Amicus Curiae Brief — VGS Corp. v. United States Department of Energy

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me Court, U.S.

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No. 86-1134

APR 8 1987

JOSEPH F. SPANIOL, JR.

— ==

IN THE

Supreme Court of the United States

OCTOBER TERM, 1986

VGS CORPORATION

d/b/a SOUTHLAND OIL COMPANY

and GLOBE ASPHALT Co., INC.,

Petitioners,

Vv.

UNITED STATES DEPARTMENT OF ENERGY and

JOHN S. HERRINGTON, SECRETARY OF ENERGY,

Respondents.

On Petition for Writ of Certiorari to the

Temporary Emergency Court of Appeals

of the United States

BRIEF OF AMICUS CURIAE

CONSUMERS POWER COMPANY IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

WILLIAM H. BOpDE *

DONALD W. FOWLER

THOMAS J. TOURISH

MICHAEL A. NARDOLILLI

SPRIGGS, BODE & HOLLINGSWORTH

1015 Fifteenth Street, N.W.

Suite 1100

Washington, D.C. 20005

(202) 898-5800

Counsel for Amicus Curiae

* Counsel of Record

_ SPE RTS EE EOE EEL RT TS RE ITT

WILSON - Epes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTION PRESENTED

Whether the doctrine of federal sovereign immunity

bars claims for interest on funds held by the United

States under circumstances in which the funds (a) were

collected from regulatory violators for the express pur-

pose of compensating members of the claimant’s class

who were injured by those violations and (b) are held

in an interest-bearing escrow account as to which the

United States makes no claim of title.

(i)

OE Ae I CE —— ee avXa—XaXKX<—

TABLE OF CONTENTS

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STATEMENT OF THE CASE ..............02..02..0..20022:c000--

REASONS FOR GRANTING THE WRIT ....................

I. Review Is Warranted Because The Decision Be-

low Is Contrary To Controlling Precedent Of

Ne cenilnbipaiptnsocsapes

II. This Court Should Grant Plenary Review Be-

cause The Issue Is Important And Likely To

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(iii)

iv

TABLE OF AUTHORITIES

CASES: Page

Bank of Hawaii v. Benchwick, 249 F. Supp. 74

Ci: FERS: BP shi necktie badges, 11

Consumers Power Company v. DOE, Civ. Action

No. 71-71112 (E.D. Mich. Sept. 8, 1982) ............... 3

Consumers Power Company v. DOE, Civ. Action

No. 71-71112 (E.D. Mich. Aug. 14, 1985), appeal

docketed, No. 6-85 (TECA 1985) ......................... 4

Consumers Power Company v. DOE, 742 F.2d 1468

es ls RRS ECan en Mn Aneee Dena 3

Dugan v. Rank, 372 U.S. 609 (1968) ............2222202---... 7

Franchise Tax Board of California v. United States

Postal Service, 467 U.S. 512 (1984) ..........0000022.... 7

Henkels v. Sutherland, 271 U.S. 298 (1926) .......... 8

Keller v. Metropolitan County Board of Education,

372 F. Supp. 528 (M.D. Tenn. 1973) .................... 6

Land v. Dollar, 380 U.S. 781 (1947) ......................... 7

Larson v. Domestic & Foreign Commerce Corp.,

BR Ee | RRO eR etre at wn 6

Library of Congress v. Shaw, 106 S. Ct. 2957

2 RCE TE ES Ns Ra correo es AU ek CARR NN 7

Miller v. Robertson, 266 U.S. 248 (1924) —...00000..... 8

Mine Safety Appliances Co. v. Forrestal, 326 U.S.

PT, AI ices cic ai sep cata eamnasien une Gen ean a Elan. 7

National City Bank v. Republic of China, 348 U.S.

BUI II 5 icin costvisacastilsnres epeeghgcncaprsiegibeonebenieenanaeataccae 6

Navajo Refining Co. v. DOE, No. 10-62 (TECA,

Ns ee III asin ccceicasicashicn css ieee sical ie 4

Pasco, Inc. v. FEA, 525 F.2d 1391 (TECA 1975).... 2

Texaco v. DOE, 795 F.2d 1021 (TECA), cert. dis-

eg et Re Fk) ine ei eee conn 3

United States v. All That Tract & Parcel Of Land,

602 F. Supp. 307 (N.D. Ga. 1985) .........0..0000000000.. 11

United States v. Louisiana, 446 U.S. 253 (1980).... 8

United States v. N.Y. Rayon Importing Co. (#2),

a Ie IE oie eee ndisasoeubeiancernins 9

United States v. One Piece of Real Estate, 571

a CD. Tare CT Re. BOM. TOD wicicneccccccsececcacecisn ese 11

Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449

MR I II ic ckacicectnctcabieeg tacoaaea eae edeamsaie 8

v

TABLE OF AUTHORITIES—Continued

ADMINISTRATIVE CASES AND EXECUTIVE

ORDERS:

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STATUTES:

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Fe Fes rian a tenmnineeniccauniinnionscnoncsinninn

a ee eg I ners ciesesscnnescoronsennenenniicesimains

r gi8 Se gl LE} eon enns

Be TER ee eiitiiciie ects n sire nneecssncnsncnstnntinesinernticnns

FEDERAL REGISTER NOTICES:

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Pe BE Ee 6 Eee er oneree sn

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Os IN SID xisraensecesncccnssoronewnnnsncenamennene

RULES:

I i ee re sri cccte neienenacitnnmniinsesonintaabnnn

OTHER AUTHORITIES:

Davis, Sovereign Immunity Must Go, 22 Ad. L.

|, SAMEERA DINU e cela Riau ees oem tea Cee

Scalia, Sovereign Immunity and Nonstatutory Re-

view of Federal Administrative Action: Some

Conclusions From The Public-Lands Cases, 68

pe et. eR nee

www hd

11

IN THE

Supreme Court of the United States

OCTOBER TERM, 1986

No. 86-1134

VGS CORPORATION

d/b/a SOUTHLAND OIL COMPANY

and GLOBE ASPHALT Co., INC.,

Petitioners,

Vv.

UNITED STATES DEPARTMENT OF ENERGY and

JOHN S. HERRINGTON, SECRETARY OF ENERGY,

Respondents.

On Petition for Writ of Certiorari to the

Temporary Emergency Court of Appeals

of the United States

BRIEF OF AMICUS CURIAE

CONSUMERS POWER COMPANY IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

INTEREST GF AMICUS

Consumers Power Company (“Consumers Power’) re-

spectfully submits this brief in support of Petitioners.

At stake before this Court is the right of Consumers

Power—and approximately one million gas customers—

to receive $8.2 million of postjudgment interest, and a

2

greater amount of prejudgment interest, accruing on

their own money while those funds were held by the

government_in escrow.

Consumers Power Company is a public gas and elec-

tric utility, regulated by the Michigan Public Service

Commission, that supplies electricity and gas to a serv-

ice area with more than 5.3 million residents throughout

Michigan. During the period September 1973 through

December 1979, Consumers Power owned and operated

a synthetic natural gas (“SNG’’) plant at Marysville,

Michigan (the “Marysville plant”) at which it converted

petroleum liquids, including Canadian plant condensate,

into various petroleum products. The SNG produced at

the Marysville plant was sold to the gas customers of

Consumers Power. Under the applicable rate tariffs,

Consumers Power is permitted to pass through to its

customers increases in the costs of SNG feedstock and

is required to pass through to its customers decreases

in such costs.

Consumers Power and its customers have an interest

in this Petition because, like Petitioners, Consumers

Power established similar rights through a series of

administrative and judicial decisions relating to the oper-

ation of the Marysville plant. Consumers Powers was

deemed to be a “refiner” and thus eligible to participate

in the federal government’s Entitlements Program,’ Con-

sumers Power Company, Interpretation 1979-26, 45 Fed.

1 From 1974 until 1981, the United States, through the Depart-

ment of Energy (“DOE”) and its predecessor agency, the Federal

Energy Administration (“FEA”), administered a Program de-

signed to ensure that all refiners paid the same cost per barrel

for crude oil even through crude oil prices varied under a multi-

tiered system of price controls. Under this so-called Entitlements

Program, refiners with greater than average access to low price

domestic oil bought “entitlements” from_refiners with less than

average access to low cost crude. See generally, Pasco, Inc. v.

FEA, 525 F.2d 1391 (TECA 1975).

8

Reg. 5664 (Jan. 24, 1980), and was found to be required

to so participate, Consumers Power Company v. DOE,

Civil Action No. 71-71112 (E.D. Mich., Sept. 8, 1982),

at all times after November 1, 1974. Conswmers Power

Company v. DOE, 742 F.2d 1468 (TECA 1984). Like

Petitioners, Consumers Power was placed in the excep-

tion relief class of refiners® due benefits from the en-

titlements program. Also like Petitioners, these entitle-

ments benefits were ultimately paid* from crude oil

overcharge funds collected from regulatory violators and

held in an interest-bearing account by DOE.*

2“Exception” relief was granted to certain firms in the Entitle-

ments Program to “prevent special hardship, inequity or unfair

distribution of burdens” which full participation may have caused.

See §504(a) of the Department of Energy Organization Act, 42

U.S.C. § 7194.

3 While the Entitlements Program was operating, exception relief

would be easily implemented via monthly entitlements notices.

Recipients of exception relief would either have the number of

entitlements they could sell increased or the number of entitle-

ments they were required to purchase lowered. This mechanism for

implementing exception relief no longer exists. On January 28,

1981, President Reagan ended the price and allocation regulations

on all crude oil and petroleum products. Exec. Order No. 12,287.

The monthly entitlements notice for January 1981 was then post-

poned by a series of federal court injunctions. A final “clean-up”

entitlements notice implementing exception relief was proposed, 46

Fed. Reg. 36092 (July 13, 1981), delayed, and finally abandoned.

48 Fed. Reg. 50824 (Nov. 3, 1983). See Texaco v. DOE, 795 F.2d

1021 (TECA), cert. dismissed, 107 S. Ct. 10 (1986).

4 DOE had collected over $200 million in principal from violators

of crude oil pricing regulations, 50 Fed. Reg. 1919, 1921 (1985),

and deposited them in an interest-bearing escrow account. DOE

concluded that the overcharge escrow was an appropriate surrogate

for the payment of relief under the Entitlements Program because

refiners such as Petitioners and Consumers Power had suffered

injury from the overcharge violations through the operations of

the Program.

4

It has taken over nine years for Consumers Power tc

obtain disbursement of these funds from DOE’s escrow

account to compensate Consumers Power for the princi-

pal due it. This arduous process included several admin-

istrative decisions, several federal district court rulings

and two appeals to the Temporary Emergency Court of

Appeals.> DOE refused, however, to permit these funds

to be used to compensate Consumers Power for DOE’s

wrongful delay in implementing the relief, asserting

that an award of interest was barred by sovereign

immunity.

DOE’s refusal to make Consumers Power whole forced

Consumers Power back to federal court where Consum-

ers Power obtained an order entitling it to interest on

the principal from September 8, 1982. Consumers Power

Company v. DOE, Civ. Action No. 71-71112 (E.D. Mich.,

Aug. 14, 1985). DOE appealed that decision asserting

the same arguments that were accepted by TECA in the

ease now before this Court. Consumers Power Company

v. DOE, No. 6-85 (TECA 1985). As the Order attached

as an appendix to this brief recites, the Court of Appeals

has stayed that action pending the resolution by this

Court of this case.

5Indeed, DOE agreed to pay the principal only after TECA

instructed it in a similar case that:

We are of the opinion that the public interest is fundamentally

against the delay imposed by DGE in this case, and as [sic]

against the principles of good government and proper treatment

of its citizens, including its corporate citizens, and that the

public interest really cries out for the Congressional mandate

of this case to be complied with, and be complied with within

the reasonable time.

Navajo Refining Co. v. DOE, No. 10-62 (TECA Dec. 10, 1985)

(Transcript of Proceedings at 45). In Navajo, TECA orally denied

DOE’s motion to stay disbursement of similar funds in an entitle-

ments exception relief case closely similar to that before the Court.

5

STATEMENT OF THE CASE

The Court of Appeals was squarely presented with the

issue of whether the accumulated interest on the escrow

account was to be used to compensate private parties,

such as Petitioners, or whether these earnings on private

funds would be retained by the government. In assessing

this question the Court of Appeals also had before it the

long history of regulatory delay in effectuating relief

due Petitioners. Indeed, the district court had charac-

terized DOE as “a dishonest litigant”? whose record of

“playing fast and loose with federal courts across the

United States” caused “delay-delay-delay.” Pet. App.

at 20a. The Court of Appeals itself surveyed the record

of DOE procrastination and stated that “[t}he actions

by DOE over the last five years in this and other mat-

ters have been simply beyond belief.” Pet. App. at 7a.

Although acknowledging that “the equities all favor”

the private parties, Pet. App. at 7a, the Court of Ap-

peals, in effect, rewarded the government for its delaying

tactics by barring the claim. The court did not deem

relevant the fact that the award of interest would be

made from private monies held in escrow by the govern-

ment in an interest-bearing account for the benefit of

private parties. Pet. App. at 9a. Nor did the court

deem pertinent the fact that the government had never

claimed a right to the money. Jd. Rather, the court

simply applied the doctrine of sovereign immunity “in

a mechanical fashion,” id., and barred the claim, stating:

[t]he Treasury has the money and the claim is

against the United States to recover that money.

This is sufficient to bring sovereign immunity into

play.

Pet. App. at 9a. Petitioners have properly asked this

Court to review the extension of the sovereign immunity

doctrine to interest earned on private monies held in an

interest-bearing escrow account for the benefit of private

parties.

6

REASONS FOR GRANTING THE WRIT

Professional comment and criticism has been almost

universal in calling for the abolition (or at least the re-

striction) of the doctrine of federal sovereign immunity.

As stated by one commentator:

It is the inherited wisdom of the American bar that

responsible professional comment and criticism are

the principal restraints upon judicial arbitrariness

at the highest level and major influences in the con-

tinuing development of court-made law. If there is

one legal development (or, perhaps more accurately,

nondevelopment) found in the pages of the United

States reports during the present century which

would cause the most credulous observer to doubt

the truth of this axiom, it is the continued good

health of the doctrine of sovereign immunity.

Scalia, Sovereign Immunity and Nonstaiutory Review of

Federal Administrative Action: Some Conclusions From

the Public-Lands Cases, 68 Mich. L. Rev. 867, 867

(1970). See also Davis, Sovereign Immunity Must Go,

22 Ad. L. Rev. 383 (1970).

This Court has long recognized that sovereign immu-

nity “has not been favored by the test of time.” Na-

tional City Bank v. Republic of China, 348 U.S. 356, 359-

60 (1955). The lower courts have also criticized the doc-

trine. See, e.g., Keller v. Metropolitan County Board of

Education, 372 F. Supp. 528, 535 (M.D. Tenn. 1973)

(sovereign immunity “should be abolished because it

lacks a rational basis”). Accordingly, the doctrine “ought

not to be extended” beyond the parameters of prior case

law. Larson v. Domestic & Foreign Commerce Corp., 337

U.S. 682, 723 (1949) (Frankfurter & Burton, J..., dis-

senting). As stated by one commentator, expansion of

federal sovereign immunity is “incredible in the conven-

tionally hyperbolic sense.” Scalia, supra at 869, n.6.

The Court of Appeals, in the face of this reasoned

criticism, has effectively extended the doctrine of sover-

7

eign immunity to areas in which it has never before been

applied and has ignored controlling precedent of this

Court in so doing. For that reason, and because the

ruling below involves an important issue, promising mis-

chief in numerous other contexts, the Court should grant

review.

I. Review Is Warranted Because The Decision Below Is

Contrary To Controlling Precedent Of This Court.

This Court has frequently condemned “mechanical” ap-

plications of sovereign immunity of the sort engaged in

below. See, e.g., Franchise Tax Board of California v.

United States Postal Service, 467 U.S. 512, 521 (1984)

(criticism of applying sovereign immunity according to

“a ritualistic formula”); Library of Congress v. Shaw,

106 S. Ct. 2957, 2966 (1986) (Brennan, Marshall &

Stevens, J.J., dissenting) (criticism of construing waivers

of sovereign immunity “in a wooden and archaic fash-

ion”). Rather, this Court has consistently instructed

that evaluating a claim of sovereign immunity requires

that a court assay the true effect of the judgment on the

public fise.

As stated by this Court, if “[t]he ‘essential nature

and effect of the proceeding’ may be such as to make

plain that the judgment sought would expend itself on

the public domain, or interfere with the public admin-

istration,” then “the suit is one against the sovereign.”

Land v. Dollar, 330 U.S. 731, 7388 (1947) (citations

omitted). See also Dugan v. Rank, 872 U.S. 609, 620

(1963) (suit is against the sovereign if “the judgment

sought would expend itself on the public treasury or

domain, or interfere with the public administration’).

Stated differently, the test when money is at issue is

whether “the suit is essentially one designed to reach

money which the government owns.” Mine Safety Ap-

pliances Co. v. Forrestal, 326 U.S. 371, 375 (1945) (em-

phasis added).

8

The “essential nature and effect” of this lawsuit is

not to reach money (or anything else) which the gov-

ernment “owns.” Indeed, DOE has disclaimed ownership

of the funds in question. Rather, this case involves a

claim for interest on money held by the government for

persons of Petitioners’ class. Ignoring this distinction,

the Court of Appeals failed to apply the test long-

established by this Court.

Indeed, this Court has applied the distinction between

public funds and private funds held by the government

in numerous cases indistinguishable from the case in

hand. For example, in Henkels v. Sutherland, 271 U.S.

298 (1926), Henkels’ stock was unlawfully seized, then

sold with the proceeds being placed in interest-bearing

securities. The Court held that Henkels was entitled to

that interest, finding that case not “in the sense of the

rule” prohibiting an award of interest against the United

States. 271 U.S. at 301.

Similarly, in Miller v. Robertson, 266 U.S. 243 (1924),

Robertson sued the United States to recover a debt owed

by enemy aliens whose property was seized. This Court

awarded interest in spite of claims of sovereign im-

munity reasoning that “[wlhile the suit . .. is one

against the United States, the claim was not against it.”

266 U.S. at 257.°

Nor do the two cases relied upon by the Court of Ap-

peals abrogate this rule. In United States v. Louisiana,

446 U.S. 253 (1980), an agreement between Louisiana

®The result below is also inconsistent with this Court’s de-

cision in Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S.

155 (1980). In Webb’s Fabulous Pharmacies, the Court held that

a state’s claim to interest on private money tendered to the clerk

of a state court and placed in an interest-bearing account for the

ultimate benefit of private parties would run afoul of the Fifth

Amendment. If government seizure of interest on private monies

raises a taking issue, then sovereign immunity cannot logically

be asserted in defense of a private party’s claim for that interest.

9

and the United States placed revenues from certain dis-

puted mineral leases in escrow pending resolution of |

ownership rights to those funds. Importantly, the par-

ties neglected to put into the agreement any duty to in-

vest the proceeds. Indeed, the record showed that Louisi-

ana specifically decided not to insist on a duty to invest

clause during the negotiations and acquiesced for many

years by receiving regular reports showing that no in-

terest was accumulating. 446 U.S. at 265. The Court’s

decision against an award of interest to Louisiana merely

reflects a natural reluctance to read into freely nego-

tiated contracts such a significant term.

Similarly, United States v. N.Y. Rayon Importing Co.

(#2), 329 U.S. 654 (1947), involved a different type of

account from that at issue in this case. In Rayon, dis-

puted custom fees were collected and deposited in an

apparently non-interest bearing account pending deter-

mination of whether these monies were rightfully col-

lected. Subsequently, when the true owners sued to col-

lect interest on the funds wrongfully held, this Court

barred their claim under sovereign immunity. Rayon is

silent as to whether the funds were earning interest or

not. However, the Court’s reference to “the appropria-

tion statutes which cover the refunds here in issue,” 329

U.S. at 659 (emphasis added), strongly suggests that

the monies were not earning interest and that refunding

with interest would drain appropriated funds. Thus,

the Rayon holding is at the very heart of the doctrine of

sovereign immunity and adopts the very rule which the

Court of Appeals failed to apply.

II. This Court Should Grant Plenary Review Because The

Issue Is Important And Likely To Recur.

Not only was the decision below inconsistent with prior

decisions of this Court, the ruling promises to work sub-

stantial mischief in other contexts. The government acts

as trustee of large escrow accounts under numerous other

federal statutes, all of which are silent as to the issue of

10

interest. The question decided below is thus likely to

arise again in other contexts and should be put to rest

now.

For example, under the terms of Pub. L. No. 98-473,

98 Stat. 2175 (1984), after a defendant is convicted of

a crime resulting in physical harm, a court may seize

the payments received by the criminal from the sale of

stories depicting the crime and retain these funds in

escrow for five years in the Crime Victims Fund in the

treasury. 18 U.S.C. § 3671(a). Victims of the crime or

the United States may then levy the funds to satisfy

money judgments or fines. 18 U.S.C. § 3671(e). Yet, no

provision is made for the recovery of interest.

Similarly, under the Low-Level Radioactive Waste Pol-

icy Amendments Act of 1985, Pub. L. No. 99-240, 99

Stat. 1842 (1985), states with a radioactive waste dis-

posal facility can impose surcharges on other states using

the facility. 42 U.S.C. § 202le(d) (2) (A). Twenty-five

percent (25%)of these monies would be placed in an

interest-bearing escrow account to be refunded to states

meeting certain “mileposts” in developing their own fa-

cilities. Any remaining funds would be returned to the

states imposing the surcharge. There is also no provision

for the payment of interest on this escrow.

Perhaps the closest modern analog to the wrongful

seizure cases, discussed supra, can be found in the Jus-

tice Assets Forfeiture Fund. Under 28 U.S.C. § 524(c),

a special fund was established in the United States

Treasury into which the Attorney General would deposit

the proceeds of seized property. Significantly, there is no

duty to invest the fund as it can be “kept on deposit or

invested.” 28 U.S.C. §524(c)(5) (emphasis added).

The fund can be used to pay valid liens and mortgages

against property forfeited “subject to the discretion of

the Attorney General to determine . . . the amount of

payment.” 28 U.S.C. § 524(c)(1)(C). The statute is

silent on the recovery of interest on liens on property

eam —

11

wrongfully seized. Importantly, disputes on the recovery

of post-seizure mortgage interest due innocent lienholders

on seized property have already surfaced with the lower

courts reaching inconsistent results. Compare United

- States v. All That Tract & Parcel of Land, 602 F. Supp.

307 (N.D. Ga. 1985) (holding that innocent lienholders

on seized property entitled to interest accruing after date

of seizure) with United States v. One Piece of Real Es-

tate, 571 F. Supp. 723 (W.D. Tex. 1983) (holding that

innocent lienholders on seized property not entitled to

post-seizure interest).

Finally, the federal courts themselves have become tem-

porary holders of large escrow amounts. Under 28 U.S.C.

§§ 2041, 2042, the federal courts administer escrow mon-

ies which, since 1983, are placed in interest-bearing ac-

counts. See Fed. R. Civ. P. 67. Claims on funds held

by federal courts have also raised the issue of the appli-

cation of the doctrine of sovereign immunity. See, e.g.,

Bank of Hawaii v. Benchwick, 249 F. Supp. 74, 78 (D.

Hawaii 1966) (claim by bank to cash deposited as bail

with court not barred by doctrine of sovereign immunity

“for the United States has not proprietary rights in cash

deposited as security for bail’).

Given the existence of these escrow statutes, claims for

interest on these funds, nominally against the sovereign,

can be expected to raise the defense of the doctrine of

sovereign immunity. For this reason as well, the Court

should grant review of the decision below.

12

CONCLUSION

For the foregoing reasons, as well as those set forth

in the Petition for Writ of Certiorari, the petition should

be granted.

Respectfully submitted,

WILLIAM H. BOopkE *

DONALD W. FOWLER

THOMAS J. TOURISH

MICHAEL A. NARDOLILLI

SPRIGGS, BODE & HOLLINGSWORTH

1015 Fifteenth Street, N.W.

Suite 1100

Washington, D.C. 20005

(202) 898-5800

Counsel for Amicus Curiae

* Counsel of Record

Date: April 8, 1987

APPENDIX

la

APPENDIX

TEMPORARY EMERGENCY COURT OF APPEALS

OF THE UNITED STATES

No. 6-35

CONSUMERS POWER COMPANY,

Plaintiff-A ppellee,

Vv.

UNITED STATES DEPARTMENT OF ENERGY, et al.,

Defendants-A ppellants.

[Filed May 30, 1986]

Before: GRANT, PECK, and MAXWELL, Judges.

ORDER

This appeal involves the August 14, 1985 final order

of the United States District Court for the Eastern Dis-

trict of Michigan which directed defendants-appellants,

the United States Department of Energy [hereinafter re-

ferred to as DOE], to place in escrow benefits owed to

plaintiff-appellee, Consumers Power Company [herein-

after referred to as Consumers], pursuant to DOE’s en-

titlements program, 10 C.F.R. # 211.67, and to add to

this amount interest from and including September 8,

1982, the date of the original disposition of the merits

of this case, until the date the escrow was established.

We stayed the appeal pending the district court’s deci-

sion on DOE’s request to amend the judgment with re-

2a

spect to the grant of postjudgment interest. The district

court denied DOE’s request on January 31, 1986, and

simultaneously ordered further briefing on whether pre-

judgment interest ought to be added to Consumers’ en-

titlements payment. The parties have agreed to be bound

on the prejudgment interest issue by a final decision in

VGS Corporation d/b/a Southland Oil Company v. De-

partment of Energy, No. 5-119 (Temp. Emer. Ct. App.)

which is scheduled for oral argument on June 4, 1986.

DOE has deposited the disputed amount of prejudgment

interest into escrow pending the resolution of this issue.

This matter now comes before this Court on DOEK’s

Motion for Further Stay of Proceedings and Consumers’

opposition to DOEK’s motion. Because the issue of pre-

judgment interest will likely be appealed, because that

issue and the issue of postjudgment interest raise similar

considerations, and because the issue of prejudgment in-

terest will be resolved in a very short time, it is

ORDERED that DOE’s motion to stay proceedings is

granted. The parties should advise this Court by June

30, 1986, and each three-month period thereafter, as to

the status of the prejudgment interest question in the

district court.

Entered: 28 May 1986

/s/ Robert A. Grant

ROBERT A. GRANT

Senior District Judge