that the oil company did not have a reasonable hearing on its challenges to the subpoenas in the District Court, and so we find no reason to impose new procedural rules on the agency.’ Finally, we find that the subpoenas were reasonably relevant to the agency’s legitimate statutory purpose and imposed no undue burden on the oil companies. Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 209 (1946). Marathon makes the rather novel argument that the Secretary should first collect documents on sub- sidization and only if he finds evidence of this practice proceed to seek information on the possibly predatory motive behind it. But nothing in the statute or its legis- lative history suggests in any way that Congress intended 7 We find no merit and little coherence in Shell’s claim that the District Court erred in denying it discovery in the en- forcement proceeding, and in reaching the merits of the subpoena question in denying Shell’s motion to dismiss, be- fore Shell filed an answer. Except in extraordinary circum- stances of the sort that are not apparent here, discovery is improper in a summary subpoena enforcement proceeding, United States v. Firestone Tire & Rubber Co., 455 F.Supp. 1072, 1078 (D. D.C. 1978), and Shell appears to have had ample opportunity to present the District Court with all its objections to the subpoenas. l4a this study to be conducted in stages; its tight deadline suggests quite the contrary. We thus conclude that as a matter of law the DOE acted within its statutory power in issuing the Title III subpoenas. Nevertheless, we uphold their enforcement subject to the precise terms of a protective order. Since the enforcement of a subpoena is an independent judicial action, and not merely an action ancillary to an earlier agency action, ICC v. Brimson, 154 U.S. 447 (1894), a court is free to change the terms of an agency subpoena as it sees fit. Flotill Products, Inc. v. FTC, 278 F.2d 850, 852 (9th Cir. 1960). DOE originally issued subpoenas to nine oil companies, including, in addition to the appellants, Ashland Oil Com- pany, Atlantic Richfield Oil Company, Clark Oil & Re- fining Company, Gulf Oil Corporation, Standard Oil Com- pany of Indiana, and Texaco, Inc. These latter six com- panies, however, avoided enforcement of the subpoenas by coming to agreements with DOE providing for volun- tary submission of documents relevant to the Title III study with special protection for certain documents desig- nated by the companies as “confidential” or “extremely confidential.” Under these agreements, “confidential” docu- ments in DOE hands would remain in special locked files, while “extremely confidential” documents would generally remain in the companies’ possession and thus never be- come agency records subject to public disclosure under the Freedom of Information Act. The gist of these protec- tions is set out in the attached Protective Order. In set- tling with the six other companies, DOE apparently be- lieved that these protections put no serious constraints on the Title III study. DOE has not shown any reason why the appellants do not need similar protection, and in fact, in an effort at settling after oral argument in this case, expressly offered equivalent confidentiality terms to ap- pellants. We therefore find it appropriate to modify the 15a subpoenas to incorporate the essential confidentiality pro- visions of these earlier agreements.® Subject to the attached Protective Order, the judgment of the District Court is Affirmed. 8 The attached Protective Order is essentially the one sub- mitted by DOE as part of its effort to settle the case after oral argument in this court. The government’s settlement proposal appears to differ from the agreements reached with the nonlitigating oil companies in only two material ways, and we must presume it was these differences which deterred the appellants from settling. First, the government did not offer the appellants, as it did the nonlitigating companies, assurance that it would not exercise any discretion it possessed under Chrysler Corp. v. Brown, 441 U.S. 281 (1979), to release to the public any information otherwise exempt under the Freedom of Infor- mation Act. We think the public interest is not disserved by providing appellants this protection, so we include it in the Protective Order. Second, the earlier agreements had provided that if DOE shares any of its Title III information with the Justice De- partment or the FTC, those agencies are bound not to use such information—unless it is elsewhere available—for any pur- pose other than that of Title III itself. The nonlitigating oil companies thus obtained assurance that the other agencies could not use any such information as the basis for any inde- pendent legal actions against them. After those agreements were drawn, DOE received complaints from the Justice De- partment and the FTC that such provisions, forcing them to read Title III documents with one eye closed, so to speak, unduly inhibit them in their statutory law enforcement duties and were not in any event required by law. We agree. Appel- lants have not alerted us to any authority, either in general or in the text or legislative history of PMPA, for requiring such extraordinary protection. Thus, we are loath to make such protection part of our Protective Order, especially since Title III expressly provides for consultation between DOE and other agencies. 16a PROTECTIVE ORDER I. Production of Documents. By March 8, 1980 Exxon Corporation, Shell Oil Com- pany, and Marathon Oil Company (hereinafter referred to as company) shall produce all documents specified in the subpoenas issued on January 22, 1979 by William C. Lane, Jr. of the Department of Energy (DOE), subject to the provisions for confidential treatment set forth below. II. Confidentiality (A) Each company shall designate in good faith at the time of production of documents or information pursuant to this Protective Order those items that it claims to be “Confidential” in that they contain proprietary, trade secret, or other confidential information. Each company may also designate a reasonable number of documents and information each company deems to be “Extremely Confi- dential” in that they contain proprietary, trade secret, or other confidential information of such a significant and confidential nature that their release may have an ex- tremely adverse effect on the company’s competitive busi- ness position. A designation by each company as “Confi- dential” or “Extremely Confidential” is not a declaration of the agency of such designation. Documents designated by being “Extremely Confidential” shall be made available for examination by personnel assigned to the Title III study from the Office of Competition (O/C), the Depart- ment of Justice (DOJ), the Federal Trade Commission (FTC), and any other agency as designated by the Secre- tary for participation in the Title III study at the offices designated by each company in Washington, D.C. In the event any of the above-listed agencies reasonably de- termines that physical possession of a copy of a docu- ment labeled “Extremely Confidential’ is necessary, those agencies may make a request for such a copy, which re- quest the company shall not unreasonably refuse. me Nn OA re et ee Snel | a SA 17a (B) In the event that copies are made of, or notes are taken concerning, such “Extremely Confidential” docu- ments by any person examining the documents, such copies and notes shall be treated as “Extremely Confi- dential” documents within the meaning of that term as it is used in this Protective Order. (C) In the event that O/C, DOJ, FTC, or any other agency designated by the Secretary for participation in the Title III study determines that physical possession of the notes from, or a copy of, a company document labeled “Extremely Confidential” is necessary for the completion of the Title III study, pursuant to Subparts (A) and (B) of this Part, or if, upon examination of such documents for Title III purposes, another law enforcement purpose is evident, such document may be requested for such use. If so requested, such agency shall provide the following continuing protections for the confidentiality of such notes or documents, as well as for documents labeled “Confiden- tial” or notes taken from such “Confidential” documents: (1) All such documents and notes, as well as drafts and manuscripts of the Title III study, shall be secured in a locked file cabinet when not in use and in a room which is locked when not in use or such other facilities as will provide comparable security. (2) A log, available to the company upon request, shall be maintained by all individuals that have access to “Confidential” documents of that com- pany. (3) A separate log, available to the company upon request, shall be maintained for “Extremely Confidential” documents which shall show on a document-by-document basis who has possession of such document. (4) Individuals granted access to “Confidential” or “Extremely Confidential” documents of a com- pany shall be informed of the status of these 18a documents and the limitations on their use and such individuals, other than attorneys employed by 0/C, DOJ, FTC, and other agencies desig- nated by the Secretary for participation in the Title III study, shall sign an acknowledgment of their understanding of these limitations in the form attached as Exhibit A. A copy of the executed undertaking shall be made available to the company. (5) All “Confidential” and “Extremely Confidential’ material shall be returned to said locked file cabinets at the end of each working day. (D) In the event O/C, FTC, or any other agency designated by the Secretary for participation in the Title III study determines that any of a company’s documents labeled “Extremely Confidential” are not necessary to the Title III study, that agency shall immediately return such documents to the company. Provided, however, that if upon examination of such document for Title III pur- poses another law enforcement purpose is evident, such document may be kept for such use. (E) Any government agency having possession of docu- ments produced under this Protective Order may share those documents with any other government agency that agrees to abide by the terms of this Protective Order. (F) Nothing in the Protective Order shail be con- strued as precluding or limiting disclosure: (1) pursuant to a valid subpoena or court order; (2) pursuant to a request formally authorized by a committee or subcommittee of Congress with jurisdiction over the subject matter of the docu- ments or information requested; (3) at the direction of the Office of Management and Budget under 44 U.S.C. § 3502 et seq. 19a (G) Any agency having possession of any documents obtained under this Protective Order shall promptly notify a company of all requests for disclosure under the Freedom of Information Act of any document or infor- mation produced by a company under this Protective Order, including requests for disclosure that would be permitted hereunder, and the basis therefor, and shall also give the company the maximum actual notice reasonably possible, and not less than ten days’ notice (unless com- pelled by court order or lawful subpoena to disclose the document in less than ten days), of any intended dis- closure. The notice period shall run from the date on which the company actually receives such written notice. No agency shall exercise any discretion it may have under the Freedom of Information Act to release other- wise exempt material provided by any company. (H) Portions of the draft report on the Title III study which contain or summarize information from ‘“Confi- dential” or “Extremely Confidential” documents shall be treated in the same manner as other “Confidential” or “Extremely Confidential” documents under this Protective Order. In addition, O/C wil send to a company those portions of the final draft of such report which cite or summarize “Confidential” or “Extremely Confidential” documents at least ten days prior to public release of the report and provide the company with an opportunity to comment on O/C’s intended use prior to release of such report. (I) At the conclusion of O/C’s Title III study, any agency in possession of any documents obtained under this Protective Order shall immediately return to a company all documents or information produced by that company pursuant to this Protective Order (and all copies of such documents or information) which are not referenced in or relied upon to prepare the Title III study or which are not, having been examined for the Title III study, necessary for a law enforcement purpose. In any event, 20a all documents will be returned to a company within four (4) years from the completion of the Title III study un- less being kept for a law enforcement purpose. (1) All documents and information not immediately returned or released to a company pursuant to Subpart (I) of this Part shall continue to be maintained by the agency in possession in the same manner as provided in Subpart (C) of this Part until returned. (2) All notes taken from a company document labeled “Extremely Confidential” shall be de- stroyed by the agency in possession when the report of the Title III study is submitted to Con- gress, unless being kept for a law enforcement purpose. (J) O/C, DOJ, FTC, or any other government agency designated by the Secretary may request and a company shall not unreasonably refuse the reclassification of any material designated either “Confidential” or “Extremely Confidential” which the agency believes may have been wrongly classified or which the passage of time may have made less sensitive. Such request of an agency shall spe- cifically state the reasons for the request, including the intended use thereof. (K) A company shall inform O/C of the person auth- orized to receive notification under this Protective Order. ee Oe Pee ee ee ee Renee Ee es 2la EXHIBIT A STATEMENT hereby states: (Name) I reside at (Street Adress) in the City of . (Name of City) County of . (Name of County) in the (Capacity) (Department or Agency) I understand that I will have access to and be ex- amining corporate documents of (Company) which are of a highly proprietary and confidential nature, and pledge that I, under no circumstances, shall remove any such confidential document from the control of . Furthermore, I have (Government Agency) read the Protective Order covering these documents and understand the limitations contained therein on the use of information contained in those documents. I further understand that violation of the terms of the Protective Order may subject me to severe penalties under 18 U.S.C. § 1905, including fines and imprisonment. Dated: 22a WILKEY, Circuit Judge, dissenting: This case deserves, and has received, all possible expedition, so I record my disagreement with my colleagues’ conclusion with unac- customed brevity. I think the appellants are correct in their challenge to the subpoenas on points (1), (2), and (5) as stated in the third paragraph of the Per Curiam. On the face of the statute there is no subpoena power under Title III, there is admittedly not one word in the legislative history implying there is such a power, and there are words from two of the legislators most active on this statute saying flatly that no subpoena power exists for the Title III study, a repeated assertion which was repeatedly uncontradicted. I agree, of course, with the imposition of the protective order. 23a APPENDIX B UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT September Term, 1979 Miscellaneous No. 79-0149 No. 80-1002 UNITED STATES OF AMERICA Ve EXXON CORPORATION, a Corporation, APPELLANT No. 80-1003 UNITED STATES OF AMERICA Vv. SHELL OIL COMPANY, a Corporation, APPELLANT No. 80-1018 UNITED STATES OF AMERICA » A MARATHON OIL COMPANY, a Corporation, APPELLANT Appeals from the United States District Court for the District of Columbia Before: WRIGHT, Chief Judge, BAZELON, Senior Cir- cuit Judge, and WILKEY, Circuit Judge NR ii ara 24a JUDGMENT These causes came on to be heard on the record on appeal from the United States District Court for the District of Columbia, and were argued by counsel. On consideration thereof, it is ORDERED AND ADJUDGED, by this Court, that the judgment of the District Court appealed from in these causes is hereby affirmed, for the reasons set forth in the Opinion for the Court filed in these cases on February 25, 1980, as amended, subject to the protective order at- tached hereto as Schedule I and which is fully incor- porated herein. Per Curiam For the Court /s/ George A. Fisher GEORGE A. FISHER Clerk Filed: February 26, 1980 Opinion for the Court per curiam. Dissenting opinion filed by Circuit Judge Wilkey in which he notes his disagreement with the disposition of this case on the merits but agrees with the imposition of the protective order. [Protective Order omitted. It is set forth as part of Appendix A, supra, pp. 16a-21a.] al Ok Lis eld he On ina 6 lal heat . miata ee A Do en renee eee T a Ei al. al a TE St Pte ree i te ee A 25a APPENDIX C UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT September Term, 1979 Misc. No. 79-0149 No. 80- UNITED STATES OF AMERICA V. EXXON CORPORATION, a Corporation, APPELLANT And Consolidated Case Nos. 80-1003 and 80-1018 Filed Feb. 29, 1980 Before: WRIGHT, Chief Judge; BAZELON, Senior Cir- cuit Judge; and WILKEY, Circuit Judge ORDER Upon consideration of appellants’ motions for stay of mandate, of the motions for expedited consideration of same, and of appellee’s opposition to the requested stays of mandate, it is ORDERED, by the Court, that the motions for ex- pedited consideration of the requests for stay of mandate are granted, and it is 26a FURTHER ORDERED, by the Court, that appellants’ motions for stay of mandate are granted to and includ- ing March 10, 1980, on which date the Clerk is directed to issue the mandate in these cases. Per Curiam FOR THE COURT: /s/ George A. Fisher GEORGE A. FISHER Clerk ee eae 27a APPENDIX D UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA Mise. No. 79-0149 Filed Dec. 19, 1979 UNITED STATES OF AMERICA, c/o U.S. Attorney, Courthouse Building, Washington, D.C. 20001, PETITIONER Vv. EXXON CORPORATION, a Corporation, c/o C. T. Corporation System, 918 - 16th St., N.W., Washington, D.C. 20006, RESPONDENT ORDER Petitioner, the United States of America, having in- voked the aid of the Court, pursuant to Section 645 of the Department of Energy Organization Act, 42 U.S.C.A. Section 7255 and Section 13(e) of the Federal Energy Administration Act, 15 U.S.C. Section 772(e) (1976), in requiring the above-captioned respondent to comply with the administrative subpoena duces tecum issued on Jan- uary 22, 1979, to obtain information for a study being conducted pursuant to Title III of the Petroleum Market- ing Practices Act, Public Law 95-297, 15 U.S.C.A. §§ 2801 et seg. and the Court having considered the Petition and other papers of record, and the Court being of the opinion that the subpoena was lawfully issued for an inquiry within the authority of the agency; the demand is not tao indefinite, and the information sought is reasonably rele- 28a vant, and therefore the subpoena should be enforced, it is hereby ORDERED that respondent Exxon appear before Wil- liam C. Lane, Jr., the Director of the Office of Competi- tion of the Office of Policy and Evaluation of the Depart- ment of Energy or his representative at a time and place in Washington, D.C., to be designated by the petitioner upon not less than ten (10) days’ notice, and produce documents as required by the subpoena duces tecum issued by William C. Lane, Jr., on January 22, 1979, a copy of which subpoena is attached to the Petition. /8/ John Garrett Penn JOHN GARRETT PENN United States District Judge December 17, 1979 a het nanan ee 29a APPENDIX E UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA Misc. 79-149 UNITED STATES OF AMERICA V. EXXON CORPORATION Misc. 79-150 UNITED STATES OF AMERICA V. SHELL OIL Co. Misc. 79-217 UNITED STATES OF AMERICA Vv. MARATHON OIL Co. Filed Jan. 15, 1980 30a MEMORANDUM These three cases came before the Court on petitions by the United States to e: force subpoenas duces tecum dated January 22, 1979, and served on the three respond- ents, Exxon Corporation {Exxon), Marathan [sic] Oil Co. (Marathon), and Shell Oil Co. (Shell). Petitioner filed these actions when the respondents failed to honor the subpoenas." The Court heard arguments in support of and in opposition to the respective petitions and on De- cember 17, 1979, entered Orders directing the respondents to comply with the subpoenas. The purpose of this Memo- randum is to briefly set forth the basis of the Court’s ruling. Petitioner brings these actions pursuant to the author- ity granted by the Department of Energy Organization Act (DOEOA), 42 U.S.C. § 7101 et. seq., and the Federal Energy Administration Act (FEAA), 15 U.S.C. § 761 et. seq. The subpoenas were issued by the Director of the Office of Policy and Evaluation, acting under a delega- tion of authority from the Secretary of the Department of Energy, to require the respondents to provide infor- mation necessary for the preparation of a study required by Title III of the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. § 2841. Section 2841(a) provides: (a) The Secretary of Energy, in consultation with the Chairman of the Federal Trade Commission and the Attorney General and other agencies as the Sec- retary deems appropriate, shall conduct a study of 1 The actions against Exxon and Shell were filed on June 29, 1979, and the action against Marthon [sic] was filed on October 10, 1979. * Similar subpoenas have been served on several other oil companies which voluntarily complied after negotiations with the Department of Energy. ae sla the extent to which producers, refiners, and other suppliers of motor fuel subsidize the sale of such motor fuel at retail or wholesale with profits ob- tained from other operations. Section 2841(b) provides that the study shall examine the role of vertically integrated operations in facilitating subsidization of sales of motor fuel at wholesale or retail, the extent to which such subsidization is predatory and presents a threat to competition, the profitability of vari- ous segments of the petroleum industry, the impact of prohibiting such subsidization on the competitive viability of segments of the industry, the prices of motor fuel to consumers and the health and structure of the industry as a whole and such other matters as the Secretary deems appropriate. The Secretary plans to submit his report on March 31, 1980." I Respondents object to the subpoenas on several grounds, namely, (1) that the PMPA does not confer subpoena power, (2) Congress did not intend to confer subpoena power upon the Department of Energy (DOE) for com- pletion of the study required by PMPA, (3) the DOE cannot look to other statutes for subpoena power, includ- ing the DOEOA and the FEAA and (4) DOE may not use its investigatory powers under FEAA and DOEOA to fulfill its responsibilities under Title II of the PMPA. Respondents also attack the subpoenas on a number of procedural grounds. After giving careful consideration to the arguments of respondents, this Court concludes that they are without merit and that the subpoenas should be enforced. 3’ The report was originally due on December 19, 1979, but was extended due to various delays in obtaining information. 32a The petitioner concedes that the PMPA, standing alone, does not grant DOE the power to subpoena the informa- tion sought by that agency. However, petitioner argues and the Court agrees, that such authority is granted by the DOEOA and, at least arguably, by the FEAA. There is nothing in the PMPA or its legislative history which suggests that by enacting the PMPA, Congress acted to limit or prohibit the use of subpoenas. Such an argument would necessarily be based on a contention that the PMPA, having made no mention of subpoenas, necessar- ily amended the DOEOA and the FEAA by implication. As noted above, the Court finds nothing to support that contention and, in any event, amendments by implication are not favored. See United States v. Weldon, 377 U.S. 95, 108, n. 12 (1964). Moreover, to accept respondents’ argument in this regard, would be to hold that every time Congress ordered DOE to perform a study pursuant to its authority under DOEOA, a special direction affirm- ing the subpoena power would be necessary. The re- spondents have offered no argument or rationale which would support such a contention. The power to issue the subpoenas is found in the DOEOA. In its declaration of purposes in creating the DOE, Congress noted that it sought to, among other things, achieve an effective management of energy func- tions, promote the interests of consumers through the provision of an adequate and reliable supply of energy at the lowest reasonable cost, and foster, insofar as possible, the good health of the nation’s small business firms, pri- vate cooperatives and others involved in energy produc- tion. See 42 U.S.C. § 7112. In order to achieve those objectives, the statute provided for the appointment of eight Assistant Secretaries and included in their assigned responsibilities the task of reviewing competition and con- sumer affairs including the promotion of competition in the energy industry, protection of the consuming public pd A Nn oc Nl es Pt be AA Rd wine 4 acme at a AE St i NT ns 8S Ie 33a in the energy policy making processes, and formulation and analysis of policies, rules, and regulation relating to competition and consumer affairs. See 42 U.S.C. § 7133 (a) (7). The statute also provides for the establishment of an agency information administration and provides that the Secretary of DOE shall delegate to the adminis- trator the responsibility for the gathering, analysis and dissemination of energy information. See 42 U.S.C. § 7185 (b). Finally, the DOEOA provides that the Secretary shall make an annual report to include a review and appraisal of the adequacy and appropriateness of the tech- niques, procedures and practices, including competitive and regulatory practices, employed by federal, state and local governments and non-governmental entities to achieve the purposes of the DOEOA. See 42 U.S.C. § 7267(5). Taking all of the above objectives into consideration, it is easily discerned that the study required to be per- formed by DOE by the PMPA, see 15 U.S.C. § 2841, is well within the authority and powers granted to DOE by the DOEOA. Thus, in performing the study required by the PMPA, the Secretary is merely performing a func- tion required of him under the DOEOA. Thus the sub- poenas which make reference to the study required under PMPA set forth a valid purpose. II The authority to issue the subpoenas now challenged by the respondents is found in 42 U.S.C. § 7255 which provides: For the purpose of carrying out the provisions of this chapter, the Secretary, or his duly authorized agent or agents, shall have the same powers and authorities as the Federal Trade Commission under Section 49 of Title 15 with respect to all functions 34a vested in, or transferred or delegated to, the Secre- tary or such agents by this chapter. The Court concludes that the subpoena power is broad and would encompass the study required by the PMPA. Respondents argue that the authority under Section 7255 is restricted to investigations and not studies since a similar restriction limits the Federal Trade Commis- sion. See 15 U.S.C. § 49. In this Court’s view, the au- thority granted under Section 7255 is the same as that granted by 15 U.S.C. § 49 without any limitation as to investigation. Section 7255 clearly provides that the sub- poena power is provided to the Secretary, “[f]or the pur- pose of carrying out the provisions [of the DOEOA]”. See also, S. Rep. No. 95-164. 95th Cong. Ist Sess., re- printed in [1977] U.S. Code Cong. & Ad. News 854, 904. While concluding that the authority to issue the sub- poenas is clearly set forth in the DOEOA, the Court notes that the authority contained in the FEAA, see 15 U.S.C. § 772(b), appears to be limited to those situations where organizations are required to make reports. Hav- ing found that the authority is contained in the DOEOA, the Court need not discuss the authority or limitations contained in the FEAA as they relate to these subpoenas. Ill Respondents also challenge the subpoenas as being in- valid because DOE allegedly failed to follow its own regulations for resolving disputes over subpoenas and that it failed to comply with the Administrative Procedure Act (APA). Respondents contend that 10 CFR § 205.8 applies to the issuance of the subject subpoenas and that since DOE did not follow the requirements of that regulation the subpoenas are unenforceable. That regulation sets forth ete Bar ns eee ok SR se Lk YS ~“ - . thew 35a an administrative procedure for rulings on objections on motions to quash subpoenas. The argumen* is without merit since 10 CFR § 205.0 provides that the provisions set forth in the above regulation applies to those proce- dures set forth in 10 CFR Parts 209 through 214. Those . sections relate to International Voluntary Agreements (Part 209), General Allocation and Price Rules (Part 210), Mandatory Petroleum Allocation Regulations (Part 211), Mandatory Petroleum Price Regulations (Part 212), Oil Import Regulations (Part 213), and Mandatory Canadian Crude Oil Allocation Regulations (Part 214). Furthermore, the Court finds no merit in the respondents due process arguments since the subpoenas issued only affect the respondents when the Court orders enforcement. The respondents arguments made pursuant to the APA, specifically 5 U.S.C. $$ 552 and 555 are likewise found to be without merit. IV This Court is satisfied that the subpoenas were properly issued pursuant to the DOEOA for a lawful purpose, that the study for the purposes of PMPA is one which falls within the authority granted under the DOEOA, that the subpoenas are not burdensome or unreasonable in view of the information sought and the requirements of the PMPA* and that the understandable concern of the re- spondents respecting confidentiality of their records is met by the order which provides for at least 10 days notice before any documents must be produced. Having carefully considered the arguments of the re- spondents, and having found those arguments without * Respondents have failed to show that the subpoenas are burdensome or unreasonable. See FTC v. Texaco, Inc., 180 U.S. App. D.C. 390, 555 F.2d 862, cert. den. 431 U.S. 974 (1977). 36a 37a merit, the Court entered the Orders in each of the cases, | APPENDIX F directing enforcement of the subpoenas.*® | UNITED STATES DISTRICT COURT Dated: January 14, 1980 FOR THE DISTRICT OF COLUMBIA Mise. 79-149 /s/ John Garrett Penn | UNITED STATES OF AMERICA JOHN GARRETT PENN United States District Judge V. EXXON CORPORATION Astin nee dat kina, ants eas Mise. 79-150 UNITED STATES OF AMERICA V. SHELL OIL Co. Mise. 79-217 UNITED STATES OF AMERICA ai 5 ales i ITs anal is Sis satiate sas tat teats. wai nih tani V. MARATHON OIL Co. Filed Jan. 15, 1980 MEMORANDUM ORDER *In view of the Court’s ruling on the merits, the various This comes before the Court on respondents’ motions requests of the respondents for discovery and to dismiss the for a stay of the Court’s Order of December 17, 1979, petitions are moot. pending appeal. In that Order, the Court granted the 38a petition to enforce subpoenas duces tecum issued to the respondents. The guidelines for consideration the the [sic] respon- dents’ request are found in Virginia Petroleum Jobbers Association v. FPC, 104 U.S. App. D.C. 106, 259 F.2d 921 (1958), and Washington Metropolitan Area Transit Commission v. Holiday Tours, Inc., 182 U.S. App. D.C. 220, 559 F.2d 841 (1977). These are whether the re- spondents have made a strong showing that they are likely to prevail on the merits, that they would suffer irreparable harm if the stay is not granted, that the issuance of a stay would not substantially harm any of the other parties, and finally, where lies the public in- terest. 104 U.S. App. D.C. at 110, 259 F.2d at 925. Viewing each guideline separately, the Court concludes that respondents have not made a strong showing that they will prevail on the merits. The Court has carefully considered the extensive briefs submitted in this case together with the arguments of counsel. Two separate hearings were held in these cases. The Court concluded that the subpoenas should be enforced and that the De- partment of Energy (DOE) has the authority to issué the subpoenas pursuant to 42 U.S.C. § 7255. Respond- ents have raised nothing in their motion for a stay pend- ing appeal which would change the Court’s conclusion. With respect to the irreparable harm that the re- spondents might suffer, it falls within two categories. First is that, if the subpoenas are enforced, the respond- ents would be required to turn over information that they contend is confidential and which might affect their competitive position in the market if exposed to the pub- lic. The Court’s order providing for ten days notice should make such a breach of confidentiality unlikely. Second, if they are required to comply with the sub- poenas prior to the appeal, such action would effectively moot the appeal. nl oat Nal, ttn So sith wie aids Ome ale Me Bilas men he deat ee ales A et nc et 39a As to the possibility of substantial harm to the other parties and where lies the public interest, any harm to the petitioner would be that it may not be able to obtain the necessary information for the completion of the study under the Petroleum Marketing Practices Act (PMPA) and the completion of that study is presumably in the public interest. “The Court is not required to find that ultimate suc- cess by the movant is a mathimatical [sic] probability, and indeed, as in this case, may grant a stay even though its own approach may be contrary to moveants’ view of the merits”. 182 U.S. App. D.C. at 222, 559 F.2d at 843. Here, the Court views the respondents’ likelihood of suc- cess as far below 50%. Nevertheless, it has balanced the other factors in these cases and concludes that a stay, conditioned upon certain actions by the respondents, should be granted. Those other factors are that this is a case of first impression, that the parties can seek an expedited appeal, that respondents have agreed that they will cooperate with the petitioner in seeking an expedited appeal and that such should be done, that an expedited appeal would not unduely burden either side to this controversy since the cases have been fully briefed and argued, that the respondents, notwithstanding the pen- dency of the appeal, can forthwith begin to collect the requested information so as to be in a position to im- mediately turn that information over to the petitioner by a date certain or final resolution of the appeal in favor of petitioner, if that is the case, and that while the petitioner may require the information in order to complete the study under the PMPA, DOE has already received similar information from other oil companies as a result of their voluntary compliance, those companies including Atlantic-Richfield Co., Standard Oil of Indiana, the Gulf Oil Companies, Texaco, Inc., Clark Oil and Re- fining Corp., and Ashland Oil Co. 40a In view of the above, it is hereby ORDERED that the Court shall grant the respondents’ motion for a stay pending appeal on the following conditions: 1. Respondents shall cooperate with petitioner in seek- ing to have the appeal heard on an expedited basis. 2. Respondents shall immediately begin to collect the necessary information and be prepared to turn that in- formation over to the petitioner on or before February 15, 1980, or on the date of the decision of the Court of Appeals, if that court affirms the order of this court, whichever is later.* Respondents shall advise this Court and the Court of Appeals that they are in compliance with this condition. Dated: January 14, 1980 /s/ John Garrett Penn JOHN GARRETT PENN United States District Judge * This requirement is similar to and in lieu of the posting of a vond pending appeal. Respondents have represented to the Court that they would begin the process of collecting the in- formation although there is a dispute as to when such infor- mation can actually be furnished. This Court concludes that that information should be available no later than February 15, 1980. 4la APPENDIX G [SEAL] Department of Energy Washington, D.C. 20461 April 25, 1979 Jay L. Carlson, Esq. Miller & Chevalier 1700 Pennsylvania Avenue, NW Suite 800 Washington, DC 20006 Re: Subpoena issued to Mr. C. C. Garvin, Jr. Chief Executive Officer, Exxon Corporation, January 22, 1979 Dear Mr. Carlson: I have received the “Application to Quash or Modify Subpoena” filed on March 20, 1979. There are no provi- sions in the DOE rules providing for such motions. I am, moreover, unpersuaded by your arguments. Since we have been unable to reach a satisfactory agree- ment regarding document production, I am turning this matter over to the Office of the General Counsel. Sincerely yours, /s/ William C. Lane, Jr. WILLIAM C. LANE, JR. Director Office of Competition 42a APPENDIX H UNITED STATES OF AMERICA DEPARTMENT OF ENERGY WASHINGTON, D.C. SUBPOENA TO: Mr. C. C. Garvin, Jr., Chief Executive Officer, Exxon Corp., 1251 Avenue of the Americas, New York, N.Y. 10020. YOU ARE HEREBY REQUIRED TO APPEAR before William C. Lane, Jr., an officer of the Department of Energy, or his designated representative, at Room 7A- 142, 1000 Independence Avenue, S.W., Washington, D.C. on the 20th day of February, 1979 at 9:00 A.M. to pro- vide information for use in the preparation of a study required by Title III of the Petroleum Marketing Prac- tices Act (PL 95-297). YOU ARE FURTHER REQUIRED TO bring with you and produce for examination at the time designated above the documents and material specified in Attachment “A”. FAILURE TO OBEY THIS SUBPOENA MAY RE- SULT IN REFERRAL TO A UNITED STATES DIS- TRICT COURT FOR ENFORCEMENT. Issued this 22d day of January, 1979 under the authority of Section 13(e) of the Federal Energy Administration Act of 1974 and Section 645 of the Department of Energy Organization Act. Signature William C. Lane, Jr. Director Office of Competition Policy and Evaluation Department of Energy 43a ATTACHMENT A INSTRUCTIONS 1. Definitions (a) The term domestic means within the United States. (b) The term document means writings of any kind, however produced or reproduced. (c) The word or \s inclusive, referring to any one or more of the disjoined words or phrases. (d) The term “your company” means the company named on the face of the subpoena, and all firms in which it owns an equity interest greater than 50 percent that are engaged in whole or in part in the production, refining, or transportation of crude oil, or the transportation, marketing, or distribution of motor gasoline, within the United States or any part thereof. 2. Complete Documents Where a document includes any material called for by the subpoena, the subpoena requires the production of the entire document, including all attachments, cover memo- randa, appendices, etc., even if only part of the document is responsive to any specification. 3. Claims of Privilege Any document responsive to any of the specifications which is not produced by reason of any claim of privilege, statute, or regulation shall be identified by a short de- scription of each such item, including the title, the type of document, the subject matter, the name, address and title of its author(s), the names and addresses of persons to whom copies were furnished, the date of preparation, 44a and a short statement of the reasons which in your opin- ion justify withholding it. 4. Specification Identification Each document shall be identified as to the specification or specifications to which it is responsive. 5. Limitations of Document Search Provide all documents described in the Specifications below which were prepared by, or received by, any of the following individuals or groups within your company during the period January 1, 1970 to the date of this subpoena: (a) The Board of Directors or any committee there- of ; (b) the president or chief executive officer ; (ec) the senior management committee; (d) any committee or individual with the authority to approve capital expenditures of $3 million or more; (e) the vice president in charge of domestic refining (or, if there is no such vice president, the high- est level employee in the company whose primary responsibility is domestic refining) ; (f) the vice president in charge of corporate plan- ning (or, if there is no such vice president, the highest level employee whose primary responsi- bility is corporate planning). (g) the vice president in charge of domestic market- ing (or, if there is no such vice president, the highest level employee whose primary responsi- bility is domestic motor gasoline marketing). ae (1) (2) (3) (4) (5) (6) (7) (8) 45a SPECIFICATIONS All documents that evaluate, analyze, or report on the feasibility or desirability of evaluating sepa- rately the financial performance of different func- tional levels within your company’s petroleum oper- ations. All documents that evaluate, analyze, or report on the financial performance or projected financial per- formance of any functional level or comparison of functional levels within your company’s petroleum operations. All documents that evaluate, analyze, or report on plans for the domestic test marketing of motor gaso- line. All documents that evaluate, analyze, or report on the domestic marketing of motor gasoline under secondary brand name(s). All documents that evaluate, analyze, or report on the expansion or contraction of the geographic area (within the United States) in which motor gasoline is marketed under brand name(s) owned by your company. All documents that evaluate, analyze, or report on motor gasoline market shares of your company or any other company in any State or metropolitan area. All documents that evaluate, analyze, or report on the effects of the Department of Energy price or allocation regulations (10 CFR Parts 210, 211, and 212) on the domestic marketing of motor gasviine. All documents that evaluate, analyze, or report on the financial aspects of proposals or plans to build, (10) (11) (12) 46a expand, close, purchase, or sell any domestic or Caribbean refinery. All documents that evaluate, analyze, or report on the financial aspects of proposals or plans to build, or to expand the capacity of, any domestic crude or product pipeline, or purchase or sell any interest in any domestic crude or product pipeline. All documents that evaluate, analyze, or report on the efficiency of, profitability of, or competitive ad- vantages or disadvantages of, the domestic refining or motor gasoline marketing operations of any firm other than your company. All documents that evaluate, analyze, or report on your company’s plans for domestic marketing of motor gasoline through company-operated stations. All annual or periodic domestic motor gasoline marketing plans and all documents that evaluate, analyze, or report on such plans. SNORE AD i mntndd tla I ~ 47a APPENDIX I SENATE DEBATE ON TITLE III OF THE PETROLEUM MARKETING PRACTICES ACT [124 Cong. Rec. S 7149 - 7158 (Daily ed., May 9, 1978).] [S 7149] PETROLEUM MARKETING PRACTICES ACT The Senate continued with the consideration of the bill. Mr. DURKIN. Mr. President, I ask unanimous con-: sent that Mike Harvey of the Committee on Energy and Natural Resources, Henry Banta, Tom Susman, of Sen- ator KENNEDY’S staff, and Richard Arnold of Senator BUMPERS’ staff be granted the privilege of the floor dur- ing debate on the pending bill. I make the same request for Linda Gold as well. The PRESIDING OFFICER. Without objection, it is so ordered. The Senator from Arkansas is recognized. UP AMENDMENT NO. 1307 Mr. BUMPERS. Mr. President, the pending amend- ment is amendment No. 1809 introduced by Mr. MarK O. HATFIELD and me. I send to the desk a modified version of that amendment. THE PRESIDING OFFICER. The amendment will be stated. The legislative clerk read as follows: The Senator from Arkansas (Mr. BUMPERS) proposes unprinted amendment numbered 1307 as a modification to amendment No. 1809. 48a Mr. BUMPERS. I ask unanimous consent that fur- ther reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. (Text of Title III as enacted is omitted. ] [S 7150] The PRESIDING OFFICER. The amendment will be so modified. Mr. BUMPERS. I ask unanimous consent that the Senator from Washington (Mr. JACKSON), the Senator from New Mexico (Mr. DoMENICI), the Senator from Kentucky (Mr. Forp), the Senator from Louisiana (Mr. JOHNSTON), and the Senator from Alaska (Mr. GRAVEL) be added as cosponsors to the amendment. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BUMPERS. Mr. President, this amendment re- flects a compromise on the issue of title III, which is pend- ing before the Senate. It is a compromise which deals with the most controversial part of the bill. I believe that the managers will be willing to accept it. The compromise, very briefly, will require the Secre- tary of Energy to study the subsidization issue fully. Full provision is made for public involvement in the study. The Secretary must send his study, together with appropriate legislative recommendations, to the Congress within 18 months after enactment. In addition, this amendment establishes a procedure where the President may develop interim measures to protect the competitive viability of the marketing sector of the petroleum industry if he considers them neces- sary and appropriate. Congress would have 90 days to act affirmatively on his proposal. Any interim proposals which might be accepted by the Congress would not extend beyond 18 months from the date of their affirmation by Congress. 49a Mr. President, if no interim measure is submitted to Congress, then, of course, at the end of 18 months from the date of enactment of this bill the Secretary shall sub- mit legislative recommendations to Congress, if he finds them to be necessary to protect the people we are trying to protect under the present legislation. If the President determines that interim measures are necessary, Congress will have 90 days in which to affirm the recommendations of the President under the procedures set forth in section 523(a) of the Energy Policy and Conservation Act. I think it is an excellent compromise, and I hope all my colleagues will see fit to support it. Mr. President, I believe that adoption of this amend- ment will help clear the way for enactment of H.R. 130, which will provide important protection to wholesalers and retailers of gasoline from arbitrary termination of supply. Mr. President, I ask unanimous consent that the name of the distinguished Senator from Tennessee (Mr. BAKER) be added as a cosponsor of the amendment. The PRESIDING OFFICER. Wi .out objection, it is so ordered. Mr. FORD. Mr. President, I ask unanimous consent that Jim Fleming, of my staff, have the privilege of the floor during the debate and vote on H.R. 130. The PRESIDING OFFICER. Without objection, it is so ordered. Who yields time? Mr. DOMENICI. Mr. President, will the Senator yield 5 minutes to the Senator from New Mexico? Mr. BUMPERS. I am happy to yield 5 minutes. Mr. DOMENICI. I thank my good friend. Mr. President, I would like to take several moments to specifically address the issue of title III, and also to make several comments on what I am told will be forthcoming amendments to title ITI. Congress has moved on several occasions to protect independent segments of the petroleum industry. During 50a the oil embargo, Congress and the executive branch pro- tected independent refiners through the entitlement pro- gram. Now the dealers are receiving protection under title I of the dealer day in court. Title III provides com- parable protection for the independent marketers—job- bers. Jobber concerns stem from a changing oil market. Their principal concern is that integrated oil companies, both major and independent refiners, are subsidizing their marketing operations with revenues earned upstream. On a nationa! basis, this concern is borne out by the decline in total retail outlets over the past several years, which have been accompanied in turn by an increase in salary operated stations by refiners. Major refiners have increased their sales from salary operated stations by 55 percent while independent and small refiners have increased their salary operated sales by 50 percent. Over- all, refiner owned and operated stations have increased their marketshare by one-third. Refiner comments on title III admit that a margin of 3 to 5 cents a gallon is appropriate between a jobber purchasing gas at the refinery—at the rack—and the sale price at the dealer outlet. The following table gives examples ‘of what can only be subsidized pricing by re- finer operated outlets. I ask unanimous consent to have the table printed in the RECORD. There being no objection, the table was ordered to be printed in the RECORD as follows: Priceto Refiner Jobber dealer direct Refiner: Location price (DTW) price Marathon: Meridian, Mich. 55.02 58.19 56.19 Powerline: Redwood City, Calif. 52.45 — 52.9 Ashland: Charlotte, N.C. 51.703 — 51.9 Champlin: Oklahoma City 53.56 51.91 Clark: Alliaoca, Ohio 52.7 — 51.91 5la Mr. DOMENICI. Mr. President, the most recent evi- dence available is some January 1978 figures from Kan- sas where Champlin Petroleum is selling on the street at 0.519 and selling to its jobbers for 0.5175. This is a 0.0015 difference, a situation that begs explanation. Title III is predicated on a question: Why would in- tegrated oil companies sell below cost? Title III answers that as a general rule below cost sales are predatory per se unless: They result, in fact, from proven cost savings; they are designed to meet competition; or they are pro- vided to enter a new market. The basic elements of title III are as follows: First. Section 302 prohibits subsidization. Second. Section 303 makes price data available to in- dependent marketers. Third. Section 304 provides for defenses based on cost, meeting competition, or penetrating a new market. Fourth. Section 305 switches the burden of proof once the jobber has proved below cost sales. Fifth. Section 306, the enforcement section, provides for civil fines, and a private right of action for treble damages. Sixth. Section 307 is the definitions section. I should like to stress that in fashioning title III, largely at my urging, I and other committee members made a variety of changes designed to meet what we saw as legitimate criticisms. Nevertheless, several policy arguments have been raised against the bill. These include: First. The oil industry does not know its costs: Ba- loney. How then does the industry know if it is making a profit? How does it know whether to make more or less of a given product? To open or close stations? The fol- lowing quote from Champlin to one of its Kansas lessees should help lay the matter to rest as to whether the in- dustry knows its costs: 52a Champlin Petroleum Company regrets to inform you that it has determined that it is no longer economic for it to operate the Champlin Service Station located at U.S. Highway No. 56 and I-35 West, McPherson, Kansas, under the present lease agreement with you. This issue of costs raises a more fundamental ques- tion. My opposition to divestiture is based on the belief that integrated oil operations generate efficiencies and economies of scale. In simple terms: they lower costs. Now the industry tells us they cannot document this. The industry cannot have it both ways. Either the cost savings of integrated oil operations can be documented or they cannot. And if they cannot, either they should be, or the industry should be broken up. Second. The Domenici title III will comulicate [sic] antitrust litigation: This is the last straw. Antitrust litigation has been ponderous and incomprehensible for decades. The present FTC case against the industry is an example. The FTC filed its complaint in 1973. In 1975, its first subpena was squashed. In November of 1976, it issued a “minisubpena.” This modest subpena ran to 1,300 pages for each of the 8 major companies. The industry responded with somewhere between 500,000 and 1 million pages. And what type of information did this “minisubpena” call for. Just basics. Organization charts, holdings, and so forth. A new subpena has now gone out asking for more information. Five years after its start, the FTC case is in the early, I repeat, early stages of discovery. Urgings by oil industry lawyers that independent marketers not confuse the crystalline verities of antitrust litigation remind one of the nursery rhyme poem: (S 7151] Will you walk into my parlour, said the spider to the fly Tis the prettiest little parlour that ever you did spy. 53a Oh, no, no, said the little fly, to ask is in vain. For who goes up your winding stair, can ne’er come down again. In short, independent marketers believe they serve an important competitive function. If they are to be driven from the marketplace, it should be because of increased efficiency, not because of the market power of the big fish who live upstream. All they ask is a chance to com- pete fairly. This hardly seems too much to ask. Mr. President, at this point I would like to spend sev- eral minutes discussing the compromise that has been worked out at the 11th hour on title III. As my remarks indicate, I am satisfied with the present title III. It is a finely tuned solution to the problem at hand. It does not establish another wave of regulations. It simply gives the little guy his day in court. It is apparent, however, to the proponents of title III that there is not support for the present title III. This lack of support arises in some cases from a legitimate concern over the lack of data at hand. Although I find this argument unpersuasive, I admit its strength. : Now, Mr. President, I am not one to attack bigness for bigness’ sake. I am also not one that believes that the oil industry is evil incarnate. I do, however, believe that this biggest of American industries does the Nation a disservice when they refuse to allow the little guy a chance to make his case in court. I feel a study is like prescribing aspirin for a severed jugular. Personally, I believe we should attend to the business at hand: Protecting the independent marketers. I do not believe their livelihood should be sacrificed while we await the results [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1809%3A1. Public record. Not legal advice.