# Appendix — Energy Reserves Group, Inc. v. Department of Energy > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_2571%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1984 - **Citation:** 469 U.S. 1077 ## Text Office - Supreme Court. US | FILED 84-188 AUG 2 1984 No. 84- 3 ALEXANDER L. STEVAS. Sj K IN THE Supreme Court of the United States OCTOBER TERM, 1984 en tlle ENERGY RESERVES GROUP, INC., et al., Petitioners, Vo DEPARTMENT OF ENERGY, et ai., Respondents. APPENDIX TO PETITION FOR A WRIT OF CERTIORARI TO THE TEMPORARY EMERGENCY COURT OF APPEALS OF THE UNITED STATES M. W. PARSE, JR. WARREN M. CHRISTOPHER * KEITH A. JONES RICHARD C. WARMER J.B. RUHL CARL R. SCHENKER, JR. FULBRIGHT & JAWORSKI AARON S. BAYER 1150 Connecticut Avenue, N.W. JAcoB M. LEwIs Washington, D.C. 20036 O’MELVENY & MYERS (292) 452-6860 1800 M Street, N.W. Washington, D.C. 20036 (202) 457-5300 * Counsel of Record Other counsel for petitioners are listed on the inside front cover. EERE IE TC I AE IIE I ITT SI TI IT ITE. CT EEE LET EATERS T SOLA EIO DN ANG Bes dt WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON. D.C. 20001 Q> a EDWARD DE LA GARZA JOSEPH W. KENNEDY EXXON CORPORATION MorkIs, LAING, EVANS, ’ P.O. Box 2180 Brock & KENNEDY Houston, Texas 77001 200 West Douglas R. Bruce MCLEAN, P.C. Wichita, Kansas 67202 DANIEL JOSEPH, P.C. DAVID HOLZWORTH AKIN, GUMP, STRAUSS, HAUF”: & FELD 1333 New Hampshire Avenue, N.W. Suite 400 Washington, D.C. 20086 WILLIAM C. STREETS MARK J. ForscH GAIL F. SCHULZ MOBIL OIL CORPORATION 3225 Gallows Road Fairfax, Virginia 22037 TABLE OF CONTENTS OF APPENDIX Appendix A appears following the petition. Appendices B through J are separately bound. APPENDIX A— Opinion and Judgment of the Tempo- rary Emergency Court of Appeals of the United States in Exxon Corp. v. United States Department of Energy, Nos. 5-103 & 10-51 (TECA July 6, sae reas: Saeki tibolnamnasaniaeanins APPENDIX B— Opinion and Order Certifying Con- stitutional Questions of the United States District Court for the North- ern District of Texas in Dorchester Gas Producing Co. v. United States Department of Energy, 4 Energy Mgmt. (CCH) {| 26,464 (N.D. Tex. Nov. 23 and Dec. 21, 1983) ............... APPENDIX C— Opinion and Order (+rtifying Con- stitutional Questions of the United States District Court for the District of Kansas in In re Department of Energy Stripper Well Exemption Litigation, 578 F. Supp. 586 (D. =. BRR APPENDIX D— Energy Reserves Group, Inc. v. FEA, No. 77-1146 (D. Kan. June 10, 1977) (order granting preliminary injunc- a iene APPENDIX E— Opinion of the Temporary Emer- gency Court of Appeals of the United States in Gulf Oil Corp. v. Dyke, 734 F.2d 797 (TECA 1984) ..................... APPENDIX F— Constitutional Provisions ................. Page la 4la 63a 94a ii TABLE OF CONTENTS OF APPENDIX—Continued APPENDIX G— APPENDIX H— APPENDIX I— GUID cccisncsscecncibsiabimiaticianeinamiecdiin Economic Stabilization Act of 1970, 12 U.S.C. § 1904 note (1976), § 211.. Emergency Petroleum Allocation Act of 1973, Pub. L. No. 93-159; 87 Stat. Gr Ge catitach dint ese Emergency Petroleum Allocation Act Extension, Pub. L. No. 93-511; 88 | ee eee Emergency Petroleum Allocation Act Extension, Pub. L. No. 94-99; 89 OT TE Se ects cetie in Emergency Petroleum Allocation Act Extension, Pub. L. No. 94-133; 89 tak: GG. Cae ehiscrernetnc i esicscienn Energy Policy and Conservation Act, Pub. L. No. 94-163; 89 Stat. 871 (1975), Title IV and Title V, Part C.. | IR SMe eee Exemption of Residual Fuel Oil from the Mandatory Petroleum Allocation Regulations, 39 Fed. Reg. 24,669 CH FD cnacveisccccichn cng eei ee Phase-Out of Old Oil Price Ceilings, 40 Fed. Reg. 19,219 (1975) ............. Phase-Out of Old Oil Price Ceilings, 40 Fed. Reg. 30,030 (1975) _...... a2 Revised Program to Phase Out Old Oil Price Ceilings, 40 Fed. Reg. SR | RRR pe PLE eee Materials From the Gerald R. Ford CEE IIa Ae) Boe Frank G. Zarb Memorandum to the President (March 8, 1974) ................ Page 14la 156a 157a 159a iii TABLE OF CONTENTS OF APPENDIX—Continued APPENDIX J— Frank G. Zarb Memorandum to the President on Petroleum Marketing Practices Act (June 9, 1976) ............. Frank G. Zarb Memorandum to the President on Deregulation of Naphtha-Based Jet Fuel (undated attachment to Frank G. Zarb Memo- randum to Elliot Richardson, et al., a cals inetincenmntsoanmnnrt Frank G. Zarb Memorandum to the President on Gasoline Decontrol is cdcersiantivinnas nies Max Friedersdorf Memorandum to the President (May 1, 1975) ............ White House Press Conference of Frank G. Zarb and Alan Greenspan I I i ceiticcinttibnbiiiainnsne List of Parent Companies, Subsidi- aries and Affiliates (Except Wholly Owned) Pursuant to Rule 28.1 .......... Page 286a 294a 299a 305a 312a A4la APPENDIX B U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION Dkt. No. CA-3-75-0836-W (Consolidated ) DORCHESTER GAS PRODUCING COMPANY, et al. V. DEPARTMENT OF ENERGY, et al., November 23, 1983, and December 21, 1983 Before Woodward, Judge. Judgment has not been entered in this case but a mem- orandum opinion was filed on June 24, 1983. Various motions have since been filed by the plaintiffs. The court’s opinion of June 24th is referred to and adopted as a part of this memorandum order except to the extent that it may be modified or changed herein. All outstand- ing motions will be disposed of by this memorandum order. Briefly, the plaintiffs in this case seek a declaratory judgment which would in effect nullify certain regula- tions and interpretations of the defendant and its prede- cessor agencies and the defendants pray for a declara- tory judgment upholding these same regulations and in- terpretations. BACKGROUND Under the authority of the Emergency Petroleum Al- location Act (EPAA) 15 U.S.C. §§ 751 et seq., the FEA 42a promulgated Subpart E which controlled the price re- finers could charge for certain petroleum products, in- cluding NGLs. Natural gas processors were held to be “refiners” and ‘thus subject to Subpart E. National Helium Corp. 1 FEA, 569 F.2d 1137, 1145 (TECA 1977). The Subpart E regulations, however, were better suited for crude oil refiners, and in 1974 the FEA pro- posed Subpart K regulations specifically applicable to nat- ural gas processors. Subpart K became effec-ive J anuary 1, 1975. Both parties (by cross motions for summary judg- ment) seek to have their methods for calculating the in- creased costs of natural gas from which NGLs are ex- tracted declared reasonable and the methods of the opposing party declared unreasonable. In its previous memorandum, the court essentially held that the regulations and interpretations of the Depart- ment of Energy (DOE) were proper and, with the ex- ception of the ethane exclusion, the court denied plain- tiff’s motion for summary judgment and gronted the cross motion for summary judgment filed by the defend- ant. The various motions subsequently filed by plaintiffs generally assert the following: (1) Though the court held the transfer-pricing method unreasonable under Subpart E, given the ambiguity of the regulation, plaintiffs’ alternative “incremental” method should be held reasonable. (2) Under the recent Supreme Court decision the promulgation of Subpart K was arbitrary and capri- cious since DOE failed to consider fixed-quantity contracts. (3) The court misread or overlooked various agency interpretations. (4) The inclusion of the fixed-quantity contract price in the weighted average cost of shrinkage is an unreasonable interpretation of Subpart K in that 43a there was no revenue loss attributable to the fixed- quantity contracts. (5) The underlying Acts, the EPAA and EPCA, are invalid (under the Chadha decision) because they both contain one-house veto provisions. Because this case covers two distinct regulatory pe- riods, it is necessary to briefly outline the methods actu- ally used by the plaintiffs during the relevant periods. Subpart E was in effect from late 1973 through 1974 and Subpart K became effective January 1, 1975. TEXACO During Subpart E period and until 1976, Texaco used a transfer pricing method of calculating increased costs. During 1976 and early 1977, Texaco used the weighted average method of calculating cost of shrinkage now ad- vocated by DOE. During this latest period, Texaco com- puted the weighted average by using the sale price for all contracts from the sale of gas from its processing plant, including fixed-quantity contracts and contracts for the sale of surplus gas.! In May 1977, Texaco began using its so-called “incremental method”; that is, Texaco calcu- lated shrinkage costs based on surplus contract prices, excluding from the calculation the price received under the fixed-quantity contracts. Affidavit of B.B. Fox in Support of Texaco Inc.’s Motion for New Trial, page 2. In December 1978, Texaco refiled to claim increased costs for the period prior to May 1977 to reflect costs computed pursuant to the incremental method.’ Counsel for Tex- aco at the October 25, 1983 hearing stated that the re filings were “accepted by DOE.” 1 Argument of counsel for Texaco at the October 25, 1983 hearing in Abilene, Texas. 2 Counsel for Texaco and the letter from Texaco’s Comptroller to Mr. Richard Anderfuren state thar Texaco refiled in December 1978. The Affidavit of B.B. Fox, however, states that Texaco refiled in October 1979. 44a EXXON Plaintiff Exxon passed through no increased costs for NGLs during August, September, and October 1978. During the period November 1973 through March 1974, Exxon computed increased costs under a formula per- mitted for old crude oil. See Exxon’s Supplemental An- swers to Defendant’s First Set of Consolidated Inter- rogatories and Request for Producticn of Documents filed April 1, 1982. In April 1974, Exxon again changed methods and until December 1974, utilized a transfer pricing method, based on its historical system of account- ing. This formula utilized the Exxon posted prices for propane and motor gasoline. Exxon re-filed, seeking to make this transfer pricing method effective as of Novem- ber 1973. Id. During Subpart K, Exxon employed its incremental method of calculating shrinkage. MOBIL Plaintiff Mobil initially challenged the regulatory con- trol of NGLs under Subpart E, lost this suit, and then refiled and used what is in effect the incremental method. Mobil Oil Corp. v. F.E.A., 566 F.2d 87 (TECA 1977). The court in Mobil affirmed the holding of the district court that the FEA has authority “to regulate the al- location and pricing of all liquid petroleum products re- covered from the ‘wet’ natural gas streams, including condensate, natural gas liquids and natural gas liquid products recovered at gas processing plants (propane, butane, and natural gasoline except ethane).” 566 F.2d 87 (TECA 1977). Mobil, during both the Subparts E and K periods, sold processed gas under five fixed vol- ume contracts and sold the remainder under a sixth con- tract to Channel Industries. The parties disagree over the characterization of the Channel Industries contract as a “surplus” contract. The Channel contract did in fact contain a maximum volume limit term, but that limit was exceeded only once. In calculating its increased / i 45a costs, Mobil used only the prices received from the Chan- nel Industries contract and ignored the fixed-quantity contracts. REFILING PROVISION Texaco and Exxon claim the above to be the methods they “actually used” by virtue of resubmitting monthly reports. Section 212.126(b) of the DOE Mandatory Petroleum Price Regulations (10 C.F.R. § 212.126(b), 39 Fed. Reg. 1961, January 15, 1974) requires that refiners . Shall prepare and file with the FEO periodic reports in accordance with forms and instructions issued by FEO. Each refiner shall submit its ecal- culations under the formulas of § 212.83 in accord- ance with the forms and instructions issued by FEO. Form FEO-96, FEA/DOE P110 and EJA-14 were issued pursuant to this provision. Both forms P110 and FEO-96 contain the question, “Is this a resubmission?” and a box to check either “yes” or “no.”’ Neither the forms nor the regulations define the purpose or scope of the resubmis- sion procedure.* The forms provided no time limit for resubmission. Effective May 1, 1979, the DOE amended § 212.126 to limit refiling to one year after the original filing except where expressly authorized by DOE or whe~e written permission to resubmit or refile is granted for good cause shown. 44 Fed. Reg. 14534, March 13, 1979, 10 C.F.R. § 212.126(d). DOE stated that the purpose of the alloca- tion reports is to assure compliance with § 212.83 (Sub- part E). “We recognize that these reports sometimes re- quire the use of estimated data and that in dealing 3 Form P110-M-1 Specific Instructions states: “Item (7)—Is this a resubmission? Answer ‘Yes’ if you are supplying additional in- formation or are resubmitting a report. In either case, the form must be completed in its entirety.” 46a with such calculations some good iaith errors are unavoidable. However, in order .o more effectively stabilize cost allocation data for the purpose of fi- nalizing compliance actions or aud'ts, and to prevent possible circumvention of the regulations by inappro- priate use of the resubmission provedure, it is neces- sary to issue explicit regulatory provisions regard- ing the time for refiling cost allocation reports by refiners and the types of revisions which may be made on the forms.” 44 Fed. Reg. 14535 March 13, 1979. Though such language might appear to preclude the use made by Texaco and Exxon of the refiling proce- dures, the interpretation of the DOE apparently con- cedes that a resubmission may be made to reflect the re- finer’s new methodology. When initially proposed, the amendments contained a sixty-day limit on refiling. Comments received in response convinced DOE to allow a full year to refile. One of the criticisms received was that “any increased allowable costs in a prior period due to retroactive DOE interpretations, rulings and clarifica- tion and court decisions could not be automatically re- ported by a unilateral refiling of an amended cost al- location form.” Thus, the agency contemplated the use of the resubmission procedure to retroactively adopt a new method. Further, the FEA stated that “While such resubmis- sions and refilings will be automatically accepted, the ad- justed data submitted will be subject to verification and approval.” Id. SUBPARTS E AND K The Mandatory Petroleum Pricing Regulations basi- cally froze the prices of all refined petroleum products at their May 15, 1973 levels. The regulations specified the permissible price increases. Subpart E applied to the sale of refined products by “refiners.” ee 47a § 212.81 Applicability . . . this subpart applies to each sale of a covered product which is purchased or refined by a refiner. § 212.82 Price Rule (a) Rule. A refiner may not charge to any class of purchaser a price in excess of the base price of that covered product except to the extent permitted pursuant to the provisions of paragraphs (c) through (k) of this section. (b) Price increases. A price in excess of the base price of an item in a product line may be charged only to recover on a dollar-for-dollar basis those net increases in allowable costs that have been incurred with respect to the product line. . . (2) ... ‘Allowable costs’ under this section means non-product costs attributable to refining operations. . . . (emphasis added) The “base price” is defined in § 212.82(f) as the May 1973 price plus “increased product costs” incurred be- tween the month of measurement and the month of May 1973.* § 212.83 prescribes the method of computing the base price pursuant to § 212.82(f). This section, however, pertains to the pricing of petroleum products produced from crude oil, as opposed to natural gas. § 212.83 Allocation of refiner’s increased product costs. (b) Definitions. For purposes of this section— ‘cost of petroleum product’ means (1) for purposes 4 The May 1973 ceiling price is the weighted average sales price on May 15, 1973; subsection (f) states that “In computing the base price, a firm may not exclude any temporary special] sale, deal or allowances in effect on May 15, 1973.” In other words, the regulations warned the refiners not to arbitrarily or unjustifiably maximize their base price calculation. 48a of domestic petroleum products other than crude petroleum, the purchase price including transporta- tion costs... . ‘Increased product costs’ are defined as the in- crease in the total cost of crude (between the month of measurement and May 1973) plus the increased cost of petroleum product. Under Subpart E, the costs refiners (or processors) were allowed to pass through were based on their actual cost of raw materials and refining operation costs. Where crude oil was a raw material used in producing a refined product, the regulations allowed the price to increase considerably. The price of crude was permitted to rise to this extent because the market price of oil was rising so astronomically.® The price of refined products produced from natural gas, on the other hand, was not allowed to rise as dramatically; rather, they were effectively limited to their May 1973 prices. See National Helium Corp. v. FEA, 569 F.2d 1137, 1148 (TECA 1977), citing Emer- gency Amendment to Special Propane Rule, 39 Fed. Reg. 28608. The price of a petroleum product therefore de- pended in part upon the raw material from which it was produced. The plaintiffs first argue that, analogizing natural gas to crude oil, their transfer-pricing is a reasonable method under Subpart E. This court has already found the transfer method un- reasonable. (Memorandum Opinion, page 17.) As stated before (and as indicated by the regulations cited above), the intra-firm transfer price was allowed only for im- ported crude. Further, the Emergency Amendment to the 5 It was in fact the oil embargo that led to the mandatory alloca- tion and price control of petroleum products in the first place. The purpose was to keep the prices stable without stifling production. ee Sere ne 49a Special Propane Rule explicitly prohibited the calculation of increased costs of NGLs based on acquisition of nat- ural gas from an affiliated entity. § 212.83(c> (1) (iii). The intra-firm transfer price utilized by Exxon referred to the “posted” price of crude. Though Exxon self- servingly argues that such a reference price results in a parity of pricing between products produced from gas and those produced from crude, the fact is that crude prices were rising while natural gas prices were not. Thus Exxon was attributing increased product costs to NGLs which, contrary to the scheme of Subpart E, had no basis in reality. Since Subpart E was geared primarily to crude oil refiners, many gas processors were left with 1973 prices. If the processor bought the natural gas he processed, ‘the increased cost based on that purchase price could be passed through under Subpart E as an increased product cost. Processors who processed their own natural gas, however, were denied inter-affiliate transfer prices, and could only pass through certain increased costs of pro- duction as increased non-product costs. Since they did not purchase raw materials, they incurred no actual in- creased product costs, but rather were effectively limited to the increased costs of producing the natural gas. Since the cost of producing natural gas did not increase significantly during the E period, their prices were effec- tively frozen at or near 1973 prices. The FEA recognized the lack of attention given gas processors in the regulations: “ec * . while natural gas liquids are subject to the FEA’s mandatory price regulations, increased costs associated with the production or processing of nat- ural gas liquids have generally been minimal and there has been no precise method for passing any increased costs through in the present regulations. The FEA is aware of the need for improving its regulations in this area and will be proposing 50a amendments for this purpose in the immediate fu- ture. In the meantime, the amount of increased product costs which may be passed through by re- finers is subject to the general principle that such increased costs are limited to those cost increases which reflect payment of lawful prices.” 39 Fed. Reg. 28608, August 9, 1974. Thus the issue is whether the plaintiffs’ “incremental” method was a reasonable one under Subpart E in that it reflected the payment of lawful prices. The FEA per- mitted the Subpart K shrinkage formula to be applied retroactively to the E period. 40 Fed. Reg. 10824, Sep- tember 4, 1975. The plaintiffs’ incremental method will therefore be discussed in the context of Subpart K, but the reasonability of the method must be judged in terms of the two distinct regulatory premises of Subpart E and Subpart K. This court rejected the plaintiffs’ incre- mental method during the K period in the original Memorandum Opinion. The FEA directly addressed the problem of NGL pricing and the natural gas/crude oil pricing disparity by enacting Subpart K. While Subpart E basically allowed the increased price paid by the proc- essor or refiner for the raw material used in processing, Subpart K calculated increased costs based on what the processed gas would have been sold for by the processor had it not been lost in the extracting process. Under Subpart K, what the gas would have been sold for is measured by the contracts in effect. Subpart E and Subpart K attack the problem of deter- mining actual increased natural gas (product) costs from two fundamentally different directions. Subpart E sought to base the price of the product on the cost of the natural gas to the processor; Subpart K sought to base the price on the price for which the processor would have sold that gas (under existing contracts) had it not been used in processing NGLs. 5la In that the purpose of the pricing regulations was (1) incentive for production of NGLs (2) minimization of prices, Subpart K’s opportunity methodology struck the balance more in favor of the incentive to produce. As set out in the original Memorandum Opinion, the relevant provisions of Subpart K are sections 162 and 167. 10 C.F.R. § 212.162 defines “cost of shrinkage” as: [t]he reduction in selling price per thousand cubic feet (MCF) of natural gas processed, which is at- tributable to the reduction in volume or BTU value of the natural gas resulting from the extraction of natural gas liquids, as determined pursuant te the contracts in effect at the time for which cost of natural gas shrinkage is being measured, and under which the processed natural gas is sold. «emphasis added) 10 C.F.R. § 212.167(b) defines “Increased product costs” as (3) the difference between the weighted average cost of natural gas shrinkage per thousand cubic feet (MCF) of natural gas processed in the month of May 1973, and the weighted average cost of natural gas shrinkage per thousand cubic feet (MCF) of natural gas processed in the current month, multi- plied by the number of thousand cubic feet (MCF’s) of natural gas processed in the current month. (emphasis added) As DOE contends, and the court agreed as the proper interpretation, Subpart K requires the processor to weight average all contracts in effect—both fixed-quantity and surplus—for the sale of residue gas to calculate the loss resulting from shrinkage. The plaintiffs’ incremental method would exclude the lower-priced fixed-quantity con- tracts from that weighted average calculation. With respect to Subpart E, the use of an opportunity cost method which excludes the fixed-quantity price, is 52a unreasonable. Subpart E sought to allow the pass- through of actual increased costs; the FEA allowed a reasonable method which would, in effect, reflect the pay- ment received by the processor in the sale of the proc- essed gas. The costs at which the processor would have sold the gas used in processing, only reasonably reflects actual costs if the fixed-quantity contract price term is included. An essential fact that the plaintiffs refused to concede at the October 25th hearing and glossed-over in their briefs, is that one of the two objectives of the EPAA was the minimization of the price of petroleum products. To use only higher price surplus contract terms in calculating the increase cost of natural gas circum- vents price control mandated by Subpart E. With respect to Subpart K, plaintiffs’ incremental method is also unreasonable.* The Preamble to subpart K states that “The cost of shrinkage shall be computed based upon the contractual terms in effect for the sale of natural gas during the time period for which shrinkage cost is being measured.” 39 Fed. Reg. 44409, December 24, 1974 (emphasis added). Clearly, the exclusion of the fixed-quantity contract price was not contemplated by the regulations, but rather subverts their purpose. The plaintiffs argue that since there is no loss of reve- nue resulting from the extraction of NGLs under satis- fied fixed-quantity contracts, Subpart K contemplates, or at least permits, the exclusion of fixed-quantity con- tracts. See e.g. Exxon’s Reply to Defendants’ Response, page 4. This argument, however, proves too much. When there are outstanding contracts—fixed-quantity or other- wise—and a stream of gas enters a plant for processing, part of the BTU content that could conceivably have gone toward satisfaction of those existing contracts is lost. In other words, the loss of revenues from process- 6 Plaintiffs’ argument was rejected in the original Memorandum Opinion, pages 5-7. PRA, FONTS AER ATSC. taP IE Ny Ni clltaiei ceieiititee tapi oo ht An = - oe NL es SoS aero hey in AOm AE LER NK ar sel 53a ing actually pertains to all the existing contracts. Plain- tiffs’ theoretical attribution of the loss of revenue due to processing exclusively to surplus contracts is spurious; it is merely a rationalization for charging the highest price possible. Plaintiffs obviously would not realize as much shrinkage loss by using their long-term low price contracts as they would on their more current contract; that is not a phenomenal or unique situation; nor is it a valid excuse to evade the regulations and exclude fixed- quantity contracts from calculating shrinkage. Further, plaintiffs argue that the shrinkage calcula- tion should include contracts under which the liquids would have been sold but for processing, but exclude con- tracts under which the liquids would not have been sold. Fixed-quantity contracts should, according to plaintiffs, therefore be excluded because no more than the commit- ted quantity would have been sold thereunder by any rational processor. This argument presumes that the regulations intend to allow processors to recoup increased costs based on prices that could presently be contracted for gas. The fact that Exxon would sell “no more than the committed quantity” is totally irrelevant. Exxon is presumed by the regulations to sell only the fixed amount at the contract price; that is why the average of all such contract prices are weighted. The price which Exxon actually received under the fixed-quantity contract, though not a price that Exxon would necssarily contract for at the time of measurement, is none the less relevant for calculating loss of revenues due to shrinkage. The dollar-for-dollar pass through entails actual, not poten- tial, prices. The plaintiffs finally make a construction argument with respect to Subpart K. Plaintiffs argue that since § 162 does not mention “weighted average”, that term, when used in § 167 pertains only to those situations where one entity operates several gas plants and cal- 54a culates a single cost of shrinkage. Ruling 1973-18 di- rectly refutes such a strained reading of the regulations: The purpose of requiring a ‘weighted average’ cost comparison is to provide a method by which firms which have chosen, pursuant to § 212.167(b), to ag- gregate the total amount of increased product costs respecting volumes of natural gas subject to differ- ing sales contracts which are processed in one or more plants, may calculate a single amount repre- senting the increased costs of natural gas shrinkage for the aggregate of volumes of natural gas proc- essed. Accordingly, the above formula provide the acceptable methods for the computation of a ‘weighted average cost of natural gas shrinkage.’ Where the increased costs associated with several volumes of processed natural gas have been aggre- gated, the residue price which is used to determine the cost of natural gas shrinkage is a weighted average of all the contract price terms under which the different volumes of processed natural gas are sold. Ruling 1975-18, 40 Fed. Reg. at 55863, Decem- ber 2, 1975 (emphasis added). Clearly Subpart K should be read as a whole, and should not be arbitrarily segregated into parts which, standing alone, are meaningless. Mobil, while making the same general argument with respect to the exclusion of the fixed-quantity contract price from the weighted average, also asserts that it should not be judged on the basis of a factual situation different from its own. The regulations in question did not contemplate uniform contractual situations for all gas processors, but rather were premised on the assump- tion that the contractual situations would be varied. See 39 Fed. Reg. 32720, September 10, 1974. The fact that all of the gas processed at Mobil’s Old Ocean piant is under contract does not in any way alter the interpreta- tion of the regulations discussed above. as ee See er ee ree Canine % / 4 55a The court finds that the plaintiffs’ “incremental meth- od” was unreasonable under both Subpart E and Subpart K, and that the DOE interpretation is reasonable in light of its purpose. ARBITRARY AND CAPRICIOUS All plaintiffs take the position that Subpart K, and the procedure used in the promulgating this subpart, con- stituted arbitrary and capricious action on the part of DOE. The thrust of the argument is that in promulgat- ing Subpart K, DOE failed to take into account the fixed- quantity contracts, and that these contracts are so im- perative to the determination of shrinkage costs that the agency’s failure to explicity consider them renders the regulations void under Motor Vehicle Manufacturers As- sociation of the United States, Inc. v. State Farm Mu- tual Automobile Insurance Co., 51 U.S.L.W. 4953 (U.S. June 24, 1983) (hereinafter “Airbags’”). In the Airbags case, the Supreme Court held that the revocation of a safety standard requiring passive restraints in cars arbitrary and capricious. Motor Vehicle Standard 208, promulgated pursuant to the National Traffic and Motor Vehicle Safety Act of 1966, required automobile manu- facturers to install either of two passive restraint de- vices: airbags or seatbelts. The industry planned to com- ply by installing seatbelts in 99% of the cars produced. Id. at 4955. The agency later concluded that the seat- belts would not achieve the anticipated safety results be- cause they could be detached, and completely rescinded the regulation. Since the agency itself had previously determined that airbags would achieve the desired results under the Motor Vehicle Safety Act, the Court held that the rescission of Standard 208 without even considering the airbag option was arbitrary and capricious. Id. at 4957, 4958. When Subpart K was promulgated, however, the DOE considered the analogous relevant factors. As stated in 56a the Preamble, “. . . there is no single ideal solution to the regulation of natural gas liquid prices, and the regu- lations adopted by the FEA today are a necessary com- promise among the conflicting considerations which must be taken into account. ... [T]he fundamental objec- tive is to permit prices that will be as low as reasonably possible without adversely affecting the availability of the product.” 39 Fed. Reg. 4408, December 24, 1974. To achieve this dual-objective, the agency considered several approaches: price ceilings, profit margin limitations, and a flexible price based on varying costs of gas and crude oil. Jd. These are the crucial considerations. Tixed- quantity contracts are not to Subpart K as airbags are to Standard 208. Fixed-quantity contracts are only one aspect of one of these alternative price control alterna- tives. The Supreme Court made this clear in Airbags by stating that “... a court may not impose additional pro- cedural requirements upon an agency ... Nor do we broadly require an agency to consider all policy alterna- tives in reaching a decision. It is true that a rulemaking cannot be found wanting simply because the agency failed to include every alternative device and thought conceivable by the mind of man .. . regardless of how uncommon or unknown that alternative may have been.” Id. at 4958, citing Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1977). In this case, the plain- tiffs’ contention would impose insurmountable require- ments upon DOE. Requiring consideration of each spe- cific contract in effect would force executive agencies to foresee every conceivable contingency and would effec- tively preclude them from rulemaking. The court finds that the agency did not act arbitrarily or capriciously in the promulgation of Subpart K. ONE-HOUSE VETO Finally, in a motion for summary judgment, Exxon asserts that the Acts in question, the EPAA and EPCA, 57a 15 U.S.C. $§ 751, et seq., are invalid because they con- tained a one-house veto provision, declared unconstitu- tional by the Supreme Court in Immigration and Natu- ralization Service v. Chadha, —— U.S. , 51 US.L.W. 4907 (June 23, 1983) .* In the Chadha case, the statute in question contained a severability clause, thus only the veto provision itself was invalidated. Further in Chadha, the veto provision was actually exercised to the detriment of the plaintiff. The Supreme Court emphasized the fact that exercise of the veto was a legislative function, and thus violated Article I.’ In this case, however, no veto has been exercised over the regulations in question. A substantial constitutional ques- tion exists as to whether a retained veto provision, though unexercised, falls under the Chadha decision. The fact that a district court has held such a retained veto provi- sion unconstitutional makes the issue no less substantial. EFOC v. Allstate Insurance Co., No. J82-0186(B) (S.D. Miss. September 9, 1983). The far-reaching implications of invalidating statutes which merely contain one-house veto provisions are hardly settled by this Mississippi court opinion. Further, in this case, Congress does not have the power to veto the regulations in question. Whether Exxon has standing to raise the issue is thus closely intertwined with the constitutional question. Both the constitutionality of the Acts and the standing ques- ion depend on the limits the Supreme Court places upon the Chadha decision. 6a The veto provisions in the EPAA and EPCA pertained only to certain provisions giving the President decontrol authority. 7 “Examination of the action taken here by one House pursuant to § 244(c) (2) reveals that it was essentially Legislative in purpose and effect . .'. The one-House veto operated in this case to overrule the Attorney General and mandate Chadha’s deportation; absent the House action, Chadha would remain in the United States. Congress has acted and its action has altered Chadha’s status. /d. at 4916 (emphasis supplied). 58a Therefore, pursuant to 12 U.S.C. § 1904 note (§ 211), the substantial constitutional issues raised by Exxon’s motion for summary judgment are certified to the Tem- porary Emergency Court of Appeals. CONCLUSION For the reasons stated above, the court finds that: 1. Both the plaintiffs’ intra-firm transfer price method and alternative incremental method are unreasonable un- der Subpart E. 2.. DOE’s interpretation of Subpart K is reasonable i. light of the purpose of Subpart K. 3. The plaintiffs’ exclusion of fixed-quantity contracts from the calculation of the weighted-average cost of shrinkage is unreasonable under Subparts E and K. In short, the weighted average cost of shrinkage reflects what processors were receiving under contracts in effect for their processed gas; and under either Subpart E or Subpart K, the exclusion of fixed-quantity contracts over- states what was actually received and is thus contrary to the purposes of the regulations. 4. DOE’s promulgation of Subpart K was not arbi- trary and capricious. 5. The one-house veto provisions in the EPAA and EPCA present substantial constitutional questions. 6. The court has considered the relevant agency rul- ings and interpretations and, as discussed in the original Memorandum Opinion, finds that they support rather than refute DOE’s position in this case. 7. The material and ultimate facts in this case are not in dispute. Therefore: The Motion of Texaco Inc. for a New Trial is denied. eS 6 Sa ere 59a The Motion of Mobil Oil Corporation and Mobil Oil Exploration and Producing Southeast, Inc. for New Trial or in the Alternative for Clarification is denied. The Motion of Exxon Corporation to Clarify Memo- randum Opinion Concerning Subpart E is denied. The Motion of Exxon Corporation to Vacate Findings of Fact and Conclusions of Law Concerning Subpart K and to Substitute Other Findings of Fact and Conclu- sions of Law is denied. The motion of Exxon for Partial Reconsideration in Light of Intervening Supreme Court Opinion and Mis- apprehension of Parties’ Positions is denied. Exxon’s Supplemental Motion for Summary Judgment presents substantial constitutional questions and is certi- fied to the Temporary Emergency Court of Appeals. In accordance with the Memorandum Opinion issued June 24, 1983, the plaintiff’s Motion for Summary Judg- ment with regard to the ethane exclusion is granted, and the defendants’ corresponding motion is denied. The de fendant’s Motion for Summary Judgment on all other is- sues is granted, and the plaintiff’s motion denied. The attorneys will confer and submit a judgment in accordance with this order. Such judgment shall include the certification of the constitutional issues to the Tem- porary Emergency Court of Appeals and shall be sub- mitted to the court for entry on or before December 15, 1983. The Clerk will furnish a copy hereof to each attorney. JUDGMENT (December 21, 1983) This matter came before the Court on the parties’ cross-motions for summary judgment. For the reasons stated in the Court’s Memorandum Opinion of June 24, 60a 1983 and its Memorandum Order of November 23, 1983, it is this 21st day of December, 1983, ORDERED, ADJUDGED and DECREED that the motion for summary Judgment of the defendant Depart- ment of Energy is denied with respect to the validity of the Ethane Exclusion Rule as promulgated on December 24, 1974, 39 Fed. Reg. 44413, 10 C.F.R. § 212.147 sub- section (a), and it is granted in all other respects; and it is further provided that this judgment shall not ad- judge the validity of any regulations pertaining to the ethane exclusion which were promulgated after Decem- ber 24, 1974, and this judgment is intended only to rule as invalid the Ethane Exclusion Rule as promulgated on December 24, 1974; and it is further ORDERED, ADJUDGED and DECREED that the motion for summary judgment of the plaintiffs is denied except with respect to the validity of the same 10 C.F.R. § 212.147 as promulgated on December 24, 1974, 39 Fed. Reg. 44413 subsection (a) and it is granted with respect to that subsection; and it is further ORDERED that the Joint Amended Complaint of the parties is dismissed with prejudice; and it is further ORDERED that plaintiffs shall bear their own costs in this lawsuit, and no later than 30 days from the date hereof, the defendant shall recover from plaintiffs its costs to be taxed by the Clerk of the Court. SUPPLEMENTAL MEMORANDUM (December 21, 1983) Plaintiff Texaco claims that it has reserved its estoppel issue based on the Larry White “incrementa} costing let- ter.” This court, however, has already disposed of the issue. The June 1983 Memorandum Opinion held that the Larry White letter was “in the nature of informal advice by agency employees which [does] not have the 6la stature of official agency interpretations through DOE’s Office of General Counsel and accordingly, are to be ac- corded little weight for purposes of regulatory interpreta- tion.” Memorandum Opinion, p. 7 citing Pennzoil Co. v. United States Department of Energy, 680 F.2d 156, 171 (TECA 1982). Plaintiff Texaco again raised the Larry White letter issue in its Motion for New Trial. In that motion and brief, Texaco did not mention its purported reservation of the estoppel issue. This court, in the No- vember 1983 Memorandum Order, specifically denied Texaco’s Motion for New Trial. Memorandum Order, p. 19. The key to the issue is the fact that Texaco could not justifiably rely on agency advice without seeking a formal agency interpretation. This point is made clear in the Pennzoil case. See Pennzoil Co. v. United States Depart- ment of Energy at 179. The estoppel argument was therefore rejected by the court in both opinions. Plaintiff Texaco further contends that the estoppel is- sue was not before the court because the defendants’ Cross Motion for Summary Judgment, which requested judgment on all issues raised in the plaintiffs’ Joint Amended Complaint, was not ever received by plaintiff Texaco. Texaco received the defendants’ Brief in Support of their Cross Motion for Summary Judgment on August 9, 1981, yet did not complain about not being served with the motion, and on October 25, 1983, counsel for Texaco appeared at the hearing in Abilene on the pend- ing motions for summary judgment and did not mention the lack of service. Therefore, the judgment to be entered in this case granting the defendants’ Motion for Sum- mary Judgment in all but one instance shall be a judg- ment overruling and denying the estoppel issue as raised by Texaco. The Clerk will furnish a copy hereof to each attorney. 62a ORDER CERTIFYING SUBSTANTIAL CONSTITUTIONAL ISSUE TO THE TEMPORARY EMERGENCY COURT OF APPEALS (December 21, 1983) Pursuant to section 211(c) of the Economic Stabiliza- tion Act of 1970, 12 U.S.C. § 1904 note, the court hereby certifies to the Temporary Emergency Court of Appeals the following substantial constitutional issue raised by plaintiff Exxon Corporation in its Supplemental Motion for Summary Judgment: Whether the Emergency Petroleum Allocation Act of 1973 and the Energy Policy and Conservation Act are unconstitutional under Immigration & Naturali- zation Service v. Chadha, 103 §S. Ct. 2764 (1983), in that they contain unconstitutional one-house leg- islative veto provisions that are not severable from the remainder of those statutes, thereby rendering void the regulations promulgated pursuant thereto. Pursuant to Rule 16 of the Temporary Emergency Court of Appeals, the nature of this cause and the facts on which the certified issue arises are set forth in this Court’s Memorandum Opinion and Memorandum Order, which are attached hereto and incorporated herein for purposes of said Rule 16. The Clerk will furnish a copy hereof to each attorney. 63a APPENDIX C UNITED STATES DISTRICT COURT D. KANSAS MDL No. 378 IN RE THE DEPARTMENT OF ENERGY STRIPPER WELL EXEMPTION LITIGATION Sept. 13, 1983 On Motion to Certify Constitutional Issues Jan. 25, 1984 Joseph W. Kennedy, Morris, Laing, Evans, Brock & Kennedy, Chartered, Wichita, Kan., for plaintiff. Larry P. Ellsworth, Marcia K. Sowles, Samuel Soopper, Dept. of Energy, Office of Gen. Counsel, Washington, D.C., for Dept. of Energy. Brian G. Grace, Curfman, Harris, Stallings, Grace & Snow, Wichita, Kan., for Tenneco Oil, Pennzoil, Tosco, Ashland Oil, Texas City Refining. Alexander B. Mitchell, Wichita, Kan., Harold E. Kohn, Michael D. Hausfeld, Joseph C. Kohn, Kohn, Savett, Marion & Graf, Philadelphia, Pa., for Nat. Freight, Inc. and Philadelphia Elec. Co. George G. Olsen, Williams & Jensen, Washington, D.C., for IU Intern. Oil & Gas Inc. . John F. Hayes, Hutchinson, Kan., William G. Rid- doch, Houston, Tex., for Shell Oil Co. James F. Flug, Washington, D.C., for State of Ala., Michigan, California. 64a Wayne Hundley, Deputy Atty. Gen., Topeka, Kan., Arthur J. Galligan, Washington, D.C., E. Dwight Taylor, Wichita, Kan., for States of Kan., Del., R.I., N.D., Ia., La. and Ala., Mich. and Cal., W.Va. Alexander B. Mitchell, Wichita, Kan., Jerry S. Cohen, Michael D. Hausfeld, Patricia F. Bak, Washington, D.C., for Independent Motor Gasoline Retailers, see dkt 279 for names of intervenors. John A. Gibney, Jr., Richmond, Va., for intervenor Commonwealth of Va. John R. Tarpley, Asst. Atty. Gen., Nashville, Tenn., for State of Tenn. Richard P. Wilson, Asst. Atty. Gen., Columbia, S.C., for Georgia and South Carolina. J. Wallace Malley, Jr., Jane Hart Marter, Asst. Attys. Gen., Montpelier, Vt., for State of Vt. Claude E. Salomon, Deputy Atty. Gen., Div. of Law, Newark, N.J., for State of N.J. Bernard Nash, Edward G. Modell, Blum & Nash, Washington, D.C., for States of Pa., Nev., Hawaii and Guam. Jo Anne Sanford, Sp. Deputy Atty. Gen., Steven Bryant, Asst. Atty. Gen., Raleigh, N.C., for North Carolina. Brad P. Engdahl, St. Paul, Minn., for Minnesota. Frank J. Huftless, Asst. Atty. Gen., Lincoln, Neb., for Nebraska. Frank W. Ostrander, Asst. Atty. Gen., Portland, Or., for Oregon. Eduardo L. Buso, Asst. Atty. Gen., San Juan, P.R., for Puerto Rico. 65a Richard R. Knoepfel, Chief, Law Div., St. Thomas, U.S. V.L., for Virgin Islands. William C. Primm, Paul Bardacke, Sante Fe, N.M., for New Mexico. Inez Smith Reid, Corp. Counsel, Doreen E. Thompson, Stuart Cameron, Washington, D.C., for District of Columbia. Richard L. Griffith, Asst. Atty. Gen., Denver, Colo., for Colorado. Dennis M. Ryan, Asst. Atty. Gen., Boston, Mass., for Massachusetts. Richard F. Webb, Asst. Atty. Gen., Hartford, Conn., for Connecticut. Bruce E. Mohl, Asst. Atty. Gen., Concord, N.H., for New Hampshire. Robert Frank, Asst. Atty. Gen., Augusta, Maine, for Maine. Stanley B. Klimberg, Gen. Counsel, N.Y. State Energy Office, Albany, N.Y., Robert Abrams, Atty. Gen. of the State of N.Y., New York City, for New York. L.C. Ross, Denver, Colo., James W. Collier, Detroit, Mich., Robert Martin, Paul Swartz, Martin Bauer, Wichita, Kan., for Total Petroleum Inc. Brian Grace, Wichita, Kan., Ralph J. Maynard, Hous- ton, Tex., for Tenneco Oil Co. John P. Mathis, Catherine C. Wakelyn, Washington, D.C., for Tenneco Oil Co. and Pennzoil Co. Perry O. Barber, Houston, Tex., for Pennzoil Co. Kenneth L. Bachman, Jr., Eugene M. Goott, Washing- ton, D.C., Jeanette M. Thomas, Los Angeles, Cal., for Tosco Corp. 66a Thomas A. Donovan, Pittsburgh, Pa., Robert H. Comp- ton, Kathleen C. Gillmore, Ashland, Ky., for Ashland Oil Inc. Richard P. Noland, Robert R. Morrow, Monica A. Otte, Washington, D.C., for Texas City Refining Inc. Brian Grace, Wichita, Kan., Van R. Boyette and Joseph C. Bell, Washington, D.C., for American Petro- leum Refiners Ass’n. Thomas D. Kitch, Wichita, Kan., Pillsbury, Madison & Sutro, San Francisco, Cal., for Chevron U.S.A. Inc. James P. Zakoura, Kansas City., Kan., Robert L. Gowdy, Kansas City, Mo., for Farmland Industries, Inc. Alphonse M. Alfano, Robert S. Bassman, Douglas B. Mitchell, Washington, D.C., Will Marson, Topeka, Kan., for Nat. Oil Jobbers Council. Walter Davis, Asst. Atty. Gen., Energy Div., Austin, Tex., for Texas. Marian Yoder, Asst. Atty. Gen., Cheyenne, Wyo., for State of Wyo. David G. High, Deputy Atty. Gen., Boise, Idaho, for State of Idaho. James F. Flug, Lee Ellen Helfrich, Lobel, Novins & Lamont, Washington, D.C., for State of Wyo., Idaho and Ind. Frank Baldwin, Deputy Atty. Gen., Indianapolis, Ind., for State of Ind. E. Dwight Taylor, Hulnick & Taylor, Wichita, Kan., Andrew P. Miller, Arthur J. Galligan, Peter J. Kadzik, Washington, D.C., for State of Utah. 67a MEMORANDUM AND ORDER OF REFERRAL FOR FACT FINDING TO ADMINISTRATIVE AGENCY THEIS, District Judge. Like flies to honey, claimants are quickly drawn by a fund containing over one billion dollars. These claimants have radically differing notions as to how the fund should be distributed, with one factor common to all suggested approaches: each claimant, unsurprisingly, desires a methodology of distribution likely to result in a large percentage of the fund being deposited into said claim- ant’s pockets. Now before the Court is a motion to refer the question of fund distribution to the Department of Energy’s Office of Hearing and Appeals (OHA). Some of the parties wholeheartedly endorse this approach, others wholeheartedly oppose it, and others embrace it only as a fall-back position should the Court reject their contentions that the money should go immediately to them. Needless to say, all parties view this motion as extremely important, if the immense effort funneled into the voluminous briefs on this issue are an accurate gauge of the parties’ perception of the importance of this motion. This action is a consolidation of a number of cases brought by oil producers to enjoin the Federal Energy Administration (FEA), now the Department of Energy (DOE), from enforcing Ruling 1974-29, concerning low production oil wells, commonly called “stripper wells.” The Court enjoined enforcement of the regulations in question, but ordered the oil producers to deposit into escrow the difference between the stripper well price and the controlled price of crude oil affected by the injunc- tion. As of October 31, 1982, the escrow fund, including interest, contained over one billion dollars. The issue of the validity of the regulations and Ruling was finally settled in In Re The Department of Energy Stripper Well Exemption Litigation, 690 F.2d 1375 (Em. 68a App. 1982), cert. denied, U.S. ——, 103 S.Ct. 763, 74 L.Ed.2d 978 (1983), in which the Temporary Emer- gency Court of Appeals (TECA) reversed this Court’s decision and upheld the rulings and regulations as valid. TECA remanded this action to this Court with instruc- tions to enter judgment for DOE, which judgment has been entered. The effect of TECA’s decision is to de- clare the funds deposited in escrow to be overcharges received due to violations of the petroleum pricing regu- lations. The remaining task is the appropriate dispensa- tion of the escrowed funds—in effect a monumental in- terpleader action with potential classes and sub-classes. The DOE has moved the Court to refer the issue of remedy to DOE pursuant to the doctrine of primary ju- risdiction. DOE contends that the remedy issues are complex and are within the special competence of the agency. DOE states that the distribution of the various claims will require analysis of the ability of the claim- ant to pass through increasing costs and the extent to which such costs were actually passed through. DOE also notes that an analysis of the impact of the complex Entitlements Program and of the system of “banks’”’ of increased costs will be required. DOE points out that it has already established a procedural mechanism for con- sidering refund applications and that issues similar to those before the Court are presently being considered in refund actions before OHA. DOE contends that initial consideration by the agency, subject to review by the Court, will be more efficient than the Court conducting the entire factual inquiry itself. Nearly every premise underlying the DOE’s motion to refer has come under attack by other parties, which challenge both DOE’s characterization of the remaining inquiry and DOE’s competence and fairness to conduct it. Plaintiff oi] producers vigorously oppose the motion to refer. From their perspective, the remaining ques- 69a tions are mostly legal, not factual. They contend referral would, by implication, decide these legal issues and that the result would be contrary to what they view as con- trolling legal precedent. The principal legal contention advanced by producers is that it is improper to attempt to determine the actual damages beyond the refiner stage of distribution. In other words, the Court should not consider whether any overcharges were passed through by refiners to marketers and consumers. The basis of this contention is a line of precedent in antitrust law reject- ing pass through theories and limiting recovery to first purchasers, with certain limited exceptions. Hanover Shoe, Inc. v. United Machine Corp., 392 U.S. 481, 88 S. Ct. 2224, 20 L.Ed.2d 1231 (1968); and Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977). This approach has been applied to private enforcement actions brought under Section 210 of the Economic Stabilization Act. FKastern Airlines, Inc. v. Atlantic Richfield Co., 609 F.2d 497 (Em. App. 1979). Producers also contend that the OHA has failed to dem- onstrate either expertise or efficiency in its handling of refund claims. Producers further claim that OHA is not autonomous and has prejudiced the issues in this case. Finally, producers claim that referral is not appropri- ate because the pending issues are of the type within the Court’s competence to address. Producers state that DOE can give the Court the benefit of its expertise by making recommendations to the Court by way of briefs. Essentially similar positions are held by the first pur- chasers, refiners that actually purchased the petroleum in question. As presented in the brief filed by Total Pe- troleum, the first purchasers’ position embraces the theory that Hanover Shoe and Illinois Brick preclude ex- amination of passed through costs, and that the first purchasers are entitled to the entire amount of over- charges. The first purchasers contend that allowance of passed through recovery would subject the first pur- 70a chasers to double liability if private parties sue them pursuant to Section 210 for the overcharges. The first purchasers argue that this is not a Section 209 action and is not a Section 210 action, but is analogous to a Section 210 action. Not dissimilar contentions are advanced by the indi- cated refiners, who also oppose referral, reject pass through recovery by marketers and consumers, and ques- tion DOE’s objectivity and competence. The key thrust of the indicated refiners’ approach is that all refiners who participated in the Entitlements Program are eligi- ble for recovery, and not just those who actually pur- chased the oil in question. This is required, contend the indicated refiners, because the Entitlements Program served to spread the overcharges equally among all par- ticipants in the Entitlements Program. In addition to opposing consideration of passed through overcharges on Illinois Brick grounds, the indicated refiners contend that overcharges were not passed on, because market condi- tions restricted what refiners could charge and thus the refiners bore the burden of the overcharges. The indi- cated refiners also contend that the forces of the market will force them to pass through the refunds they receive from the escrow fund in the form of reduced prices to ultimate consumers. The intervening States argue that referral is unneces- sary and contend that this Court should order distribu- tion to the States as representatives of the ultimate con- sumers of petroleum products. The States rely on the recent opinion of Judge Flannery in United States v. Exxon, 561 F.Supp. 816 (D.D.C. 1988), in which the Court ordered distribution to the States for use in pro- grams designed to benefit petroleum consumers. The States argue that review of the regulatory statutes shows that overcharges were passed along to the ulti- mate consumers and that it would be impossible to as- certain the precise damage borne by the ultimate victim. Tla Thus, since DOE could not precisely determine losses suffered by particular claimants, the Court should, in the interests of restitution and equity, distribute the fund to the States, in proportion to their citizen’s use of petro- leum products during the controls period, for use in energy-related programs. To refer the case would, in the States’ view, plunge the agency, the Court, and the escrow fund into an administ~ative quagmire. The States argue, however, that if their proposal for immediate payout to the States is not endorsed by the Court, the motion to refer should then be granted. They argue that if the quagmire must be entered, DOE has the expertise and procedures to best accommodate the expedi- tion. The States also contend that the Court can exer- cise supervisory control over the DOE to allay fears of bias and to insure prompt attention to the case. Intervening purchasers have split on the issue of re- ferral. The National Oil Jobbers Council (NOJC), a fed- eration of 42 trade associations representing thousands of small petroleum marketers, favors referral. The NOJC contends that the Government has the duty to at least try to ascertain the identity of overcharge victims, and cites Citronelle-Mobile Gathering, Inc. v. Edwards, 669 F.2d 717 (Em. App. 1982) in support of this con- tention. The NOJC contends that there is no factual basis, in the absence of such an attempt, to conclude that none of the overcharge victims can be identified. A number of other intervening purchasers, seeking to represent classes of gasoline retailers, trucking companies and electric uti.ities, opposed referral. They raise ques- tions of agency bias and assert the Government is or may be trying to appropriate the funds for itself. They chal- lenge DOE’s competence and expertise and claim that re- ferral will merely cause further delay in resolving this ease. They raise the possibility of the Court appointing a special master and generally contend that the distribu- 72a tion issue is within the Court’s competence and province to resolve. Consideration of the above questions leads the Court to conclude that two basic questions must be resolved before a decision on referral can be made: 1. Are any parties other than the first purchasers or participants in the Entitlements Program en- titled to refunds? 2. Is it clearly impossible to ascertain particular harms suffered by particular parties by virtue of the overcharges? If the first question is answered in the negative, then it must be asked: why refer? If the answer to the first question is affirmative, however, the second question be- comes decisive. If it is clearly impossible to ascertain the impact of overcharges with particularity, does equity require that the fund be distributed in the public inter- est to the States, or to the Government standing in place of the ultimate consumers? The Court will now examine these questions in detail. The key legal issue in deciding whether any parties other than first purchasers or participants in the Entitle- ments Program can recover is the applicability of Han- over Shoe and Illinois Brick to this case. In Hanover Shoe, supra, the Supreme Court held that defendant in a private antitrust action could not assert the “passing on” defense that plaintiff shoe manufacturer suffered no legally cognizable injury because it increased the prices it charged its customers (i.e., it “passed on” the overcharges caused by defendant’s illegal actions). The Court’s reasoning on this issue is as follows: “Even if it could be shown that the buyer raised his price in response to, and in the amount of, the over- charge and that his margin of profit and total sales had not thereafter declined, there would remain the 73a nearly insuperable difficulty of demonstrating that the particular plaintiff could not or would not have raised his prices absent the overcharge or main- tained the higher price had the overcharge been dis- continued. Since establishing the applicability of the passing-on defense would require a convincing show- ing of each of these virtually unascertainable fig- ures, the task would normally prove insurmountable. On the other hand, it is not unlikely that if the ex- istence of the defense is generally confirmed, anti- trust defendants will frequently seek to establish its applicability. Treble-damage actions would often re- quire additional long and complicated proceedings involving massive evidence and complicated theories. “In addition, if buyers are subjected to the passing- on defense, those who buy from them would also have to meet the challenge that they passed on the higher price to their consumers. These ultimate con- sumers, in today’s case the buyer of single pairs of shoes, would have only a tiny stake in a lawsuit and little interest in attempting a class action. In con- sequence, those who violate the antitrust laws by price fixing or monopolizing would retain the fruits of their illegality because no one was available who would bring suit against them. Treble-damage ac- tions, the importance of which the Court has many times emphasized, would be substantially reduced in effectiveness.” Hanover Shoe, 88 §.Ct. at 2231-2232. In Illinois Brick, supra, the Court concluded that the pass-on rule must be applied equally to plaintiffs and defendants, and held that only the direct purchasers, and not others in the chain of manufacture or distribution could recover for overcharges. As in Hanover Shoe, the Court emphasized both the complexity that pass-on theories entail and the resultant impairment of private antitrust enforcement. The Court noted: 74a “Permitting the use of pass-on theories under § 4 es- sentially would transform treble-damages actions into massive efforts to apportion the recovery among all potential plaintiffs that could have absorbed part of the overcharge—from direct purchasers to mid- dlemen to ultimate consumers. However appealing this attempt to allocate the overcharge might seem in theory, it would add whole new dimensions of complexity to treble-damages suits and seriously un- dermine their effectiveness.” Illinois Brick, 97 S.Ct. at 2070. The Court also noted: “The concern in Hanover Shoe for the complexity that would be introduced into treble-damages suits if pass-on theories were permitted was closely re- lated to the Court’s concern for the reduction in the effectiveness of those suits if brought by indirect purchasers suing for the full amount of the over- charge. The apportionment of the recovery through- out the distribution chain would increase the overall costs of recovery by injecting extremely complex is- sues into the case; at the same time such an ap- portionment would reduce the benefits to each plain- tiff by dividing the potential recovery among a much larger group. Added to the uncertainty of how much of an overcharge could be established at trial would be the uncertainty of how that overcharge would be apportioned among the various plaintiffs. This ad- ditional uncertainty would further reduce the in- centive to sue. The combination of increasing the costs and diffusing the benefits of bringing a treble- damage action could seriously impair this important weapon of antitrust enforcement.” Illinois Brick, 97 S.Ct. at 2074. Based on Hanover Shoe and Illinois Brick, TECA has held that the passing on defense cannot be used in a pri- vate enforcement action under Section 210 of the Eco- 75a nomic Stabilization Act. Eastern Air Lines, Inc. v. At- lantic Richfield, supra. This Court does not believe the rationale of Hanover Shoe and Illinois Brick is applicable, however, in this action. This action is fundamentally different from a private enforcement action under the Antitrust Laws or under Section 210 of the Economic Stabilization Act. In this action, oil producers sought declaratory judgments to forestall government enforcement of overcharge viola- tions under Section 209. Preliminary injunctive relief was granted, conditioned on the oil producers paying the alleged overcharges into escrow. The Court now considers this action to be, in effect, a Government enforcement action in which the fact of overcharge has been deter- mined and the Court is now faced with effecting restitution. In the Court’s view, the difficulty in computing passed on costs and the subsequent adverse effect on antitrust enforcement were inextricably bound together in Hanover Shoe. In that case the Court found that addition of pass-on issues to already protracted private antitrust suits would seriously hamper the scheme of private en- forcement of the antitrust laws. In Illinois Brick, the Court was faced with the problem of whether to permit offensive use of pass-on theories after defensive use had been barred by Hanover Shoe. The Court declined to al- low offensive use, repeatedly emphasizing the adverse im- pact on private antitrust enforcement that pass-on theories would entail. As one commentator noted: “The Illinois Brick result apparently rests on the proposition that a rule allowing all purchasers to re- cover would so reduce the incentives for direct pur- chasers to bring suit that while there might be some enforcement gains at the indirect purchaser level, the total number of suits would decline.” The Supreme Court, 1976 Term, 81 Harv. L.Rev. 72, 226 (1977). 76a In this case no such fears are applicable. There is no private enforcement involved, and thus, no incentive to encourage private suits by disallowing pass-on theories. On that ground alone, the Hanover Shoe—lIllinois Brick doctrine is inapplicable to an action under Section 209 or an action, such as this one, closely analogous to a Sec- tion 209 action. While Hanover Shoe and Illinois Brick may be suitable for Section 210 actions, it must be noted that the objectives of Section 209 differ significantly from those of Section 210. Section 210 provides for pri- vate suits seeking damages. Section 209 provides for Government action in which the Court may order restitution. In Section 209, Congress gave the courts “equitable power... to set things right and order restitution.” S.Rep. No. 92-507, 92nd Cong., 1st Sess. reprinted in 2, 1971 U.S.Code Cong. & Ad.News 2283, 2291, quoted in Sauder v. Department of Energy, 648 F.2d 1341 (Em. App. 1981). In Sauder, TECA made clear that restitu- tion, as provided in Section 209, is fundamentally an equitable concept. The Court quoted Moore’s Federal Practice Vol. 5, | 38.24[2], stating: “In equity, restitution is usually thought of as a remedy by which defendant is made to disgorge ill- gotten gains or to restore the status quo or to ac- complish both objectives.” 648 F.2d at 1348. TECA approved an action which did not seek damages, “which may or may not be the amount of the over- charge,” but sought restitution. TECA also made it clear that the Court’s equitable power is broad: “There is no indication . . . that the section thereby attempts to limit the power of the courts or the agency to restitution or to a particularly strict inter- pretation of restitution.” Sauder, 648 F.2d at 1348. 77a Restitution seeks to restore the status quo but, if that is not possible because the status quo has been perma- nently altered, restitution seeks to provide other kinds of compensation. See Restatement of Restitution, § 1, com- ment a (1937). Thus, the restitutionary nature of Section 209 and of this action differ fundamentally from the damages rem- edy of Section 210 and of the Antitrust Laws. For this additional reason, the Hanover Shoe and Illinois Brick cases do rot apply to this action. This was also recog- nized by the District Court in Citronelle-Mobile Gather- ing, Inc. v. O’Leary, 499 F.Supp. 871 (S.D. Ala. 1980), rev'd on other grounds, 669 F.2d 717 (Em.App. 1982), which rejected attempts to bar consideration of pass-on consequences. Referring to Hanover Shoe and Illinois Brick, the Court stated: “The policies underlying those cases are largely in- applicable to enforcement actions by the government, and restitutionary relief by its nature does not have some of the difficulties which arise in actions for damages. “In an enforcement action, there is no danger that the incentive to enforce the law will be reduced by permitting indirect purchasers to recover.” 499 F.Supp. at 884. The Court would also note that the fundamental dif- ference in and independence of the 209 and 210 remedies were recognized by TECA in Bulzan v. Atlantic Richfield Co., 620 F.2d 278 (Em. App. 1980). The first purchasers have also raised the spectre of potential double liability if pass through is allowed and they are then subject to a private enforcement action under Section 210. It has been recognized, however, that both private and public remedies may be applied to the same violation. Bulzan v. Atlantic Richfield Co., supra. 78a In Bulzan, TECA noted a number of solutions to the multiple liability problem, stating that one solution is adjudication of a liability action under Section 210 “to take into account a prior or subsequent” restitution award. Bulzan, at 283-284. The spectre of double liabil- ity was similarly dispelled in U.S. Oil Co., Inc. v. Koch Refining, 518 F.Supp. 957 (E.D. Wis. 1981); Martin Service v. Koch Refining Co., Unpub. No. 81-1844 (E.D. Ill., Oct. 18, 1982); Ray L. Hunt v. Department of Energy, Unpub. No. CA-3-78-02440-W (N.D. Tex. July 25, 1983). Since considerations of equity are so vital in restitu- tion, the Court must note that allowing first purchasers to retain all of the overcharges, particularly in the ab- sence of a factual showing that they did not pass on some or all of the overcharges, would not be an equitable result. This is particularly true when the first purchas- ers’ proposed remedy would result in most of the over- charges being returned to plaintiffs in this action, who were the parties responsible for and who attempted to benefit from the overcharges in the first place. At this stage of the proceedings, there are no facts to show that this would not be an inequitable windfall to the first purchasers or indicated refiners. Having concluded that recovery is not limited to first purchasers or the participants in the Entitlements Pro- gram, the Court must now consider whether it is clearly impossible to ascertain with particularity the parties that bore the burden of the overcharges. The States argue that such a task is clearly impossible and, relying on Judge Flannery’s opinion in United States v. Exxon, supra, contend that the States should receive the escrow fund for use in programs aiding energy consumers. The Court tends to agree with the States and with Judge Flannery that it is likely that the ultimate con- sumers of petroleum products bore the brunt of these overcharges and that it will be impossible to determine 79a otherwise. If this is the case, the Court believes that the equitable goals of restitution would mandate distribu- tion to either the state governments or the federal government for use in programs designed to aid energy consumers. Such a distribution would be akin to the cy pres doctrine in the legal field of charitable trusts where, when it is impossible to carry out the specific intent of the testator, courts dispose of the funds in the “next best” manner. Such a doctrine has been extended to the distribution of funds in class action and overcharge cases and, where it is impossible to specifically identify the proper claimants, allows the funds to be used in a man- ner designed to benefit the claimants as a class. See Note, Collecting Overcharges from the Oil Companies: The Department of Energy’s Restitutionary Obligation, 32 Stan.L.Rev. 1039 (1980). This approach was most notably applied in West Vir- ginta v. Chas. Pfizer & Co., 314 F.Supp. 710 (S.D.N.Y. 1970); aff'd., 440 F.2d 1079 (2nd Cir 1970), cert. de- nied, 404 U.S. 871, 92 S.Ct. 81, 30 L.Ed.2d 115 (1971). This was a nationwide antitrust class action against drug companies accused of price fixing brought by 37 states on behalf of consumers. Pursuant to a court-approved set- tlement, a fund of 37 million dollars was administered for refunds to individual consumers, but application of a claim procedure still left 32 million dollars in the fund. This was distributed to states for use in public health programs. A similar rationale underlay Judge Flan- nery’s remedial action in United States v. Exxon, supra, in which the overcharges were placed in an escrow ac- count for distribution to the states for use in energy con- servation programs. Likewise, a direct refund to the United States treasury would serve equitable and restituticuary goals. While such a remedy would not aid energy consumers as di- rectly as refunded to the states for use in energy pro- grams, it would have certain advantages. It would in- 80a volve virtually no administrative expense and would benefit the public at large by increasing federal revenues. Since mobile transportation is an all-encompassing way of life in our nation, those injured may well be the pub- lic at large. Hence such a distribution would probably serve the purpose of aiding the injured party. It would also, of course, fulfill the restitutionary goal of requiring plaintiffs to disgorge their judicially-determined illegal gains. See Note, Refunding Overcharges Under the Emergency Petroleum Allocation Act: The Evolution of a Compensatory Obligation, 79 Mich.L.Rev. 1454, 1473 (1981). The Court reaches no conclusion as to what remedy would be the most efficacious or equitable, but merely points out that equitable remedies do exist in the ab- sence of proof as to the particulars of the burden of the overcharges. The Court believes, however, that an at- tempt must be made to determine if particular harm can be shown and that Judge Flannery’s resolution in Exxon was premature. The Court believes this approach is required by TECA in light of Citronelle-Mobile Gathering Co. v. Edwards, supra, where the Court concluded : “The Government has a duty to try to ascertain those overcharges, and refund them, with interest, from the restitutionary funds.” 669 F.2d at 723. The Court would note that it has before it no facts at this time which could establish that it is impossible to identify at least some of the injuries caused by the over- charges. For the Court to conclude that impossibility at this time would be a too-hurried retreat from the objec- tive of restitution to most nearly restore the status quo and return to those overcharged the amount of their loss. Having reached that conclusion, the Court must reject the request of the States for immediate distribution to 8la them. The Court has thus rejected various claims for immediate distribution and concluded that an attempt must be made to identify those harmed by the over- charges. The basic question remaining is whether this issue should be referred for fact-finding to the OHA of the DOE. Where the claim before the Court requires the resolu- tion of issues which, under a regulatory scheme, are placed within the purview of an administrative agency, the doctrine of primary jurisdiction may be applied to suspend the judicial process pending referral of such an issue to the administrative agency. United States v. Western Pacific R.R. Co., 352 U.S. 59, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956). In the Western Pacific case, the Supreme Court noted: “Ti]n cases raising issues of fact not within the con- ventional expertise of judges or cases requiring the exercise of administrative discretion, agencies cre- ated by Congress for regulating the subject matter should not be passed over.” 77 S.Ct. at 165. The Supreme Court has empasized that referral is use- ful when uniformity and consistency is important and where technical questions of fact within the expertise and the experience of the agency exist. Nader v. Al- legheny Airlines, Inc., 426 U.S. 290, 96 S.Ct. 1978, 48 L.Ed.2d 643 (1976). Referral is also desirable when one compares the flexibility or agency procedures with the rigidity too often characteristic of court procedures. Sunflower Electric Coop. v. Kansas Power & Light Co., 603 F.2d 791, 795 (10th Cir. 1979). The doctrine is best summarized in fn. 14 of Columbus Gas Transmission v. Allied Chemical Corp., 652 F.2d 503 (5th Cir. 1981), wherein it is stated at 519: “It is a discretionary tool of the courts, a flexible concept to integrate the regulatory functions of agen- 82a cies into the judicial decision making process by having agencies pass in the first instance on tech- nical questions of fact uniquely within the agency’s expertise and experience, or in cases where referral is necessary to secure uniformity and consistency in the regulation of business, such as issues requiring the exercise of administrative discretion.” In the Court’s view, the tracing of overcharges in- volves complicated and technical questions of fact, com- pounded by the impact of regulatory phenomena such as the Entitlements Program and the “banking” of costs. The OHA has developed procedures for refund claims in overcharge cases and is better equipped than the Court to make preliminary findings concerning the particular impact of overcharges on various parties. Opponents of referral have pointed to the rather rocky beginning OHA experienced in developing refund proce- dures, but it appears that OHA has now made significant progress in implementing such procedures. See Office of Enforcement, 9 DOE { 82,521 (hereinafter Alkek); Of- fice of Enforcement, 9 DOE {982,553 (hereinafter Adams), which show that OHA is progressing with large refund proceedings. The agency has established a mecha- nism for considering applications for refunds, known as Subpart V procedures. The Court believes that the large number of technical questions involved in attempting to determine the alloca- tion of the burden of overcharges in the thicket of the regulatory scheme could more efficiently be addressed be- fore the OHA. The Court does share the concern of the parties who have noted that OHA has not been as effi- cient at handling claims as might be hoped. The Court will therefore retain jurisdiction over this case and re- quire regular progress reports from the Department on its handling of the referred matters in this case. The Court is also aware of the concern of some parties of DOE bias in this case, and notes that the Department 83a has not taken a position on what the final disposition of the escrowed funds should be. Positions of the DOE in other actions concern some parties. The Court em- phasizes that he is referring to the DOE only the factual question concerning the particularized impact of the over- charges. The Court is specifically retaining jurisdiction and will make the final determination of the disposition of the funds. The Court, not the DOE, will decide where the funds go. The Court does believe, however, that the OHA’s claim process and DOE’s acquired expertise, will assist the Court in developing the facts needed for an equitable disposition of the funds. The Court notes that it can retain jurisdiction of this matter while referring only limited factual questions to the agency. See Israel v. Barter Laboratories, 466 F.2d 272 (D.C.Cir. 1972) ; Danville Tobacco. Assoc. v. Bryant- Buckner Associates, Inc., 383 F.2d 202 (4th Cir. 1964). The Court is retaining jurisdiction of this action, and is merely suspending its consideration of the issues in this case in order to allow OHA to attempt to determine with particularity the tracing and impact of the overcharges or any portion of them in this case. The Court is therefore referring to the Office of Hear- ing and Appeals of the Department of Energy the task of attempting to determine what parties bore the cost of the overcharges and in what amounts. The Court will also welcome the views of the OHA on how restitution can best be achieved in this case. The Court, however, is retaining jurisdiction over both this action and the escrow fund. No determination of restitution nor payout from the escrow fund may be ordered by the OHA, as such matters remain within the province of this Court. The Court also orders OHA to make an interim report to the Court within six months of the date of this order, and a final report to the Court within one year from the date of this order, regarding the extent of its progress 84a in determining the questions referred. The Court real- izes that these matters are complex and that consider- able time may well be needed for OHA to complete its assigned task. Nevertheless, the Court would expect sub- stantial progress in one year, and emphasizes that this is MDL litigation deserving the utmost expedition. If substantial progress is not made, OHA is ordered to pro- vide detailed explanation of why progress has been lack- ing. A lack of progress and the reasons therefore may indicate to the Court that the process is futile and may require the Court to take equitable action as noted else- where in this opinion. On the other hand, the Court may determine that more time and a greater effort on the part of OHA is all that is required. These issues will be explored by the Court after receipt of OHA’s reports. IT IS THEREFORE ORDERED AND ADJUDGED that the Department of Energy’s motion to refer is granted, with the following conditions: 1. This Court retains jurisdiction over this action and over the escrow fund. All decisions concern- ing restitution and payout from the fund are reserved to this Court for judicial resolution. 2. The Department of Energy’s Office of Hearings and Appeals is ordered to conduct factfinding pursuant to its regulatory process concerning the particularized tracing and impact of the over- charges at issue in this case. The DOE is or- dered to make an interim report to this Court within six months of the filing of this order, and a final report within one year from the date of this order, concerning its progress in such fact- finding. 3. All parties with claims on the escrow fund in this case shall submit specific proof thereof to the OHA consistent with the regulatory process established by that agency. 85a 4. The Court will suspend its consideration of this action, pending OHA’s reports to this Court, or until further order of the Court. The Court will hold in abeyance all pending motions unti! that time, including motions to intervene or to certify class actions. IT IS FURTHER ORDERED, for the reasons set forth in the foregoing memorandum, that the motions of Total Petroleum and Farmland Industries for immedi- ate distribution from the escrow fund are hereby denied. On Motion to Certify Constitutional Issues - On September 13, 1983, this Court referred the issue of the appropriate remedy in this multidistrict litigation to the Office of Hearings and Appeals [OHA] of the De- partment of Energy [DOE], with instructions to the OHA to report in March and September of 1984 on its progress. The relief afforded to the Court by this re- ferral has, however, been short-lived. The case is once more before the Court on a hotly contested and heavily briefed motion. The plaintiffs, various oil producers, have moved this Court to certify three constitutional issues concerning one house legislative vetoes in the Emergency Petroleum Allocation Act [EPAA] and the Energy Policy and Conservation Act, [EPCA] to the Temporary Emergency Court of Appeals [TECA] for consideration in light of the United States Supreme Court’s recent declaration that one-house legislative vetoes are unconstitutional, see Immigration and Natu- ralization Service v. Chada, — U.S. —, 103 S.Ct. 2764, 77 L.Ed2d 317 (1983). Numerous parties, including the DOE, intervening states, and intervening purchasers, hereinafter collectively referred to as the defendants, are bitterly opposed to any certification. For the reasons that follow, this Court believes that substantial consti- tutional issues exist in this case, and that those constitu- tional issues must be certified to TECA, see § 211(c) of the Economic Stabilization Act of 1970, 12 U.S.C. § 1904 note. 86a I. Brief Factual and Procedural Background This action was originally brought by an individual plaintiff to enjoin the DOE and its predecessor, the Fed- eral Energy Administration, from enforcing Ruling 1974-29, which concerned low-production oil wells com- monly referred to as “stripper wells.” This Court en- joined enforcement of the Ruling, but required the plain- tiffs to deposit into an escrow account the difference be- tween the higher stripper well price the injunction per- mitted them to receive and the lower controlled crude oil price they would otherwise have received. This escrow fund currently contains approximately eight hundred million dollars. Unfortunately, this litigation has tread a rocky road to arrive at the present motion. First, this Court con- cluded that Ruling 1974-29 was void, Energy Reserves Group, Inc. v. Federal Energy Administration, 447 F. Supp. 1135 (D.Kan.1978). This conclusion was reversed by TECA in a two-to-one decision, and the case was remanded for trial, Energy Reserves Group, Inc. v. The Department of Energy, 589 F.2d 1082 (Emp.App.1978). Numerous other cases*concerning the same issue were collected around the country and consolidated here as multidistrict litigation in June of 1979, In re The De- partment of Energy Stripper Well Exemption Litigation, 472 F.Supp. 1282 (Jud.Pan.Mult.Lit.1979). After a brief second sojourn at TECA in which the DOE un- successfully attempted to obtain a writ of mandamus against this Court, Duncan v. Theis, Chief Judge, 613 F.2d 305 (Em.App. 1979), the case was finally tried in early 1981. After the trial, this Court concluded that Rule 1974-29 was arbitrary, capricious, and contrary to the expressed intent of Congress, In re The Department of Energy Stripper Well Exemption Litigation, 520 F.Supp. 1232 (D.Kan.1981). The case was then taken to TECA for the third time, and TECA once again reversed, In re 87a the Department of Energy Stripper Well Exemption Litigation, 690 F.2d 1375 (Em.App.1982), cert. denied, — US. —, 103 S.Ct. 763, 74 L.Ed.2d 978 (1983). The final section of TECA’s opinion reads as follows: Conclusion In summary, we find: 1) The legislative history of the stripper well ex- emption amply supports the DOE’s position that injection wells were not intended by Congress to be included in the well count; 2) Ruling 1974-29 is not beyond the authority of the DOE granted by the controlling statutory provisions; 3) Our prior decision in Energy Reserves I, Duncan v. Theis and Wiggins have correctly decided that Ruling 1974-29 is a reasonable interpretation of the applicable statutes and regulations; and 4) The stripper well regulations, as interpreted by Ruling 1974-29, are neither arbitrary nor capri- cious. For all these reasons, the decision of the district court is reversed, and these consolidated cases are remanded to the district court with instructions to enter judgment for the [defendants]. Id. at 1892. In accordance with TECA’s instructions, judgment was entered for the DOE on February 14, 1983, see Dk. No. 282, in the following words: IT IS THEREFORE ORDERED that judgment is hereby rendered in favor of defendants and against plaintiffs, in accordance with the mandate of the Temporary Emergency Court of Appeals filed herein on September 20, 1982. Dk. No. 282, at 2. As the Court stated in its Order of September 13, 1983. 88a The remaining task is the ajyropriate dispensation of the escrowed funds—in effect a monumental inter- pleader action with potential classes and sub-classes. 578 F.Supp. at 589. After hearing from the various parties and inter- venors at extraordinary length, this Court concluded that the most expeditious method of proceeding was for this Court to retain jurisdiction over both the case and the escrowed funds while referring the factfinding as to who bore the brunt of the overcharges to the OHA, 578 F. Supp. at 596-97. On November 14, 1983, the plaintiffs moved to certify three constitutional issues to TECA, to vacate the re- ferral of factfinding to the OHA, and to release the escrowed funds. The three constitutional issues are stated by the plaintiffs as follows: 1) Whether the Emergency Petroleum Allocation Act, as amended, must be declared unconstitutional, ab initio, because it contains an invalid and in- severable one-house legislative veto provision that was twice utilized to the detriment of plaintiffs. 2) Whether the Oil Pricing Policy added as section 8 to the Emergency Petroleum Allocation Act by sec- tion 401 of the Energy Policy and Conservation Act must be declared unconstitutional, ab initio, because it contains three invalid and inseverable one-house legislative veto provisions and imposed price controls to the detriment of plaintiffs. 3) Whether MDL No. 378 must be dismissed for lack of subject matter jurisdiction in view of the constitutional invalidity of the Emergency Petro- leum Allocation Act as amended, and section 401 of the Energy Policy and Conservation Act. Memorandum in Support of Plaintiffs’ Motion, Dk. No. 520, at 1-2. The Court heard extensive oral argument on 89a the motions on Monday, January 16, 1984, and is now ready to rule. II. Preliminary Issues No one disputes that the Chada decision declared-one- house legislative vetoes to be an unconstitutional in- fringement of the Article I requirements of bicameralism and presentment. Instead, the defendants present four essentially procedural arguments in support of their basic assumption that the plaintiffs cannot raise their con- stitutional challenge at this juncture. The defendants assert that: (1) the motion to certify the constitutional issues is inexcusably tardy; (2) the plaintiffs are with- out standing to raise the constitutional challenge; (3) the legislative vetoes in the EPAA and EPCA are, in any event, severable from the remainder of the acts; and (4) retroactive application of Chada would be inequi- table. The Court will deal with these assertions in the order listed. (1) Timeliness The defendants first argue that the plaintiffs’ motion is inexcusably tardy because judgment has already been entered in this case, see Dk. No. 282, and because Rule 60 of the Federal Rules of Civil Procedure provides no mechanism whereby that judgment may be modified. This argument proceeds from the erroneous assumption that a final judgment has been entered in this case. Rule 54(b) of the Federal Rules of Civil Procedure explicitly states that When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross- claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express deter- mination that there is no just reason for delay and 90a upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however desig- nated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all of the parties. The judgment entered on February 14, 1983, Dk. No. 282, is on its face not a final order. The rights and lia- bilities of the plaintiffs, the defendants, and the numer- ous intervenors simply were not finally adjudicated by that order. No disposition of the huge escrow fund was made, and all parties still maintain their entitlement to that fund. The Court, in fact unequivocally expressed its understanding that no final judgment was entered when it expressly retained jurisdiction over the case and the escrow fund while referring the factfinding mission to the OHA. Such retention would have been nonsensical had a final judgment adjudicating all the claims and the rights and liabilities of all of the parties been entered seven months earlier. Additionally, the substantial fact- finding presently being conducted by the OHA and the difficult question remaining for the Court of who gets the money make any notion of finality in this case untenable at this time. Because the question of who gets the money is unresolved, and because a decision that the EPAA and EPCA are unconstitutional could have a major impact on the resolution of that question, this Court believes that the plaintiffs’ motion to certify the constitutional issues is timely. (2) Standing The essence of the standing challenge is the supposed lack of injury from an exercise of the concededly uncon- 9la stitutional one-house vetoes. The short answer to this argument is that the plaintiffs allege that the EPAA and EPCA must be declared void ab initio because of the one- house vetoes, and that the money presently in the escrow fund must, therefore, be restored to the plaintiffs because it was exacted from them under unconstitutional acts. Clearly, the exaction of large sums of money under un- constitutional acts is an injury, that injury is traceable to those acts, and that injury could be redressed by a declaration that the acts are unconstitutional and that the money should be returned to the plaintiffs, see, ¢.g., Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 464, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). This Court believes that the plaintiffs have a sufficient “personal stake in the out- come of this controversy to warrant [their] invocation of federal court jurisdiction and to justify exercise of the Court’s remedial powers on [their] behalf,” Arling- ton Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 260-61, 97 S.Ct. 555, 560-61, 50 L.Ed.2d 450 (1977); Holly Sugar Corp. v. Goshen City Coopera- tive Beet Growers Association, 72E F.2d 564, 567-68 (10th Cir. 1984). The plaintiffs therefore have standing to assert their constitutional challenge. (3) and (4) Severability and Retroactivity The Court will consider these two assertions together because a similar analysis applies to both. As a pre- liminary matter, it must be remembered that this Court lacks jurisdiction to determine the constitutional validity of any provision of the EPAA or EPCA, or of the regu- lations under those Acts, inasmuch as exclusive jurisdic- tion over those issues is vested in TECA and the United States Supreme Court by way of appeal, see § 211(g) of the Economic Stabilization Act of 1970, 12 U.S.C. § 1904 note. If any substantial constitutional issue exists, it must be certified to TECA, see id. § 211(c). 92a These restrictions on this Court’s jurisdiction and power are relevant to the defendants’ final two asser- tions because those assertions invite this Court to reach the merits of the constitutional challenge, albeit in- directly. Were this Court to conclude that the concededly unconstitutional one-house vetoes are severable from the remainder of the Acts, the Court would also be conclud- ing that the remainder of the Acts passes constitutional muster, despite the plaintiffs’ vigorous assertion that the Acts must be declared void ab initio. Likewise, a deci- sion that Chada will not be applied retroactively to this litigation would be tantamount to a delaration that the price controls are constitutionally sound enough to be enforced by the final judgment this Court must even- tually enter disbursing the escrowed funds. Both of these inquiries are so firmly intertwined with the merits of the constitutional challenge as to be inseverable from it and, therefore, outside this Court’s jurisdiction and power to hear. The parties have briefed these issues with their cus- tomary professionalism and attention to detail, and their lengthy citations to the case law and the legislative his- tories of the Acts have demonstrated that each side has a substantial argument and that the question is indeed a close one. This demonstration has helped to convince this Court that the constitutional issues raised by the plaintiffs are substantial, and that those isssue must, therefore, be certified to TECA. III. Certification IT IS THEREFORE ORDERED that the three con- stitutional issues raised by the plaintiffs and set out verbatim in this Memorandum and Order, supra p. 599, be certified to the Temporary Emergency Court of Appeals. IT IS FURTHER ORDERED that the plaintiffs’ mo- tions to vacate the referral of factfinding to the OHA 93a and to release the escrowed funds be held in abeyance pending TECA’s resolution of the constitutional issues. IT IS FURTHER ORDERED that OHA continue un. interrupted with its factfinding mission. IT IS FURTHER ORDERED that this Court retain jurisdiction over this case and over the escrowed fund to the maximum extent consistent with the certification of constitutional issues to TECA. 94a, APPENDIX D IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS ENERGY RESERVES GROUP, INC. and SUBURBAN PROPANE GAS CORPORATION, Plaintiffs, vs. FEDERAL ENERGY ADMINISTRATION and JOHN F. O’LEaARY, Administrator, Federal Energy Administration, Defendants. [Filed Jun. 10, 1977] PRELIMINARY INJUNCTION On this 26th day of May, 1977, this matter comes on for hearing on the motion of the plaintiffs herein for a Preliminary Injunction. The plaintiffs appear by Joseph W. Kennedy and Robert I. Guenthner of Morris, Laing, Evans, Brock & Kennedy, Chartered, and the plaintiff Energy Reserves Group, Inc. also appears by Paul B. Swartz of Martin, Pringle, Schell & Fair. The defend- ants appear by Jon K. Sargent, Deputy United States Attorney for the District of Kansas; Robert Heiss, Office of General Counsel, Federal Energy Administration; and Linda L. Pence, United States Department of Justice. THEREUPON, the matter proceeds to hearing and trial and the plaintiffs present their evidence and rest. The defendants offer no evidence. 95a THEREUPON, the Court, after considering the evi- dence introduced at the hearing, the Affidavits in support of the Motion for Preliminary Injunction previously filed and the arguments and statements of counsel, makes the following findings of fact and conclusions of law: 1, The Court finds that the plaintiffs have made a substantial showing of irreparable damage which would result to them in the event the Motion for Preliminary Injunction is denied. 2. The Court further finds that this action is not friv- olous, that there are serious questions raised by the plain- tiffs’ Complaint herein, and that the plaintiffs have dem- onstrated a reasonable probability of success on the merits of this action. 3. The Court further finds that the importance of the rights asserted by the plaintiff herein predominate over the importance of the acts sought to be enjoined in that the substantial pecuniary loss to the plaintiffs if the in- junction is denied outweighs the little, if any, adverse impact on the public interest herein. In fact, the Court finds that it is in the public interest to have the validity of the ruling in question in this case judicially determined and that both the plaintiffs and defendants desire to have the judicial determination concerning the validity of such ruling. 4. The Court further finds that the interests of all parties can be protected during the pendency of this ac- tion by appropriate orders providing for the refund of any later determined overcharges for the price of crude oil. Because of this the Court finds that the entry of a preliminary injunction will in no way damage the de- fendants or the public interest and will serve to protect the rights of the plaintiffs while this matter is in litiga- tion. IT IS THEREFORE BY THE COURT CONSID- ERED, ORDERED, ADJUDGED AND DECREED that 96a the defendants, their officers, agents, servants, employees and attorneys are hereby restrained and enjoined, pend- ing the final determination of this action, from taking any action whatsoever to enforce, or attempting to en- force, any final order of the Federal Energy Administra- tion against the plaintiffs herein, which final order is based on alleged violations of Federal Energy Adminis- tration Regulations construed in accordance with FEA Ruling 1974-29. IT IS FURTHER ORDERED that the defendants, their officers, agents, servants, employees and attorneys are hereby restrained and enjoined from enforcing the civil and criminal penalty provisions of FEA regulation § 205.203 against plaintiffs to the extent that plaintiffs would otherwise be subject to such penalties as a result of their certification during the pendency of this action of oil properties operated by them as stripper well prop- erties based on the counting of injection wells located on such properties in the computation of average daily pro- duction if it is ultimately determined that such counting of injection wells is improper. IT IS FURTHER ORDERED that the plaintiffs shall pay, or cause to be paid, to the Clerk of the United States District Court for the District of Kansas, at Wichita, Kansas, the difference between the price received for crude oil sold pursaunt to any and all certification of a property as a stripper well property and the price for which such crude oil would have been sold had the same been sold pursuant to a certification of the property as a non-stripper property. IT IS FURTHER ORDERED that the Clerk of this Court invest any and all funds so received in interest bearing short-term obligations of the United States Gov- ernment until the further order of this Court. IT IS FURTHER ORDERED that, in the event funds so paid to the Clerk of this Court, are later determined — 97a to be subject to refund to the purchaser of the crude oil, then at that time said funds shall be paid directly to the purchaser of the crude oil together with all accrued in- terest thereon, in full satisfaction and discharge of the plaintiffs’ refund obligations pursuant to appropriate regulations of the Federal Energy Administration. IT IS FURTHER ORDERED that the foregoing pro- vision concerning payment of funds to the Clerk of this Court fully satisfies the requirement for security for a preliminary injunction as provided in Rule 65(c) of the Federal Rules of Civil Procedure. IT IS BY THE COURT SO ORDERED. /s/ Judge Frank Theis APPROVED: _ /8/ Joseph W. Kennedy JOSEPH W. KENNEDY of Morris, Laing, Evans, Brock & Kennedy, Chartered Suite 430, 200 West Douglas Wichita, Kansas 67202 One of the Attorneys for Plaintiffs. /s/ Linda L. Pence LINDA L. PENCE (Approved As To Form) United States Department of Justice Washington, D.C. One of Attorneys for Defendants. 98a APPENDIX E TEMPORARY EMERGENCY COURT OF APPEALS Nos. 9-80, 9-81 GULF OIL CORPORATION, Defendant-Appellant and Cross-A ppellee, Vv. RICHARD W. DYKE, dba WESTERN STATIONS Co., COLVIN OIL COMPANY, and F.O. FLETCHER, INC., dba FLETCHER OIL COMPANY, Plaintiffs-A ppellees and Cross-Appellants, UNITED STATES OF AMERICA, Intervenor. Argued March 19, 1984 Decided April 17, 1984 Jack D. Fudge and Michael L. Hickok, McCutchen, Black, Verleger & Shea, Los Angeles, Cal., on the brief for appellant/cross-appellee. John L. Schwabe and Neva T. Campbell, Schwabe, Williamson, Wyatt, Moore & Roberts, Portland, Or., on the brief for appellees/cross-appellants. John R. Knight, Edward T. Cotham, Jr. and Bradley Ford Stuebing, Gulf Oil Corporation, Houston, Tex., on the brief for appellant/cross-appellee. 99a Larry P. Ellsworth, Asst. General Counsel, David En- gels and Marcia K. Sowles, Dept. of Energy, and Richard K. Willard, Acting Asst. Atty. Gen., Anthony J. Stein- meyer and Douglas Letter, Attys., Dept. of Justice, Washington, D.C., on the brief for the United States. William H. Bode, John E. Varnum and Tobey B. Marzouk, Spriggs, Bode & Hollingsworth, Washington, D.C., on the brief for amici curiae, Independent Oil and Tire Co., Shepherd Brothers Service Stations, and U.S. Oil Co., Inc. John A. Evans, Marathon Petroleum Co., Findlay, Ohio, William C. Streets and Gail F. Schulz, Mobil Oil Corporation, Fairfax, Va., R. Bruce McLean, P.C., Daniel Joseph, P.C., Warren E. Connelly, P.C., and David A. Holzworth, Akin, Gump, Strauss, Hauer & Feld, Wash- ington, D.C., on the brief for amici curiae, Marathon Petroleum Co. and Mobil Oil Corp. Before CHRISTENSEN, ESTES and ZIRPOLI, Judges. ESTES, Judge: This is an action for overcharges under § 210(b) of the Economic Stabilization Act of 1970 (“ESA”), 12 U.S.C. § 1904 note, as incorporated in the Emergency Petroleum Allocation Act (“EPAA”), 15 U.S.C. § 751 et seg. brought by Plaintiffs-Appellees and Cross-Appel- lants Richard W. Dyke, dba Western Stations Co., Colvin Oil Company, and F.O. Fletcher, Inc., dba Fletcher Oil Company (hereinafter “Dyke” when referred to collec- tively; “Richard W. Dyke” when referring to plaintiff Dyke singularly), against Defendant-Appellant and Cross- Appellee Gulf Oil Corporation (hereinafter (“Gulf”) .? Gulf also filed a counterclaim for unpaid bills for gaso- 1 Independent Oil and Tire Co., Shepherd Brothers Service Sta- tions and U.S. Oil Company, Inc. have filed a joint brief as Amici Curiae on the prejudgment interest and attorneys’ fees questions presented by this appeal. 100a line in the sum of $728,753.78 against Richard W. Dyke only,? which was not contested.* Dyke alleged that Gulf overcharged it in sales of gasoline from Gulf to Dyke between January 1974 and January 1977. An Amended Judgment entered on September 12, 1983* in the United States District Court for the District of Oregon was awarded to plaintiffs against Gulf in amounts as follows: Prejudgment Attorney’s Overcharges _ Interest Fees Richard W. Dyke, dba $1,264,555.22 $ 557,588.38 $385,500 Western Stations Co. Colvin Oil Company 745,000.00 200,568.99 173,500 F.O. Fletcher, Inc.,dba 790,000.09 408,471.69 191,000 Fletcher OilCompany «= $2,799,555.22 $1,166,629.06 $750,000 In addition +o the $4,716,184.28, total of the above sums, the Amended Judgment also awarded costs and post- judgment interest to plaintiffs at the rate of 10.58 per- cent against Gulf. Gulf appeals from this judgment. Dyke has filed a cross-appeal contending the district court incorrectly computed the prejudgment interest which Dyke was awarded. In October of 1972, Gulf’s board of directors decided to divest Gulf of all its marketing activities in its San Francisco Retail Marketing District, which included northern California, northern Nevada, Oregon and Wash- ington. The decision to divest followed losses by Gulf of $31.7 million in 1971 and $37 million in 1972 in the Northwest.’ The passage of the EPAA, however, forced 2 Record at Vol. 1, Tab 2. 3 Record at Vol. 1, Tab 3, p. 1. 4 Record at Vol. 11, Tab 161. The Original Judgment entered August 25, 1983 (Jd. at Tab 157) and first Amended Judgment entered August 26, 1983 (Jd. at Tab 158) were set aside by Order of September 2, 1983 (Jd. at Tab 160). 5 Findings of Fact and Conclusions of Law (“FFCL’”), Record at Vol. 11, Tab 147, pp. 4-5. oe enema 10la Gulf to continue to supply its customers in the area and to place its purchasers into classes which would main- tain the customary price differentials in existence on May 15, 1973.° Gulf continued to supply all of its jobber customers in the area, but converted all of the branded jobbers’ to unbranded jobbers on January 1, 1974. Be- fore 1974, Gulf had supplied only one jobber in the dis- trict on an unbranded basis.* On May 15, 1973, Richard W. Dyke, Colvin, and Fletcher all purchased gasoline from Gulf as resellers- retailers as defined in 10 C.F.R. § 212.31. Gulf was a refiner as defined in the same section. Richard W. Dyke and Colvin were among those purchasers who were branded jobbers on May 15, 1973 and converted to un- branded jobbers on January 1, 1974. The other jobbers in the district who were reclassified from branded to unbranded on January 1, 1974, were placed in the Armour class of purchaser to reflect their new status. Richard W. Dyke and Colvin, however, were given base prices reflecting those published in Platt’s Oilgram for May 15, 1973 for Portland and Eugene, Oregon and Seattle/Tacoma, Washington. Gulf reasoned that its jobbers in Oregon and Washington comprised a substantially different market from those in northern California and should constitute a separate class with a different base price. Gulf relied on the new item/new market rule® to justify its use of Platt’s Oilgram in es- 610 C.F.R. § 212. 7 Gulf’s branded jobbers received free painting of service sta- tions, hauling allowances and the privilege of honoring Gulf credit cards. FFCL, supra, at 4. Dyke and Colvin were Gulf branded jobbers before January 1, 1974. Id. 8FFCL, supra, at 5-6. The unbranded jobber was Armour Oil Co., which purchased gasoline from Gulf’s northern California terminals only. Id. ® FFCL, supra, at 11. The new item-new market rule, ~ F.R. § 212.111, allowed sellers to use a market price as the base price 102a tablishing a base price for Richard W. Dyke and Colvin, which is an exception to the rule that base prices must correspond to a price actually charged the most similar existing class on May 15, 1973."° Richard W. Dyke filed a complaint on January 4, 1977 and ceased paying for gasoline received from Gulf on December 16, 1976, yet continued to receive gasoline without payment until January 28, 1977. Colvin’s com- plaint was filed on October 11, 1977. Fletcher filed its complaint on October 20, 1977. The three cases were consolidated, with Richard W. Dyke proceeding to judg- ment first. The decision and findings in Richard W. Dyke were binding on Colvin and Fletcher. The case was originally assigned to Chief Judge Skopil."*. An interlocutory appeal was filed by the De- partment of Energy (“DOE”) contesting their joinder in the cases. The DOE was released from further par- ticipation in the cases by this Court’s decision and man- date and the district court order which followed.’* On remand, new Chief Judge Burns granted a six-month stay in the proceedings before Judge Owen M. Panner was assigned to the cases in July, 1980." Judge Panner lifted the stay on July 21, 1980." for a product in certain instances rather than the price actually charged the most similar class of purchasers on May 15, 1973. Gulf later conceded that its use of the new item-new market rule was improper. FFCL, supra, at 11. © Pacific Supply Co-Op v. Shell Oil Co., 697 F.2d 1084 (Em.App. 1982). 11 FFCL, supra, at 12, fn. 2. 12 Record at Vol. 1, Tab 8, June 29, 1979; Record at Vol. 17, Tab 263, August 16, 1979. See, Dyke v. Gulf Oil Corp., 601 F.2d 557 (Em.App. 1979). 13 FFCL, supra, at 12, n. 2. Judge Panner began duty as U.S. District Judge on March 24, 1980. 14 Record at Vol. 1, Tab 14. 103a Trial before the court began on November 17, 1981. The trial was conducted in stages with succeeding orders entered as follows: 'n Phase 1, Gulf’s use of the Platt’s Oilgram prices as base prices for the plaintiffs was held improper. November 17, 1981; Record at Vol. 4, Tab 47. In Phase 2, the unbranded Armour class of pur- chasers and its corresponding base price was held proper for the plaintiffs. November 20, 1981; Record at Vol. 4, Tab 49. In Phase 3, the method of calculating the over- charges was decided, prejudgment interest was awarded to the plaintiffs, and the selection of the appropriate statute of limitations was made. January 20, 1982; Rec- ord at Vol. 7, Tab 67. In Phase 4, plaintiff Fletcher was held to be the real party in interest. April 15, 1982; Record at Vol. 7, Tab 80. In Phase 5, attorney’s fees were awarded the plaintiffs. May 27, 1982; Record at Vol. 8, Tab 93. The calculation of prejudgment interest was referred to a magistrate on June 1, 1982." The magistrate en- tered his Findings and Recommendations on September 9, 1982, and they were adopted by the district court on October 26, 1982.% The district court entered its Find- ings of Fact and Conclusions of Law on June 20, 1983 ” and filed a separate opinion on the issue of attorney’s fees on August 23, 1983.% 571 F.Supp. 780. The Amended Judgment was entered on September 12, 1983." Gulf filed its Notice of Appeal in this Court on October 6, 1983. Dyke filed its Notice of Cross-Appeal in this Court on October 20, 1983. ® Record at Vol. 8, Tab 94. © Record at Vol. 9, Tab 126; Vol. 10, Tab 129. 17 Record at Vol. 11, Tab 147. *® Record at Vol. 11, Tab 155. 19 Record at Vol. 11, Tab 161. 104a ISSUES The issues on appeal, as stated by Gulf in its brief filed November 14, 1983, are as follows: 1. Whether overcharges can be refunded under the EPAA without any determination that sales exceeded the “maximum allowable prices” permitted under the govern- ing Refiner Price Rule; 2. Whether prejudgment interest can ever be awarded on overcharge refunds under the EPAA; 8. If such prejudgment interest is ever recoverable, whether it can be awarded where the amount of over- charges to be refunded was unliquidated and became certain only by trial; 4. Whether attorney’s fees may be awarded under the EPAA where the overcharges were found to be uninten- tional; 5. Whether attorney’s fees awardable under the EPAA may substantially exceed those actually charged ; 6. Whether appellee Fletcher lacks standing as an in- direct purchaser to sue Gulf for overcharges under the EPAA; 7. Whether application of the two-year Washington statute of limitations to Fletcher frustrates national policy under the EPAA; 8. Whether the passing-on defense is available in this EPAA case because all parties were subject to Federal Price Regulations, and the trial court specifically quanti- fied the amount of overcharges actually passed through; and 9. Whether the trial court abused its discretion by making a class of purchaser determination contrary to 105a the Pretrial Order without considering evidence offered in issue.” Dyke states in its brief that the issue on the cross- appeal is: Whether the Trial Court erred in its calcula- tion of prejudgment interest.** Gulf’s Motion to Dismiss Gulf, without raising the question in the lower court, was given leave to file an untimely Motion to Dismiss the Cross Appeal of Dyke, which challenges the subject- matter jurisdiction of this Court following the recent Supreme Court decision in I.N.S. v. Chadha, —— USS. —, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983). Dyke has opposed the motion and contended that the Chadha de- cision did not invalidate the statutes. .The United States has filed a motion to intervene on the question of the constitutionality of the statutes pursuant to 28 U.S.C. § 2403 and has also argued that the statutes remain valid. Gulf contends that because the applicable stat- utes granting jurisdiction to this Court contain insever- able and unconstitutional legislative veto provisions, the legislation is void and this Court has no jurisdiction over the cross-appeal. It has been determined that Gulf’s mo- tion raises a jurisdictional question which we must de- cide.” After examination of the statutes, their legisla- 2» Brief of Defendant-Appellant and Cross-Appellee Gulf (“Gulf’s Br.”) at 3-4. 21 Brief of Plaintiffs-Appellees and Cross-Appellants Dyke, et al. (“Dyke's Br.”) at 1. 22 Marathon Petroleum Company and Mobil Oil Corporation have filed a joint brief as Amici Curiae in support of Gulf’s position that this case should be dismissed for lack of subject-matter jurisdiction. 28 Gulf has placed itself in the anomalous position of moving to dismiss only Dyke’s cross-appeal on the basis that the statutory authority for the cross-appeal is unconstitutional. Since Gulf’s appeal also depends on the validity of the EPAA and EPCA, any 106a tive histories, prior decisions and the arguments of coun- sel, we conclude that the unconstitutional legislative vetoes contained in the EPAA and EPCA [Energy Policy and Conservation Act] are severable, leaving the re- maining sections of the legislation intact and operable, including the sections conferring jurisdiction of this ap- peal upon this Court. Neither the EPAA nor the EPCA contains a sever- ability clause.“ The absence of such a clause, however, is holding of this Court dismissing the cross-appeal because of the unconstitutionality of the EPAA or EPCA would also necessitate the dismissal of Gulf’s appeal. Dyke has maintained that the consti- tutional issues raised by Gulf are not in reality directed at the subject-matter jurisdiction of this Court, but rather at the decision on the merits of the District Court below. See, Memorandum filed by Dyke, et al., December 28, 1983 and Memorandum filed by Dyke, et al., January 10, 1984. Dyke maintains that such an argument must first be raised in the District Court below. See, United States v. Empire Gas Corp., 547 F.2d 1147, 1153 (Em.App. 1976), cert. denied, 430 U.S. 915, 97 S.Ct. 1826, 51 L.Ed.2d 592. Gulf’s motion does have such bearing on the subject-matter jurisdiction and the very viability of this Court as to mandate consideration here. We have a “duty to observe questions relating to jurisdiction whenever they may appear.” McWhirter Distributing Co. v. Texaco, Inc., 668 F.2d 511, 525 n. 22 (Em.App. 1981), citing Condor Operating Co. v. Sawhill, 514 F.2d 351, 354 (Em.App.), cert. denied, 421 U.S. 976, 95 S.Ct. 1975, 44 L.Ed.2d 467 (1975). See also, Exxon Corp. v. F.E.A., 516 F.2d 1897 (Em.App. 1975). 2 However, the ESA, which was the precursor of the EPAA and EPCA, does contain a severability clause at Section 220. We are also most persuaded by the language of Section 211(g) of the ESA that Congress intended this Court to sever unconstitutional portions of the statutes and leave the remainder intact: “(T)he Temporary Emergency Court of Appeals, and the Supreme Court upon review of judgments and orders of the Temporary Emergency Court of Appeals, shall have exclusive jurisdiction to determine the constitutional validity of any provision of this title or of any regula- tion issued under this title.” (Emphasis Added). This Court was given full authority to determine the unconstitutionality of one provision of a statute without the requirement of invalidating the whole statute as a result. a TT ene 107a in no way dispositive of the question of severability. E.E.0.C. v. Hernando Bank, Inc., 724 F.2d 1188, 1190 (5th Cir. 1984). Indeed, “the ultimate determination of severability will rarely turn on the presence or absence of such a clause.” United States v. Jackson, 390 U.S. 570, 585 n. 27, 88 S.Ct. 1209, 1218, 20 L.Ed.2d 188 (1968). The proper test is that “[u]nless it is evident that the legislature would not have enacted those provisions which are within its power, independently of that which is not, the invalid part may be dropped if what is left is fully operative as a law.” Buckley v. Valeo, 424 U.S. 1, 108, 96 S.Ct. 612, 677, 46 L.Ed.2d 659 (1976), quoting Champlin Refining Co. v. Corporation Commission, 286 U.S. 210, 234, 52 S.Ct. 559, 565, 76 L.Ed.2d 1062 (1932). In order to determine whether Congress would have enacted the remainder of the EPAA and EPCA had it known that the one-house veto provisions were unconsti- tutional, we must examine the language and legislative history of the Acts. E.E£.0.C. v. Hernando Bank, supra, at 1190; Muller Optical Co. v. E.E.0.C., 574 F.Supp. 946 (W.D.Tenn. 1983). “Congressional intent and purpose are best determined by an analysis of the language of the statute in question.” E.E.0.C. v. Hernando Bank, supra, at 1190. The stated purpose of the EPAA is as follows: Sec. 2...— (b) The purpose of this Act is to grant to the Pr [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_IA40385010_2571%3A2. Public record. Not legal advice.