Petition for Writ of Certiorari — Inexco Oil Co. v. United States Department of Energy

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86-9229 > Sons

TILEa MR.

NOV 29 1985

No. 85- IOGEPH FA SPANI@L, JR.

In THE

Supreme Court of the United ‘States

OcTOBER TERM, 1985

INExco O1L COMPANY,

Petitioner,

Vv.

UNITED STATES DEPARTMENT OF ENERGY

AND JOHN S. HERRINGTON, SECRETARY OF ENERGY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE TEMPORARY EMERGENCY COURT OF APPEALS

OF THE UNITED STATES

ROGER RIDER

Counsel of Record

THOMAS W. HOUGHTON

RONALD J. BIGELOW

THOMAS M. FARRELL

Mayor, Day & CALDWELL

P.O. Box 61269

Houston, Texas 77208

(713) 225-7000

STANLEY K. HATHAWAY

HATHAWAY, SPEIGHT AND KUNZ

One Pioneer Center

2424 Pioneer Avenue

Cheyenne, Wyoming 82001

(807) 634-7723

Attorneys for Petitioner

Inexco Oil Company

i

QUESTIONS PRESENTED

1. Whether the Temporary Emergency Court of Appeais

may assume jurisdiction of a petition for a writ of mandamus

to review a discovery order even though it would have no

jurisdiction under Bray v. United States, 423 U.S. 73 (1975)

(per curiam), to review such an order in a criminal contempt

proceeding.

2. Whether the Temporary Emergency Court of Appeals has

misapplied the doctrine of res judicaia by holding that a

previous judicial approval of an agency's interpretation of a

regulation, based upon the substantia! evidence in that case,

precludes non-parties from subsequently attacking the

agency's interpretation of the regulation on the basis of a

different administrative record.

LIST OF PARTIES IN THE

TEMPORARY EMERGENCY COURT OF APPEALS

The following is a full and complete list of the parties before

the Temporary Emergency Court of Appeals in this action:

Name

Inexeo Oil Company

United States Department

of Energy

John-S. Herrington, Secretary

Department of Energy

The Honorable Clarence A.

Brimmer,

Chief Judge of the United

States District Court for

the District of Wyoming

Address

2100 RepublicBank Center

Houston, Texas 77002

1000 Independence Ave.,

S.W.

Washington, D.C. 20585

1000 Independence Ave.,

S.W.

Washington, D.C. 20585

P.O. Box 985

Cheyenne, Wy. 82001

TABLE O*¥ CONTENTS

ND PEPOPPPTTTTITEI TET TET TET Eee

List of Parties in the Temporary Emergency Court of

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Statutes and Regulations Involved... ... 6... 6. cen

has wed gtig 5 vaecis 66666600 ce0eneis

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Reasons for Granting the Writ ...... 2... 6.6.

A. The Temporary Emergency Court of Appeals May Not

Assume Jurisdiction To Review a Discovery Order by

Writ of Mandamus When It Would Have No Jurisdic-

tion Under Bray v. United States To Review Such an

Order in a Criminal Contempt Proceeding ...........

B. The Temporary Emergency Court of Appeals Misap-

plied the Doctrine of Res Judicata by Holding that a

Previous Judicial Approval of an Agency's Interpreta-

tion of a Regulation, Based Upon the Substantial

Evidence in that Case, Precludes Non-Parties from

Subsequently Attacking the Agency's Interpretacion of

the Regulation on the Basis of a Different Administra-

SES Sec euhSce Ch habeus ciLERe we ceecedecses

ae 6 eRe ee ie es alvin de OS os a Waele 66 COR

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iv

TABLE OF AUTHORITIES

Cases

Allied Chemical Corp. v. Daifion, Inc., 499 U.S. 33 (1980)

GOGGIN hin on cn gncctecennsecandscvescascesesens

DED 6c bd0b 600 sndenes 04000080 6eesanemaeies dues

Belfer v. Pence, 435 F.2d 121 (9th Cir. 1970) (per curiam)

Bray v. United States, 423 U.S. 73 (1975) (per curiam) ...

DOE v. Brett, 659 F.2d 154 (TECA 1981) (per curiam),

cert. denied, 456 U.S. 936 (1982) ............ 6... e ne

DOE v. Crocker, 629 F.2d 1341 (TECA 1980) (per

GU 0 rc bs 4hueu 6 e608 6OUR504 4b 66066 RAC EKES Ci Sees

DOE v. Osborn, 760 F.2d 282 (TECA 1984) .............

AA we. Ba, GED UR. FB CIDTED ow onc cin ceticcvccsccncs

Grigsby v. DOE, 585 F.2d 1069 (TECA 1978), cert. denied,

SE STA ccdvdocchandtecéccccbcececis

Kerr v. United States District Court, 426 U.S. 394 (1976) ..

Maresse v. American Academy of Orthopaedic Surgeons,

726 F.2d 1150 (7th Cir. 1984) (en banc), rev'd, cert.

GE, Gee Gh a GH COUEIEE vowtcnccccccedecescess

Mountain Fuel Supply Co. v. DOE, 656 F.2d 69C (TECA

SE 4.6s dndih tn nhsabs eecinech vhs keh denchabenth ccd

NLRB v. Sears, Roebuck & Co., 421 U.S. 132 (1975} .....

P&R Trading Co., Dkt. No. RO85-20-000 (FERC Sept. 23,

nt Ree

Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) ......

Renegotiation Board v. Grumman Aircraft Engineering

Cs Ge Sa CE SAID ok 6 oS bide kbc vec tedigaws:

Sector Refining, Inc. v. Enterprise Refining Co., 771 F.2d

Se I hs is en ee Sadeeekbddeaewecnese hs

Texaco Inc. v. DOE, 616 F.2d 1193 (TECA 1979) ........

United States v. Texas Energy Petroleum Corp., 719 F.2d

EY EEE KASS Cds cewan ane keadiseueececes

United States v. Uni Oil, Inc., 646 F.2d 946 (Sth Cir. 1981),

— ey gb ge Ff Brrerer er TeTiTey

Will v. Calvert Fire Ins. Co., 437 U.S. 655 (1978) ........

Will v. United States, 389 U.S. 90 (1967) .. 2.2... 2.66 .66..

Vv

Statutes

Economic Stabilization Act of 1970,

tt Cn. occa eeu shechesbapsesnceced 2,4,7,10

Emergency Petroleum Allocation Act of 1973, 15 U.S.C.

YAN a gies a DiS Ste inn 2,4,7,10,12

Fe Pe es Ge is OO 6 eo ec hve cccccceccecs 3

Freedom of Information Act, 5 U.S.C. § § 552 ef seg. ..... 8

Miscellaneous

4 K. Davis, Administrative Law Treatise § 21:2 (1983) .... 14

8 C. Wright & A. Miller, Federal Practice and Procedure:

Civil § 2006 (1970 & Supp. 1985) ..... 2... 6... eee 9

Rule 26, Federal Rules of Civil Procedure ............... 12

In THE

Supreme Court of the United States

Ocroser Term, 1985

No. 85-

INExcOo On COMPANY,

Petitioner,

v.

Unrrep States DEPARTMENT OF ENERGY

AND Joun S. HERRINGTON, SECRETARY OF ENERGY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE TEMPORARY EMERGENCY COURT OF

APPEALS

OF THE UNITED STATES

I.

OPINIONS BELOW

The opinion of the Temporary Emergency Court of Appeals

(“TECA”) granting the petition for a writ of mandamus has not

yet been reported. It appears in Appendix A. The order of the

United States District Court for the District of Wyoming compel-

ling the production of discovery documents is an unpublished

order. It appears in Appendix B.

2

At

JURISDICTION

The Temporary Emergency Court of Appeals did not have

subject-matter jurisdiction of this proceeding. It nonetheless

entered judgment on October 2, 1985, and denied a petition for

rehearing and a suggestion for rehearing en banc on November |,

1985. This Court has jurisdiction under Section 211(g) of the

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

incorporated by Section 5(a)(1) of the Emergency Petroleum

Allocation Act of 1973, 1S U.S.C. § 754(a)(1).

Il.

STATUTES AND REGULATIONS INVOLVED

Section 211(b)(2) of the Economic Stabilization Act of 1970,

12 U.S.C. § 1904 note, provides:

(2) Except as otherwise provided in this section, the

Temporary Emergency Court of Appeals shall have exclusive

jurisdiction of all appeals from the district courts of the

United States in cases and controversies arising under this

title or under regulations or orders issued thereunder. Such

appeals shall be taken by the filing of a notice of appeal with

the Temporary Emergency Court of Appeals within thirty

days of the entry of judgment by the district court.

Section 5(a)(1) of the Emergency Petroleum Allocation Act

of 1973, 15 U.S.C. § 754(a)(1), provides:

(a)(1) Except as provided in paragraph (2), (A) sec-

tions 205 through 207 and sections 209 through 211 of the

Economic Stabilization Act of 1970 (as in effect on Nov-

ember 27, 1973) shall apply to the regulation promulgated

under section 753(a) of this title, to any order under this

chapter, and to any action taken by the President (or his

delegate) under this chapter, as if such regulation had been

promulgated, such order had been issued, or such action had

been taken under the Economic Stabilization Act of 1970;

and (B) section 212 (other than 212 (b)) and 213 of such

Act shall apply to functions under this chapter to the same

3

extent such sections apply to functions under the Economic

Stabilization Act of 1970.

The All Writs Act, 28 U.S.C. § 1651, provides:

(a) The Supreme Court and all courts established by Act

of Congress may issue all writs necessary or appropriate in

aid of their respective jurisdictions and agreeable to the

usages and principles of law.

(b) An alternative writ or rule nisi may be issued by a

justice or judge of a court which has jurisdiction.

IV.

STATEMENT OF THE CASE

This case presents important questions with respect to federal

appellate jurisdiction and administrative law. The first question

involves the relationship between TECA and the courts of appeals

for the various circuits. TECA has, by using the extraordinary

writ of mandamus, purported to expand the scope of its statutorily

limited jurisdiction to review a district court's interlocutory dis-

covery decision. If TECA’s decision is correct, parties in future

cases will be able to obtain review in TECA of decisions that this

Court has held should be reviewed in a circuit court of appeals, by

simply seeking a writ of mandamus.

The second issue invoives a dangerous misapplication of the

doctrine of res judicata in the area of administrative law. In the

opinion below, TECA has held that prior judicial decisions

reviewing the interpretations of an agency's regulations which

involved distinct parties and unique administrative records are

binding on subsequent unrelated parties with different administra-

tive records. This is a fundamental misapprehension of the

principles of administrative law which permit each party to

question an agency action in its own unique circumstances.

TECA's decision below, if upheld, would grant the agency's

adjudication the same binding effect as a general rulemaking

proceeding, even on a party who could not have participated in

the adjudicatory proceeding.

4

The Department of Energy (“DOE”)' has accused Inexco Oil

Company (“Inexco”) of charging illegal prices for crude oil.

Inexco has contested DOE’s findings at each stage of the admin-

istrative-review process and has now challenged the final adminis-

trative action in the United States District Court for the District

of Wyoming. The Honorable Clarence A. Brimmer, Chief Judge

of the United States District Court for the District of Wyoming,

ordered DOE to produce 63 documents that are, in his judgment,

relevant to Inexco’s judicial challenge of the administrative ac-

tion. TECA issued a writ of mandamus requiring Judge Brimmer

to vacate his discovery order.

¥;

SUMMARY OF ARGUMENT

TECA does not have subject-matter jurisdiction of a petition

for mandamus seeking interlocutory review of discretionary dis-

covery decisions made by a trial court under the Federal Rules of

Civil Procedure. TECA’s jurisdiction is limited to review of

issues arising under the Economic Stabilization Act of 1970

(“ESA”) or the Emergency Petroleum Allocation Act of 1973

(“EPAA”). Under this Court’s decision in Bray v. United States,

423 U.S. 73 (1975) (per curiam), TECA does not have jurisdic-

tion here because this mandamus proceeding, which arises solely

under the discovery provisions of the Federal Rules of Civil

Procedure, will not require the interpretation of any substantive

provisions of the ESA, the EPAA or regulations promulgated

thereunder.

TECA has attempted to avoid Bray by noting that here DOE

sought appellate review by mandamus rather than by direct

appeal of a final contempt conviction. This Court must rebuff any

such attempt to limit Bray to contempt proceedings. Under

either avenue of review, the court of appeals may examine the

propriety of the underlying enforcement order. If mandamus may

be sought in TECA, but a criminal contempt conviction is

' As used herein, the term “DOE” shall refer to the current Department

of Energy and all of its predecessors, including the Cost of Living

Council, the Federal Energy Office, and the Federal Energy

Administration.

5

reviewable only in the circuit court of appeals, a party in a district

court proceeding may choose the furum in which to obtain review.

In direct conflict with Bray, the opinion below would permit a

party in a proceeding arising under the Criminal Code to obtain

review in TECA, by mandamus, of interlocutory decisions by the

district court on issues that only peripherally concern the EPAA

or the DOE regulations.

Assuming arguendo that TECA had jurisdiction of the manda-

mus proceeding below, TECA erred fundamentally in holding

that its prior decisions foreclose Inexco’s suit even before the

discovery phase. Due process prohibits a judgment from binding

a subsequent litigant who was not a party or privy to the previous

decision. The rule holds equally true in an administrative adjudi-

catory proceeding because judicial review of an agency adjudica-

tion is based upon the substantial evidence compiled in the

‘administrative record. Inexco has contended in the district court

that, based upon the admittedly more extensive facts and issues

contained in Inexco’s record, DOE’s application to Inexco of the

term “posted price” was arbitrary and capricious and not sup-

ported by substantial evidence. A court of appeals cannot

lawfully decide that issue as a question of law by reference solely

to the facts and contentions in different administrative records

involving different parties. To do so is to convert an administra-

tive adjudication regarding limited issues, facts and parties into a

generally applicable rulemaking proceeding without providing the

affected parties the requisite notice and opportunity to participate.

VI.

REASONS FOR GRANTING THE WRIT

A. The Temporary Emergency Court of Appeals May Not Assume

Jurisdiction To Review a Discovery Order by Writ of Mandamus

When It Would Have No Jurisdiction Under Bray v. United States

To Review Such an Order in a Criminal Contempt Proceeding.

The allocation of jurisdiction between TECA and the courts of

appeals for the various circuits presents an important question

which this Court has not addressed since Bray v. United States,

423 U.S. 73 (1975) (per curiam). The courts of appeals have

6

directed a considerable amount of their scarce resources to the

threshold question of TECA’s jurisdiction under the ESA or the

EPAA. For example, in the recent decision in Sector Refining,

Inc. v. Enterprise Refining Co., 771 F.2d 496, 502 (TECA 1985),

TECA noted that “‘[a]pproximately thirty percent of TECA’s

cases are decided upon jurisdictional grounds.’” This case

presents this Court an opportunity to resolve the confusion

created by the courts of appeals since Bray.

The legality of the prices charged by Inexco, as a seller, turns

on whether the offers to purchase crude oil made by Inexco’s

purchasing division, Inexco Oi! Marketers, constituted the highest

“posted prices” in various fields of Wyoming’s Powder River

Basin on May 15, 1973, within the meaning of applicable DOE

regulations. In essence, Inexco’s position in the district court is

twofold: (1) DOE’s interpretation of the term “posted price” in

this and other cases is arbitrary and capricious and is not entitled

to judicial deference because, inter alia, it conflicts with the

agency’s contemporaneous construction of the term, and (2) even

if DOE’s interpretation is valid in the abstract, the administrative

record in this case does not contain substantial evidence to

support DOE’s application of that interpretation to the unique

facts of Inexco’s case.

Inexco sought discovery in the district court of documents

relevant to both the interpretation and application of the term

“posted price.” DOE argued initially that discovery was com-,

pletely unavailable because judicial review is limited to the

administrative record compiled by the agency. Judge Brimmer,

however, concluded that Inexco was entitled to discovery to

determine whether the administrative record was complete and

whether DOE’s current interpretation and application of the term

“posted price” conflict with DOE’s ccntemporaneous construc-

tion of the term. After initially protesting that all responsive

documents had been supplied to Inexco, DOE identified 228

additional documents, but refused to produce 63 of them on the

basis of the pre-decisional, deliberative-process privilege.

Following DOE’s refusal to produce the documents, Judge

Brimmer conducted an in camera review and, in a comprehen-

sive, 36-page order which discusses each document, determined

7

that all 63 of the documents are discoverable and should be

produced. His decision with respect to each document is based

on one or more of three considerations: (1) DOE did not provide

enough information for the court to determine whether the

privilege applies; (2) the document is not both pre-decisional and

deliberative in nature; or (3) Inexco’s need for the document

outweighs DOE’s interest in preventing disclosure. App. B; see

App. C. Each of these determinations resulted from an interpre-

tation of the deliberative-process privilege and the discovery

provisions of the Federal Rules of Civil Procedure, not the EPAA

or its implementing regulations. To protect the confidentiality of

the documents, Judge Brimmer prohibited Inexco from duplicat-

ing the documents, disclosing them to third parties, or using them

for any purpose other than the triai in this matter. App. B at B-

21.

DOE sought a writ of mandamus from TECA requiring Judge

Brimmer to vacate his discovery order. On October 2, 1985,

TECA issued an opinion granting DOE’s petition for a writ of

mandamus. The court rejected Inexco’s argument that TECA

lacked jurisdiction, holding that

where a claim of qualified privilege is overruled on the

grounds that the requestor’s need for the discovery outweighs

the opponent’s interest in non-disclosure, and where the

finding of need is based on a conclusion that the discovery

sought is material to establish a claim or defense under the

EPAA ..., that legal conclusion involves the adjudication of

an EPAA issue ....

App. A at A-5. TECA found that this Court’s decision in Bra

was “inapposite” because DOE did not here seek review of a

criminal contempt conviction. Jd. at A-6. TECA stated that

[t]he short opinion in Bray apparently did not contemplate

that the decision to enforce the subpoena might itself involve

the adjudication of an ESA issue, or that the invalidity of the

district court’s enforcement order under the ESA might be

raised on appeal of the criminal contempt conviction as a

defense.

Id.

8

In Bray, the appellant disobeyed a district court’s order to

produce documents sought by the government in an investigation

of possible violations of the ESA. The appellant was then held in

criminal contempt. He appealed the contempt conviction to the

United States Court of Appeals for the Tenth Circuit. The Tenth

Circuit dismissed the appeal for want of jurisdiction on the

ground that the case “arose under” the ESA. This Court

concluded that the appeal did not “arise under” the ESA and that

the Tenth Circuit, not TECA, had jurisdiction:

The [ESA] does not contain any provision prohibiting the

violation of a district court’s enforcement order or establish-

ing penalties for such a violation. Thus, rather than “arising

under” any provision of the [ESA], the contempt prosecu-

tion was commenced under 18 U.S.C. § 401, the provision of

the Criminal Code that empowers federal courts to punish

certain contempts of their authority.... Review in the

TECA of criminal contempt convictions relating to compli-

ance investigations or enforcement efforts is not necessary to

assure uniform interpretation of the substantive provisions of

the stabilization scheme. Indeed, a requirement of such

review would only serve to undermine the prompt resolution

of Stabilization Act questions by burdening the TECA with

additional appeals.

423 US. at 75.

TECA itself has recognized that TECA does not have jurisdic-

tion of appeals relating to an analogous question regarding the

production of documents. In United States v. Texas Energy

Petroleum Corp., 719 F.2d 394 (TECA 1983), DOE was seeking

to enforce subpoenas it had issued to Texas Energy under, inter

alia, the EPAA. The district court held that the subpoenas were

enforceable but stayed enforcement pending resolution of Texas

Energy’s counterclaim seeking enforcement of document requests

that Texas Energy had made under the Freedom of Information

Act (“FOIA”), 5 U.S.C. §§ 552 et seg. DOE appealed to

TECA, which declared that it would not have jurisdiction to

review an order by the district court concerning Texas Energy’s

FOIA requests:

9

Appellate jurisdiction of the FOPA counterclaim would be

within the jurisdiction of the Fifth Circuit Court of Appeals.

The issues raised by the FOIA counterclaim appear only to

involve the application of that statute; construction and

application of the [EPAA or ESA] will not be required. . . .

Id. at 398 (citations omitted).

The only appreciable distinction between Bray and this case is

the procedural vehicle used to move from the district court to

interlocutory appellate review of orders relating to the production

of documents. Mandamus, the vehicle chosen by DOE, has

traditionally been disfavored as a means of obtaining review of

interlocutory orders compelling the production of documents.

See, e.g., Kerr v. United States District Court, 426 U.S. 394

(1976); Belfer v. Pence, 435 F.2d 121, 123 (9th Cir. 1970) (per

curiam). Rather, aggrieved parties have generally been required

to follow the path of review chosen by the.petitioner in Bray:

appeal of a criminal contempt conviction following disobedience

of the order to produce the documents. If DOE had not chosen

the mandamus vehicle, but had refused to produce the docu-

ments, Bray undeniably would have required review in the United

States Court of Appeais for the Tenth Circuit. DOE’s selection

of a disfavored avenue of review should not be permitted to

expand TECA’s limited jurisdiction.

TECA’s attempt to distinguish Bray on the ground that the

appellant there sought review by appealing a criminal contempt

conviction, rather than by petitioning for a writ of mandamus,

elevates form over substance. The issue on direct appeal from a

contempt conviction, at least where the underlying production

order was not otherwise reviewable, is whether the district court

properly ordered the production of the documents. See Maresse v.

American Academy of Orthopaedic Surgeons, 726 F.2d 1150,

1152, 1156-58 (7th Cir. 1984) (en banc), rev'd on another issue,

cert. denied on this issue, 105 S.Ct. 1327, 1335 (1985); see also 8

C. Wright & A. Miller, Federal Practice and Procedure: Civil

§ 2006 at 34 & n.85 (1975 & Supp. 1985). Indeed, TECA’s

opinion in this case recognizes that the appellant in Bray properly

could have raised (and the appellate court properly could have

considered) argument concerning the validity of the underlying

10

subpoena enforcement order, App. A at A-6, just as TECA

considered the propriety of Judge Brimmer’s discovery order.

The issue in a mandamus proceeding challenging a discovery

order, on the other hand, is whether the district court exceeded

the considerable bounds of its discretion in ordering the produc-

tion of the requested documents. See Allied Chemical Corp. v.

Daifion, Inc., 449 U.S. 33 (1980) (per curiam); Will v. Calvert

Fire Ins. Co., 437 U.S. 655 (1978); Will v. United States, 389

U.S. 90 (1967). Because a court of appeals on a petition for a

writ of mandamus cannot go behind a district court’s discretion-

ary decisions, its review of an interlocutory discovery decision is

necessarily less searching than its review of a criminal contempt

conviction based on the failure to produce documents. If a case

like Bray does not present an ESA or an EPAA issue, this case, a

fortiori, does not either. The mandamus exception that TECA

has carved out for itself, therefore, makes little sense.’

The courts of appeals have held since Bray that TECA’s

jurisdiction is limited to review of issues arising under the ESA or

the EPAA or regulations promulgated thereunder. E.g., Texaco

Inc. v. DOE, 616 F.2d 1193, 1196-98 (TECA 1979). An issue

“arises under” the ESA or the EPAA only if it “involve[s] the

construction, applicability or effect” of either of those statutes or

the regulations promulgated thereunder. Atlantic Richfield Co. v.

DOE, 769 F.2d 771, 778-80 (D.C. Cir. 1984).

The primary basis for the Court’s holding in Bray is that

“[r]eview in the TECA of [matters relating to the production of

documents] is not necessary to assure uniform interpretation of

the substantive provisions of the [ESA or the EPAA].” 423 U.S.

at 75; see United States v. Uni Oil, Inc., 646 F.2d 946, 950-51 (Sth

Cir. 1981), cert. denied, 455 U.S. 908 (1982). Where the EPAA

or the ESA is only peripherally involved, TECA does not

> TECA cited only two opinions in support of its decision to sidestep

Bray and take jurisdiction of this case. DOE v. Brett, 659 F.2d 154

(TECA 1981) (per curiam), cert. denied, 456 U.S. 936 (1982); and

DOE v. Crocker, 629 F.2d 1341 (TECA 1980) (per curiam). Both

Brett and Crocker were rendered after Bray, but neither opinion cited or

discussed Bray. TECA did not expressly address the question of its

jurisdiction in Brett. In Crocker, TECA did address its jurisdiction, but

it did not discuss Bray.

il

have jurisdiction. United States v. Uni Oil, 646 F.2d at 950. A

review of the district court's order here makes clear that it did not

decide a single substantive issue under the EPAA, and that the -

EPAA is at most only peripherally involved.

The district court’s decisions with respect to each document

relate solely to the deliberative-process privilege. Whether a

document is truly deliberative in nature, for example, is deter-

mined by neutral principles established in case law construing the

discovery provisions of the Federal Rules of Civil Procedure. See,

e.g., EPA v. Mink, 410 U.S. 73 (1973); NLRB v. Sears, Roebuck

& Co., 421 U.S. 132 (1975); Renegotiation Board v. Grumman

Aircraft Engineering Corp., 421 U.S. 168 (1975). These princi-

ples apply equally to EPAA and non-EPAA cases. Their applica-

tion in this case required no interpretation of the substantive

provisions of the ESA, the EPAA or regulations promulgated

‘ thereunder. Obviously, there is no need, for the sake of uniform-

ity, to vest TECA with jurisdiction of this case or any other case

involving only the deliberative-process privilege.

TECA’s decision is not only logically flawed. The mandamus

exception that it creates is also potentially insidious. If TECA’s

decision is upheld, appellate jurisdiction of discovery disputes and

other interlocutory orders will turn on the procedural vehicle

chosen to obtain review. The mischief to which this device is

susceptible is manifest. Forum shopping is disdained at the trial

level and should likewise be condemned at the appellate level. If

TECA’s view prevails, a litigant in a criminal case like Uni could

seek mandamus of a district court’s interlocutory order excluding

evidence on the basis of relevancy to an EPAA issue and thereby

vest the TECA rather than the appropriate appellate court with

exclusive jurisdiction. The decision below could lead to disparate

discovery or evidentiary standards within the same circuit: one

standard developed by the appropriate federal appellate court for

the majority of cases and a different standard developed by

TECA in cases such as this which peripherally involve EPAA

issues. Moreover, it would be the disappointed litigant itself who

could determine which appellate court had jurisdiction by seeking

mandamus as opposed to more traditional methods of review.

12

The only other possible distinction between this case and Bray

is that the federal government rather than a private litigant sought

review in TECA. This will often be the case given the prominent

role that DOE plays in the EPAA regulatory scheme; however,

just as the method of seeking appellate review should not dictate

the proper forum, neither should the identity of the litigant.

B. The Temporary Emergency Court of Appeals Misapplied the Doc-

trine of Res Judicata by Holding that a Previous Judicial Approval

of an Agency's Interpretation of a Regulation, Based Upon The

Substantial Eviderce in that Case, Precludes Non-Parties from

Subsequently Attacking the Agency’s Interpretation of the Regula-

tion on the Basis of a Different Administrative Record.

On the merits of the petition for mandamus, TECA determined

that the requested documents are not discoverable because they

are irrelevant as a matter of law. This conclusion is based on the

premise that prior judicial approval of DOE’s interpretation of the

term “posted price,” although it was based on different adminis-

trative and judicial records compiled by different parties, pre-

cludes Inexco from bringing forward evidence of agency

impropriety that would undermine the validity of that

interpretation.

TECA’s decision ignores fundamental notions of due process

and threatens to undermine accepted standards for judicial review

of administrative adjudications. Thus, even if it had jurisdiction

of this mandamus proceeding, TECA’s decision presents an

important question that deserves this Court's attention.

TECA expressed its holding on the merits in varying terms.

According to TECA, the requested documents are either “irrele-

vant to any proper issue before the district court for resolution,”

App. A at A-7, or “not material to any proper issue in the district

court,” id. at A-8.° These conclusions are based on the remarka-

ble proposition that “Inexco may not put in issue below ihe

validity of the DOE’s current interpretation of the posted price

* Compare Fed. R. Civ. P. 26 (permitting “discovery regarding any

matter, not privileged, which is relevant to the subject matter involved

in the pending action”) (emphasis supplied).

13

term, nor may it urge that its interpretation is not due judicial

deference.” Jd.

TECA relied upon two subsidiary propositions in determining

that Inexco may not challenge DOE’s interpretation of the term

“posted price”: (1) Inexco’s principal argument is that “DOE's

interpretation of the ‘posted price’ definition urged below was

inconsistent with its ‘contemporaneous construction’ of that term,

and therefore, was either invalid or not entitled to judicial defer-

ence,” App. A at A-7, and (2) TECA has already determined, in

three prior opinions to which Inexco was not a party,* that DOE’s

interpretation of the term “posted price” is “not infirm on either

due process or contemporaneous construction grounds” — a

determination which TECA held to be “binding on the district

courts until it is either reversed or overruled.” Jd. at A-7, A-8.

The first of these subsidiary propositions is simply wrong as a

matter of fact. Inexco’s attack in the district court is mot based

principally on the argument that DOE’s interpretation of the term

“posted price” is invalid. Inexco has argued with equal force that,

assuming that DOE’s interpretation of the term is valid, DOE’s

application of that interpretation to Inexco’s unique situation is

not supported by substantial evidence. See Inexco’s Verified

Complaint at 10-11. Until this case, TECA has recognized the

distinction between these two arguments. See, e.g., Osborn, 760

F.2d at 284-85.

In any event, TECA’s second subsidiary proposition — that

Inexco is foreclosed by Osborn, Mountain Fuel, and Grigsby from

arguing that DOE's interpretation of the term “posted price” is

invalid — is wrong as a matter of law. By so holding, TECA has

lost sight of the fundamental precept that “[i]t is a violation of

due process for a judgment to be binding on a litigant who was not

a party or a privy and therefore has never had an opportunity to be

heard.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 327 n.7

(1979). TECA has, in effect, given res judicata effect to Grigsby,

Osborn, and Mountain Fuel. It is clear beyond peradventure,

* See DOE v. Osborn, 760 F.2d 282 (TECA 1984); Mountain Fuel

Supply Co. v. DOE, 656 F.2d 690 (TECA 1981); Grigsby v. DOE,

585 F.2d 1069 (TECA 1978), cert. denied, 440 U.S. 908 (1979).

14

however, that collateral estoppel and res judicata do not apply to

non-parties such as Inexco. Parklane Hosiery, 439 U.S. at 327.

Inexco concedes that Grigsby, Osborn, and Mountain Fuel

have stare decisis effect on the questions of law there decided. A

decision that an agency interpretation of a regulation is valid,

however, depends in part on the factual question of how the

agency and its employees have applied the regulation, especially

where the attack, as in this case, is that the agency’s proffered

interpretation conflicts with the agency’s contemporaneous con-

struction. A court’s decision with respect to an attack like this

necessarily will be based in significant part on the peculiar facts

adduced by the litigants. A court’s decision might change, for

example, if another party attacking the agency’s interpretation

were able to show, as a factual matter, that top agency officials

had applied the regulation at issue in an erratic and inconsistent

manner.

Inexco was not a party to Grigsby, Osborn, or Mountain Fuel.

Indeed, under FERC rules of intervention, Inexco could not have

been a party to those proceedings. See P&R Trading Co., Dkt.

No. RO85-20-000 (FERC Sept. 23, 1985).° Inexco, therefore,

has never had a chance to prove that DOE’s current interpretation

of the term “posted price” conflicts with DOE’s contemporaneous

construction. TECA has held, in effect, that Inexco is bound by

the inability of other parties to adduce the facts necessary to prove

their respective cases. This is a novel and dangerous holding.

While res judicata has traditionally been applied in the adminis-

trative context, it has always been applied with its identity-of-

parties requirement intact. See 4 K. Davis, Administrative Law

Treatise § 21:2 (1983). TECA would abrogate that requirement

and would deprive Inexco of its own chance to prove that DOE

has been erratic and inconsistent. The requested documents, as

Judge Brimmer was well aware, are relevant on this point.° The

effect of such a holding, of course, is to give individual adjudica-

tory decisions by agencies the force of full-blown agency rules

* A copy of P&R Trading Co. has been lodged with the Court.

* See Letter of Judge Brimmer to TECA, attached hereto as Appendix

c.

15

without the statutorily mandated opportunity for notice and

comment.

TECA said in the opinion below that “Inexco’s campaign

against DOE’s current interpretation of the ‘posted price’ term

has been previously fought, and lost.” App. A at A+7. Inexco,

however, was not on that battlefield. Remarkably, TECA would

forever deny Inexco the opportunity to wage its own campaign.

VIL.

CONCLUSION

The petition for a writ of certiorari should be granted.

Re tfully submitted,

Rocer RIDER

Counsel of Record

THOMAS W. HOUGHTON

RONALD J. BIGELOW

THOMAS M. FARRELL

Mayor, Day & CALDWELL

P. O. Box 61269

Houston, Texas 77208

(713) 225-7000

STANLEY K. HATHAWAY

HATHAWAY, SPEIGHT AND

KUNZ

One Pioneer Center

2424 Pioneer Avenue

Cheyenne, Wyoming 82001

(307) 634-7723

Attorneys for Petitioner

Inexco Oil Company

16

CERTIFICATE OF SERVICE

I hereby certify that all parties required to be served with a

copy of the foregoing document have been served. A copy of the

foregoing document was mailed postage prepaid by first class mail

to each of the following:

Solicitor General

Department of Justice

Washington, D.C. 20530

Thomas C. Newkirk

Larry P. Ellsworth

Thomas H. Kemp

Charles L. Cope

Rodney L. Solenberger

U. S. Department of Energy

Office of General Counsel

1000 Independence Avenue, S.W.

Washington, D.C. 20585

(202) 252-5411

The Honorable Clarence A. Brimmer

Chief Judge of the United States District Court

for the District of Wyoming

P. O. Box 985

Cheyenne, Wyoming 82001

aa

ROGER) RIDER

APPENDIX A

TEMPORARY EMERGENCY COURT OF APPEALS

OF THE UNITED STATES

No. 10-60

THE UNITED STATES DEPARTMENT OF ENERGY and

JOHN S. HERRINGTON, Secretary of Energy,

PETITIONERS,

v.

THE HONORABLE CLARENCE a. BRIMMER,

Chief Judge

of the United States District Court for the

District of Wyoming, and INEXCO OIL COMPANY,

RESPONDENTS.

Petition For Issuance of a Writ of Mandamus to the

United States District Court

for the District of Wyoming

(C-83-0513)

(Argued: April 17, 1985 Decided: October 2, 1985)

THOMAS C. NEWKIRK, United States Department of En-

ergy, arguedwith whom on the brief were Larry P. Ellsworth,

Charles L. Cope and Rodney L. Solenberger, Washington, D.C.,

for Petitioners.

ROGER A. RIDER, of Mayor, Day & Caldwell, argued with

whom on the brief were Ronald J. Bigelow and Charles E.

Suffling of the same firm, Houston, Texas, and Stanley K.

Hathaway, John B. Speight and Richard J. Barrett, Hathaway,

Speight and Kunz, Cheyenne, Wyoming, for Respondent, Inexco

Oil Company.

Before: CHRISTENSEN, JAMESON and MACBRIDE,

Judges.

MACBRIDE, Judge:

The petitioners, the United States Department of Energy and

the Secretary of Energy (collectively, “DOE”), seek a writ of

OO

A-2

mandamus directing the respondent district court judge to vacate

a discovery order entered in litigation between DOE and the

respondent Inexco Oil Company (“Inexco”), which required

DOE to produce 63 internal government documents DOE

claimed to be privileged. On February 4, 1985, we granted a stay

of that order pending disposition of the petition. We now

conclude that the requested documents are irrelevant to any issue

properly before the district court, and accordingly order that the

writ of mandamus issue.

BACKGROUND

The lengthy history of this case is here briefly summarized. In

1979, the Southwest Enforcement District of the Economic

Regulatory Administration (“ERA”), an enforcement arm of the

Department of Energy, issued a Proposed Remedial Order

(“PRO”) alleging that in violation of then effective regulations,

Inexco had overcharged its customers during the period from

September 1973 through December 1975 for “old” crude oil

produced at certain of its fields in the Powder River Basin in the

State of Wyoming. The effective regulations set the ceiling price

for “old” crude oil at the sum of “the highest posted price of that

grade of crude oil at that field” on May 15, 1973, and a specified

premium. 10 C.F.R. § 212.73(b) (1974). The PRO alleged thai

Inexco had improperly calculated the applicable ceiling price for

its “old” crude by recognizing its own 1973 contract prices as the

“highest posted price” in its ceiling price calculations. The PRO

alleged that a lower price, appearing in price bulletins of Mobil,

Amoco, and Conoco, constituted the appropriate “highest posted

price.” Accordingly, the PRO alleged that Inexco had been

charging its customers in excess of the maximum legal price, and

proposed that Inexco be ordered to refund overcharges of nearly

$100,000.00 plus interest.

Inexco challenged the PRO in the Office of Hearings and

Appeals (“OHA”), the adjudicative agency within the Depart-

ment of Energy. Before the OHA, Inexco sought an order

compelling DOE to produce precisely the same type of docu-

ments sought in the district court: internal governmental and

other documents construing the regulatory “posted price” term,

A-3

both in general terms and as applied to Inexco’s circumstances.

Inexco’s discovery request was denied, on the grounds that the

requested discovery was irrelevant to the proceedings, since the

validity and correct construction of the “posted price” term had

previously been authoritatively established. Jnexco Oil Co., 6

DOE P 82,581 at 85,248-85,252 (1980) (OHA order denying

discovery). The OHA subsequently affirmed the PRO. Jnexco

Oil Co., 7 DOE P 83,015 (1981).

Inexco appealed the latter OHA decision to the Federal Energy

Regulatory Commission (“FERC”). Inexco initially declined to

request discovery in preparation for proceedings before FERC,

and when later it moved to discover much the same documents

sought in the OHA proceedings, its motion was denied as

presented too late. Jnexco Oil Co., 18 FERC P 62,476 (1982)

(presiding officer’s order denying discovery). After argument and

briefing, FERC upheld the OHA decision. IJnexco Oil Co., 25

FERC P 61,146, supplemented, 25 FERC P 61,411, affirming 25

FERC P 62,354 (presiding officer’s proposed erder) (1983).

Inexco thereupon sought review of the FERC decision in the

United States District Court for the District of Wyoming. Jnexco

Oil Co. v. United States Dep't of Energy, No. C-83-0513 (D.

Wyo. filed December 23, 1983). In that court, Inexco sought to

compel DOE to produce essentially the same sort of documents

previously sought before the OHA and FERC, namely, docu-

ments showing internal DOE memoranda discussing or applying

the “posted price” term, and internal memoranda pertaining to

DOE’s application of that regulation to Inexco’s circumstances.

DOE resisted all discovery, relying on its argument that review of

the administrative action must be confined to the record before

the administrative decision-maker. DOE’s position was overruled

by the presiding magistrate, and DOE was ordered to produce the

requested documents. DOE produced 165 documents, but ulti-

mately claimed the governmental deliberations privilege as to 63

documents. Inexco thereupon sought an order compelling discov-

ery. The presiding magistrate granted the order.

On appeal of the magistrate’s ruling to the respondent district

judge, the court conducted an in camera review of all the

documents in question and determined that all of them should be

A-4

produced. As to four of the documents, the court concluded that

they should have been included in the administrative record. As

to each of the other 59 documents, the court made an individual-

ized decision either that the governmental deliberations privilege

did not apply to the document, or that if the privilege applied,

Inexco’s need outweighed the petitioners interest in non-disclo-

sure. The court ordered disclosure conditioned by a limited

protective order which forbade Inexco from communicating the

documents to any other party.

Petitioners thereupon filed this petition for writ of mandamus

seeking vacation of the contested discovery order. We ordered a

stay of the district court’s order pending our disposition of this

petition.

DISCUSSION

Inexco contends that (1) this court lacks jurisdiction over the

issues raised by this petition; (2) the district court did not abuse

its discretion in ordering production of the disputed documents,

and (3) even if the district court’s order was error, mandamus

does not lie to correct it. We address these points in order.

JURISDICTION

The Temporary Emergency Court of Appeals (“TECA”’) is a

court of special and narrowly limited jurisdiction. MGPC, Inc. v.

Dep't of Energy, 673 F.2d 1277, 1280 (TECA 1982). With

respect to the circumstances of this case, our jurisdiction extends

only to the determination of issues arising under the Emergency

Petroleum Allocation Act (“EPAA”), 15 U.S.C. § 751 et seq.,

and the regulations promulgated pursuant to its authority, which

issues were actually adjudicated in the district court. Inexco’s

jurisdictional argument has two, somewhat related, prongs. In-

exco first asserts that the district court’s discovery and privilege

decisions did not adjudicate any EPAA issue. We reject that

contention. Discovery is appropriate only where the material

sought is “relevant to the subject-matter of the litigation.” Fed.

R. Civ. Proc. 26(b)(1). Where a district court’s finding of

relevance is grounded on the production request’s materiality to

A-5

an issue of law arising under the EPAA, that decision necessarily

involves an adjudication of an EPAA issue. See United States

Dep't of Energy v. Crocker, 629 F.2d 1341, 1344 (TECA 1980)

(per curiam). Likewise, where a claim of qualified privilege is

overruled on the grounds that the requestor’s need for the discov-

ery outweighs the opponent’s interest in non-disclosure, and

where the finding of need is based on a conclusion that the

discovery sought is material to establishing a claim or defense

under the EPAA or its appurtenant regulations, that legal conclu-

sion involves the adjudication of an EPAA issue, and as such is

subject to our appellate authority.

In this case, as is more fully discussed below, it appears that the

district court concluded that the requested documents were rele-

vant to determining the validity of, or the correct interpretation

and application of DGE’s regulations, promulgated under the

authority of the EPAA, defining the disputed “posted price”

term. Under the legal standards described above, that conclusion

of relevance to a claim or defense relating to the validity,

construction, or application of an EPAA-authorized regulation

represents the decision of an EPAA issue, and hence is properly

placed before us for review.

Second, Inexco argues that, even if the district court’s discov-

ery and privilege decisions pose EPAA issues within TECA’s

competence, we nonetheless lack subject-matter jurisdiction

under the Supreme Court’s decision in Bray v. United States, 423

U.S. 73 (1975). In Bray, the Internal Revenue Service, which

then had enforcement authority under the Economic Stabilization

Act (“ESA”), subpoenaed certain documents from Bray to

further an investigation into possible violations of the ESA.

When Bray failed to comply, the district court granted the IRS’s

petition for an enforcement order, and when Bray disobeyed that

order, the court convicted him of criminal contempt under 18

U.S.C. § 401. Bray appealed his conviction to the Court of

Appeals for the Tenth Circuit. That court dismissed the appeal

for lack of jurisdiction, concluding that the appeal represented a

“case or controversy” arising under the ESA, and thus falling

within TECA’s exclusive purview. The Supreme Court reversed,

holding that the matter for determination was the validity of a

A-6

criminal conviction under 18 U.S.C. § 401, not any ESA issues,

and thus the conviction was within the circuit court’s jurisdiction.

The short opinion in Bray apparently did not contemplate that

the decision to enforce the subpoena might itself involve the

adjudication of an ESA issue, or that the invalidity of the district

court’s enforcement order under the ESA might be raised on

appeal of the criminal contempt conviction as a defense. Perhaps

as a consequence, Bray does not provide how the Circuit Court of

Appeals should determine a criminal conviction appeal in which

ESA or EPAA issues are raised defensively. We, however, need

not explore these interesting problems here. In this case, no

contempt proceeding under 18 U.S.C. § 401 was commenced,

and the petitioners do not seek review of a criminal conviction.

Hence, Bray is inapposite. We have repeatedly recognized our

jurisdiction to entertain mandamus petitions in circumstances

similar to this case. See United States Dep't of Energy v. Brett,

659 F.2d 154 (TECA 1981) (per curiam), cert. denied, 456 U.S.

936 (1982); United States Dep't of Energy v. Crocker, 629 F.2d

1341 (TECA 1980) (per curiam). Accordingly, we conclude

that we have jurisdiction to determine the issues posed by this

petition.

MERITS

On the merits, the petitioners argue that the district court erred

on several grounds. First, petitioners argue that since the statu-

tory scope of review of agency action is confined to review of the

record developed before the agency adjudicators,.further discov-

ery, save in exceptional circumstances not involved here, is

improper. Second, petitioners argue that even if discovery were

not generally improper, the contested documents are not “mat-

ter... relevant to the subject matter of the pending action” or

“matter... reasonably calculated to lead to the discovery of

admissible evidence,” and hence not discoverable under Fed. R.

Civ. Proc. 26(b)(1). Third, petitioners contend that even if

marginally relevant, the contested documents are protected by the

qualified executive privilege, and the district court incorrectly

ruled that Inexco’s proper need for the documents outweighed the

governmental and public interest in non-disclosure.

A-7

We decline to resolve petitioner’s first and third contentions,

because we are convinced that these documents are irrelevant to

any proper issue before the district court for resolution. The order

of the district court and Inexco’s brief before this court are

remarkably vague in addressing the materiality of the requested

documents to Inexco’s case. A close review of the record below,

however, reveals that Inexco principally advanced, and the district

judge principally relied on, Inexco’s contention that the requested

documents were material to proving that DOE’s interpretation of

the “posted price” definition urged below was inconsistent with its

“contemporaneous construction” of that term, and therefore, was

either invalid or not entitled to judicial deference.

Inexco’s campaign against OE’s current interpretation of the

“posted price” term has bevn previously fought, and lost. In

Dep't of Energy v. Osborn, 760 F.2d 282 (TECA 1984), Moun-

tain Fuel Supply Co. v. United States Dep't of Energy, 656 F.2d

690 (TECA 1981), and Grigsby v. Dep't of Energy, 585 F.2d

1069 (TECA 1978), this court has repeatedly ruled that the

DOE’s current interpretation of the regulatory “posted price”

term is valid, rational and entitled to judicial deference. In

Mountain States, this court rejected, over the dissent of Judge

Jameson, the arguments that the history of DOE’s interpretation

of the “posted price” term had been so erratic and confusing that

its current interpretation either was invalid or was not entitled to

judicial deference under the “contemporaneous construction”

doctrine suggested by the decision in Skidmore v. Swift & Co.,

323 U.S. 134, 140 (1944). Mountain States, 656 F.2d at 695.

Further, the court in that case found no merit in the due-process

argument that the agency’s late-blooming construction of the

“posted price” term had besmirched that provision with “the taint

of retroactivity.” Id.

in Osborn, Judge Jameson, writing for the court, reviewed

Grigsby and Mountain States, and concluded: “[T]hese two prior

decision leave no doubt .. . that the agency’s interpretation of its

own reguiation is valid.” 760 F.2d at 284. This court’s holding

that DOE’s interpretation of the “posted price” term is valid, and

not infirm on either due process or contemporaneous construction

grounds, represents a legal conclusion, Grigsby, 585 F.2d at 1079

A-8

(“[ t]he issues argued on this appeal are legal, not factual issues

....), which is binding on the district courts until it is either

reverscd or overruled.

Accordingly, Inexco may not put in issue below the validity of

the DOE’s current interpretation of the posted price term, nor

may it urge that its interpretation is not due judicial deference.

The contested documents, which were sought, and ordered pro-

duced on the grounds of Inexco’s need to prove the agency

interpretation invalid on contemporaneous construction and due

process grounds, are therefore not material to any proper issue in

the district court. Consequently, the order mandating production

of those documents was error.

Inexco contends that even if the district court erred in ordering

production, mandamus does not lie to correct the error. We

recognize that the writ of mandamus is an extraordinary judicial

remedy, MGPC, Inc. v. Dep't of Energy, 673 F.2d 1277, 1283

(TECA 1982), the use of which should not be permitted to

circumvent federal statutory policy disfavoring interlocutory ap-

peals. At the same time, where substantial claims of privilege are

overruled at the discovery stage, and the order compelling discov-

ery involves the adjudication of EPAA issues, this court possesses

the discretion to review the production order by writ of manda-

mus, beceuse once the disclosure is made, the erroneous compul-

sory disclosure may, as a practical matter, be irremediable by the

usual appellate process. Accordingly, we have previously recog-

nized our authority to review, upon petition for writ of mandamus,

district court orders compelling the disclosure of information as to

which substantial claims of privilege have been asserted. See

United States Dep't of Energy v. Brett, 659 F.2d 154 (TECA

1981) (per curiam), cert. denied, 456 U.S. 936 (1982); United

States Dep't of Energy v. Crocker, 629 F.2d 1341 (TECA 1980)

(per curiam).

Given that this case presents a proper case for review by

mandamus, issuance of the writ is appropriate even where our

conclusion of district court error does not require decision of the

privilege issues posed. See e.g. Sanderson v. Winner, 507 F.2d

477, 480 (10th Cir. 1974) (“[i]n view of our ruling that the

matters sought... are irrelevant, we deem it unnecessary to

A-9

determine whether the documents sought are privileged”) (man-

damus issued), cert. denied, 421 U.S. 914 (1975).

Accordingly, a writ of mandamus shall issue directing the

district court to vacate its order of January 4, 1985 compelling

production.!

1 The district court held that four of the requested documents must be

produced because they should have been included in the administrative

record. We disagree. The district court did not detail the reasons for its

finding. Ordinarily, however, the administrative record is appropriately

supplemented in the district court only where it is discovered that

evidence considered by the agency adjudicators was, because of clerical

mistake or other oversight, not included in the administrative record

forwarded to the district court. See MGPC, Inc. v. Duncan, 581 F. Supp.

1047, 1058 (D. Wyo. 1984). Our review of the record makes plain that

the four documents were not before the OHA officers or FERC

commissioners when they decided Inexco’s appeals. In a case such as

this, where the principal issue is whether the agency findings are

supported by substantial evidence, the district court lacks the authority

to supplement the record with a view to weighing evidence not consid-

ered by the agency adjudicators. See /nternational Brotherhood of

Electrical W. v. Boldt, 513 F.2d 1405, 1407 (TECA 1975) (“the

[ogenty decision must stand or fall on the basis of the evidence then

before it”). The district court’s conclusion that the four documents

must be produced was error.

B-|

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF WYOMING

INExco O1L COMPANY

Plaintiff,

™ > No. C83-0513

UNITED STATES DEPARTMENT OF

ENERGY, Et. Al.

Defendants. |

ORDER ON DISCOVERY MOTIONS

This matter came before the Court on November 6, 1984 at

final pretrial conference at which Richard T. Barrett, Esq. and

Roger A. Rider, Esq. appeared for plaintiff, and Rodney L.

Solenberger, Esq. appeared for defendants. During the course of

such conference counsel presented arguments to the Court con-

cerning defendants’ Motion for Review and Stay of Magistrate's

Discovery Order. Following such argument the Court instructed

defendants’ counsel to submit to the Court for in camera review

the sixty-six (66) documents which are claimed to be privileged,

together with a supporting brief and Vaughn index. At the time

defendants submitted such materials to the Court they waived all

privilege objections concerning documents P27 and 27A, P30 and

P32, and submitted most of the remaining documents to the

Court. The Court having reviewed such documents, together

with the pleadings in this matter, having considered the argu-

ments of counsel, and being fully advised in the premises, FINDS

and ORDERS as follows:

United States Magistrate William C. Beaman, in his October

23, 1984 Order, found that defendants’ interests in avoiding an

undue chilling effect upon intra-agency communications were

inadequate to override plaintiff's interest in ensuring a full and

complete review of the record in this proceeding, and categori-

cally overruled each of defendants’ objections to discovery, order-

B-2

ing production of all sixty-six (66) documents. Magistrate

Beaman concluded that defendants’ interests in avoiding disclo-

sure of these documents were not substantial since the requested

documents pertain to a scheme of price regulation which is now

defunct, and since most of the requested documents are old, in

most cases dating back five (5) to ten (10) years, or more.

The deliberative process privilege protects from discovery intra-

agency communications which reveal the “cerebrations and

mental processes” of government officials. Car! Zeiss Stiftung v.

V.E.B. Carl Zeiss Jena, 40 F.R.D. 318, 329 (D.D.C. 1966), aff'd

on opinion below 384 F. 2d 979 (D.C. Cir.), cert. denied 389 U.S.

952 (1967); United States v. Morgan, 313 U.S. 409, 422 (1941);

N.L.R.B. v. Sears, Roebuck & Co., 421 U.S. 132, 151 (1975).

While a variety of reasons have been forwarded in explaining the

policies underlying this privilege, the primary concerns are protec-

tion of the integrity of the administrative processes, and encourag-

ing the free flow of intra-agency discussions by avoiding the

chilling effects which would result from disclosures. Jd. How-

ever, not every recommendation made by an agency official is

privileged, since the privilege protects only those communications

which are “deliberative” in nature. Coastal States Gas Corpora-

tion v. D.O.E., 617 F.2d 854 (D.C. Cir. 1980); United States v.

Ahmad, 499 F.2d 851, 855 (3rd Cir. 1974). A document is

deliberative in nature if it reveals evaluation, recommendations

and analyses of factors, or, put another way, if it reflects the give-

and-take of the consultative process. Coastal States Gas Corpora-

tion v. D.O.E., supra 617 F.2d at p. 866; United States v. Exxon,

supra 87 F.R.D. at p. 637. All presumptions favor discovery, and

the burden is on the defendant agency to show a given document

formed a direct path in a specific decisional process. Vaughn v.

Rosen, 484 F.2d (D.C. Cir. 1973) on remand 383 F. Supp. 1049

(D.D.C. 1974), aff'd. 523 F.2d 1136 (D.C. Cir. 1975). Therefore

the privilege should be claimed in the form of an affidavit, rather

than by a mere assertion in interrogatories or production answers,

or in a motion objecting to discovery. United States v. Exxon,

supra 87 F.R.D. at p. 637; Cf Carl Zeiss Stiftung v. V.E.B. Carl

Zeiss Jena, supra 40 F.R.D. at p. 323. Only those portions of a

document which constitute “recommendations” or “opinions” are

protected, and generally factual matters disclosed in such docu-

B-3

ments must be revealed. United States v. Exxon, supra 87 F.R.D.

at pp. 636-637; National Courier Association v. Board of Gov. of

Fed. R.S., 516 F.2d 1229, 1242 (D.C. Cir. 1975).

Finally, the predecisional process privilege is not absolute in

nature, and the final determination concerning the discoverability

of document must be made through a balancing of the p!:iatiff’s

interests in obtaining a full and fair review of the record against

the agency’s interest in avoiding discovery of deliberative materi-

als. Jn re D.O.E. Stripper Well Exemption Litigation, 4 Energy

Mgt. (CCH) para. 26, 267 at p. 28,087 (D. Kan. 1980); United

States v. Ahmad, 499 F.2d 851, 853 (3rd Cir. 1974); N.L.R.B. v.

Sears, Roebuck & Co., 421 U.S. 132, 149 fn. 16 (1975); EPA. v.

Mink, 410 U.S. 73, 86 n. 13 (1973); Hickman v. Taylor, 329 U.S.

495, 511-512 (1947); Jencks v. United States, 353 U.S. 657

(1957); United States v. Nixon, 418 U.S. 683 (1974). Thus the

weight of plaintiffs need for each document must be measured

against the extent to which such document reveals “delibera-

tions”, and the actual chilling effect disclosure would cause, and

disclosure may be required where plaintiffs need is adequate to

override the agency’s competing interest. /d.

Magistrate Beaman correctly concluded that defendants’ inter-

ests in avoiding disclosure is lessened due to the fact that the

deliberations in question involve a regulatory scheme which is

presently defunct due to the issuance of Executive Order No.

12,287, Decontrol of Crude Oil and Refined Petroleum Products,

46 Fed. Reg. 9909 (1-30-81), and due to the fact that almost all

of the documents in question are relatively old, and were gener-

ated in proceedings which have been completed for many years.

In re D.O.E. Stripper Well Exemption Litigation, 4 Energy Mgt.

(CCH) para. 26,267 (D. Kan. 1980); United States v. Ahmad,

499 F.2d 851, 853 (3rd Cir. 1974). However, rather than rule

categorically that all the documents requested should be pro-

duced, the Court concluded that a proper balancing of the

competing interest required an in camera review of each docu-

ment, and an individual determination in each instance.

In many instances defendants have failed to articulate grounds,

much less establish a basis, to support its privilege claims.

Frequently the author, recipient, date, and/or specific deliberative

lanai

B-4

process are not even identified in defendants’ Vaughn index. No

supporting affidavits were submitted by defendants to show that

any given document formed a direct path in a specific deliberative

process, or to identify the exact harm to the agency which would

purportedly flow from disclosure of any given document. Defend-

ants’ Vaughn index repeatedly alleges disclosure would have a

chilling effect upon predecisional deliberations, without supplying

a basis for such allegation. Thus, in many instances defendant

failed to establish grounds for its discovery objections.

Furthermore, defendants take an unduly expansive view of the

predecisional deliberative process privilege. Every document

generated by an administrative agency relates to some “process”

within the agency, and all documents generated prior to the final

decision or action is “predecisional.” Under defendants’ view of

the privilege no discovery could ever be obtained from an admin-

istrative agency since only final, published rules, regulations or

orders would be subject to disclosure. Clearly this view is not

supported by the narrow privilege defined in the cases cited above.

After reviewing each of the submitted documents the following

determinations were made concerning defendants’ discovery

objections:

Pl. Defendants fail to identify the author, recipient, date or

specific deliberative process relating to this document. The

document does not contain any of the direct give-and-take the

deliberative process privilege is designed to protect. Without

more information it is impossible for the Court to determine

whether this document contains the recommendations of a

subordinate, or rather the mandates of a superior. The Court

cannot determine whether the position suggested in the document

was rejected by the agency, or was finally adopted as the agency’s

position; neither can the Court make an accurate determination

concerning the harm, if any, which would flow from disclosure of

this document. Clearly an unidentified author of this document

would suffer no embarrassment should its contents be revealed.

Defendants’ unsupported claims that harm would result should

this document be disclosed are inadequate to override the pre-

sumption favoring discovery to enable a full and fair review of the

record in this proceeding. Any interests defendants may have in

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avoiding the disclosure of this document are clearly overridden by

plaintiff's interest in obtaining such full and fair review of the

administrative record in this proceeding.

P2. This document summarizes a meeting held May 30, 1973

to discuss oral comments presented to Dick Laulor concerning

the clearance of forms CLC-8 and CLC-9. Defendants have

failed to identify the specific deliberative process which generated

this document, or the role such document played in such process.

The document merely summarizes the subject matter of discus-

sions at the meeting, and only the last two sentences on page |

and the first sentence on page 2 even remotely reveal mental

processes. Plaintiffs need for the document clearly overrides any

interests defendants may have in avoiding its disclosure.

P3. This is a five page memorandum written May 30, 1973

from William Johnson to P.L. Essley, Jr. Defendants have not

revealed what position each party to the document held, and

therefore it is not possible to determine with certainty whether

this memorandum constitutes the recommendations of a

subordinate officer, or the mandates of a superior. The first four

paragraphs of this document are factual; much of the remainder

of the copy of the document submitted to the Court is illegible,

and therefore these portions may also be factual. The document

contains a contemporaneous construction of the regulations at

issue in this proceeding, and therefore plaintiffs need for this

document is compelling. The document is nearly eleven years

old, and concerns proceedings which have been closed for nearly

as long. Plaintiffs need for this document is adequate to override

defendants’ interest in avoiding its disclosure.

P4 and PS. See discussion concerning document P/, supra.

P6. This is a two page White House memorandum dated May

1, 1973. Defendants have failed to identify the specific delibera-

tive process which generated this document, or the role this

document played in such process. The document appears to

involve inter-agency, rather than intra-agency communications.

Any interest defendants may have in avoiding disclosure of this

document is clearly overriden by plaintiff's need for the same.

B-6

P7. This is a two page memorandum from Mike Ware to

David Albinson dated October 10, 1973. The position of the

parties is not revealed. (See discussion concerning document P3,

supra). The memorandum does not address any specific propos-

als, but rather only identifies a series of problems encountered in

the use of form CLC-90. No specific deliberative process is

identified which generated this document, nor is the role this

document played in such process revealed. Any interest defen-

dant may have in avoiding disclosure of this document is clearly

overriden by plaintiffs need for its disclosure.

P8. This is a one page memorandum from Chuck Boehl to

Chachie Owens dated November 10, 1973. The position of the

parties to the document is not revealed. The specific deliberative

process which generated this document is not identified nor is the

role this document played in such process set forth. The memo-

randum only identifies problems which need to be addressed by

defendants, and does not contain evaluations, recommendations

or analyses of factors, and therefore is not deliberative in nature.

Any interest defendants may have in avoiding disclosure of this

document is clearly outweighed by plaintiffs need for the same.

P9. This is a five page draft FEA Investigative report concern-

ing Grigsby Oil Company dated April 25, 1975 written by Mary

D. Proctor, an investigator, to D.M. Fowler, Regional Adminis-

trator. The proceedings which generated this document have

been closed for many years. The draft merely summarizes facis

discovered through the relevant investigation, and does not con-

tain evaluations, recommendations or analyses of factors, and

therefore is not deliberative in nature. The weight of defendants’

interest in avoiding disclosure of this document cannot be mea-

sured since no final version of this draft has been submitted to the

Court, and therefore the Court cannot determine whether this

document embodies a position which was subsequently rejected

by the agency, or whether such position was ultimately adopted.

Plaintiff's need for this document clearly overrides any apparent

interest defendants have in avoiding its disclosure.

P10 and PIOA. These are two copies of a transmittal memo-

randum dated September 24, 1975 sent with a Notice of Probable

Violation (NOPV) from Alvin A. Ohm, Office of Regional

_

B-7

Counsel, Region VI, to Compliance Division Personnel in Region

VI. Defendants asset: only a predecisional deliberative process

privilege in relation to this document. This document does not

contain recommendations, evaluations or analyses of factors, but

rather is a mandate of a superior officer concerning changes

made, in relation to a draft NOPV, and constitutes the working

law of the agency. The record reveals the author of this document

participated in this proceeding. Plaintiff's need for this document

clearly outweighs any interest defendants may have in avoiding its

disclosure.

Pl] to P11G. These are eight copies of a draft NOPV to be

issued to Grigsby Oil Company. The authors, recipients, and

dates of such drafts are not revealed, and no final version of the

NOPYV has been submitted for purposes of comparison. so as to

enable the Court to determine whether these drafts en.body the

positions ultimately adopted by the agency. Defendants assert

only a predecisional deliberative process privilege in relation to

this document. See discussions concerning documents P/and P9,

supra.

P12. This is a transmittal memorandum from Robert Long of

the Office of Case Resolution to Carl Corrallo of FEA’s Office of

General Counsel dated November 28, 1975 which was attached

to a draft NOPV concerning Grigsby Oil Company. Defendants

assert only a predecisional deliberative process privilege in reia-

tion to these documents. This document merely summarizes the

contents of the draft NOPV, and does not contain any recommen-

dations, evaluations or analyses of factors. No final version of this

document has been submitted. Plaintiff's need for this document

clearly outweighs any interest defendants may have in avoiding

their disclosure.

P13 and P13A. These are copies of a two page memorandum

from Alvin Ohm, Office of Regional Counsel, Region VI to Carl

Corrallo and Everard A. Marseglia of the Office of General

Counsel dated October 9, 1975. Defendants assert only a

predecisional deliberative process privilege in relation to this

document. No specific deliberative process which generated this

document is revealed, and the role such document played in such

process is not explained. The memorandum states the author’s

B-8

understanding of the proper application and definition of the term

“posted price” and requests clarification from the National Office.

The author of the document participated in this proceeding.

Plaintiffs need for this document is compelling, and is adequate

to override any interest defendants may have in avoiding its

disclosure.

P14 and P14A. These are two copies of a thirty page memoran-

dum entitled “A Domestic Crude Oil Pricing Guide for Crude

Producers, Crude Purchasers, and Crude Resellers” sent from

Gordon W. Harvey, Director, Office of Compliance Policy and

Planning, Regulatory Programs to Regional Administrators, Re-

gions V, VI, VII, and IX, dated February 9, 1976. No final

version of this draft has been identifieu or submitted for purposes

of comparison. See discussion concerning document P9, supra.

‘P15 and PISA. These are two copies cf a memorandum from

Larry White, Regional Director Compliance Division, to Gorman

Smith, Assistant Administrator, Office of Regulatory Programs

dated January 27, 1976. Only the last paragraph on page two is

responsive, and the remainder of this document may be excised.

The responsive portion of this document does not discuss or

analyze any specific proposals, but merely states that problems

exist under the present regulations which need to be resolved

through some administrative process. The record indicates the

author of this document participated in this proceeding. Plaintiffs

need for this document clearly outweighs any interest defendants

may have in avoiding its disclosure.

P16. The author, recipient, date, specific deliberative process,

or significance of this draft speech is not identified. The Court

cannot determine whether this draft was in fact used by defen-

dant, or whether it was subsequently modified. See discussion

concerning document P/, supra.

P17 to 17B. These are copies of a memorandum concerning

the “Clarifications to the Price Regulations Concerning Crude

Oil” Dated May 10, 1976, sent from Everard A. Marseglia, Jr.

and Carl A. Corrallo to J. Peter Leudtke, Assistant General

Counsel for Pricing. Defendant asserts only a predecisional

deliberative process privilege in relation to this document. Only

B-9

page 2 of this document is responsive, and the remainder may be

excised. While this document is deliberative in nature, the agency

subsequently adopted the position recommended, and therefore

defendants’ interest in avoiding disclosure of this document is not

substantial. Conversely, the author of this document participated

in this proceeding, and the responsive portions of this document

constitute a contemporaneous construction of the term “posted

price”. Plaintiffs need for this document is compelling, and

clearly overrides any interest defendants may have in avoiding its

disclosure.

P18. This is a four page memorandum dated May 12, 1976

from Larry White, Regional Director Region VI to Gorman C.

Smith, Assistant Administrator Regulatory Programs, FEA.

Only the last paragraph on page 3 is responsive, and the remain-

der of the document may be excised. See discussion concerning

documents P/7 and P/7A supra.

P19. This is a six page memorandum dated June 6, 1976

entitled ““Panel Discussion Summary on Clarification to Domestic

Crude Oil Price Regulations.” The author of this document, and

the role it played in the specific deliberative process is not

revealed. Only page 4 is responsive, and the remainder of this

document may be excised. The responsive portions of this

document are primarily factual. The position recommended was

ultimately adopted by the agency, and therefore defendants’

interest in avoiding its disclosure are not substantial. Conversely,

plaintiff's need for the document is compelling, and is adequate to

override defendants’ competing interests.

P20. This is a memorandum dated August, 1976 which

discusses the draft of the Clarification Amendments to pricing

regulations. The author and recipient are not identified. See

discussion concerning document P/, supra. Only pages 8 and 9 of

this document are responsive, and the remainder of the document

may be excised. This document contains a contemporaneous

construction of the term “posted price’’, and plaintiff's compelling

need for the document overrides any interest defendants may

have in avoiding its disclosure.

B-10

P21. This is an eight page draft memorandum dated August

10, 1976 from Rendel Alldredge to Edwin Mappe entitled “Pro-

posed Rule Making, Definition of Posted Price.” No final version

of the memorandum has been identified or submitted. While this

document contains deliberations, it also constitutes a contempora-

neous construction of the term “posted price’, and identifies

perceived problems under the pricing regulations in effect at that

time. Plaintiff's need for this document is compeiling, and is

adequate to override defendants’ interest in avoiding its

disclosure.

P22 and P22A. These are copies of a draft memorandum from

Mike F. Butler, FEA General Counsel, to John A. Hill, Deputy

Administrator, and Frank G. Zarb, Administrator, of FEA dated

August 11, 1976, which were transmitted with the final draft of

the Clarification of the Mandatory Petroleum Price Regulations

Applicable to Domestic Crude Oil which was subsequently pub-

lished in the Federal Register. The documents are not “predeci-

sional” nor “deliberative” in nature, but rather explain the

decision previously made by the agency officials. No final “draft”

of the memorandum has been submitted or identified. Any

interest defendants may have in avoiding the disclosure of this

document are clearly overriden by plaintiffs need for the same.

P23. The author, recipient and date of this draft press release,

and the final version of the draft, are not identified. See discussion

concerning document P/, supra.

P24 to P24M. These are fourteen copies of drafts of the

“Clarifications to Mandatory Petroleum Price Regulations Appli-

cable to Domestic Crude Oil.” The authors, and recipients are

not identified. The responsive portions of these drafts are as

follows: P24, P24C, P24G, P24H, and P24] at pages 49 to 56;

P24A at pages 45 to 51; P24B and pages 26 to 32; P24D at pages

48 to 54; P24E at pages 47 to 54; P24F and P24M at pages 49 to

57; P24J, P24K, and P24L at pages 51 to 57. The remainder of

these documents may be excised. It is important to note that the

responsive portions of these documents do not vary in any

substantive manner. Such portions do not contain the sort of

handwritten notes found in non-responsive portions of such drafts.

P24L includes a cover memorandum from Larry White, Regional

B-11

Director Compliance Division, to all area managers dated August

25, 1976 where White identifies the decument as being a “final

draft” and instructs the managers to apply the guidelines in all

open and future cases. Therefore at the time this “draft” was

forwarded it constituted the working law of the agency. Plaintiff's

need for the responsive portions of these documents overrides any

interest defendants may have in avoiding their disclosures.

P25. This is a memorandum from Chuck Boehl and Rendell

Alldredge to Bart House apparently addressing issues surrounding

the proposed rule making proceedings described in the preceding

paragraph. The document was written around August 17, 1976.

Only the last two paragraphs are responsive, and the remainder of

the document may be excised. See discussion concerning docu-

ment P2/, supra.

P26. This is a memorandum from Rendel Alldredge to Barton

House dated September 23, 1976 concerning the final draft of

Proposed Revised Compliance Guidelines for Domestic Crude

Oil Pricing — Producers and First Purchasers. The third and

fourth full paragraphs on page 2 of this document directly

addresses the subject matter of this proceeding. This discussion is

not deliberative in nature, but rather identifies problems which

had arisen under the then current regulatory scheme which

needed to be resolved by the agency through rule making, and

therefore are not deliberative. Plaintiff's need for this document

is compelling and is adequate to override any interest defendants

may have in avoiding its disclosure.

P27 and P27A. Defendants released these documents to

plaintiff.

P28 and P28A. These are copies of a draft Exceptions and

Appeals Decision and Order concerning Grigsby Oil and Gas

Company. The author and recipient of this draft are not identi-

fied, and the final draft of this document has not been identified

nor submitted for purposes of comparison. See discussions

concerning documents P/ and P9, supra. Plaintiffs need for this

document is compelling, and is adequate to override defendants’

interests in avoiding its disclosure.

B-12

P29. This is an undated, twenty-one page speech. The author,

recipient, and specific deliberative process which generated this

document are not identified. The document is not deliberative in

nature, but rather merely explains the application and effect of

regulations in existence at that time. See discussion concerning

document P/6, supra.

P30. Defendants released this document to plaintiff.

P31 and P31A. These are copies of a fifty-two page draft ruling

entitled “Ruling 1977, Clarifications to Mandatory Petroleum

Price Regulations Applicable to Domestic Crude Oil.” Only

pages 41 to 48 are responsive, and the remainder of the document,

together with the handwritten notes contained within the respon-

sive portions of document P3/ may be excised. The remainder of

the document contains a contemporaneous construction of agency

regulations relevant to this proceeding, and plaintiff's compelling

need for this discussion is adequate to override any interests

defendants may have in avoiding their disclosure.

P32. Defendant released this document to plaintiff.

P33 and P33A. These are non-identical drafts of “A Compli-

ance Guide for Domestic Crude Oil Policy for Producers and

First Purchasers.” The authors and recipients of these drafts are

not identified. See discussion concerning document P/, supra.

The responsive portions of each document are found at pages 23

to 26 and 36, and the remainder of these documents may be

excised. The responsive portion of these documents are not

predecisional or deliberative in nature, but rather explain the

effect of clarifications set forth in Ruling 1977-1. Portions of the

copy of document P33A are not legible due to the poor quality of

the photocopy submitted to the Court. All documents submitted

by defendants to plaintiff pursuant to this Order of the Court

must be legible and complete. Plaintiff's need for these docu-

ments is compelling, and overrides any interest defendants may

have in avoiding their disclosure.

P34 to P34B. These are three copies of a four page memoran-

dum from Herbert Buchanan to ail Region VI managers. Mr.

Buchanan’s position is not identified, and it is impossible for the

Court to determine whether this constitutes the mandate of a

B-13

superior, or rather the recommendations of a subordinate officer.

Furthermore, the specific deliberative process which generated

this document is not identified. The document is not deliberative

in nature, but rather explains the application and effect of existing

regulations under specific factual circumstances, and identifies

issues which need to be resolved by the agency. Plaintiff's need

for this document overrides any interest defendants may have in

avoiding its disclosure.

P35. This is an eighteen page draft memorandum dated

August 31, 1973 bearing the caption “For Consideration by

Counsel.” Defendants assert only a predecisional deliberative

process privilege in relation to this document. The author and

recipient of this document are not identified. See discussion

concerning document P/, supra. No specific deliberative process

is identified. The document is not deliberative in nature, but

rather explains the proper construction of existing regulations, and

their applicability to given factual situations. This document

contains a contemporaneous construction of regulations relevant

to this proceeding, and plaintiffs compelling need for this docu-

ment overrides any interest defendants may have in avoiding its

disclosure.

P36. This is a twenty page draft notice of proposed rule making

regarding the “Clarification to Mandatory Petroleum Price Regu-

lations Applicable to Domestic Crude Oil.” Only pages 9 through

12 are responsive, and the remainder of this document may be

excised. Plaintiffs compelling need for this document is adequate

to override any interest defendants may have in avoiding its

disclosure.

P37 and P37A. This is an undated three page memorandum

entitled “Characteristic Situations Which Posted Price Ruling

Must Resolve.” The author and recipient of this document are

not identified. See discussion concerning document P/, supra.

The document is not deliberative in nature, and merely poses

issues which its author believes are unanswered under the existing

regulatory scheme. Any interest defendants may have in avoiding

disclosure of this document are overriden by plaintiff's compelling

need for the same.

B-i4

P38. This is an undated two page memorandum entitled “The

Posted Price Ruling (RBA Comments).” See discussion con-

cerning documents P37 and P37A, supra.

P39. This is an undated three page memorandum entitled

“Characteristic Situations Which Posted Price Ruling Must Re-

solve.” See discussion concerning documents P37 and P37A,

supra.

P40. This is a two page memorandum entitled “Personal

Alldredge Notes on Proposed Price Ruling.” See discussion

concerning documents P37 and P37A, supra.

P41 and P41A. These are two copies of an undated seven page

draft of correspondence between Michael F. Butler, General

. Counsel, and William E. Enrich, Jr., Deputy City Attorney of

Long Beach, California, concerning a May 27, 1975 request for

interpretation of the applicable ceiling price of certain domestic

crude oil under applicable regulations. The author and recipient

of this document are not identified, and no final version of the

draft has been submitted to the Court for purposes Of comparison.

See discussions concerning documents P/ and P9, supra. This

document is not deliberative in nature, but rather only explains

the application and effect of existing regulations to given factual

situations. Plaintiff's need for this document clearly overrides any

interest defendant may have in avoiding its disclosure.

P42. This is a four page memorandum for General Counsel

dated November 11, 1976, and prepared by Rendel B. Alidredge

concerning a request for interpretation by Murphy Oil Company

submitted October 11, 1976. This document is not deliberative in

nature, but rather explains the application and effect of existing

price regulations to given factual situations. Plaintiff's need for

this document clearly overrides any interest defendants may have

in avoiding its disclosure.

P43 and P43A. These are two copies of an undated memoran-

dum entitled “Federal Energy Administration (10 C.F.R. Part

212) Posted Price Manual. . .Notice of Inquiry.” The author and

recipient of this document and the specific deliberative process in

which it was generated are not identified. Furthermore, this

document is not deliberative in nature, but rather merely explains

B-15

the application and effect of existing regulations to given factual

situations. Plaintiffs compelling need for these documents

clearly overrides any interest defendants may have in avoiding

their disclosure.

P44 and P44A. These are two copies of a one page memoran-

dum from Rendel B. Alldredge to Edwin P. Mampe dated June 1,

1977 entitled “Posted Price Notice of Inquiry.” See discussion

concerning document P2/, supra.

P45. Defendants failed to submit a copy of this document for

in camera review. Defendants’ Vaughn index indicates that this

document, like several of the documents described above, con-

tains an explanation concerning the application and effect of

existing regulations under given factual circumstances, and there-

fore is not deliberative in nature, and also constitutes a contempo-

raneous construction of regulations relevant to this proceeding.

The final version of this memorandum has not been identified nor

submitted for purposes of comparison. Plaintiffs compelling need

for this document clearly overrides any interest defendants may

have in avoiding its disclosure.

P46. This is a two page memorandum dated October 8, 1975

from Alvin A. Ohm, Office of Regional Counsel, to Romulo

Garcia and Mark Ables, two Compliance Division personnel,

concerning a draft NOPV relating to Pioneer Corporation. No

final version of the NOPV has been identified or submitted for

purposes of comparison. See discussion concerning documents

P9 and P2/, supra.

P47. This is a two page memorandum dated October 29, 1975

from Alvin A. Ohm, Office of Regional Counsel, to Romulo

Garcia and Mark Ables of the compliance division discussing an

NOPV concerning O’Meara Brothers. Defendants assert only a

predecisional deliberative process privilege in relation to this

document. The final version of this document is not before the

Court for purposes of comparison. See discussion concerning

document P9, supra. This document is not predecisional nor

deliberative, but rather constitutes the mandate of a superior

officer to subordinate officers concerning changes made, or to be

made, in the draft NOPV. The only analysis contained in the

B-16

document concerns the application and effect of existing regula-

tions under the factual circumstances presented in that proceed-

ing. Plaintiffs need for this document overrides any interest

defendants may have in avoiding its disclosure.

P48. This is an undated five page draft NOPV in the O’Meara

Brothers proceeding. No final version of this document has been

identified or submitted for purposes of comparison. See discus-

sion concerning document P9, supra.

P49. This is an undated eight page draft NOPV concerning

proceedings relating to Mullins and Prochard, a partnership. The

author and recipient are not identified, and no final version of this

document has been identified or submitted for purposes of com-

parison. See discussions concerning documents P/ and P9, supra.

Furthermore the responsive portions of this document, found at

pages 6 and 7, are not deliberative in. nature, but rather merely

explain the applicability and effect of existing regulations to the

factual setting presented in that proceeding.

P50. This is a one page memorandum dated March 26, 1976

from Alvin Ohm to the “Reading File.” No specific recipient, nor

specific deliberate process in which this document was generated,

or role this document played in such process, is identified. This

document does not contain analysis concerning any proposais, but

rather identifies problems which the author believed were

presented under the then present regulatory scheme. Plaintiff's

compelling need for this document overrides any interest defend-

ants may have in avoiding its disclosure.

P51. This is a one page memorandum dated August 1, 1976

from Alvin A. Ohm, Office of Regional Counsel, to Larry White,

Director Compliance Division, concerning the O’Meara NOPV.

Defendants only assert a predecisional deliberative process privi-

lege in relation to this document. This document is not delibera-

tive in nature. See discussion concerning document P47, supra.

P52. This is a twenty-two page Remedial Order (RO) con-

cerning O’Meara Brothers dated August 10, 1976. The author

and recipient of this document are not identified. No final version

of this document has been submitted for purpose of comparison.

See discussion concerning documents P/ and P9, supra.

B-17

P53. This is a two page memorandum from Thomas P.

Humphrey, Acting Assistant General Counsel for Compliance

Office of General Counsel to Barton Isenberg, Director of Audit

and Enforcement, dated June 14, 1978 concerning a proposed

NOPYV privilege in relation to this document. This document is

not deliberative in nature, but rather constitutes the mandate of a

superior officer concerning changes made, or to be made, in a

draft NOPV. This document should be included as part of the

full and complete administrative record in this proceeding. Citi-

zens to Preserve Overton Park v. Volpe, 402 U.S. 402 (1971).

P54. This is a two page memorandum from Burton Isenberg to

L. Ken Jones, Acting Director of Enforcement, Region VI, dated

July 14, 1978 concerning the proposed NOPYV in this proceeding.

This document is not deliberative in nature, but rather constitutes

instructions by a superior officer concerning the proper procedure

to be followed in this proceeding, and concerning changes to be

made in the NOPV. This document should also be added to the

administrative record in this proceeding.

P55 to PSSF. These are seven non-identical drafts of the

NOPYV in this proceeding. P55, P55D, and PSSF are copies of the

same document. P55A, P55B, P55C, and PSSE, are copies of a

different document. P5SS5C is dated June 29, 1977, and P55 is

dated November 7, 1977, and thus it appears the second group of

documents is the earlier draft in the series. Alvin Ohm is

identified as the author of P55. No other authors or dates, and

not recipients of these documents are identified. See discussion

concerning document P/, supra. Defendarts ultimately adhered

to the agency position set forth in these documents, and therefore

their interest in avoiding disclosure of these documents is not

substantial. Conversely, plaintiff's need for these documents is

compelling, and is adequate to override defendants’ competing

interests. These documents should be added to the administrative

record in this proceeding.

P56. This is a two page memorandum dated February 1, 1977

from Lon W. Smith Acting Director, Compliance Case Resolu-

tion to Avrom Landesman, Assistant General Counsel for Com-

pliance, discussing a draft RO concerning | U. International Oil

and Gas, Incorporated. No final version of the RO has been

B-18

identified or submitted for purposes of comparison. See discus-

sions concerning documents P9 and P2/, supra. This document

refers to attachments which were not submitted to the Court for

in camera review, and such attachments shall be produced

together with this document in complying with this Order of the

Court. This document contains a contemporaneous construction

of the regulations at issue in. this proceeding, and plaintiffs

compelling need for this document overrides any interest defend-

ants may have in avoiding its disclosure.

P57. This is a one page memorandum from James B. Wilcox,

Jr., Office of General Counsel, Compliance Division to Tony

Gallagher, Office of Compliance Case resolution dated March 22,

1976 discussing the draft RO concerning I. U. International Oil

and Gas, Incorporated. This document is not deliberative in

nature, but rather merely identifies issues which must be resolved

under the then present regulatory scheme.

P58. This is a two page draft memorandum dated March 18,

1977 from Charles Croxton, Director Regional Cases Division

Compliance Case Resolution to Alvin Landesman, Assistant

General Counsel for Compliance, Office of General Counsel,

discussing a proposed RO concerning Berry Holding Company.

No final version of this RO has been identified or submitted for

purposes of comparison. This document is not predecisional nor

deliberative in nature, but rather describes a decision made by the

Regional Case Division. Plaintiffs need for this document is

compelling, and overrides any interest defendants may have in

avoiding its disclosure.

P59. This is a three page memorandum dated March 30, 1977

from Charles Croxton to Avrom Landesman concerning the Berry

Holding Company RO. This document is not deliberative in

nature, but rather discusses the applicability and effect of existing

regulations to specific factual settings. See discussion concerning

document P58, supra.

P60 and P60A. These are copies of a draft NOPV concerning

Conoco’s pricing in fields relevant to this proceeding which

discuss the relation of plaintiff's letter offers to purchase upon

posted prices in fields covered by the same. This document

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reveals an early expression of the agency's position upon the

issues which are contested in this proceeding. No final version of

this NOPV has been identified or submitted for purposes of

comparison. See discussion concerning document P9, supra. The

Court believes the information contained in this document is so

pertinent to the issues raised in this related proceeding that such

document should have been included in the administrative record

in this proceeding. Plaintiffs need for this document is compel-

ling, and is adequate to override any interest defendants may have

in avoiding its disclosure.

P61. This is a two page memorandum from Rueben Litz,

RARP Auditor — Region VI, to Everett Seal, RARP manager,

Region VI concerning Conoco pricing in fields relevant to this

proceeding, and concerning the effect of plaintiffs letter offers to

purchase upon the posted price in such fields. See discussion

concerning documents P60 and P60A, supra.

P62. This is a fourteen page draft of portion of an NOPV to be

issued to Union Oil Company. The author and recipient of this

document are not identified, and the final version of this NOPV

has not been identified nor submitted for purposes of comparison.

See discussions concerning documents P/ and P9, supra.

P63. This is a four page memorandum entitled “Violation

Supplement to Audit Report” concerning pricing by Chio Oil

Company (a predecessor to Marathon Oii Company) in the

Grass Creek Frontier Unit. The author, recipient and specific

deliberative process which generated this document have not been

identified. See discussions concerning documents P/ and P9,

supra. The first page of the document is labeled “page 7”.

Defendant’s Vaughn index states that this is a supplement to an

audit report, which constituted pages | through 6. Defendants

failed to submit this portion of the document for in camera

inspection by the Court, and such portion shall be supplied

plaintiffs together with this document in complying with the

Court’s Order. This document is not deliberative in nature and

merely summarizes allegations concerning purported overcharges

by Ohio Oil Company. Plaintiffs need for this document over-

rides any interest defendants may have in avoiding its disclosure.

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P64. This is a seventeen page draft audit report concerning

Champlin Production Company dated February | 3, 1980 discuss-

ing pricing upon Champlin’s properties in Kansas and Wyoming.

The authors of the document are Henry W. Egleston, L. M.

Halford, and D. J. Whittaker. The recipient of this document is

not identified, and no final version of the report has been submit-

ted for purposes of comparison. The responsive portions of this

document are found at pages 11 through 14, and the remainder of

the document may be excised. The document is not deliberative

in nature, but rather states that Champlin misapplied pricing

rules resulting in overcharges, identifies what the agency's officers

concluded were the applicable posted prices, and computes the

amount of alleged overcharges. The document explains the

application and effect of existing regulations to specific factual

situations. Plaintiffs need for this document overrides any

interest defendants may have in avoiding its disclosure.

P65. This is an undated three page memorandum from Hank

Egleston, Tulsa Crude Production Audit Branch, to Robert E.

Boldt, Director, Office of Field Operations, Office of Special

Counsel, entitled “Analysis of Champiin’s Memorandum for

OSC dated July 9, 1980.” Defendants have failed to identify the

exact role played by this memorandum in the deliberative process

in which it was generated. The responsive portion of this

document is found at page 1, paragraphs 2, 3, and 4, and the

remainder of the document may be excised. This discussion is

not deliberate in nature, but rather merely explains the applica-

tion and effect of existing regulations to specific factual settings.

Plaintiff's need for this document is adequate to override any

interest defendants may have in avoiding its disclosure.

P66. This is a five page memorandum dated May 4, 1978 from

E. W. Dorcheus, Acting Director, Office of Audit and Enforce-

ment to Noah Baer, Compliance and Regional Operations Divi-

sion, Office of General Counsel entitled “Bonus Price on Posted

Prices.” The specific deliberative process which generated this

document, and the role played by this document in such process,

are not revealed. The document appears to contain unpublished

guidelines which constitute the working law of the agency rather

than deliberation upon any given proposals. This document

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contains a contemporaneous construction of the term “posted

price”, and the record indicates its author participated in this

proceeding. Plaintiffs compelling need for this document clearly

outweighs any interest defendants may have in avoiding its

disclosure.

As was noted above, documents P53 to P55 and P60 to P6/

should have been included in the administrative record of the

proceedings below. Citizens to Preserve Overton Park v. Volpe,

401 U.S. 402, 420 (1971). The remaining documents provide

needed background information which may be considered by the

Court in evaluating the contentions raised by plaintiff in this

proceeding. Hiatt Grain and Feed Inc. v. Bergland, 446 F.Supp

457 (D. Kan. 1978), affirmed 602 F.2d 929 (10ti Cir. 1979) cert.

denied 444 U.S. 1073 (1980). All production pursuant to this

Order shall be made subject to the following protective measures:

(A) Plaintiff, and its counsel, shall not photocopy, or other-

wise duplicate any document produced pursuant to this Order of

the Court, nor any portion thereof;

(B) No document produced pursuant to this Order of the

Court nor any portion thereof shall be disclosed to any person

other than counsel and the parties to this proceeding;

(C) Plaintiff, and its counsel, shall not use any document

produced pursuant to this Order of the Court, or any part thereof,

for any purpose other than the trial in this matter. Now therefore

it is

ORDERED that the October 23, 1984 Order of United States

Magistrate William C. Beaman be, and the same hereby is,

affirmed as modified by this Order of the Court; it is further

ORDERED that defendants produce to plaintiff forthwith full

and complete legible copies of all requested documents not

heretofore produced to plaintiff, subject to the limitations and the

protective order set forth above.

Dated this 4th day of January, 1985.

/s/ CLARENCE A. BRIMMER

United States District Judge

C-i

APPENDIX C

CLARENCE A. BRIMMER

U.S. District Judge

UNITED STATES DISTRICT COURT

District of Wyoming

P.O. Box 985

Cheyenne, Wyoming 82001

February 19, 1985

Ms. DONNA M. BOLD

Clerk of Court

Temporary Emergency Court of Appeals

Room 2400 - U.S. Courthouse

Washington, D.C. 20001

Re: The United States Department of Energy, et al.

v. The Honorable Clarence A. Brimmer

TECA No. 10-60

Inexco Oil Company v. United States Department of

Energy, et al. USDC NO. C83-0513-B

Dear Ms. Bold:

The Court has stricken the trial setting of this case which was

to be held on February 20, 1985 in view of the stay granted by the

Court of Appeals. My law clerk received notice by telephone on

February 11, 1985 that the panel has ordered that an answer to

the petition be filed in this matter on or before February 26, 1985.

This letter is written to advise the clerk, and the parties, that the

Court does not intend to appear in this proceeding, and is

submitted pursuant to the provisions of Rule 21(b) of the Federal

Rules of Appellate Procedure.

However, the Court believes the present record in this proceed-

ing must be supplemented to-enable- the members of the panel to

review the documents as to which petitioners are asserting privi-

lege claims, because:

(1) As the Court indicated in its Order on Discovery Motions,

Petitioners’ Vaughn index is not adequate to enable a full and fair

C-2

review of the merits of their privilege claims, and in fact is often

misleading. Such Order, at page 6, states:

Defendants’ Vaughn index repeatedly alleges disclosure

would have a chilling effect upon predecisional deliberations,

without supplying a basis for such allegations.

Petitioners in their Vaughn index, describe various documents

as containing “mental processes” and “deliberations.” But an

actual review of the described documents showed this Court that

very often this was not the case.

(2) Inexce Oil Company challenges the validity of Petitioners’

interpretation of their own regulations. The consistency of the

agency’s present position with prior constructions of the same

regulations is an crucial issue in this action, since this factor

defines the degree of deference the Court should afford to the

agency’s present position. Skidmore v. Swift and Co., 323 U.S.

134, 140 (1944); Bowles v. Seminole Rock and Sand Co., 325

U.S. 410, 413-414 (1945); Standard Oil Co. v. DOE, 596 F.2d

1029, 1055-1056 (TECA 1978); Mountain Fuel Supply Co. v.

DOE, 656 F.2d 1069, 1074-1075 (TECA 1978) (Jameson, J.

dissenting). Inexco’s due process interests in obtaining a full and

fair review of the record in light of the surrounding circumstances,

in the opinion of the Court, are substantial, and are adequate to

override Petitioners’ competing interests in avoiding discovery of

those portions of the documents to be released, subject to the

Court’s protective order.

Under these circumstances the Court believes the documents

reviewed in camera by the Court must be added to the record as

exhibits, and should be reviewed by the Court of Appeals, in

relation to the Petition. These documents are hereby submitted

by the Court for this purpose.

Sincerely yours,

/s/

CLARENCE A. BRIMMER,

Chief Judge

CAB:cjt

C-3

Documents submitted under separate cover

cc: Roger Rider, Esq. w/out attachments

Richard J. Barrett, Esq. w/out attachments

Larry P. Elsworth, Esq. w/out attachments