# Reply Brief — TransAmerican Natural Gas Corp. v. United States Department of the Interior > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2160%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Reply Brief - **Published:** January 1, 1987 - **Citation:** 484 U.S. 871 ## Text Supreme Court, U.S. FILED JUL 23 87 " JOSEPH F. SPANIOL, JR, meee IN THE Supreme Court of the United States OCTOBER TERM, 1987 TRANSAMERICAN NATURAL GAS CORPORATION (formerly GHR Energy Corporation), Petitioner, v. UNITED STATES DEPARTMENT OF THE INTERIOR and WILLIAM P. CLARK, Secretary of the Interior, Respondents. On Petition for a Writ of Certiorari to the Temporary Emergency Court of Appeals of the United States REPLY BRIEF OF PETITIONER EDWARD C. CERNY III Counsel of Record LANE & MITTENDORF 99 Park Avenue New York, New York 10016 (212) 972-3000 Of Counsel: JAMES L. MARKETOS ROBERT J. WooDy FRANKLIN D. DODGE Witsow - Eres Printing Co.. Inc. - 789-O096 - WASHINGTON, D.C. 20001 TABLE OF CONTENTS BAPEMNMIT Dy ces ssnssisonorecncassesenans salinstackesepipengbnhclscubsenionagne I. The Petition Presents Issues of Immediate, Not Merely Historical, Importance ............................. II. The Court Should Resolve a Conflict Among the Circuits Concerning The TECA’s Jurisdiction and Instruct Litigants and the Lower Courts on How to Apply the Appropriate Jurisdictional SIN. /c4rccatceaetcasstowedn teat tandsanteaieneran an cacaneos PI cats cas esa cceacs ciara ncas oes steam nabadicenencel aed il TABLE OF AUTHORITIES CASES: - Page Bray v. United States, 423 U.S. 73 (1975) (per UID evsicttcacsincicpinticsnienneascteiaea omnia 5 Citronelle-Mobile Gathering, Inc. v. Gulf Oil Corp., 591 F.2d 711 (Temp. Emer. Ct. App.) (per curiam), cert. denied, 444 U.S. 879 (1979) ........ 5 Coastal States Marketing, Inc. v. New England Petroleum Corp., 604 F.2d 179 (2d Cir. 1979) _... 4 Conley v. Gibson, 355 U.S. 41 (1957) .............--..----.- 3 Gordon v. Laborers’ Int’l Union, 490 F.2d 133 (10th Cir.), cert. denied, 418 U.S. 836 (1974)... 5 Grand Blane Educ. Ass’n v. Grand Blanc Bd. of Educ., 624 F.2d 47 (6th Cir. 1980) ..........02222222..... 4 Johnson Oil Co., Inc. v. DOE, 690 F.2d 191 (Temp. mer. CL. AR. TI cco 3 Mountain Fuel Supply Co. v. Johnson, 586 F.2d 1375 (10th Cir. 1978), cert. denied, 441 U.S. 952 CRITE aecrecnnicnannsak:incaneacsecude ide sideman 4 RJG Cab, Inc. v. Hodel, 797 F.2d 111 (3d Cir. BOD ennrsnceintcest scesticiisnsiincnnnaianeiiaislodsdndee macnn : 4 St. Mary’s Hosp. of East St. Lowis, Inc. v. Ogilvie, 26 F.28 1084 Ce Coe. 178) 4 Texaco Inc. v. DOE, 616 F.2d 1193 (Temp. Emer. CH BIA, BIPCUD ccccsincicniceninscixtesenansnemngeeaanetaa 4 United States v. Hill, 694 F.2d 258 (D.C. Cir. BE scion caccicacsssssceupontseonincecupeesoaaea 4 United States v. Wyatt, 680 F.2d 1080 (5th Cir. BI soca ccscs «csc cccinancncansnieesmaatedtialbeeseeeien manana 4 STATUTES: Economic Stabilization Act of 1970 (“ESA”), Pub. L. No. 91-379, tit. II, 84 Stat. 799 (1970) (expired April 30, 1974) (codified as amended at 12 U.S.C.A. Section 1904 note (West 1980) (Cost of Living Stabilization) ) -.........0....0002000022... 2 Outer Continental Shelf Lands Act (“OCSLA”’), 43 U.S.C. Sections 1331-1356 (1982 & Supp. III | Rane eC Ma tcneans PRINS 2D AS I YAS 2 IN THE Siywenw Cmet of the United States OCTOBER TERM, 1987 No. 86-1712 TRANSAMERICAN NATURAL GAS CORPORATION (formerly GHR Energy Corporation), ¥. Petitioner, UNITED STATES DEPARTMENT OF THE INTERIOR and WILLIAM P. CLARK, Secretary of the Interior, Respondents. On Petition for a Writ of Certiorari to the Temporary Emergency Court of Appeals of the United States REPLY BRIEF OF PETITIONER ARGUMENT I. The Petition Presents Issues of Immediate, Not Merely Historical, Importance Respondents misstate the case in urging that it in- volves nothing more than an arcane dispute over dis- continued price controls (see Brief in Opp., at 7). The fundamental question is the Government’s amenability to suit. The specific issue is whether a litigant seeking to enforce private rights originating in contracts with the Government, authorized by a statute that waives sover- eign immunity, will be foreclosed from all judicial relief because the contracts incorporate by reference, for cer- tain of their terms, a federal statute that does not ex- pressly waive sovereign immunity. 2 The case pits the constitutionally protected, private rights of the citizen directly against the perceived dic- tates of a federal policy embodied in a regulatory stat- ute. It raises a most fundamental issue of the faith, credit, and obligation of the United States, namely, whether the citizen can rely on the availability of a fed- eral forum for the enforcement of his contract rights, or whether he contracts with the Government at his peril, taking to himself all the risks and liabilities of the con- tract, but receiving none of its customary protections, such as mutuality of obligation, which constitute prop- erty rights. In addition, this specific case, because of its unusual jurisdictional setting, also involves the questions of which federal court properly hears the case, and which court has the power to review disputed issues. These are not questions of a passing or merely historical im- portance. Instead, they go to the very heart of a private citizen’s commercial relationship with the Government and to the foundation of the federal judiciary’s author- ity to resolve commercial disputes between the Govern- ment and private parties. Respondents necessarily hold to the very narrow view, as did the TECA in reaching its decision, that this case “arises under’—and only under—the ESA. Based on this unduly constricted first premise, they conclude both that the Government is immune from suit and that the TECA has exclusive appellate jurisdiction over every is- sue in the case. In so doing, they ignore other equally justifiable sources of petitioner’s right, such as the stat- ute authorizing the Government’s entry into the con- tracts in the first place (the OCSLA, which expressly waives sovereign immunity), the Constitution, and the contracts themselves (which traditionally have sufficed as grounds for invoking federal jurisdiction and over- coming sovereign immunity). Petitioner is entitled to a broader review of its pleading, which essentially alleges that it bought oil from the Government under contract and was overcharged. Any theory or form of action that 3 sustains this claim will be a basis for relief and should be separately evaluated in determining whether sover- eign immunity bars relief and whether jurisdiction is properly exercised. See Conley v. Gibson, 355 U.S. 41, 48 (1957). The TECA’s limited view stems, understandably, from its special-purpose jurisdiction. The TECA, unlike the other courts of appeals, has an openly avowed, policy- based mandate “to wind up regulation of the oil indus- try.” Johnson Oil Co., Inc. v. DOE, 690 F.2d 191, 196 (Temp. Emer. Ct. App. 1982). It is a court with a mis- sion, and that mission, not the law, has produced the judgment sought to be reviewed. In a different case, such vindication of a “predominant” federal policy (see Brief in Opp., at 7) by a special-purpose tribunal might be seen as a laudable result, but here it is not, because im- portant, constitutionally protected, private contract rights have been trampled in the bargain. Not only should this wrong be righted, but the Court should also take the opportunity afforded by this case to reaffirm that rights acquired under contract with the Government continue to be, as they traditionally have been, protected and are enforceable in the federal courts, that they can- not be vitiated by an after-the-fact claim of sovereign immunity, and that they are not subordinate to the vicissitudes of federal commercial policy. II. The Court Should Resolve a Conflict Among the Cir- cuits Concerning The TECA’s Jurisdiction and In- struct Litigants and the Lower Courts on How to Apply the Appropriate Jurisdictional Standard Contrary to respondents’ statement (Brief in Opp., at 5), the Circuits are in conflict concerning the scope of the TECA’s jurisdiction. The Second, Third, Fifth, Tenth, and District of Columbia Circuits, as well as the TECA, interpret the TECA’s jurisdictional grant over cases and controversies “arising under” the ESA as requiring “bifurcated” appeals whereby the ESA is- 4 sues in a single controversy are reviewed by the TECA, and the non-ESA issues in the same controversy are re- viewed by the appropriate court of appeals. Coastal States Marketing, Inc. v. New England Petroleum Corp., 604 F.2d 179 (2d Cir. 1979); RJG Cab, Inc. v. Hodel, 797 F.2d 111 (3d Cir. 1986); United States v. Wyatt, 680 F.2d 1080 (5th Cir. 1982); Mountain Fuel Supply Co. v. Johnson, 586 F.2d 1375 (10th Cir. 1978), cert. denied, 441 U.S. 952 (1979); United States v. Hill, 694 F.2d 258, 260 n.5 (D.C. Cir. 1982) ; Texaco Inc. v. DOE, 616 F.2d 1193 (Temp. Emer. Ct. App. 1979). This interpretation results in the possibility of conflicting ap- pellate judgments in a single case. By contrast, the Sixth and Seventh Circuits construe the TECA’s jurisdiction as arising only when the entire claim “arises under” the ESA, Grand Blane Educ. Ass’n v. Grand Blane Bd. of Educ., 624 F.2d 47 (6th Cir. 1980); St. Mary’s Hospital of East St. Louis, Inc. v. Ogilvie, 496 F.2d 1324 (7th Cir. 1974), thereby safe- guarding against conflicting appellate judgments in the same case, but raising the possibility that truly different theories of relief, some perhaps arising under the ESA, others not, will be inappropriately lumped together for the expedient purpose of characterizing a claim and allo- cating jurisdiction. Neither of the prevailing interpreta- tions furnishes an arbiter for jurisdictional disputes aris- ing within the same case, nor does either interpretation articulate a standard for identifying so-called ESA issues or claims, and the “ourt has not previously addressed the issue. The TECA’s special jurisdiction, and the conflicting interpretations as to its scope, naturally produce confu- sion in the large number of cases, like this one, which present either a number of claims or allege differ- ent theories of relief. As of 1979, approximately thirty percent of the TECA’s cases were decided on jurisdic- tional grounds, Texaco Inc. v. DOE, 616 F.2d 11938, 1199 (Temp. Emer. Ct. App. 1979) (Hoffman, J., dissenting), 5 and Congress’s purpose in creating the TECA to achieve efficient and consistent review of ESA cases, see Bray v. United States, 423 U.S. 73, 74 (1975) (per Curiam), has been frustrated, with review often degenerating, as here, into multiple appeals, stays, and dismissals owing to uncertainty about the boundaries of the TECA’s juris- diction. See generally Citronelle-Mobile Gathering, Inc. v. Gulf Oil Corp., 591 F.2d 711 (Temp. Emer. Ct. App.) (per curiam), cert. denied, 444 U.S. 879 (1979); Gordon v. Laborers’ Int’l Union, 490 F.2d 133 (10th Cir.), cert. denied, 419 U.S. 836 (1974). The prejudice of such confusion is plainly apparent in the present case. One appellate court, the Fifth Circuit, which has jurisdiction over any issue in the case that does not “arise under” the ESA, deferred, at least preliminar- ily, to the other appellate court, the TECA, which has claimed fuil jurisdiction (possibly for policy-based rea- sons), but which ultimately may not be entitled to exer- cise it. The confusion—and, hence, dispute—over whether petitioner’s claims are jurisdictionally within the TECA’s or the Fifth Circuit’s province, or partially in both, has required petitioner to prosecute parallel appeals and to make and defend against numerous motions in order to preserve its procedural entitlement to a full review of all issues in each court. Nor is this the first case in which an appellate court has been tempted to defer to the TECA’s claim of complete jurisdiction. In Gordon v. Laborers’ Int’l Union, 490 F.2d 133 (10th Cir. 1974), the Tenth Circuit, though harboring serious doubts as to the wisdom of the TECA’s prior ruling in the case, nonetheless deferred to the TECA’s presumption of ju- risdiction, accepting it, in the absence of any attempt to obtain certiorari review, as the “law of the case” in order to “avoid any semblance of a conflict with TECA.” Id. at 139. The present case squarely presents the conflict avoided by the Tenth Circuit in Gordon and points to the need for a standard with which to determine whether a case 6 “arises under” the ESA. Without it, litigants are left in confusion, and policy, not law, ultimately determines the parties’ rights, including the important question of jurisdiction. We respectfully submit that the present case does not “arise under” the ESA, and that the TECA’s determination that it does is erroneous and has led to the further erroneous conclusions concerning sovereign immunity and jurisdiction. A properly formulated “aris- ing under” standard will allocate original and appel- late jurisdiction in cases that allege numerous claims or separate theories of relief, and will also have the salient effect of reducing confusion, duplication, delay, and ex- pense. CONCLUSION Some court of the United States must be competent to determine the liabilities of the United States on petition- er’s commercial contracts. The petition should be granted so that the Court can confirm that contract rights do not yield to changing federal policy, and that sovereign im- munity does not bar a private party’s claim merely be- cause a federal statute not expressly waiving sovereign immunity is incorporated by reference in a contract to which the Government is an authorized party. The peti- tion should also be granted so that the Court can instruct litigants and the lower federal courts concerning the proper limits of the TECA’s jurisdiction. Dated: New York, New York July 23, 1987 Respectfully submitted, EDWARD C, CERNY III Counsel of Record LANE & MITTENDORF 99 Park Avenue New York, New York 10016 Of Counsel: (212) 972-3000 JAMES L. MARKETOS ROBERT J. Woopy FRANKLIN D. DODGE --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2160%3A3. Public record. Not legal advice.