Petition — Andrus Energy Corp. v. United States

Supreme Court brief1982

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ANDRUS ENERGY CORPORATION and

BILL W. ANDRUS, PRESIDENT,

A ppellants-Petitioners

UNITED STATES OF AMERICA and

DEPARTMENT OF ENERGY AUDIT

DIRECTOR, JAMES LOUTHAN,

A ppellees-Respondents.

ROBISON ENERGY, INC. and

GARY WOMACK, VICE-PRESIDENT,

A ppellants-Petitioners,

UNITED STATES OF AMERICA and

DEPARTMENT OF ENERGY,

Appellees-Respondents.

ALBERT E. VACEK, JR.

VACEK & WELTMAN, P.C.

7880 San Felipe, Suite 123

Houston, Texas 77063

Attorney for Appellants-Petitioners

“™Alpha Law Briel Co, Inc.-S606 Parkersburr—Houston, Teaas 17056-223-3003

QUESTIONS PRESENTED FOR REVIEW

A. WHETHER THE TEMPORARY EMERGENCY

COURT OF APPEALS OF THE UNITED STATES

HAD SUBJECT MATTER JURISDICTION OF

THESE APPEALS FROM THE DISTRICT

COURTS’ ORDERS ENFORCING THE DEPART-

MENT OF ENERGY SUBPOENAS AGAINST

PETITIONERS.

B. WHETHER THE DEPARTMENT OF ENERGY’S

COMMENCEMENT OF ITS AUDITS OF PE-

TITIONERS IN VIOLATION OF A REGULA-

TION PROHIBITING THE DEPARTMENT FROM

COMMENCING AUDITS WITHOUT “PROBABLE

CAUSE” DEPRIVED PETITIONERS OF THEIR

DUE PROCESS.

C. WHETHER THE DEPARTMENT OF ENERGY

SUBPOENAS MUST BE INVALIDATED AS THEY

CONSTITUTE UNLAWFUL GENERAL WAR-

RANTS.

D. WHETHER THE TEMPORARY EMERGENCY

COURT OF APPEALS ERRED IN AFFIRMING

THE DISTRICT COURT’S ORDERS ENFORCING

THE DEPARTMENT OF ENERGY SUBPOENA

IN LIGHT OF THE FACT THAT THE DISTRICT

COURT EXPRESSLY FAILED AND REFUSED

TO MAKE A DETERMINATION OF THE RELE-

VANCE OF THE SUBPOENAED DOCUMENTS.

- [LIST OF PARTIES

All of the parties to this action are named on the front

cover of this Petition. The parent company of Petitioner,

Andrus Energy Corporation, is Andrus Interests, Inc.

TABLE OF CONTENTS

re age,

PROVISIONS INVOLVED ............00ceeseeees

STATEMENT OF THE CASE ............seseeeeeee

SUMMARY OF ARGUMENT IN SUPPORT OF CER-

TIORARI

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oe owWnw

*s33

TABLE OF AUTHORITIES

CASES Page

Accardi v. Shaughnessy, 347 US. 260, 74 S.Ct. 499 (1954) 14,24

American Broaacasting Co., Inc. v. FCC, 197 F.2d 437

NG REET Tae 24

Bray v. Unsted States, 423 US. 73, 96 S.Ct. 307 (1975) .. 10, 12

Brooks v. Clifford, 409 F.2d 700 (4th Circ. 1969) ....... 24

Civil Aeronautics Board v. Fronter Airismes, inc., 468 F.

Supp. 443 (D.C. Colo. 1979) ........ccceceeceeeeee 26, 28

Civ Aecronautscs Board v. Unsted Airlines, inc., 542 b .2d

Ss SURAEIUER. 4 5 Vin c'eaneehbic cocadsbeesenve 26, 27, 28

Miranda v. Arizona, 384 US. 436, 86 S.Ct. 1602 (1966).. 15, 17

Oktanoma Press Publishing Co. v. Walang, 327 U.S. 186

SEEN 0h cid es cn dian adh Gib wedbbaws caves teeesy t il

Valley Television Corp. v. United States, 269

Ne CN, RN a cc cchincceescens 24

Service v. Duies, 354 US. 363, 77 S.Ct. 1152 (1957) . 14

Smith v. Resor, 406 F.2d 141 (2nd Circ, 1969) ......... 24

Southern Kattway Company v. interstate Commerce Com-

mission, 553 ¥.2d 1345 (D.C. Cire, 1977) ......eee0e: 26

Sunshine Gas C v. Department of Energy, 524

F Supp 834 (N.D. Tex. 1981) ......0seccccceeceees 26, 27, 28

Texaco, inc. v. Department of Energy, 616 F.2d 1193

(Em. BEB WBGDD. cv ve cvcccdcccscccctvccsessocesecs 10

United States v. » 440 US. 741, 99 S.Ct. 1465

SE nactivees i dediie iceendiaiii wee dace Gast 7, 13, 14, 17, 18, 23

United States v. Cooper, 482 F.2d 1393 (Em. App. 1973).. 10

United States v. First City Nat'l Bank of Ei Paso, 598 F.2d

594 (Em. App. 1979) ......0ccceccccvecenceeeeecees 29

United States v. Fitch Oi Company, __F.2d__, No. 5-70

March 23, 1982 (Em. App.) ........+..+.- 6, 7, 14, 15, 17, 18, 23

United States v. Hefjner, 420 F.2d 809 0 Pre ee )

adubechscesveteVsesudeapamsdesebScucvebcates 14, 18, 20, 23

United States v. Leahey, “ae Bad 7 ist Give. 1670)

epneedde caaponaudeseses coeusvadhesss 7, 15, 16, 17, 18, 21, 22, 23

United States v. Morton Salt Co., 338 US. 632 (1950).... 11

United States v. Powell, 379 U.S. 48, 85 S.Ct. 248 (1964). .11, 20, 29

United States v. Tobins, $12 F.Supp. 308 (D.C. Mass.

BEE) cscacdhacncd deetses es ekabe beers cbtoucmedess 21, 22, 23

United States v. Wi 619 F.2d 75 (Em. App. wy 9, 12

United States v. Uni Oil, Inc., 646 F.2d 946 (Sth Circ.

1981) (App. for Writ of Cert. a Se 9,10, 12

United States v. Zang, 545 F.2d 999 (Em. App. 1981) . 7,9, 10

Vitarelli v. Seaton, 359 U.S. 535, 79 S.Ct. 968 (1959). 4, 20, 22, 24

Vick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064 (1886) .. 17

Page

UNITED STATES STATUTES

12 U.S.C. § 1904, note (Supp. 1977) .........5.cceeeees 2,9

ee IE ai ie bo 6 GPE 60s cnvccecne ste ce cegcsoute o

REGULATIONS

TEE - Svc cadveceded cbs edihen stccceteec: 27

ED TEED. “dn. du eC eensbeegdepeeenreeyeoces ves 18, 27

En cts leis avheavenenenesébeceest 27

DOU ETE cudetddints 6 ¢cequacthdhesvocees coerce 27

10 CFR, Part 210, Appendix A (Audit Policy) .......... 3, 18, 21

MISCELLANEOUS AUTHORITIES

U.S. Code Cong. & Admin. News (1971), 2283, 2292 .. 9

2 Davis, Administrative Low, Second Edition, § 7:21 sence 16

re we a —\aedbbertaentne casa 87 Harv.

4).

Octoser Term, 1981

ANDRUS ENERGY CORPORATION and

BILL W. ANDRUS, PRESIDENT,

Appellant s-Petitioners

UNITED STATES OF AMERICA and

DEPARTMENT OF ENERGY AUDIT

~~ ita

ROBISON ENERGY, INC. and

GARY WOMACK, VICE-PRESIDENT,

Appellant s-Petitioners,

UNITED STATES OF AMERICA and

DEPARTMENT OF ENERGY,

A ppellees-Respondents.

The Temporary Emergency Court of Appeals has is-

sued an opinion in this case, a copy of which appears in

Appendix “3” to this Petition. The opinion has not yet

been reported.

The decision of the Temporary Emergency Court of

Appeals was entered on April 9, 1982. (A.3). Petitioners’

Motion for Rehearing was denied on April 30, 1982.

(A. 4).

The jurisdiction of this Court is invoked under and

pursuant to the Economic Stabilization Act, as amended,

Section 211(G), 12 U.S.C. § 1904, note.

atl

jie

‘

capi

Statutes; Economic Stabilization Act:

As these provisions related to the TECA’s jurisdiction

are voluminous, they are set forth in full at Appendix “S”.

tion audits after June 30, 1978, at: (1) Any re-

sellers, reseller-retailers or retailers (as defined in

10 CFR 212.31) of petroleum products other than

isi

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[slats

itt

respective

Petitioners each filed Motioas for Stay of the

1982, the

, with an elaborate opinion,

, on February

District Court issued an Order

Temporary

A Motion for Rehearing was denied by the

The Jurisdictional Issue.

As will be hereinafter noted, the TECA has assumed

jurisdiction of Department of Energy subpoena cases for

“policy” reasons. However, the TECA is a court of special

thn

inthe

ff it

Depts Earby, Tempra Ey

el i

several cases decided by this Couri, including the recent

case of United States v. Caceres, 440 U.S. 741, 99 S.Ct.

1465 (1979), in which this Court recognized the Due

policy, and not a rule or regulation binding on the De-

partment of Energy. As a result, it held that such an audit

policy should not hinder the enforcement of the subpoenas

the relevance of the items sought by the cubject subpoenas.

However, notwithstanding these precedents, the Tempo-

rary Emergency Court of Appeals and the district court

has expressly refused to even consider relevance. Such

action by the lower courts requires supervision by this

Court in order to settle conflicts with applicable decisions

of this Court.

A. THE TEMPORARY EMERGENCY COURT OF

APPEALS LACKED JURISDICTION OF THESE

APPEALS FROM THE DISTRICT COURTS’

ORDERS ENFORCING THE DEPARTMENT OF

ENERGY SUBPOENAS AGAINST PETITION-

ERS.

The Temporary Emergency Court of Appeals lacked

subject matter jurisdiction of the present appeal, since

the appeal did not involve issues or controversies under

the Economic Stabilization Act (ESA) (A.5) or Emerg-

ency Petroleum Allocation Act (EPAA). Therefore, the

Mandate issued by the Court is null and void.

The Temporary Emergency Court of Appeals, unlike

the other Circuit Courts of Appeal, is a court of special

jurisdiction and competence. United States v. Zang, 545

F.2d 999, 1002 (Em. App. 1981); U.S. Code Cong. &

Admin. News 1971, pp. 2283, 2292.

Under Section 211 (b)(2) of the Economic Stabiliza-

tion Act of 1970 (ESA) (A.5), the Temporary Emerg-

ency Court of Appeals is vested with exclusive jurisdiction

“of all appeals from the District Courts of the United

States in cases and controversies arising under this title

or under regulations or orders issued thereunder.” 12

U.S.C. § 1904 note (Supp. 1977).*

3. of jurisdiction was carried forward Sec-

tion S(a)(1) of the Petroleum Allocation Act (EPAA),

as amended. 15 U.S.C. § 754; United States v. Uni Oil, Inc., 646

F.2d 746 (Sth Circ. 1981) '(App. for Writ. of Cert. );

United States v. Zang, supre, at 1002; United States v. Wickland,

619 F.2d 75, 78 (Em. App. 1980).

In determining whether a particular case arises under

the ESA, EPAA, or a regulation thereunder, a strict con-

struction must be given to the term “in cases and con-

troversies arising under this title” in light of the traditional

rule that courts of special jurisdiction should strictly con-

strue their statutory grants of jurisdiction. United States

v. Zang, supra, at 1002; United States v. Cooper, 482 F.

2d 1393, 1398 (Em. App. 1973); Texaco, Inc. v. Depart-

ment of Energy, 616 F.2d 1193, 1197 (Em. App. 1979).

A case or controversy is said to “arise under this title”

(i.e., involve an ESA or EPAA issue), if the case involves

issues that must be decided by the Temporary Emergency

Court of Appeals in order that “uniform interpretation of

the substantive provisions of the statute” may be achieved.

In United States v. Uni Oil, Inc., supra, at 951, the Fifth

Circuit made this additional comment:

The case or controversy itself must arise under the

statute or regulations; the resolution of the issue

ree

. at °

When a case or controversy does not require interpreta-

tion of t' < substantive provisions of the ESA or EPAA,

it is not a case arising under the ESA or EPAA, Bray

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

215 (1975); United States v. Uni Oil, Inc., supra, at 952,

The present appeal involves the enforcement of two sub-

poenas issued by the Department of Energy under its ESA,

EPAA, and regulatory powers. Thus, the threshhold ques-

require the interpretation of the substantive provisions of

the ESA, EPAA, and, or regulations arising thereunder?

The answer to this question is clearly “no”.

The applicable sections of the ESA and EPAA provide

that “[t]he head of an agency exercising authority under

this title, or his duly authorized agent, shall have authority

. . . to sign and issue subpoenas .. .” (Section 206 of

the ESA). The substantive provisions of both the ESA

and EPAA do not control other aspects of Department

of Energy subpoenas, except to authorize the enforcement

of Department of Energy subpoenas in the district courts.

These statutes do not expressly or impliedly vest the TECA

with jurisdiction of appeals from district court Orders

enforcing Department of Energy subpoenas. Thus, the

substantive provisions of the ESA and EPAA encompass

only the Department of Energy’s authority to issue sub-

poenas.

The substantive provisions make no mention of the

general legal issues concerning the validity of a subpoena

issued pursuant to the ESA or EPAA. The rules related

to the review of a subpoena, issued by any and all agencies,

have been firmly formulated by the United States Supreme

Court. United States v. Powell, 379 U.S. 48 (1964);

Oklahoma Press Publishing Co. v. Walling, 327 US.

186 (1946); United States v. Morton Salt Co., 338

U.S. 632 (1950). These established rules and guidelines

do not require the interpretation of, and are not subject

to, any substantive provisions of the ESA or EPAA.

Had Petitioners attacked the Department of Energy’s

authority to issue subpoenas under the ESA or EPAA,

this appeal would have unquestionably required the inter-

pretation of the substantive provisions of the ESA or

EPAA. However, Petitioners have always recognized the

Department’s fundamental authority to issue the sub-

poenas in question. Instead, the Petitioners, on the basis

B. THE DEPARTMENT OF ENERGY’S COM-

MENCEMENT OF ITS AUDIT OF PETITION-

ERS IN VIOLATION OF A REGULATION

PROHIBITING THE DEPARTMENT FROM

COMMENCING AUDITS WITHOUT “PROB-

ABLE CAUSE” DEPRIVED PETITIONERS OF

THEIR DUE PROCESS.

1. Reasons for Binding an Agency to its Regu-

lations or Published Procedures: the TECA’s

Decision Conflicts with Supreme Court and

Circuit Court Authorities.

In United States v. Caceres, 440 U.S. 741, 99 S.Ct.

1465 (1979), this Court explained that its decisions in

prior cases, wherein agency action in violation of pro-

cedures or regulations was upheld, “demonstrates that

the [agency] was not required by the Constitution to

adopt these regulations.” Jd. at 75. However, this Court

also recognized that even agency procedures or regula-

tions not mandated by the Constitution or some specific

statute must be followed by the agency, if the result of

any violation of the procedure would be to affect an

individual’s rights, or implicate the Due Process Clause.

The Court recognized that Constitutional safeguards,

such as Due Process, could invalidate agency action which

runs afoul of a published procedure or regulation. This

principle is demonstrated by the Court’s comment:

Nor is this a case in which the Due Process Clause

is because an individual has

Thus, according to this Court in Caceres an agency is

bound by its regulations or procedures when: (1) the

regulation is mandated by the Constitution or Statute;

(2) the agency's violation of the regulation or procedure

would affect an individual's rights; and (3) Due Process

requires the agency to follow the regulation. Petitioners

do not rely on the first or second reasons for invalidating

the Department of Energy's actions herein, but rely on

the third reason. The Due Process Clause is implicated

when an individual has reasonably relied on agency regu-

lations promulgated for his guidance or benefit and has

suffered substantially because of their violation by the

agency. United States v. Caceres, supra, at 752, 753.

Service v. Dulles, 354 U.S. 363, 77 S.Ct. 1152 (1957);

Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499

(1954); United States v. Heffner, 420 F.2d 809 (4th

Circ. 1969). This Court, in Vitarelli v. Seaton, 359 US.

535, 79 S.Ct. 968 (1959), held that the Secretary of

Circuit in United States v. Heffner, at page 812, based

on the Vitarelli case, concluded that “it made no differ-

ence that the State Department had no statutory or con-

stitutional obligation to establish the procedure in ques-

tion” for an agency to be bound by its published pro-

cedure or regulation.

The TECA, in United States v. Fitch Oil

F.2d___., No. 5-70, March 23, 1982 (Em. App.),

duct by all agents; and

528283

hell TE

‘th

i i

18 JE

sta

in Miranda is only coincidental. The

of the Leahey Court was not that the Miranda

were required to be given in such cases, because

expressly refused “to require that the full

of Miranda warnings be given a taxpayer, not in

who is interviewed by LR.S. agents”. Id. at 8.

the second reason why the Leahey Court deter-

that Due Process requires an agency to follow an

The apparent conflict between the Leahey case and the

case of United States v. Fitch Oil, is due to the TECA’s

misconstruciiou of the Leahey case. The Temporary Emer-

gency Court of Appeals in Fitch Oil held that Due Process

sal

requires an agency to follow only those regulations which

are mandated by the Constitution or Act of Congress,

contrary to the principles set forth in Leahey. The Leahey

Court did not espouse the principle that an agency must

a procedural regulation. 10 C.F.R., Part 210 Appendix

“A” (43 Fed. Reg. 27,782), set out in full on page 3

_A reading of the audit policy as a whole indicates that

this policy actually declares two (2) new policies con-

cerning audits. |

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In light of the uncontradicted evidence adduced in both

cases, the investigation of Petitioners, which prompted the

issuance of the subject subpoenas, is clearly in derogation

of the Department of Energy’s own regulation concerning

the commencement of new audits or investigations.

Paragraph “A” of the policy establishes an agency-wide

standard which must be met before a new audit and in-

ment of audits without a showing of “Probable cause”,

precluded the random commencement of audits. Con-

versely, the imposition of a “probable cause” standard

handed administration of the laws. . .”. United States v.

Tobins, 512 F.Supp. 308 (D.C. Mass. 1981).

When an agency “goes public” it does not do so lightly.

Its obligations increase just as do those of a privat cor-

‘poration. United States v. Leahey, supra, at 10. The

violation. Relying on this procedural regulation, Petition-

ers could reasonably be expected to and did invest large

menced against Petitioners, and firms similarly situated,

they were less prepared to meet the financial burdens of

complying with or defending against the unlawful audit.

announcement, made in response to inquiries and Con-

3.. The TECA’s Conclusion that Only Legislative

Rules are Binding on Agencies is Erroneous

and in Conflict with Various Circuit Courts.

In Fitch Oil, the TECA concluded that “[tJhe audit

policy in question was not a legislative rule by designation

or substance and [t]herefore . . . was not binding” on the

Department of Energy. Id. at 8.

At the outset, Petitioners vigorously maintain that the

“audit policy” was a rule and a regulation in substance.

However, should this Court determine that the audit

supra, at 752, 753; United States v. Leahey, supra; United

States v. Tobins, supra. Thus, in Leahey, the First Circuit

required the Internal Revenue Service to abide by a press

release because regulated entities could expectably rely

on it and the directive in the release was intended to

assure uniform conduct of IRS agents with respect to the

agent's initial conduct with the taxpayer target. Likewise,

the Fourth Circuit in United States v. Heffner, 420 F.2d

809 (4th Circ. 1969), held that the Internal Revenue

A. It is the policy of the Economic Regulatory

Administration (ERA) not to commence any

price regulation audits after June 30, 1978, at:

§ 4(c) ( 20, 1967), Smith v. Resor, 406

); an F.C.C. “Rule” which had not been

a regulation, Valley Television

269 F.2d 221 (D.C. Circ. 1959); an FCC

Co., Inc. v. FCC, 179 F.2d 437

(4th Circ. 1969).

gure

(1) po er errs resellers, resellers-retailers or ee (as

in 10 C.F.R. 212.31) of fe

(Emphasis

Sie ta ce artagraa le

The Department of Energy regulations do not provide

a definition for the term “petroleum product”. However,

the term “covered products” is defined in 10 C.F.R.,

§ 212.31 as follows:

The TECA refers to the preamble of the subject State-

ment of Policy as evidence that such policy is not in-

tended to benefit crude oil resellers. Petitioners respect-

fully submit that all comments related to crude oil re-

sellers in the preamble and in the Statement of Policy

relate to the time limitations on openings of new

other

violation. Thus, crude oil resellers do benefit from Para-

graph “A” of the Policy and the TECA is in error in

C. WHETHER THE DEPARTMENT OF ENERGY

SUBPOENAS MUST BE INVALIDATED AS

THEY CONSTITUTE UNLAWFUL GENERAL

WARRANTS.

Every agency must disclose with specificity its purpose

for the subpoena and the investigation. The requirement

is not satisfied by merely reciting that “the purpose of

the investigation is to determine compliance with the law”.

Civil Aeronautics Board v. United Airlines, Inc., 542 F.2d

394 (7th Circ. 1976); Southern Railway Company v.

Interstate Commerce Commission, 553 F.2d 1345 (D.C.

Circ. 1977); Civil Aeronautics Board v. Frontier Air-

lines, Inc., 468 F.Supp. 443 (D.C. Colo. 1979); Sunshine

Gas Company v. Department of Energy, 524 F.Supp. 834

(N.D. Tex. 1981).

ment of purpose:

“to determine whether said violated the

ee = oe et Price and

(10 C.F.R., Parts 210, 211

jae ere Rha tng end cena Rone

tions (10 C.F.R., Part 205) with regard to pur-

chases and sales of crude oil.”

Even a cursory review of the Code of Federal Regula-

tions would confirm the fact that Parts 210, 211 and 212

of Title Ten (10), when taken together, contain each

Thus, the Department of Energy Subpoenas in these

investigation. Civil Aeronautics Board v. United Airlines,

Inc., supra.

The Court in Sunshine, at page 840, finding support in

Civil Aeronautics Board v. United Airlines, Inc., con-

pose of the investi, 1k ede > 5 ged

with the law”. Id., at 402; og C.A.B. v.

Frontier Airlines, 468 F.Supp. ia 447 (D.C. Colo.

1979). (Emphasis Added).

From the United Airlines case and its progeny the

following rules emerge: (1) the agency demand, in what-

ever form, must specify a purpose for the particular de-

mand; and (2) that purpose must be stated with sufficient

specificity.

The sole issue to be resolved under the first principle is

simply whether any purpose for the demand is stated.

If no purpose is stated, the demand will not be enforced

mine compliance with the law”. Civil Aeronautics Board

v. United Airlines, Inc., supra at 402; Sunshine Gas Com-

pany v. United States Department of Energy, supra at

840; Civil Aeronautics Board v. Frontier Airlines, Inc.,

supra.

In accordance with the foregoing authorities and in

required by law and that the lower Court exred by en-

forcing the Department of Energy subpoenas in question.

it At

us|: “4

matters in itself should compel this Court to grant Writ

of Certiorari.

Houston,

(713) 975-6600

bit

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CIVIL ACTION NO. H-81-2782

UNITED STATES OF AMERICA and

DEPARTMENT OF ENERGY AUDIT

DIRECTOR JAMES LOUTHAN,

Petitioners,

ANDRUS ENERGY CORPORATION and

BILL W. ANDRUS, President,

- Respondents.

ORDER

On this days CAME ON TO BE HEARD the Order

to Show Cause in the above-styled case. The Court having

heard the evidence, argument of counsel, and reading of

the pleadings and Memorandum of Law is of the opinion

that the subpoena should be enforced.

It is therefore ORDERED, ADJUDGED, and DE-

CREED that the Andrus Energy Corporation comply with

the subpoena issued on February 20, 1981, except all

items for which a privilege is claimed be listed and sub-

mitted to the Court for an in camera inspection within

30 days of this Order.

DONE at Houston, Texas, this 14th day of January,

1982.

/s/ JOHN V. SINGLETON

United States District Judge

APPROVED AS TO FORM:

/s/ ROBERT DARDEN

Robert Darden

Assistant United States Attorney

CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Order was

hand-delivered to Albert E. Vacek, Jr., Attorney for

Respondents, on this the 14th day of January, 1982.

Robert Darden

Assistant United States Attorney

. APPENDIX 2

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

CIVIL ACTION NO. H-81-2834

UNITED STATES OF AMERICA,

Petitioner,

ROBISON ENERGY, INC.; and GARY L.

WOMACK, Vice-President of Robison Energy, Inc.,

Respondents.

ORDER ENFORCING DEPARTMENT

OF ENERGY SUBPOENA

CAME ON to be heard on the 17th day of December,

1981, the Petition to Enforce Department of Energy Sub-

poena in the above-entitled and numbered action, said

nomic Regulatory Administration, upon Respondent Robi-

son Energy, Inc. by serving Respondent’s Vice-President,

Gary L. Womack;

(3) That no officer, employee or agent of Respondent

Robison Energy, Inc. appeared in response to the sub-

poena,

(4) That no records or documents were produced by

Respondent Robison Energy, Inc. or any of its officers,

employees or agents in response to the subpoena;

(5) That the subpoena was issued for a lawful purpose,

that is, to conduct an audit of Robison Energy, Inc., a

crude oil reseller, in order to determine its compliance

with 10 C.F.R. Parts 205, 210, 211, and 212, and in

accord with the Department of Energy’s published policy;

(6) That the records and documents sought pursuant

to the subpoena are reasonably relevant to the stated law-

ful purpose of the subpoena;

(7) That the subpoena is not overly broad given the

fact that the Department of Energy has not previously

audited Robison Energy, Inc. and does not know what

types of business records it actually maintains;

(8) That no showing of specific need is necessary to

determine the reasonable relevance of the materials sought

by the subpoena;

(9) That there was no showing that the request for

production of ERA Forms 69 is unnecessarily duplicative;

(10) That Respondents have presented no legally suf-

ficient defense which would bar enforcement of the sub-

poena; and,

APPENDIX 3

TEMPORARY EMERGENCY COURT OF

APPEALS OF THE UNITED STATES

Nos. 5-71 and 5-77

UNITED STATES OF AMERICA, et al.,

Petitioners-Appellees,

Vv.

ANDRUS ENERGY CORPORATION, et al.,

Respondents-Appellants.

No. 5-72

UNITED STATES OF AMERICA,

Petitioner-Apvell

ROBISON ENERGY, INC. and

GARY WOMACK, Vice President,

Respondents-Appellants.

On Appeals from the United States District Court

For the Southern District of Texas

(Civil Nos. H-81-2782 and H-81-2834)

(Submitted on the briefs Decided: April 9, 1982)

ALBERT E. VACEK, JR. and STEVEN L. WELT-

MAN, Vacek & Weltman, P.C., Houston, Texas, were on

the briefs for Appellants Andrus Energy Corporation,

et al. and Robison Energy, Inc., et al.

DANIEL K. HEDGES, United States Attorney, and C. J.

(Neil) Calnan and Robert Darden, Assistant United States

Attorneys, Houston, Texas, were on the brief for Ap-

| neh agaanlinata reg ened eendaaadad

DANIEL K. HEDGES, United States Attorney, and C. J.

(Neil) Calnan and M. Angela Flores, Assistant United

States Attorneys, Houston, Texas, were on the brief for

Appellee, United States of America, in No. 5-72.

Before Ingraham, Estes and Pointer, Judges.

Per Curiam:

Appellants’ challenges of the Department of Energy

subpoenas in question and the orders enforcing them by

United States District Judges Singleton and Black of the

Southern District of Texas are frivolous and entirely with-

pose. United States v. Empire Gas Corp., 547 F.2d 1147

(TECA 1976), cert. denied, 430 U.S. 915 (1977), Unit-

ed States v. Pasco Petroleum Co., 633 F.2d 956, 958-9

(TECA 1980), cert. denied, 450 US. 995 (1981),

United States v. Fitch, No. 5-70 (TECA, Mar. 23, 1982),

F.2d___, United States v. Pel-Star Energy, Inc., No.

5-68 (TECA, Jan. 25, 1982), Slip Op., 5, ___F.2d__,

United States v. Wickland, 619 F.2d 75 (TECA 1980),

United States v. First City National Bank of El Paso, 598

F.2d 594 (TECA 1979), United States v. Southwest Na-

tional Bank, 598 F.2d 600 (TECA 1979), United States

v. Bell, 564 F.2d 953 (TECA 1977). The subpoenas in

question are valid and were properly enforced.

Moreover, the contentions of Appellants that the DOE

audit policy statement barred the issuance and enforce-

ment of the subpoenas in question overlooks the fact that

when read as a whole with the preamble* published con-

temporaneously therewith, 43 Fed. Reg. 27,777, the pol-

icy applies to resellers of petroleum products but for ex-

pressed reasons clearly excepts from its operation re-

sellers of crude oil, which Appellants are.

“Basically, the power to compel the production of the

records of any organization arises out of the inherent and

necessary power of the federal and state governments to

enforce their laws. . . .” United States v. White, 322 U.S.

694, at 701, 64 S.Ct. 1248, at 1252 (1944), quoted in

United States v. Empire Gas Corp., supra, at 1153. The

learned district judge in Empire Gas Corp. correctly

stated: “It is . . . significant that the applicability of the

regulations to respondents cannot be determined until the

information sought by subpoena is made available to the

[DOE] investigators.” Id.

The orders and judgments of the District Court in the

above-captioned appeals, Nos. 5-71/5-77 and 5-72, should

be affirmed and these appeals dismissed. IT IS SO OR-

DERED.

* Wiggins Bros., Se oe 0 Cpeees & ae e al.,

667 F.2d 77, 88 (TECA 1981), cert. denied, Mar. 29, 1

US. Oil Corp., et al. — * fj Energy, a a.,

No. 3-26 xR Mar. 26 1982), 2d. 2

APPENDIX 4

TEMPORARY EMERGENCY COURT OF

APPEALS OF THE UNITED STATES

Nos. 5-71 and 5-77

UNITED STATES OF AMERICA, et al.

Petitioners-Appellees,

ANDRUS ENERGY CORPORATION, et al.,

Respondents-Appellants.

No. 5-72

UNITED STATES OF AMERICA,

Petitioner-Appellee,

ROBISON ENERGY, INC., et al.,

Respondents-A ppellants.

Before: INGRAM, ESTES and POINTER, Judges.

ORDER DENYING APPELLANTS’

PETITION FOR REHEARING

Having duly considered Appellants’ petition for rehear-

ing, the Court is of the opinion that such petition is en-

tirely without merit, that Appellants’ assertion therein that

10a

this court does not have jurisdiction* is also frivolous, and

such petition should be denied.

It is therefore ORDERED that Appellants’ petition for

rehearing is hereby denied. The mandate shall issue on

Friday, May 7, 1982.

FOR THE COURT:

/s/ DONNA M. BOLD

Donna M. Bold

Clerk

April 30, 1982

* “We hold this Court has exclusive jurisdiction of this appeal.

$§ 206 and 211 Economic Stabilization Act (ESA) of 1970, as

amended, 12 U.S.C. § 1904 note [incorporated by § 5(a)(1) of the

tna at Petroleum Allocation Act (FPAA) of 1973, 15 U.S.C.

§ 754], $§ 301, 502 and 705 of the Department of Energy Organi-

zation Act (DOEOA), 42 US.C. §§7151, 7192 and 7295, and

10 C.F.R. §§ 205.8 and 205.201.” United States v. Pel-Star Energy,

Inc., 670 F.2d 1032, 1033 (TECA 1982); United States v. Wickland,

619 F.2d 75, 77-79 (TECA 1980).

§ 211.

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