# Opposition Brief — Exxon Corp. v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1986
- **Citation:** 474 U.S. 1105

## Text

FILED

: 2]
Nos. 85-429, 85-430, 85-432, 85-440 and 95-444 CEC 23 Ge
errr SPANIOL, J

IN THE
Suprenw Court of the United States

OCTOBER TERM, 1985

COPY

EXXON CORPORATION, et ai.,
Petitioners.

V.

UNITED STATES OF AMERICA, et al.,
Respondents.

On Petitions for a Writ of Certiorari to the
Temporary Emergency Court of Appeals
of the United States

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BRIEF FOR THE STATE RESPONDENTS
IN OPPOSITION

FRANCIS X. BELLOTTI ANDREW P. MILLER
Attorney General GEORGE KAUFMANN
of Massachusetts STEPHAN G. WIELGOZ
GEORGE B. DEAN DICKSTEIN, SHAPIRO & MORIN
ALAN L. Kovacs 2101 L Street, N.W.
One Ashburton Place— Washington, D.C. 20037
20th Floor (202) 785-9700

Boston, Massachusetts 02108

BERNARD NASH

DAVID FROHNMAYER EDWARD G. MoDELI

Attorney General of Oregon BLUM, NASH & RAILSBACK \
DONALD C. ARNOLD 1133 Fifteenth Street, N.W.
100 State Office Building Suite 1100

Salem, Oregon 43710 Washington, D.C. 20005

(202) 857-0220

JCHN VAN DE KAMP JAMES F. FLUG

Attorney General of California PAULA DINERSTEIN
YEORYIOS C. APALLAS LOBEL, NOVINS & LAMONT
6000 State Building 1275 K Street, N.W.

350 McAllister Suite 770

San Francisco, California 94102 Washington, D.C. 20005
(202) 371-6626
December 23, 1985

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 26001

\ ® cE co

QUESTIONS PRESENTED

1. Did the District Court abuse its discretion under
$209 of the Economie Stabilization Act of 1970, as
amended, in formulating a remedy for overcharges mod-
eled on previous restitutionary legislation, where the
spreading of the consequences of the violation to con-
sumers throughout the economy made it impossible to
determine the injuries of individual victims?

2. Do any of the petitioners raise a substantial ques-
tion that the District Court erroneously denied them any
procedural right?

(i)

li

LIST OF JURISDICTIONS JOINING IN THIS BRIEF

We accept the listing of parties below as set forth in
the respective petitions; however, we here specifically
list the jurisdictions which join in this brief.

Alabama Nevada
Arkansas New Hampshire
California New Jersey
Colorado New Mexico
Connecticut New York
Delaware North Carolina
District of Columbia North Dakota
Georgia Ohio

Guam Oregon
Hawaii Pennsylvania
Idaho Puerto Ric
Illinois Rhode Island
Indiana South Carolina
Iowa South Dakota !
Kansas Tennessee
Louisiana Texas

Maine Utah
Maryland Vermont
Massachusetts Virgin Islands
Michigan Virginia
Minnesota West Virginia
Mississippi Wisconsin
Montana Wyoming
Nebraska

1 South Dakota joins in the brief as amicus curiae pursuant to
Rule 36.4 of this Court.

TABLE OF CONTENTS

QUESTIONS PRESENTED ......

LIST OF JURISDICTIONS JOINING IN THIS
SIs ietpaenepiineien

COUNTERSTATEMENT OF THE CASE

REASONS FOR DENYING THE PETITIONS
‘

Il.

CONCLUSION

A. The Regulatory Program .............0.00........
B. The Proceedings Below
1. The District Court ......... 2 .
2. The Court of Appeals ........................

TECA’S AFFIRMANCE OF THE DISTRICT
COURT'S EXERCISE OF ITS EQUITABLE
DISCRETION RAISES NO ISSUE WAR-
RANTING FURTHER REVIEW BY THIS
a lisecas tstsannebesnnnsnenest en

A. Because Section 209 of the ESA Vested the
District Court with Broad Equitable Powers,
the Scope of “Appellate Review is Corre-
spondingly Narrow”

B. The Remedy Chosen by the District Court
Was Well-Grounded in Fact and Law ...........

1. The Record and Regulatory Scheme Made
It Clear That It Was Impossible to Trace
the Impact of Exxon’s Overcharges to In-
dividual Victims .

The Restitutionary Remedy Selected by
the District Court Was Equitable, Fair
and Reasonable

no

3. TECA’s Decision Is Entirely Consistent
With This Court’s Decisions ...

NONE OF THE PETITIONS PRESENTS A
PROCEDURAL ISSUE WARRANTING RE-
VIEW

Page

14

14

15

18

iv
TABLE OF AUTHORITIES

CASES: Page
Adams Resources and Energy, Inc., 9 DOE © 82,553

§ ieee Sr elareianio tometer Sree ne Octane 19

Alfred B. Alkek, 9 DOE § 82,521 (1982) ................ 19
Cities Service Co. v. FEA, 529 F.2d 1016 (Em.

App. 1975), cert. denied, 426 U.S. 947 (1976) ..... 5,7

Citronelle-Mobile Gathering, Inc. v. Edwards, 669
F.2d 717 (Em. App.), cert. denied, 459 U.S. 877

PR Soca recencepiinkadece accsanieccuaneiaigseaaanicbencmcnaens 14, 22, 25
Department of Energy Stripper Weil Exemption

Litigation, M.D.L. No. 378 (D. Kan.) -................ 16
Federal Power Commission v. Interstate Natiural

eo ee Rik Sy A | eRteener meen 24
Hanover Shoe, Inc. v. United Shoe Machinery

oe og! Re ke een eee ere 27
Hecht Co. v. Bowles, 321 U.S. 321 (1944) ............. 20

Hodgson v. United Mine Workers, 153 U.S. App.

tee ae. 2 i ) . : neemebaisiemn ene 29
Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) . 27
Lemon v. Kurtzman, 411 U.S. 192 (1973) ............ 15
Mitchell v. DeMario Jewelry, Inc., 361 U.S. 288

(BBR ur ark AR ree Ria ee 14, 15, 20
NAACP Vv. New York, 413 U.S. 345 (1978) ............. 29

Pellegrino v. Nesbit, 203 F.2d 463 (9th Cir. 1953) .. 29
Porter v. Warner Holding Co., 328 U.S. 395
PIRI °osssceiis oss iniaiseuielblaccn siderite Manataaiicienesnciaat 14, 15, 20, 22-25
Sauder v. DOE, 648 F.2d 1341 (Em. App. 1981)... 14, 22
Smack v. Hobson, 132 U.S. App. D.C. 372, 408

Pe TE EID «ss seeccsstcncinehaenibiescaasunstedanipbassticidasions 29
Textile Workers v. Lincoln Mills, 353 U.S. 448

PI = cae ere nace cane ial pegeleeaco a Ralls 22
Tully v. Mobii Oil Corp., 455 U.S. 245 (1982) 12
Tumey V. Ohio, 273 U.S. 510 (1927) ..................... 18
Union Oil Co. v. DOE, 688 F.2d 797 (Em. App.

1982), cert. denied, 459 U.S. 1202 (1985) .......... 5, 7
United Airlines, Inc. Vv. McDonald, 432 U.S. 385

f - | SSRN Scere Mere aE ISLS REDE RR eons Ne Oe 29
United States v. Leib, 333 F. Supp. 424 (W.D. Tex.

1971), aff'd, 462 F.2d 1161 (Em. App. 1972)...... 22

Wolpe v. Poretsky, 70 U.S. App. D.C. 141, 144 F.2d
505, cert. denied, 323 U.S. 777 (1944) ..........000.... 29

Vv

TABLE OF AUTHORITIES—Continued

UNITED STATES CONSTITUTION Page
ee ee ence 25
STATUTES

Economie Stabilization Act of 1970, as amended,
12 U.S.C. § 1904 note

oe 0 ere epaded ae 1, 2, 5, 7, 9, 11, 14
Be BUI sanchsnscickaunssainashies mapsciisceinbscaadibeeiaindsileaie ele ae aaa 11
BES oodaccrysteshnce cosets cekabenciialeiaiide ae eae 2

Emergency Petroleuin Allocation Act of 1975, as

amended, 15 U.S.C. $751 ef seq. .......................:. 3, 4
15 U.S.C. § 753 (b) (2) meal SE Reed: OF ae Soe 3
16 U.S.C. § 763(b) (2) (A) ..................0.0..... e022 4
15 U.S.C. § 754(a) (1) ....00002..... PoP MeN eee! 2

Emergency Price Control Act of 1942, ch. 26, 56
Stat. 23 (repealed 1946)

i I sisi coscdctsatkn thc canndipcietiemeco manent mecre cies 14, 22
DEE sexencceetecaens SORA A PIN ad he Rm JA Md 22
Energy Conservation and Existing Buildings Act
of 1976, Part A, 42 U.S.C. § 6861 et seq. ........ ae 20
Energy Policy and Conservation Act, Part D of
Title ITI, 42 U.S.C. § 6321 et seq. .................... ane 20
CD snciasincoosanttestetesmaneetibase eaten 21
|!) RE ee erro PT ae Oe SL Tas 21
Dy GED WIDE vicckccaccsecinadngnciictcapeuaeeiie a eeieeae 21
Energy Policy and Conservation Act, Part G of
Title III, U.S.C. 42 U.S.C. § 6371 et seq. .............. 20

Further Continuing Appropriations Act 1983, Pub.
L. No. 97-377, 96 Stat. 1830, 1919 § 155 (1982). 8,9,

18-22
Low-Income Home Energy Assistance Act of 1981,
GE Teen ee OE hse ee 21
National Energy Extension Service Act, 42 U.S.C.
be Be pe Oa Pn 20
RE Le NE Fe Ak 21
2. & Ff IRR ety ore a. ek 21

DPD cosine 21

vi

TABLE OF AUTHORITIRS—Continued

COURT RULES Page
Rules of the Supreme Court of the United States
Rule 17 .. sssaayeeanesis ease 12
Rule 36. 4. aaeeees a aie ee ii
Federal Rules of Civil Procedure
NTI... cnecasacacasscssesenseeinnscniaknebileiaapaancoveuneee ans 25
| enn
Rule 24(b) .......... ce-desmnhannaie eae eects 29
Rule 56 ee. ouabaathie si lacie apace 25, 28

REGULATIONS AND PROPOSED REGULATIONS

Executive Order No. 12287, 46 Fed. Reg. 9909_....... 4

Mandatory Petroleum Allocation and Price Reg-
ulations, 10 C.F.R. § 211 et seq. (1934)

RIG evscininrnsncvnencosssianshileccnacrmminnnnannnnas 4,5, 7, 9, 10
Part 212, Subparts F and L. ............................ 7
BD BERTI) ...cnxnencsnsccesnesavesesscccneencccssosensssnsenannesss 10
aaa sicoudbnantsaisaitteosmianehaneine salina akan 7
ED incscsseeecscccoccnevenoseiinnvibaaadaaie 10
§ 212 3 |) aC a fe a lated id
Rese Measures and Energy Audits, 10
ott Bg Bt | eee 2)

Mandatory Petrolerm Products Allocation and
Procedural Regulations, 39 Fed. Reg. 1924
CRIED vacicccnsisecsnanacaniecccnisoissvdabiccsicecinlaematniaanmanaats 4

Allocation of Old Oil, 39 Fed. Reg. 31650 (1974),
reprinted in Energy Mgmt. (CCH), Proposed
Regulations 1974-1978, § 12,526 ........................... 4

LEGISLATIVE MATERIALS

128 Cong. Rec. $15115 (daily ed. Dec. 16, 1982)... 19
128 Cong. Rec. 815116 (daily ed. Dec. 16, 1982)... 18
128 Cong. Rec. S15117 (daily ed. Dec. 16, 1982)... 20
128 Cong. Ree. $15701 (daily ed. Dec. 20, 1982)... 19

IN THE
Supreme Court of the United States

OCTOBER TERM, 1985
Nos. 85-429, 85-430, 85-432, 85-440 and 85-444

EXXON CORPORATION, et ai.,
Petitioners,
V.
UNITED STATES OF AMERICA, et al.,
Respondents.

On Petitions for a Writ of Certiorari to the
Temporary Emergency Court of Appeals
of the United States

BRIEF FOR THE STATE RESPONDENTS
IN OPPOSITION !

COUNTERSTATEMENT OF THE CASE

This is an action brought by the United States under
$ 209 of the Economic Stabilization Act of 1970 (“ESA”),

! This brief is filed on behalf of the States and other jurisdictions
listed on p. ii, supra. Although we maintain that the courts below
correctly resolved all questions of liability (including amount) in
favor of the United States and against the Exxon Corporation
(“Exxon”), because of the limited scope of the intervention which
we were granted below, this brief does not respond to Exxon’s
petition for certiorari (No. 85-429), which presents no question
concerning the distribution of the amounts for which Exxon was
held liable.

The opinions below will be cited to the Appendix to the Exxon
petition (“Exx. App.”).

2

as amended,’ against Exxon Corporation, alleging that
the prices Exxon charged beginning in January 1975 for
crude oil produced from the Hawkins Field Unit ‘“HFU”)
in Texas exceeded the maximum prices permitted by law.
The District Court found in favor of the United States
on the issue of liability. In fashioning an equitable rem-
edy under § 209, the District Court accepted the Govern-
ment’s contention that, “({d]ue to the pervasive reach of
oil price regulation at the time these overcharges oc-
curred, ... the overcharges worked their way throughout
the economy nationwide to the millions of ultimate con-
sumers of petroleum products,” * and ordered Exxon “to
make restitution of the full amount of the overcharges,
plus interest, to the |United States] Tr«ury’*, to be
held in trust for immediate redistribution to the States,’
in proportion to each State’s share of nationwide con-
sumption of petroleum products, for expenditures on
energy-related programs designed to benefit their injured
citizens. TECA, which has exclusive appellate jurisdic-
tion in all ESA and EPAA matters (see ESA § 211),
affirmed the District Court’s Order.

Four petitions for certiorari, in addition to that of
Exxon, have been filed by intervenor-parties at virtually
every level of distribution and use of petroleum products,

212 U.S.C. § 1904 note, as incorporated by §5(a)(1) of the
Emergency Petroleum Allocation Act of 1973 (“EPAA”), as
amended, 15 U.S.C. §754(a)(1). In relevant part, § 209 of the
ESA provides that a court may “order restitution of moneys re-

ceived in violation of any .. . order or regulation [under this
Title].”

3 Exx. App. 239a (emphasis added).
*Exx. App. 254a.

5 As used herein, the term “States” refers to all fifty States, the
District of Columbia, American Samoa, Guam, the Northern Mari-
ana Islands, Puerto Rico and the Virgin Islands.

® Exx. App. 255a-256a.

3

from refiners to an individual motorist.’ All challenge
the District Court’s restitutionary order and contend that
awards should instead have been made to them (and to
the classes which some purport to represent).

A. The Regulatory Program

The District Court’s Order and TECA’s affirmance rest
squarely on the regulatory program which these decisions
implement: we therefore begin by describing that pro-
gram.

The EPAA, 15 U.S.C. § 751 et seq., directed the Presi-
dent to promulgate regulations implementing price and
allocation controls on petroleum and petroleum products,
and further directed, in relevant part, that:

{ijn specifying prices (or prescribing the manner
for aetermining them), the regulation shall provide
for (A) a dollar-for-dollar passthrough of net in-
creases in the cost of crude oil, residual fue! oil, and
refined petroleum products to all marketers or dis-
tributors at the retail level .. . [EPAA, § 4/b) (2),
15 U.S.C. § 753 (b) (2) }

“Passthrough” is the key word in this passage and the
cornerstone of the implementing regulations. From their

*The four petitions were filed by: Marathon Petroleum Com-
pany, Mobil Oil Corporation, Murphy Oil Corporation, Ashland Oil,
Inc., Pennzoil Company, Tenneco Oil Company, and Tosco Corpo-
ration (collectively “Marathon”) (No. 85-430); Air Transport As-
sociation of America, Petroleum Marketers Association of America,
The Jobbers’ Group, and Independent Gasoline Retailers (collec-
tively “ATA”) (No. 85-432); Philadelphia Electric Company
(“PECO”) (No. 84-440); and National Freight Inc., RJG Cab
Co. Inc., and Geraldine H. Sweeney (collectively “National Freight” )
(No. 85-444). These petitions and their appendices are referred to
hereafter, respectively, as, “Mar. Pet.” and “Mar. App.”, “ATA Pet.”
and “ATA App.”, “PECO Pet.” and “PECO App.”, and “Nat. Frt.
Pet.” and “Nat. Frt. App.” The 45-volume Record of proceedings in
the District Court as filed in the TECA will be referred to by vol-
ume number and page number as “— R. —.”’

4

adoption on January 14, 1974,' until all petroleum prod-
ucts were decontrolled on January 28, 1981,° the regula-
tions promulgated pursuant to the EPAA permitted re-
finers, crude oil resellers and petroleum product resellers
to pass through to their customers their net increases in
crude oi! costs for refined petroleum products, together
with their increased costs of purchased refined products
and certain “non-product” costs.”° On August 30, 1974,
the Department of Energy’s (“DOE”) predecessor agency,
the Federal Energy Administration (“FEA”), published
a Notice of Proposed Rulemaking concerning the Old Oil
Allocation (“Entitlements”) Program."' FEA stated that
“'tihe objective of the entitlements program proposed is
to achieve the equitable distribution of the low priced old
oil among all sectors of the petroleum industry ... .”
(89 Fed. Reg. at 31650). FEA also commented that
“lulnder the proposal, all money spent or received as the
result of the purchase or sale of entitlements would be
passed through to consumers, either as a cost increase or
decrease, respectively.” (Jd.).

Effective November 29, 1974, FEA adopted regulations
instituting the Entitlements Program.’ In keeping with
the Congressional mandate that there be “dollar-for-
dollar passthrough of the net increases in the cost of crude
oil,” 15 U.S.C. § 753(b) (2) (A), the regulations pro-
vided that the entitlements costs or proceeds would be in-
cluded in crude oil cost calculations. In upholding the
constitutionality and validity of the Entitlements Pro-
gram, TECA explained:

The basic purpose of the Entitlements Program was
to spread the benefit of access to old price-controlled

8 See 39 Fed. Reg. 1924 (1974).

® See Exec. Order No. 12287; 46 Fed. Reg. 9909 (1981).
10 See 10 C.F.R. § 212.83(c) and (d).

11 See 39 Fed. Reg. 31650 (1974).

12 See 10 C.F.R. § 211.67 (1974)

5

oil and the burden of dependence on uncontrolled oil
among all sectors of the petroleum industry, all re-
gions of the country, and among all consumers of
petroleum products... .¥

As TECA stated in its opinion herein, one consequence
of the Entitlements Program was that if, as happened
here, price-controlled crude was improperly certified as
exempt (or nigher priced) crude oil, the effects of the
overcharges initially would be distributed among all do-
mestic refiners; thereupon “the regulatory system was
designed to insure that money spent or received by the
refiners as the result of their purchases or sales of en-
titlements would be passed along to the ultimate con-
sumers.” ™

B. The Proceedings Below

1. The District Court

On June 8, 1978, DOE instituted this enforcement ac-
tion against Exxon under § 209 of the ESA, alleging that
the prices Exxon had been charging since January 1975
for crude oil produced from the HFU exceeded the maxi-
mum prices pe*mitted by law. (I R. 16). In its prayer
for relief, DO. urged the District Court to order Exxon
to pay the overcharges, with interest, to the United
States Treasury.'’ Over the ensuing 4 years, the District
Court issued 8 reported opinions and over 100 separate

13 Cities Service Co. v. FEA, 529 F.2d 1016, 1021 (Em. App.
1975), cert. denied, 426 U.S. 947 (1976) (emphasis added).

14 Exx. App. 87a, citing Union Oil Co. v. DOE, 688 F.2d 797, 802
(Em. App. 1982), cert. denied, 459 U.S. 1202 (1983). See also the
decision of the District Court herein quoted at p. 7, infra.

15 “Plaintiff prays that this Court enter judgment in its favor
upon this Complaint: ... 3. Ordering that Exxon make restitu-
tion of moneys, in the form of payments to the United States Treas-
ury, equal to the amount of its overpricing for first sales of crude
oil from the [Hawkins Field Unit];” (I R. 33).

6

orders, and TECA issued 3 reported opinions on inter-
locutory appeals brought by Exxon.

On August 27, 1982, DOE and Exxon filed cross-
motions for summary judgment presenting both liability
and remedy issues for decision. On November 24, 1982,
five weeks after oral argument on the summary judg-
ment, a group of 6 refiners, including 4 of the 7 petition-
ers in No. 85-430, and a trade association representing
other refiners (“Indicated Refiners”) filed a “Conditional
Motion . . . To Intervene” in which they argued, as
Exxon had, that “it is impossible to trace the impact of
the overcharges,” and that, based upon precedent in pri-
vate antitrust damage actions, refiners should receive the
entire overcharge fund (XLV R. 38973). Some three
months after oral argument, 5 gasoline station operators
(“Gasoline Retailers’), purporting to represent 187,000
independent branded retailers throughout the United
States, filed a motion for limited intervention in the Dis-
trict Court; they urged that the “impact of the over-
charge” should be traced through the DOE Entitlements
Program to the “more than 200 refiners nationwide” and
then, “taking into account each refiner’s banked costs”
and DOE’s “[{c]omprehensive compliance audits’, to all
“purchasers of refined products throughout the period of
violation” (XLV R. 38995-38997). At Exxon’s request,
the District Court stayed consideration of both the Indi-
cated Refiners’ and the Gasoline Retailers’ intervention
motions. (ATA App. A-288 and A-289.)

On March 25, 1983, the District Court issued its Mem-
orandum Opinion holding Exxon liable for some $895
million in crude oil overcharges between January 1975
and January 1981, plus interest. The District Court
determined that, as a matter of law, Exxon was re-
quired to change its accounting practices relating to
Hawkins Field crude oil on January 1, i975, and that
there was no factual dispute as to its failure to do so.

7

In fashion an equitable remedy under § 209 of the
ESA, the District Court determined that “the over-
charges worked their way throughout the economy na-
tionwide to the millions of ultimate consumers of petro-
leum products.” Following TECA’s prior holding con-
cerning the operation of the Entitlements Program, the
District Court reasoned that “|jjust as the program
spread the benefit of access to old oil, so too did the
program spread the burden of Exxon’s overcharges among
all sectors of the petroleum industry, all regions, and all
consumers [of petroleum products].”'* The District
Court also referred to record evidence of Exxon’s ad-
mitted understanding of this impact '* as well as the cost-
passthrough effects of DOE’s price regulations.'® It deter-
mined:

Exxon’s overcharges were not, as it simplistically
asserts, borne by Exxon itself, but instead were
borne by ultimate consumers of petroleum products
throughout the entire country.”

Accordingly, the District Court found thac:

[t]he broad scattering of the ill effects of Exxon’s
wrongdoing renders impossible the tracing of the
overcharges to their ultimate victims and the calcu-
lation of the precise damages suffered by each.”

16 Exx. App. 239a (emphasis added).

17 Exx. App. at 248a, citing Cities Service Co. v. FEA, p. 5 n.13,
supra. See also id. at 248a-249a, quoting Union Oil Co. v. DOE,
supra, p. 5, n.14.

18 Exx. App. 248a-249a.

19 Exx. App. 249a, citing 10 C.F.R. § 212.83(c) (2)(iii) and 10
C.F.R., Part 212, Subparts F and L.

20 Exx. App. 249a. Based on this finding, the District Court
initially denied the conditional intervention motion of the Indicated
Refiners and the motion for limited intervention of the Gasoline
Retailers. Exx. App. 249a, n.56.

21 Exx. App. 250a.

8

The District Court ordered Exxon “to make restitution
of the full amvunt of the overcharges, plus interest, to
the [United States] Treasury” ** to be held “in trust” **
for distribution to the States, in proportion to each State’s
share of nationwide consumption of petroleum products,
for use in energy-related programs designed to benefit
their injured citizers.** The procedures for disbursement
to the States were modeled on the Congressional enact-
ment of § 155 of the Further Continuing Appropriations
Act, 1983. The District Court explained:

In formulating its order, the court in no way relies
on Section 155 as an express statutory grant of au-
thority to this court, but acts instead in the exercise
of its broad equitable powers to order restitution.
However, Section 155 clearly bespeaks the intent of
Congress that violators of the petroleum price regu-
lations should be made to disgorge their illgotten
gains even in situations, like the case before the
court, where the victims cf the petroleum over-
charges cannot be identified. The colossal scale of
Exxon’s wrongdoing, and the workings of pervasive
regulations to spread the burden of that wrongdoing
impossibly far and wide, must not deter this court
from fashioning an appropriate equitable remedy.
The purpose of the domestic petroleum price regula-
tions was to keep oil prices down, to relieve con-
sumers of some of the burden of towering oil costs.

22 Exx. App. 254a.
23 District Court Judgment, XXXV R. 31658 at 31659.

24 Exx. App. 255a-256a. The programs are listed infra at p. 20,
n.41.

25 Pub. L. No. 97-377, 96 Stat. 1830, 1919, § 155 (1982) (“Warner
Amendment” or the “Amendment”), reproduced at ATA App. A-
316. In the Warner Amendment, Congress directed the Secretary
of Energy to distribute up to $200 million in escrowed overcharge
funds for energy related uses by the States in proportion to the
relative consumption of both price-controlied and uncontrolled petro-
leum products in each State during the period in which price con-
trols were in effect.

9

The five energy conservation programs identified in
Section 155 operate acros the nation to reduce that
same burden, either by reducing overall consumption
through conservation or by direct financial assistance
to those most in need. Although one might speculate
as to alternative remedies, this court respects the
wisdom of the solution chosen by Congress and shall
adopt it as the most appropriate equitable remedy in
the circumstances of this case. [Exx. App. 256a,
footnote omitted, emphasis added. ]

Thereafter 33 States and Territories and the District
of Columbia were allowed to intervene to support the
District Court’s restitution order on appeal.** Six addi-
tional separate motions to intervene were filed by a joint
total of 14 parties, including refiners, jobbers, utilities,
a trucking company, a taxicab company, and an individ-
ual motorist. Each of these motions sought only to inter-
vene for purposes of appeal. None moved the District
Court to reopen the record on the question of the feas-
ibility of tracing the effect of the overcharges or for a
hearing on or reconsideration of any issue. The District
Court granted all applications for intervention, includ-
ing on reconsideration those of the Indicated Refiners
and the Gasoline Retailers, for the purpose of arguing
the remedy issue on appeal. (See ATA App. A-290
through A-298).

2. The Court of Appeals

On appeal, TECA unanimously affirmed the judgment
of liability against Exxon. By a 2-1 vote, TECA also
affirmed the District Court’s remedy under § 209.

TECA rejected the contention “that the trial court was
required to trace, or attempt to trace, the overcharges
from first purchaser, ta refiner, through various monthly
accountings required by the Entitlements Program and
its ‘banking’ system, and then to determine the nature

~~

26 Subsequently, 12 additional States intervened for the same pur-
pose before TECA.

10

and extent of any passthrough of increased costs through
the distribution system, such as might be authorized by
10 C.F.R. Section 212.83(¢)-(d) (refiners) and 212.93(a)
(resellers and retailers).” (Exx. App. 85a). TECA
agreed with the District Court that:

any attempt to trace the overcharges would be
doomed to failure because of the pervasive influence
of the Entitlements Program and other regulations
which had the effect of passing on and diffusing the
HFU overcharges through the distribution system.
[Exx. App. 86a-87a. ]

TECA explained the consequences of the Entitlements
Program whereby overcharges would be passed along to
the ultimate consumers (Exx. App. 87a; see pp. 3 to 5,
supra) and continued:

We agree with the trial court’s conclusion that any
attempt to tréce increased costs attributable to the
HFU overcharges would require a full scale audit
of the entire petroleum industry, and that any effort
to do so would be futile. As the Government sug-
gests, the first step in any such audit would require
recalculating over seventy monthly entitlement lists
issued during the period of the overcharges, taking
into account such variables as the volumes of new
and old oil produced during each month, the average
acquisition costs, and the values of each entitlement.
In determining the precise impact of the overcharges
on any particular refiner, it would then be necessary
to consider the impact of exception relief which may
have been granted by the agency over the term of
the Entitlements Program.

- * *

Even if the HFU overcharges could be traced to in-
dividual refiners, it would then be necessary to trace
their effect on product resellers, retailers and con-
sumers, through the provisions of passthrough regu-
lations. That this task would be futile is illustrated
by the difficulty of applying only one aspect of the
regulations, that is, the calculation of ‘banked

11

cests.”” Exxon itself admitted that it was unable to
supply information on its own costs... .

* * *

The fact that banked costs might exist as to any
particular refiner does not mean of course that in-
creased costs were not passed on through the dis-
tribution system. To determine this would require
an investigation into the state of mind of each re-
finer in setting prices for individual petroleum prod-
ucts each month. Such a task would be impossible,
and several of the intervenors have so conceded.
[Exx. App. 88a-90a. |

TECA rejected the refiners’ suggestion “that refunds
be made payable to themselves as ‘first purchasers’ [be-
cause] that would result in inequities, inconsistent with
the fundamental purpose of restitution under Section
209.” (Exx. App. 90a). Moreover, TECA ruled:

There was no need for the District Court in this
action to attempt the impossible task of attempting
to ascertain the damage sustained by individual con-
sumers of petroleum products. In this respect, it
should be noted that this action for restitution under
Section 209 differs in significant degree from a pri-
vate action of damages under Section 210 [Exx. App.
90a-91a. ]

In conclusion, TECA approved the “form of relief
chosen by the trial court in this action by which the res-
titution funds will be channeled through the states for
use in the enumerated energy programs designed to bene-
fit the consuming public... .” (Exx. App. 91a):

We believe this form of disbursement to be equita-
ble, and fair, and a reasonable method of compensat-
ing the consuming public for the HFU overcharges.
It accomplishes the intent of Congress that violators
of the price regulations be required to disgorge their
gains, even in situations where it may not be possi-

12

ble to identify and compensate each individual vic-
tim. While other remedies might have been adopted
by the trial court, the remedy chosen avoids further
administrative delay and confusion, with additional
costs, it prevents the frustration of congressional ob-
jectives in securing prompt enforcement of what has
been denominated as “emergency” price regulations,
and it is a reasonable means to protect the public
interest. [Exx. App. 9la-92a, footnote omitted. |

Petitions for rehearing and/or suggestions for rehear-
ing en banc filed by Exxon and several intervenor appel-
lants were denied. (Exx. App. 269a-270a). On October
23, 1985, TECA denied a motion by Marathon, Mobil and
Murphy for leave to file a second petition for rehearing.

REASONS FOR DENYING THE PETITIONS

The several petitions filed herein uniformly fail to
demonstrate that there are, as Rule 17 requires, “special
and important reasons” for this Court to grant another
round of review of the District Court’s exercise of its
equitable discretion in formulating a restitutionary rem-
edy for this case. The remedy chosen rests on the District

sCourt’s reasoned conclusion—based upon the regulatory
scheme and the voluminous record before it—that the con-
sequences of Exxon’s overcharges were spread throughout
the economy so that individual victims and amounts of
injury cannot possibly be identified and that, ultimately,
all oil products consumers nationwide suffered as a result
of the overcharges. Accord .ngly, the District Court fash-
ioned a well-grounded reinedy to benefit those ultimate
consumers.

In turn, TECA, “a court intimately familiar with the
intricacies of federal energy regulations,” (Tully v. Mobil
Oil Co., 455 U.S. 245, 248 (1982)), and empowered with
exclusive appellate jurisdiction in these matters, agreed
with the District Court’s findings, and approved its choice

ee

13

of remedy as “equitable, and fair, and a _ reasonable
method of compensating the consuming public for the...
overcharges”. (Exx. App. 91a). In so ruling, TECA ob-
served that “other remedies might have been adopted by
the trial court” (Exx. App. 92a), and thus refrained
from limiting future decisions in similar cases. Thus, far
from deciding any “important question of federal law
which has not been, but should be settled by this Court”,
it merely applied its long experience with and expertise
in the regulatory mechanism it supervises to confirm that
the District Court’s restitutionary choice not only fell
within the broad equitable discretion which prior opinions
of this Court and TECA had already settled, but was a
commendable exercise of that discretion in the complex
context of the particular regulatory violation at issue,
where identification of individual injury among many
millions of potential claimants was impossible. Petition-
ers’ attempt to narrow this discretion, and to have this
Court require the trial court in every case to attempt
identification of individual injury even where that task is
impossible, lacks both logic and precedent.

Finally, the petitioners’ various contentions that they
were improperly denied procedural rights are wholly with-
out merit. The only petitioners who sought intervention in
the District Court prior to the entry of judgment did so
well after final oral argument on the summary judgment
motions, and their intervention papers merely added rea-
sons for a finding of impossibility, as described above. All
other petitioners requested—and were granted—interven-
tion only for purposes of appeal. Thus, there has been no
departure “from the accepted and usual course of judicial
proceedings” requiring further review by this Court.

14

I. TECA’S AFFIRMANCE OF THE DISTRICT
COURT’S EXERCISE OF ITS EQUITABLE DIS-
CRETION RAISES NO ISSUE WARRANTING
FURTHER REVIEW BY THIS COURT

A. Because Section 209 Of The ESA Vested The Dis-
trict Court With Broad Equitable Powers, The
Scope Of “Appellate Review Is Correspondingly
Narrow”

Section 209 of the ESA, under which the United States
brought this suit against Exxon, provides that, in addi-
tion to the power to issue mandatory injunctions granted
therein, “the court may also order restitution of moneys
received in violation of any .. . order or regulation [un-
der this Title].”” The District Court was thus vested with
broad discretionary power.*' As Justice Harlan wrote in
Mitchell v. DeMario Jewelry, Inc., 361 U.S. 288, 291-
292 (1960) :

When Congress entrusts to an equity court the en-
forcement of prohibitions contained in a regulatory
enactment, it must be taken to have acted cognizant
of the historic power of equity to provide complete
relief in light of the statutory purposes.

Justice Harlan also quoted with approval and followed
this Court’s decision on the scope of equitable jurisdiction
under § 205(a) of the Emergency Price Control Act of
1942, Porter v. Warner Holding Co., 328 U.S. 395
(1946) :

Thus the Administrator invoked the jurisdiction of
the District Court to enjoin acts and practices made
illegal by the Act and to enforce compliance with the
Act. Such a jurisdiction is an equitable one. Unless
otherwise provided by statute, all the inherent equi-
table powers of the District Court are availabie for
the proper and complete exercise of that jurisdiction.
And since the public interest is involved in a pro-

27 Exx. App. 86a; Citronelle-Mobile Gathering, Inc. v. Edwards,
669 F.2d 717, 721-722 (Em. App.), cert. denied, 459 U.S. 877
(1982) ; Sauder v. DOE, 648 F.2d 1341, 1848 (Em. App. 1981).

15

ceeding of this nature, those equitable powers as-
sume an even broader and more flexible character
than when only a private controversy is at stake...

Moreover, the comprehensiveness of this equitable
jurisdiction is not to be denied or limited in the ab-
sence of a clear and valid legislative command. Un-
less a statute in so many words, or by a necessary
and inescapable inference, restricts the court’s juris-
diction in equity, the full scope of that jurisdiction is
to be recognized and applied. “The great principles
of equity, securing complete justice, should not be
yielded to light inferences, or doubtful construction.”
Brown v. Swann, 10 Pet. 497, 508. [361 U.S. at 292,
quoting 328 U.S. 397-398].

These decisions give special force herein to a corollary
of the trial court’s “broad discretionary power” in shap-
ing equity decrees—that “appellate review is correspond-
ingly narrow.” See Lemon v. Kurtzman, 411 U.S. 192,
200 (1973) (Op. of Burger, C.J.). A fortiori, where as
here, the Court of Appeals has approved as “equitable,
and fair, and... reasonable” ‘i “istrict Court’s exer-
cise of its equitable jurisdictiox, only a most compelling
showing of abuse could justify a second round of review
by this Court. No such showing has been made by any
of the petitioners herein.”

B. The Remedy Chosen By The District Court Was
Well-Grounded In Fact And Law

1. The Record And Regulatory Scheme Made It
Clear That It Was Impossible To Trace The
Impact Of Exxon’s Overcharges To Individual

Victims
The District Court found, on the basis of the record
before it: “The broad scattering of the ill effects of
Exxon’s wrongdoing renders impossible the tracing of

28 Petitioners are not identically situated substantively or proce-
durally. Where pertinent in this discussion, we will identify partic-
ular petitions or petitioners. Otherwise, the term “petitioners” will
mean some or all of those identified in n.7, supra.

16

the overcharges to their ultimate victims and the calcula-
tion of the precise damages suffered by each.” (Ex. App.
250a).* (See p. 7 supra). TECA “agree!d]| with the
trial court that any attempt to trace increased costs at-
tributable to the HFU overcharges would require a full-
scale audit of the entire petroleum industry, and that
any effort to do so would be futile.” (Exx. App. 88a).
It explained that conclusion by detailed examination of
the regulatory scheme, about which it has developed spe-
cial expertise in the exercise of its exclusive appellate
jurisdiction.

Petitioners point to no evidence which was in the rec-
ord before the District Court which contradicts, let alone
renders unreasonable, the District Court’s and TECA’s
conclusion that the ultimate victims of Exxen’s over-
charges and the extent of their individual injuries cannot
be ascertained in any manageable proceeding. Nor did
any of the petitioners offer to present such evidence to
the trial court in motions to intervene or otherwise.
Here, however, they rely on a 1985 report by DOE’s
Office of Hearing and Appeals (the “OHA report”) in a
separate, ongoing proceeding.*® That report, obviously,

*® The tracing issue was vigorously litigated before the District
Court entered judgment. As that court observed, in order “to post-
pone its day of reckoning” Exxon had argued:

that it must be allowed to conduct further discovery to deter-
mine if the Entitlements Program in fact operated as it was
designed and to trace the Hawkins Field overcharges to their
ultimate victims. In effect, Exxon would like to launch a na-
tionwide inquiry into the workings of more than 200 domestic
refiners during a period of several years. [Exx. App. at 247a-
248a. |

3° Report of the OHA to the United States District Court for the
District of Kansas in Department of Energy Stripper Well Exemp-
tion Litigation (“Stripper Well Litigation’), M.D.L. No. 378, re-
produced in ATA App. at A-320. Although OHA’s factfinding in
the Stripper Well Litigation should have no bearing upon the cor-
roetness of the District Court’s earlier findings in this case, based
uyon the record at the time judgment was entered, the States note

17

was not before the District Court when it rendered its de-
cision or thereafter. In fact, the OHA report was issued
on June 21, 1985, more than a year after oral argument
of this case before TECA and less than two weeks before
TECA issued its opinion affirming the District Court."
The District Court’s finding cannot be overturned on
the basis of a report which was not before it“? Nor can
it be overturr.ed on the basis of a criticism of that report,

that, like the District Court here, the recent report found, after
nearly two years of effort, that:

it is impossible to trace these increased costs [of crude oil to
all domestic refiners] through an individual refiner’s refining,
distribution and marketing operations. In fact, no party sought
to establish such a tracing in the context of this proceeding, or
suggested a valid tracing methodology based on inspection of
an individual refiner. [ATA App. A-339.]

3. ATA’s assertion that the “very facts” which it alleges concern-
ing the possibility of tracing “appear in the instant record in the
form of a detailed fact finding report by the OHA” (ATA Pet. 14)
is, therefore, incorrect. Indeed, when the OHA report was sub-
mitted to TECA that court was careful to provide only “that the
Report of OHA of June 21, 1985 be filed in the Office of the Clerk
of this Court.” Order Denying Without Prejudice Motion To Per-
mit Parties To File A Supplemental Brief On The Significance Of
The June 21, 1985 OHA Report And Granting Leave To File The
Report. (ATA App. at A-189.)

82 Indeed, the Kansas district court has not yet decided whether
to adopt the OHA rep rt. Moreover, in relying on that report for
the proposition that it would be feasible to trace the injuries of the
victims of the overcharges, petitioners fail to take due account of
the two serious deficiencies which that report itself acknowledges:

First, the report rests on assumptions and estimates which it ad-
mits are subject to valid criticism. It is, in its own terms, only one
theoretical estimate of the impact on the refining industry as a
whole if a particular set of contested assumptions is applied.

Second, as the report states, no methodology exists by which to
determine the impact on any particular refiner, much less down-
stream customers of any refiner or direct purchaser. See n.30,
supra; ATA App. at A-346, A-380 to A-381.

18

as three refiners remarkably argue in a supplemental
brief.*

2. The Restitutionary Remedy Selected By The Dis-
trict Court Was Equitable, Fair and Reasonable

The District Court’s decision to look to the Warner
Amendment (also referred to as “§ 155”) as the model
for its choice of restitutionary distribution to benefit con-
sumers was a sound exercise of its discretion since “the
victims of the petroleum overcharges cannot be identi-
fied.” (Exx. App. 256).** Three points about the Amend-
ment are especially noteworthy. First, Congress stated
that where particular injured individuals “cannot be rea-
sonably identified,” or their injury “is too small to be
capable of reasonable determination,” a refund for energy
related purposes through the States is one which is “rea-
sonably expected to benefit the class of persons injured.”
§ 155(a) (emphasis added).** Second, in choosing a State-

33 See Supplemental Brief of Petitioners Marathon, Mobil, and
Murphy in Support of Petitioners (No. 85-430). The materials
which that brief presents concerning a controversy over various
drafts of the OHA report are, of course, entirely outside the record
which was before the District Court and before TECA when it af-
firmed. It is a measure of these petitioners’ desperation that they
must rely on such materials, and on the contention that OHA’s sup-
posed bias creates a due process issue under Tumey v. Ohio, 273
U.S. 510 (1927), in order to seek review of a judgment which did
not in any way depend on the OHA report.

34 Because of the change of circumstances resulting from decon-
trol in 1981, previous mechanisms for passing refunds along the dis-
tribution chain to ultimate consumers no longer exist. Thus, as
TECA stated, refunds to first purchasers would “result in inequi-
ties, inconsistent with the fundamental purpose of restitution un-
der § 209.” (Exx. App. 90a).

35 See, e.g., 128 Cong. Rec. S15116 (daily ed. Dec. 16, 1982)
(statement of Senator Percy):

This money would come from $200 million now in escrow which
has been collected from oil company overcharges to consumers
during the seventies. This money rightfully belongs to the con-

19

based remedy, Congress necessarily found that paying
such funds to the States, in proportion to their oil product
consumption and on behalz of their injured citizens for
energy related purposes, is “restitutional.” Jd. Third, in
adopting the Amendment, Congress confirmed the propri-
ety of DOE’s repeated use of the State remedy to benefit
ultimate consumers,* and accelerated what DOE had been
intending to do with escrowed overcharge funds even
without Congressional action, i.e., distribute funds to
States on behalf of ultimate consumers.”

The petitioners’ primary disagreement with the Dis-
trict Court’s remedy is, of course, that they would prefer
to receive the money themselves. While they do raise ob-
jections directed specifically to the use of the Warner
Amendment, these do not have any merit.

a. Petitioners argue that the District Court should not
have turned to the Warner Amendment as a mode] be-

sumers who were actually overcharged during this period. But
because it is impossible to identify each individual consumer,
we should at least attempt to place this money where consumers
in general will benefit. Distribution to the States provides the
quickest means to get this money out.

% See e.g., Aifred B. Alkek, 9 DOE { 82,521, at p. 85,124 (1982)
(“We chose to distribute the money to state governmercs because
we believed that they would be able to design a distribution scheme
for the refund proceeds which would benefit all injured consumers
in each state, and account for the varying energy-related needs
of their citizens. We also believe that the states would be able to
expend the proceeds in an administratively efficient and cost-effective
manner.”); Adams Resources and Energy, Inc., 9 DOE { 82,553
at p. 85,292 (1982).

37 In proposing the Amendment, Senator Warner stated: “The
Department of Energy is seeking to provide secondary remedies to
State governments and is currently reviewing a distribution plan
which I understand is consistent with this amendment.” 128 Cong.
Ree. S15115 (daily ed. Dec. 16, 1982). See also 128 Cong. Rec.
$15701 (daily ed. Dec. 20, 1982) (statement of Senatuc Kennedy) :
“DOE has in part been proceeding in this fashion. It is the most
appropriate method of providing restitution for the injuries suf-
fered by the consumer.”

20

cause the Amendment provided only for a one-time dis-
tribution vf funds. The argument overlooks the court’s
clear statement that it was “in no way rel[ying] on Sec-
tion 155 as an express statutory grant of authority to this
court but [was acting] instead in the exercise of its broad
equitable power to order restitution.” (Exx. App. 256a,
quoted at p. 8, supra). Congress’ decision not to
compel future distribution on the basis of the Warner
Amendment formula *® cannot be taken as precluding a
court of equity from choosing to do what Congress had
done and for similar reasons.*° “Unless otherwise pro-
vided by statute, all the inherent equitable powers of the
District Court are available for the proper and complete
exercise of that jurisdiction.” DeMario Jewelry, 361
U.S. at 291, quoting Porter, 328 U.S. at 3638; see also.
Hecht Co. v. Bowles, 321 U.S. 321, 330 (1944).

b. Some petitioners present undocumented assertions
that they will not receive any benefit at all from the pro-
grams which the States must fund under the District
Court’s order.*! While there is no requirement that the

38 This fact renders frivolous the assertion of the National
Freight petitioners that by selecting the approach of the Warner
Amendment, the District Court violated the constitutional separa-
tion of powers. (Nat. Frt. Pet. 13-14, 21-22).

39 The Senate-passed version made the Warner mechanism manda-
tory in all future cases. See 128 Cong. Rec. S15117 (daily ed.,
Dec. 16, 1982).

49 Petitioners rely especially on the comments of Congressman
Dingell as forbidding any use of the Warner Amendment as prece-
dent; but, where, as shown above, the statute on its face makes
clear Congress’ view that its own remedy was reasonable and resti-
tutionary, a court may accept the soundness of that judgment.

41 The five Federal energy conservation programs involve (1)
weatherization of buildings (see 42 U.S.C. § 6861 et seq.); (2) im-
plementation of State energy conservation programs (see 42 U.S.C.
§ 6321 et seq.); (3) reduction of energy consumption in, or the
funding of alternate energy sources for, schools and hospitals (see
42 U.S.C. $5371 et seq.); (4) promotion of conservation by small
businesses and individuals, (see 42 U.S.C. § 7001 et seq.); and (5)

21

remedy adopted by the court directly benefit each person
who was injured by the overcharges, it is plain that peti-
tioners’ view of these programs is far too narrow. For
example, State energy conservation plans are intended to
reduce total energy consumption by all citizens and busi-
nesses within the State. See 42 U.S.C. § 6322(a) (1).
A reduction in demand can lower oil product prices, bene-
fitting all buyers, especially commercial users, in propor-
tion to consumptio and in long-range terms will reduce
the dangers of ha: nful energy shortages. Moreover, the
provisions which are listed in the District Court’s order
are sufficiently broad and flexible to permit funding of
programs which would quite specifically benefit businesses
such as those represented by various petitioners. Without
attempting to be exhaustive, we note in the margin some
possibilities which readily come to mind.**

assistance to low-income people in paying home utility bills (see 42
U.S.C. § 8621, et seq.). See Exx. App. 255a, n.58.

42 To achieve that goal, the plans are required to promote more
efficient lighting for public buildings and thermal efficiency stand-
ards and insulation requirements for new and renovated buildings.
42 U.S.C. §6322(c). The States are further permitted to adopt
transportation controls, programs of public education, and “any
other appropriate method or programs to conserve and to improve
efficiency in the use of energy.” 42 U.S.C. § 6322(d) (5).

43 State energy conservation plans are intended to be coordinated
with the operation of State energy extension service plans, 42
U.S.C. § 7005(h), which in turn allow the States to provide on-site
energy use evaluations and recommendations to consumers and
businesses, including information about the availability of aid for
“planning, financing, installation, and effective monitoring of en-
ergy-related facilities and activities.” 42 U.S.C. § 7004(b)(6) and
(b)(7). Airports and airlines could seek aid for airport improve-
ments to reduce fuel burning caused by delays in landing time un-
der these provisions. Part 450 of 10 C.¥.R. contains a list of
energy conservation measures aiready approved by DOE for imple-
mentation by State energy extension services with both residential
and industrial applications, including, for example, audits, insula-
tion measures, control systems and installation of high efficiency

22

In short, it was fully appropriate for the District
Court to look “at the policy of the legislation and fash-
ion[] a remedy that will effectuate that policy,” Textile
Workers v. Lincoln Mills, 353 U.S. 448, 457 (1957), and
in doing so, (as the District Court said) to “respect[]
the wisdom of ‘he solution chosen by Congress and [to]
adopt it as the most appropriate equitable remedy in the
circumstances of this case.” (Exx. App. at 256a).

3. TECA’s Decision is Entirely Consistent With
This Court’s Decisions

TECA in this case and in its prior decisions has fully
attended to this Court’s major teaching in Porter v. War-
ner Holding Co., supra, that in these public enforcement
cases, courts should exercise broad and flexible powers to
do equity.** Nevertheless, citing private damage action
precedents, and ignoring Porter’s distinction between
such private actions and public restitution actions,*’ pe-
titioners argue that Porter restricted the scope of equita-
ble jurisdiction, and required individual injury determi-
nations in every overcharge restitution case. They do so
by tearing out of context the concluding paragraph of the
Porter opinion, from which they quote.*® That paragraph
equipment. These are precisely the type of efforts in which many
utilities already engage and which the States could help finance un-

der the remedy adopted by the District Court.

44 See Citronelle-Mobile and Sauder, p. 14, n.27, supra.

* “Restitution, which lies within that equitable jurisdiction
[granted by § 205(a) of the 1942 price control Act] is consistent
with and differs greatly from the damages and penalties which
may be awarded under § 205(e).” 328 U.S. at 402.

46 Marathon’s argument that by “restitution, Congress meant the
refund of overcharges to the party injured” as in United States v.
Lieb, 333 F. Supp. 424 (W.D. Tex. 1971), aff’d, 462 F.2d 1161 (Em.
App. 1972) (Mar. Pet. 15), is wholly without merit. Where Con-
gress takes pain to confirm an expressly “inherent equitable power”
of historically large scope, its action is not to be construed as nar-

23

set forth the trial court’s authority and responsibility on
remand to resolve “conflicting claims and counterclaims
between tenants and landlord as to the amounts due...”
(328 U.S. at 403). The “interested parties” whom che
tria] court was instructed to bring in, if necessary, were
the tenants against whom the landlord had such counter-
claims, a small and readily ascertainable class.*7 The
purpose of bringing them in was not to allow them to
assert claims for restitution (which the Secretary was
doing on their behalf) but to enable the court to adjudi-
cate any “counterclaims” against them by the landlord.

Because “[t]he broad scattering of the ill effects of
Exxon’s wrongdoing renders impossible the tracing of the
overcharges to their ultimate victims and the vaiculation
of the precise damages suffered by each,” ** the teachings
of Porter which are truly applicable in this case are those
which forcefully affirm the broad powers of the courts of
equity to fashion a restitutionary remedy, see pp. 14 to
15, supra. Petitioners’ insistence that proceedings were
required which would enable them, and the literally
countless other persons and entities who were similarly

rowing the courts’ discretion by requiring them to conform to the
particular circumstance of a case which is cited in the legislative
history to illustrate that the power already exists.

47 This portion of the Pcrter opinion was a response to the land-
lord’s argument, based on evidence that he ‘“‘may have valid counter-
claims against certain tenants for damage to «r theft of its prop-
erty.” (Br. for Warner Holding Co., No. 793, Jct. T. 1945, p. 36,
quoting 60 F. Supp. 513, 520.) This Court’s opinion answered the
trial court’s question: “Could this court, without 4 jury, adjudi-
cate the amount of restitution in each of he twenty rental units
involved here, some of which have had several different tenants,
without the tenants before it and without the defendant having an
opportunity to interpose valid counterclaims as a defense?” (Jd.)
This Court held that a court of equity did have the power to adjudi-
cate the counterclaims and to bring the tenants before it for that
purpose.

48 Exx. App. at 250a.

24

situated, to prove their individual injuries in order
that they may be compensated, cannot be reconciled with
those teachings. Indeed, as the District Court recognized,
adoption of the petitioners’ position would, as a practical
matter, nullify the restitutionary remedy “because DOE
{or a court] could never accurately determine the losses
suffered by any one claimant.” (Exx. App. at 253a.)

The decision below is also entirely consistent with Fed-
eral Power Commission v. Interstate Natural Gas Co.,
336 U.S. 577 (1949). While Jnterstate directed the fed-
eral court to make a “prognostication” as to what would
in fact have happened as a consequence of federal or
State law if the stay had not been issued (id. at 584), it
was evidently anticipated that this task could readily be
accomplished :

Distribution of the fund should not involve prolonged
litigation. It is an administrative matter involving
the exercise of an informed judgment by the federal
vourt and should have the flexibility and dispatch
which characterize the administrative process. [Jd.]

Here, by contrast, the courts below have found that allo-
cating the fund among the potential individual claimants
is “impossible.” (Exx. App; 86a-9la, 247a-151a).*

Surprisiagly, since this Court does not sit to resolve
intracireuit conflicts, petitioners attempt to make much
of a supposed inconsistency between the decision below

49 Some petitioners place particular reliance on a portion of Jus-
tice Frankfurter’s separate concurring opinion. In so doing, they
omit the concluding sentence of the paragraph from which they
quote: “It will be time enough to distribute the fund by some
makeshift rule of thumb if what is concededly a rule of intrinsic
fairness should be found judicially unenforceable.” (336 U.S. at
590). Justice Frankfurter recognized that even a “makeshift rule
of thumb” would be preferable to imposing upon the lower court a
duty which it could not perform; here, no “makeshift” rule was
needed since there existed a model well grounded in Congressional
and administrative example.

25

and that in Citronelle-Mobile Gathering, supra. In so
doing, petitioners simply disregard TECA’s careful and
detailed explanation (Exx. App. 85a-87a) of why “the
District Court’s judgment and Order . . . are fully in
accord with our ruling in Citronelle ....” (Id. 85a).

Il. NONE OF THE PETITIONS PRESENTS A PROCE-
DURAL ISSUE WARRANTING REVIEW

Petitioners present an array of procedural objections to
the District Court’s decision, invoking variously Rules 24
(intervention) and 56 (summary judgment) of the Fed-
eral Rules of Civil Procedure and the Due Process Clause
of the Fifth Amendment. Their common objection, what-
ever the form of their individual arguments, is that the
| istrict Court should have granted them a hearing on
the issue of remedy. A close examination of the proceed-
ings below and of the respective petitions shows that
none of the petitioners present a procedural issue merit-
ing review.

A. At the outset, it is essential to recall that most of
the parties that are now petitioners here sought leave
from the court to intervene only for the purposes of
appeal. This was true of all the parties who moved to
intervene after the court issued its decision—specifically
three of the refiners who petition in No. 85-430 (Mara-
thon, Mobil and Murphy); all parties to the ATA peti-
tion (No. 84-432) except the Gasoline Retailers (spe-
cifically ATA, Petroleum Marketers and Jobbers); as
well as PECO (No. 85-440); and all parties to the Na-
tional Freight petition (No. 85-444) (National Freight,
RJG Cab and Sweeney). These parties did not move the
District Court for leave to adduce any evidence to refute
any of the findings which the court had made or other-
wise to reconsider its decision. In short, since the Dis-
trict Court granted the postjudgment movants all the
intervention which they sought, they cannot now assert
that the court denied them any procedural rights.

26 '

B. This leaves to be considered only the procedural
objections of the prejudgment (but post-oral argument)
movants, the Indicated Refiners and the Gasoline Re-
tailers.

1. Four of the refiners who were parties to the Indi-
cated Refiners’ prejudgment motion to intervene have
joined in the Marathon petition; that petition raises
two related procedural issues. (Mar. Pet. i).

The first. is that the District Court should have given
notice and an opportunity to be heard to all potential
claimants. That issue is irsubstantial. The court could
not possibly provide notice or an opportunity to be heard
to all such persons, which include not only the present
intervenors, but all others similarly situated, including,
for example, 187,000 gasoline retailers and tens of mil-
lions of individual motorists. The refiners have asserted
that they were injured and were unable to pass through
all of the overcharges, but not that other persons such as
consumers bore none of the burden. Moreover, as the
refiners recognize, TECA ruled that such notice was un-
necessary “on the theory that actual overcharges are
incapable of judicial proof.” (Mar. Pet. 20). They now
contend—and this is the second part of the question which
they present—that “that ‘finding’ is pure speculation.”
(Id.).

As shown above, however, the District Court’s finding
was fully substantiated in the Court’s analysis of the
regulatory framework and the particular record before
it, the issue having been pressed by Exxon. Even more
important for present purposes, the refiners cannot ask
this Court to review that finding because, far from prof-
fering any contrary evidence, they conceded the impos-
sibility of tracing the overcharges below. In the District
Court the Indicated Refiners asserted that “it is impos-
sible to trace the impact of the overcharges directly to

5® They are Ashland, Pennzoil, Tenneco and Tosco.

27

any subsequent purchasers.” (XLV R. 38973). Before
TECA, the other refiners who here join in the Marathon
petition asserted that with respect to both controlled and
uncontrolled petroleum products that it would be im-
possible to determine whether or not the refiners absorbed
or passed on the overcharges.”

The refiners so argued because their position in the
courts below was that the rule in antitrust damage suits
under Hanover Shoe, Inc. v. United Shoe Machinery
Corp., 392 U.S. 481 (1968) and Illinois Brick Co. V.
Illinois, 431 U.S. 720 (1977) should be applied by anal-
ogy. They argued that in providing a remedy under
§ 209, the District Court was bound to award restitu-
tion to the first purchaser without regard to actual in-
jury, as TECA had done in certain circumstances in pri-
vate § 210 damage suits. TECA rejected that restrictive
view of § 209 (Exx. App. 90a) and the question pre-
sented in the Marathon petition does not challenge this
basis for denying the refiners’ claim. That is, oi course,
a separate and independent ground for denying the
refiners’ petition.*”

2. The Gasoline Retailers present no question or argu-
ment relating to the fact that their motion to intervene

51 Brief of Intervenor-Appellants Marathon Petroleum Company,
et al., at 16-17. This statement by Marathon, et al. and that of an-
other refiner which is not a petitioner here were cited by TECA
in making the very ruling which the refiners now challenge. See
Exx. App. 90a, quoted at p. 11, supra.

52 In the closing footnote of their petition, the refiners say that,
if the lower courts had applied the principles of the above-cited de-
cisions, “the impossibility of proving the absorption or pass on of
overcharges in transactions subsequent to the first purchases
would have required the entire restitutionary award to be made to
the first purchaser unless a showing was made that a subsequent
purchaser had a fixed quantity cost plus contract or its functional
equivalent.” (Mar. Pet. 24, n.21, emphasis added). The under-
scored passage is consistent with the refiners’ position below, but
cannot be reconciled with the theory of their petition—that they
are entitled to a hearing on whether it is “impossible”.

28

was filed prior to the District Court’s judgment.*
Rather, their petition makes a more general! point, appli-
cable to all the parties which join therein, that, because
the District Court had granted them intervention as a
matter or right under Rule 24(a), it violated that Rule
by denying them the opportunity to present evidence of
their injury. ATA Pet. i, first question; 18-21.% This
contention is a non sequitur, for Rule 24(a) contains
within it the requirement that the motion to intervene
as of right be “‘timely”’.

Here, all the motions which sought intervention for the
purpose of appeal were timely for that purpose and were
granted. On the other hand, neither the motion of the
Gasoline Retailers nor that of the Indicated Refiners,
which were filed prior to judgment but after oral argu-
ment on DOE and Exxon’s motions for summary judg-
ment, were timely for the purpose of requiring the Dis-
trict Court to reopen its proceedings. The indisputable
fact is that from the very outset of this case it has been
clear that the United States was seeking restitution in
the form of a payment into the United States Treasury.
(See Complaint quoted at p. 5, n. 15, supra). The mov-
ants did not suggest in the District Court—nor do they

53 The Retailers’ motion to intervene was originally denied by the
District Court on the basis of its finding that the real victims of
the overcharges were the ultimate consumers of petroleum products.
(Exx. App. 249a, n.56). It is significant that the petition for certi-
orari in which they joined contains nothing to show that any re-
tailer can demonstrate injury as a result of Exxon’s overcharges.

54 The parties to the ATA petition other than the Gasoline Re-
tailers cannot maintain that contention for the additional reason
that they moved to intervene only for the purposes of appeal. They
are thus making the unsupportable assertion that the District
Court erred by denying them that for which they did not ask. Like-
wise, since none of the petitioners opposed the granting of summary
judgment, in accordance with the procedures of Rule 56 or other-
wise, the argument in the ATA petition, pp. 21-23, that their rights
under Rule 56 were infringed is also untenable.

29

demonstrate now—that they had a right to wait until the
proceedings befo.e the District Court were virtually com-
plete before seeking to make a record on their claims.

The position urged in the ATA petition would lead to
the absurd result that, where intervention is as of right,
intervention may not be granted for purposes of appeal
only. This Court has, however, approved intervention for
purposes of appeal only, stressing that the propriety of
such an appeal depends on “whether in view of all the
circumstances the intervenor acted promptly after the
entry of final judgment.” United Airlines, Inc. v. McDon-
ald, 482 U.S. 385. 395-396 (1977). Cf. NAACP v. New
York, 413 U.S. 345, 366 (1973). In McDonald, interven-
tion had been allowed under Rule 24(b), see id. at 390,
but the Court there cited with approval a series of court
of appeals decisions which allowed intervention for pur-
poses of appeal only under Rule 24(a). (Jd. at 395-396,
n.16).*°

No distinction between Rules 24(a) and (b) for this
purpose has been proffered in the ATA petition, or read-
ily suggests itself. If petitioners’ submission were cor-
rect, a party whose interest is sufficient to allow inter-
vention as of right and is timely for purpose of appeal
could not be granted such intervention without being al-
lowed to reopen the case in the trial court, even if its
intervention is untimely for that purpose. Any such re-
sult would either defeat the right to intervene for pur-
poses of appeal only or undermine the timeliness require-
ment of Rule 24(a).

55 These cases are: Hodgson v. United Mine Workers, 153 U.S.
App. D.C. 407, 419, 473 F.2d 118, 129 (1972); Smuck v. Hobson,
132 U.S. App. D.C. 372, 378-379, 408 F.2d 175, 181-182 (1969) ;
Pellegrino v. Nesbit, 203 F.2d 463, 465-466 (9th Cir. 1953) ; Wolpe
v. Poretsky, 70 U.S. App. D.C. 141, 144, 144 F.2d 505, 508, cert.
denied, 323 U.S. 777 (1944). The reports of the other cited cases
do not state whether Rule 24(a) or (b) intervention was involved.

In sum, the prejudgment movants’ procedural objec-
tions are no more worthy of review than those of the
other petitioners, who intervened for purposes of appeal

only.

CONCLUSION

For the foregoing reasons, the petitions for certiorari

should be denied.

FRANCIS X. BELLOTTI
Attorney General
of Massachusetts
GEORGE B. DEAN
ALAN L. Kovacs
One Ashburton Place—
20th Floor
Boston, Massachusetts 02108

DAVID FROHN MAYER
Attorney General of Oregon
DONALD C, ARNOLD

100 State Office Building
Salem, Oregon 43710

JOHN VAN DE KAMP

Attorney General of California
YEoRYIOS C, APALLAS

6000 State Building

350 McAllister

San Francisco, California 94102

December 23, 1985

Respectfully submitted,

ANDREW P. MILLER

GEORGE KAUFMANN

STEPHAN G. WIELGOZ
DICKSTEIN, SHAPIRO & MORIN
2101 L Street, N.W.
Washington, D.C. 20027
(202) 785-9700

BERNARD NASH

EDWARD G. MODELL

BLUM, NASH & RAILSBACK

1133 Fifteenth Street, N.W.

Suite 1100

Washington, D.C. 20005

(202} 857-0220

JAMES F. FLuG

PAULA DINERSTEIN

LOBEL, NOVINS & LAMONT

1275 K Street, N.W.

Suite 770

Washington, D.C. 20005
202) 371-6626

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0730%3A3. Public record. Not legal advice.