# Opposition — Energy Consumers & Producers Ass'n v. Department of Energy

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition
- **Published:** January 1, 1980
- **Citation:** 449 U.S. 832

## Text

rr Supreme Court, U.S,
FILED

No. 79-1875 JUL 18 1980
PWICHAEL RODAK, JR, CLERK

In the Supreme Court of the Hnited States

OCTOBER TERM. 1979

ENERGY CONSUMERS AND PRODUCERS ASSOCIATION,
INC.. PETITIONER

Vv.

DEPARTMENT OF ENERGY

ON PETITION FOR A WRIT OF CERTIORARI TO
THE TEMPORARY EMERGENCY COURT OF APPEALS
OF THE UNITED STATES

BRIEF FOR THE RESPONDENT IN OPPOSITION

Wank H. McCrer. Jr.
Solicitor General
Department of Justice
Washington, D.C. 20530
(202) 633-2217

FRANK W. KROGH
RUSSELL L. WEAVER
Attorney's
Department of Energy
Washington, D.C. 20461

In the Supreme Court of the Hnited States

OCTOBER TERM, 1979

No. 79-1875

ENERGY CONSUMERS AND PRODUCERS ASSOCIATION,
INC., PETITIONER

Vv.

DEPARTMENT OF ENERGY

ON PETITION FOR A WRIT OF CERTIORARI TO
THE TEMPORARY EMERGENCY COURT OF APPEALS
OF THE UNITED STATES

BRIEF FOR THE RESPONDENT IN OPPOSITION

QUESTIONS PRESENTED

1. Whether the exclusive appellate jurisdiction of the
Temporary Emergency Court of Appeals over “all appeals
from the district courts of the United States in cases and
controversies arising under” the Emergency Petroleum
Allocation Act of 1973 extends to an appeal by the
Department of Energy, in an action brought under the
EPAA, from a judgment of the district court declaring
invalid a ruling issued by DOE for failure to comply with
the notice and comment procedures of the Administrative
Procedure Act, 5 U.S.C. 553.

2. Whether the Department of Fnergy’s ruting relating
to an exemption from price controls of crude oil produced
from “stripper wells” was interpretative and therefore
exempt from the notice and comment procedures of the
Administrative Procedure Act under 5 {i.S.C. 553(b)(A).

TABLE OF CONTENTS

Page
I IE iiecnes sales veinasces¥ainedibckiapascchaceeantplpewactumaians |
BUS intiicatennnichataestiidsainebenctknanetisat aie |
IIIT eo csiicbiditins dancaahsnckshtocsdhinnkentares sop auwesieceeden |
IID. Sects cpnncisincercsthsceiejnssdsaunshneshaninir sees ti sletawes bade |
INI siccssdeveccassutnanbnnksvavdoiupinciodetiaaninn seas iedasaseliatiines 4
CID | osckcsvtitigintiitetascanelstiesincaiaaaaiees 7
TABLE OF AUTHORITIES
Cases:
Bray v: United States, 423 UB. 73 ccvcccscuxcssescicsns 5
British Caledonian Airways, Ltd. v. CAB,

Be i FH aiid csthihesdiiicepeb ta inichks Binzahiens 6
Chrysler Corp. v. Brown, 441 U.S. 281... 6
Energy Reserves Group, Inc. v. Department

OF Eteeey, TEP FB TEES, occcrsistnccmncrionies 5
Garelick Mfg. Co. v. Dillon, 313 F. 2d 899 ....... 5
General Electric Co. v. Gilbert, 429

Ren ARIE a ietbietls as itsics veapaepenabeoain hess imdieeeaesainavalan 6
Gibson Wine Co. v. Snyder, 194 Fk. 2d 329 ....... 6
Joseph v. United States Civil Serv. Comnin,

Fe <5 TI sainnschcdicnaagctnsnsieckcdscubeaenenniiaeics 6
National Retired Teachers Ass'n v. U.S.

i ee ee 0 ene 6

samen GE Co. wv. Fre. GA BBE R? oi recsicisics 6

Page
Cases—Continued:
Texaco, Inc. v. Department of Energy.
I a a a VE at 5
Ven-Fuel, Inc. v. Duncan, cert. denied.
No. 79-1498 (June 9. 1980) oo... 4
Statutes and regulations:
Administrative Procedure Act. 5 U.S.C
551 et seq. :
Be I) CO nn a emhsyeiet |
I; «IIR Secs Dan cvcd ce nn tices snidtecs ssnsaneks 3
Department of Energy Organization \ct.
Pub. L. No. 95-91. 91 Stat. S65, 42 USC,
TE TE. Or 6 icra vs. cs sg ski nasaoneners z
Economic Stabilization Act of 1970. 12 U.S.C.
I tie eo enbeaaceuah |
SI ME er Sr gee |
SII psoas candy scan dcvanpibaaetls< usca Posbent
Emergency Petroleum Allocation Act of 1973,
Pub. L. No. 93-159. 87 Stat. 627. 15 ULSLC,
751 et seq. :
Section 4(e)(2)(A). 1S ULS.C. (Supp. IV
ag Be Ba FSR ee |
Section S(a)(l). 1S ULS.C.
TR ah htc she sie, sceee OM, PON Hs” Se
oe Aiet be BS Gy 5 |) 2

Energy Conservation and Production Act _
of 1976, Pub. L. No. 94-385, Section 121..
WF MN RI eich ncckeracignarde castes cotudsascsdudasdeleunsses 2

lV
Page
Statutes and regulations--Continued:

Energy Policy and Conservation Act.
Pub. L. No. 94-163. 89 Stat. 871 oo... 2

Trans-Alaska Pipeline Authorization Act.

a Oe Se ee
Bi RM MI orgies ago cas csdeck cosas sasckocedaentos 5
age aes CED UID. aay rivcce as cvacersnsuciisepebceuveers 2
Pe es TRS obouiivceiaicksbcvpincs covcedacainecss 2
Miscellaneous:
Exec. Order No. 12009 (42 Fed. Rey. 46267
ig CBS RSI SC CORE Ce eer a ne 2

The Attorney General's Manual on the
Administrative Procedure Act (V947) ooo... 6

OPINIONS BELOW

The opinions of the court of appeals (Pet. App. A-I to
A-32) and the district court (Pet. App. A-39 to A-53) are
unreported.

JURISDICTION

The judgment of the court of appeals was entered on
April 4, 1980. A petition for rehearing was denied on
April 28, 1980 (Pet. App. A-33). The petition for a writ of
certiorari was filed on May 27, 1980. The jurisdiction of
this Court is invoked under 28 U.S.C. 1254(1) and Section
211(g) of the Economic Stabilization Act of 1970, 12
U.S.C. 1904 note.

STATUTES INVOLVED
The pertinent provisions of Section 211(b)(2) of the
Economic Stabilization Act of 1970. 12 U.S.C. 1904 note,
which is incorporated into Section S(ay(l) of the
Emergency Petroleum Allocation Act of 1973. 1S U.S.C.

754(a)(1), are set forth at Pet. 2. The pertinent provisions
of 5 U.S.C. 553(b) are set forth at Pet. 3.

STATEMENT

In 1973, Congress enacted the Emergency Petroleum
Allocation Act (““EPAA”), Pub. L. No. 93-159. 87 Stat.
627 et seq., which imposed an emergency mandatory
system of allocation and control of prices of petroleum
products. Section 4(e)(2)(A) of the EPAA exempted from
price control regulations crude oil from leases whose
average daily production did not exceed ten barrels per
well; such low-yield wells are known as “stripper wells.”!

'The stripper well exemption first appeared in Section 406 of the
Trans-Alaska Pipeline Authorization Act. Pub. 1. No. 93-153, 87
Stat. 576. Although the exemption in Section 4(e 2) A) of the EPAA
was repealed in 1975 by the Energy Policy and Conservation Act,
Pub. L. No. 94-163, 89 Stat. 871 e¢ seg... it: subsequently was

2

Regulations implementing the stripper well exemption
were originally codified at 6 C.F.R. 150.54(s) (1974) and
were later recodified at 10 C.F.R. 210.32 (1976). In 1975,
the Federal Energy Administration (“FEA”). a
predecessor agency to the Department of Energy
(“DOE”) issued Ruling 1975-12. Part Ul. which
interprets the stripper well exemption to allow producers
to count a “multiple completion well” as more than one
well in calculating the average daily production per well
for purposes of the exemption. A multiple completion
well produces oil from more than one crude oil reservoir
through a common well casing while segregating the oil
produced from each reservoir into a separate tubing
string.

Petitioner filed this action for declaratory and
injunctive relief in the United States District Court for the
Eastern District of Oklahoma. claiming. jer alia. that
Part Ill of Ruling 1975-12 was invalid because it was
arbitrary and capricious and was issued without
observance of the notice and comment procedures of the
Administrative Procedure Act. 5 U.S.C. 553. Petitioner
brought this suit on behalf of its members producing oil
from “commingled wells.” which, under Part HI of Ruling
1975-12, are not counted as more than one well for
purposes of the stripper well exemption. A commingled
well, like a multiple completion well. produces oil from
more than one crude oil reservoir through a common well

reinstated by Section 121 of the Energy Conservation and Production
Act of 1976. Pub. L. No. 94-385. 90 Stat. 1132-1133. The exemption
is currently codified at 1S U.S.C. 757(i).

"Effective October 1. 1977, the statutory responsibilities of the
Federal Energy Administration were transferred to the Department
of Energy pursuant to the Department of Pnergy Organization Act,
Pub. L. No. 95-91, 91 Stat. 565. 42 U.S.C. (Supp. Hl) 7101 er seq.
and Exec. Order No. 12009 (42 Fed. Reg. 46267 (1977)).

3

casing. However, a commingled well is fundamentally
different from a multiple completion well because, among
: Other things, it does not segregate the oil from each
reservoir into separate tubing strings (see Pet. App. A-5 to
A-6, A-43 to A-44). After a trial. the district) court
concluded that Part III of Ruling 1975-12 was not an
interpretative rule (S U.S.C. 553(b)(A)) and. accordingly,
that the ruling was void because of FFA’s failure to
comply with the notice and comment provisions of the
APA prior to issuing the ruling (Pet. App. A-39 to A-54).

On appeal, the Temporary Emergency Court) of
Appeals. reversed (Pet. App. A-I to A-32). TECA first
concluded that it had jurisdiction over the appeal,
observing that the notice and comment provisions of the
APA had been incorporated by reference in Section
S5(a)(1) of the EPAA, 15 U.S.C. 754(a)(1). and that it was
uncontroverted that TECA “has exclusive jurisdiction of
appeals from final decisions by district courts on issues
arising under the EPAA” (Pet. App. A-20 to A-21). In
addition, TECA concluded that while the agency's
designation of Part III of Ruling 1975-12 as interpretative
was not binding on the courts. “an examination of the
material statute, the legislative history. the regulation, and
the rule demonstrates that it is interpretative. and
expressly exempt from the notice and comment
procedures of the APA” (Pet. App. A-27).'

After examining the trial record. TECA concluded that.
although it was not compelled to accept Part HI of Ruling
1975-12 as a correct interpretation of the stripper well

‘In support of its conclusion that the ruling ts interpretative. EECA
noted (Pet. App. A-27) that “Part HI of Ruling 1975-12 ts in form
and substance an interpretation of the preexisting ‘stripper well
statutory exemption and the preexisting regulation * * *) Neither in
form or substance did it expand or contract the meaning of the term
‘well’ as used in the statute or regulation.”

.

4

exemption, the ruling was a reasonable interpretation of
the underlying statute and regulatory exemption (Pet.
App. A-28 to A-31). TECA also concluded that FEA’s
construction of the stripper well exemption in Part III of
Ruling 1975-12 to permit only a multiple completion well
and not a commingled well to be counted as more than
one well was consistent with the statutory and regulatory
scheme (ibid.).
; ARGUMENT

1. Petitioner contends (Pet. 5-9) that TECA’s
jurisdiction is limited only to those issues that are directly
linked to the price control program established by the
EPAA and does not extend to issues of general law that
arise in the course of adjudicating an action brought
under the EPAA. In this case, petitioner claims, the only
issue raised in DOE’s appeal was one olf general
administrative law, i.e., whether Part III of Ruling 1975-
12 is an interpretative rule, and that such issues are not

within TECA’s jurisdiction, but are instead within the

exclusive jurisdiction of the eleven circuit courts of
appeals. In Ven-Fuel, Inc. v. Duncan. cert. denied, No.
79-1498 (June 9, 1980), this Court recently declined to
review a similar contention. concerning TECA’s
jurisdiction over an appeal from the dismissal of an
EPAA claim for failure to exhaust administrative
remedies. There is even less reason to grant review here,
since, as TECA noted, the notice and comment provisions
of the APA were expressly incorporated by reference in
Section S(a)(l) of the EPAA. As the court below
observed, “ ‘{a]n issue arising under the APA is not a
collateral issue, then, but. by virtue of Section S(a)(1) of
the EPAA an issue arising under the FPAA itself * (Pet.

+We are sending petitioner a copy of our brief in opposition in Ten-
Fuel.

5

App. A-20, quoting Texaco, Inc. v. Department of
Energy, 616 F. 2d 1193, 1198 n.4 (TECA 1979)).

Petitioner’s reliance (Pet. 6) on Brav v. United States,
423 U.S. 73 (1975), is misplaced. In Bray. this Court held
that TECA did not have jurisdiction to review a contempt
conviction arising solely under a federal criminal statute
(18 U.S.C. 401) not within TECA’s appellate jurisdiction,
even though the contempt had been committed in a case
arising under a statute that is within TECA’s jurisdiction.
Here, unlike the contempt proceeding in Bray. petitioner's
action arises directly under EPAA. and the procedural
issue presented in DOE’s appeal is based on a statute that
is expressly incorporated in the EPAA. Accordingly.
TECA properly concluded that it had jurisdiction over the
instant case.

2. Petitioner contends (Pet. 9-12) that Part HI of
Ruling 1975-12 was not an interpretative rule and that
therefore DOE was required to comply with the notice
and comment provisions of the APA (5 U.S.C. 553) prior
to issuing the ruling. We submit that the court below
correctly determined (Pet. App. A-27) that the ruling was
interpretative in nature because it neither expanded nor
contracted the statutory and regulatory exemption but
merely clarified the term “well” for purposes of the
stripper well exemption. See Energy Reserves Group, Inc.
v. Department of Energy, 589 F. 2d 1082. 1092 (TECA
1978); Garelick Mfg. Co. v. Dillon, 313 F. 2d 899, 900
(D.C. Cir. 1963) (regulation clarifying terms contained in
preexisting regulation was interpretative rule).

In holding that the ruling was interpretative. TECA
correctly observed that DOE claimed for the ruling only
the limited effect of an interpretative rule. Although a
legislative regulation is treated as having the torce and
effect of law, an interpretative rule will, at most. be

6

accorded deference. Chrysler Corp. v. Brown, 441 ULS.
281, 295-296, 301-302, 313-315 (1979). Interpretative rules.
in other words, have no binding effect. See General
Electric Co. v. Gilbert, 429 U.S. 125. 141-142 (1976).
Rather, they reflect the position of the agency on the
particular subject addressed therein. Gihson Wine Co. \
Snyder, 194 F. 2d 329, 331 (D.C. Cir. 1952).

In sum, the issue presented here is simply whether
TECA was correct in determining that an agency ruling
was interpretative in nature. Resolution of that issue
involves the application of settled principles of law to the
particular ruling in the context of the entire statutory and
regulatory scheme. TECA’s thorough discussion
demonstrates that it employed the proper analysis and
reached the correct result in this case. Further review is
especially inappropriate here. in view of petitioner's
failure to challenge TECA’s additional conclusion that the
ruling was a reasonable st ain ian of the stripper well
exemption.®

‘Accord, National Retired Teachers Ass'n v. ©.S8. Postal Serv.. 593
F. 2d 1360, 1363 (D.C. Cir. 1979): British Caledonian Airways, Ltd.
v. CAB, 584 F. 2d 982, 989 (D.C. Cir. 1978): Joseph v. United States
’ Civil Serv. Comm'n, 554 F. 2d 1140. 1153 0.24. 1154 0.26 (D.C. Cir.
1977): Shell Oil Co. v. FPC, 491 F. 2d 8&2. 88 (Sth Cir. 1974). See also
The Attorney General's Manual on the Adminisirative Procedure Act
30 (1947).

*It should be noted that prior to the issuance of Ruling 1975-12.
Part III, producers were not expressly authorized to count any type
of well as more than one well for purposes of the stripper well
exemption. Thus, even if petitioners were to succeed in invalidating
the ruling on procedural grounds. DOF would still be authorized to
interpret the stripper well exemption to refuse to permit: petitioner's
members to count a commingled well as more than one well under
the exemption. Because petitioner's members would scom to have
little, if anything, to gain by overturning the DOL ruling. turther
review of TECA’s decision is especially inappropriate.

7
CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

Wapre H. McCrer. JR.
Solicitor General

FRANK W. KROGH
RUSSELL L. WEAVER
Attorneys
Department of Energy

Jury 1980

DOJ- 1980-07

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_2446%3A2. Public record. Not legal advice.