Petition for Writ of Certiorari — Consolidated Edison Co. v. Chevron U. S. A. Inc.

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Supreme Court, U.S.

ee FILED

02 207 AUG 92002

OFFICE OF THE GLERK

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.

LONG ISLAND LIGHTING COMPANY, ORANGE AND

ROCKLAND UTILITIES INC.,SAN DIEGO Gas AND

ELECTRIC COMPANY, INTERNATIONAL PAPER COMPANY ,

CHAMPION INTERNATIONAL CORPORATION, WESTVACO

CORPORATION, and WEYERHAUSER COMPANY

PETITIONERS

CHEVRON U.S.A. INC.

RESPONDENT

ON PETITION FOR WRIT OF CERTIORARI TO THE

COURT OF APPEALS FOR THE FEDERAL CIRCUIT

Philip P.. Kalodner

Attorney of Record for Petitioners

208 Righters Mill Rd.

Gladwyne PA 19035

(610) 649-8749

4 R VIEW

1. Has the practice of issuing unpublished

decisions not citable as precedent been so

misused here to avoid facing issues of

first impression so as to require reversal?

2. Do the varying standards of the Courts

of Appeals with regard to the use of

unpublished opinions and their citation as

precedent or for their persuasive effect

require this Court's consideration as to

the need for a uniform policy?

3. Has the refusal of the Court of Appeals

for the Federal Circuit here to honor the

language of prior decisions and its own

repeated assurance that a private cause of

action exists pursuant to the Economic

Stabilization Act ("ESA") to recover for

crude oil overcharges so far departed from

the usual course of judicial proceedings as

to call for an exercise of this Court's

Supervisory power?

4. Was the refusal of the Federal Circuit

here to apply a specific federal statute of

limitations for public enforcement actions

pursuant to ESA Section 209 to private

causes of action under ESA Section 210 for

the same violations in conflict with the

decisions of this Court?

(i)

LIST OF PARTIE RATE AF

The caption of the case contains the

names of all of the parties.

International Paper Company, Westvaco

Corporation and Weyerhauser Company are all

themselves publicly owned corporations and

have no parent corporation, nor is there

any publicly held corporation which owns

10% or more of their stock.

Consolidated Edison Company of New

York Inc. and Orange and Rockland Utilities

Inc. are wholly owned subsidiaries of a

publicly owned corporation, Consolidated

Edison Inc.; San Diego Gas & Electric

Company is a wholly owned subsidiary of a

publicly held corporation, Sempera Energy;

Champion International Corporation is a

wholly owned subsidiary of International

Paper Company. Long Island Lighting Company

is a wholly owned subsidiary of Long Island

Power Authority, a corporate municipal

instrumentality of the State of New York.

(ii)

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW (i)

LIST OF PARTIES AND CORPORATE

AFFILIATES (11)

TABLE OF CONTENTS (111)

TABLE OF CITED AUTHORITIES (vii)

CITATION OF REPORTS OF OPINIONS 1

JURISDICTION 1

STATUTES INVOLVED 1

STATEMENT OF THE CASE 2

ARGUMENT 12

I P TICE OF It N ISHED

EEO

CONCLUSION 30

APPENDIX

OPINIONS ENTERED IN CONJUNCTION

WITH JUDGMENT SOUGHT TO BE REVIEWED

OPINION OF U.S. COURT OF

APPEALS FOR THE FEDERAL

CIRCUIT, APRIL 5, 2002 la

STATUTES INVOLVED

DENIAL OF REHEARING

MAY 13, 2002 3a

MEMORANDUM OPINION OF THE

DISTRICT COURT FOR THE

DISTRICT OF COLUMBIA Sa

Economic Stabilization Act

Amendments of 1971, Pub. L.

92-210, 85 Stat. 743 (1971),

Sec. 209-211 (a) 16a

Emergency Petroleum

Allocation Act of 1973,

Pub. L. 93-159, 87

Stat. 627 (1973),

Sec. 5(a) (1) 19a

Petroleum Overcharge

Distribution and Restitution

Act 1986 (PODRA), Pub.L.

99-509, 100 Stat. 1881

(1986), 15 U.S.C. Sec. 4504 20a

Federal Courts Administration

Act of 1992, Pub. L. 102-572,

Sec. 102 (a)-(d),

106 Stat. 4506 (1992) 25a

(vi)

Cases

Agency Holding Corp. v. Malley-Duff ¢§

Associates Inc., 483 U.S. 143 (1987)...29

Arnson v. General Motors Corporation,

377 F. Supp. 209 (N.D. Ohio 1974)..-...17

Ashland Oil Co. of Cal. v. Union Oil Co.

of Cal., 567 F. 2d 984 (TECA | gg) ee 21

Bond v. Texaco, 647 F. Supp. 1135

OR | ren ee nner pn oe eee 11,29

~j lle-Mobile Gather; a

Edwards, 669 F. 2d 717 (TECA 1982),

cert. denied, 459 U.S. 877 (1982)...... 19

Consolidated Edison Co. of New York v.

O'Leary, 131 F. 3d 1475 (Fed. Cir.

RFE A recess e Vie wwe aes eke cua 10,26

Ww k v

O'Leary , 117 F. 3d 538 (Fed. Cir.

itis RET EE COE ee 27

(vii)

gE Bir Lj I At] :

Richfield Co., 609 F. 2d 497 (TECA

oy, ) ere rere eee ree ee ee ee 17-18, 26

Gulf Oil Corp. v. Dyke,

734 F. 2d 797 (TECA 1984) ..17-18,20, 25-26

Kellermyer v. Blue Flame Gas Corp.,

797 BP. 24 983 (THCA 1986) .....cccccccce 20

In Re The Department of Energy Stripper

1 Lit ("strs

Well"), 653 F. Supp. 108 (D. Kan. 1986..8

Lampf_ v. Gilbertson, 501 U.S. 350, 115 L.

Ed. 2d 321, 111 S. Ct. 2773 (1991)..28-30

Reed United T “Pe

488 U.S. 319, 102 L. Ed. 2d 665,

109 S. CO. 621 (1969)... ccc ccccscccecs 28

Sinclair Oil ¢ ' ; ;

Co., 720 F. Supp. 894 (D. Utah 1989)...21

Sousa v. BP Oil Inc.,

1995 WL 842003 (D. Mass. 1995)......... 20

(viii)

ani’ ain it and i al

Entitlements Program, 39 Fed. Reg.

42,246, formerly 10 CFR Sec.

Final Settlement Agreement in Stripper

Well, 7 Energy Mgmt. (CCH) par. 90,509..9

Notice of Proposed Remedial Order

to Chevron, 57 Fed. Reg. 20475 (May 13,

EE ae Ps oy as oe es bose ee Sead 9-10

Report of OHA to Stripper Well Court,

7 Energy Mgmt. (CCH) par. 90,507........ 6

The 2 : Uni F the Ci 1]

Field, 24 DOE (CCH) par. 81,035

Se eS 5 oh a 6 6 aca ie ae va eek cee becwdan 6

Statutes

Federal Courts Administration Act of

1992, Pub. L. 102-572, Sec. 102 (a) -

(dad), 106 Stat. 4506 (1992).............. 2

(ix)

Economic Stabilization Act Amendments of

1971, Pub. L. 92-210, 85 Stat. 743

+. 275 err errr eT ee eee ee ee eee 1, passim

Emergency Petroleum Allocation Act of

1973, Pub. L. 93-159,

BF Seat. GAT CASTS) occ cc vcsvecsvvsveses 1

Petroleum Overcharge Distribution and

Restitution Act of 1986,

15 U.S.C. Sec. 4504......... 2,10-11,13,21

rM ri

Law Library Journal, Vol. 93:4

"Unpublished Opinions as the Bulk of the

TCOEDETG" . 0. ccc cece rece rewecceesececes 23

Procedural Rules of the various

Circuit Courts of Appeals........... 22-24

(x)

ITATION OF REPORT F_ OPINION

Neither the Decision of the Court of

Appeals for the Federal Circuit nor the

District Court Opinion is reported

officially.

The Court of Appeals Decision is

reported unofficially at 2002 U.S. Appeals

LEXIS 7072 and at 32 Fed Appx. 588, and

the denial of rehearing is unofficially

reported at 2002 U.S. Appeals LEXIS 11815.

JURISDICTION

The Judgment sought to be reviewed

was entered April 5, 2002.

A timely filed Petition for Rehearing

was denied by Order entered May 13, 2002.

Jurisdiction of the Supreme Court is

pursuant to 28 U.S.C. Sec. 1254.

ES I L

The statutes involved, the pertinent

text of which is set forth in the appendix

are: Economic Stabilization Act Amendments

of 1971, Pub. L. 92-210, 85 Stat. 743

(1971), Sections 209-211 (a) ("ESA"),

Emergency Petroleum Allocation Act of

1973, Pub. L. 93-159, 87 Stat. 627 (1973),

Sec. 5 (a) (1) ("EPAA"), Petroleum

Overcharge Distribution and Restitution

Act of 1986 ("PODRA"), Pub. L. 99-509, 100

Stat. 1884 (1986) 15 U.S.C. Sec. 4504,

Federal Courts Administration Act of 1992,

Sec. 102 (a)-(d), 106 Stat. 4506 (1992).

STATEMENT OF THE CASE

Plaintiffs, four electric utility

companies ("Utilities") and four paper

manufacturers ("Manufacturers") sought in

this Complaint recovery for overcharges by

defendant, Chevron U.S.A.Inc. ("Chevron").

They sought such on their own behalf and

on behalf of similarly situated purchasers

of petroleum products during the period of

federal regulation of the price of crude

oil (August 1973 through January 1981)

Utilities and Manufacturers averred

that Chevron as a producer of -crude oil

had overcharged by recovering for price-

controlled "old" oil as if it were price-

uncontrolled "new oil," and that’ the

plaintiffs and the class had paid a pro

rata share of such overcharges. Relief was

sought pursuant to Economic Stabilization

Act ("ESA") Section 210 which provides for

recovery in a private cause of action.

Jurisdiction. of the District Court

was pursuant to ESA Section 211 (a).

Judge Richard W. Roberts of the

District Court for the District of

Columbia granted a Chevron motion to

dismiss on two grounds, that (i) even if

overcharged, the plaintiffs have no

Standing to sue because they had not

purchased from Chevron directly, and (ii)

the action is barred by the applicable

Statute of limitations.

An appeal was taken by Utilities and

Manufacturers to the Court of Appeals for

the Federal Circuit which, after briefing

and oral argument, entered per curiam

judgment with a single word decision, i.e.

"Affirmed." and a legend "NOTE: Pursuant

to Fed. Cir. R. 47.6 this disposition is

not citable as precedent. It is a public

record. This disposition will appear in

tables published periodically." A petition

for panel rehearing and for rehearing en

banc was "Denied."

1. The Principal Elements of the Chevron

Overcharge

Chevron's recertification of price

controlled "old oil" as price-uncontrolled

"new oil" was pursuant to a = program

authorized by the Department of Energy

("DOE") to encourage tertiary recovery,

i.e. infusion in an oil field in order to

recover additional oil. The program, known

as the Tertiary Incentive Program ("TIP")

permitted a producer of crude oil to

increase to the world price crude oil

which otherwise had a ceiling price. A

producer was permitted to so "recertify" a

volume of ceiling price crude oil to the

extent necessary to recover (i) 75% of its

expenses and anticipated expenses in the

TIP program it was implementing, and (ii)

the additional federal Windfall Profits

Tax and State Severance Taxes which would

result from such a recertification and the

resulting higher crude oil prices.

As to its January 1981 production,

Chevron accordingly raised its prices on

otherwise price-controlled oil sold to

itself as a refiner in the amount of $205

million, representing such as within the

TIP program authorized purposes..

The condition of the permission to

increase crude prices was a requirement

that to the extent such increase was

either not justified initially or became

unjustified by virtue of an abandonment of

the TIP program before its completion, the

amount of the unjustified increase was

required to be returned to those who had

paid it. In effect, to the extent the

increase was unjustified, it was an

overcharge, i.e. an unjustified avoidance

of the ceiling price.

The Complaint here charges that in a

number of important respects, the increase

in the price of crude oil either initially

was unjustified or became unjustified as a

result of a premature abandonment of the

TIP Program and a recovery from the U.S.

Treasury of a portion of the Windfall

Profits Tax actually paid, and from the

States of a portion of the Severance Tax

which had been paid and used as a

justification for the price increase.

Y 2 The Impact of the Chevron

Vv aintif

Class

The increased price of crude oil

recertified by a producer in order to

implement a TIP Program was charged by it

to the refiner purchasing its crude oil.

Pursuant to DOE regulations, it was then

passed on by the purchasing refiner to all

other domestic refiners of crude oil pro

rata, i.e. with each domestic refiner

reflecting in its crude oil costs a

percentage of the increased crude price

calculated by a fractiqn, the numerator of

which was the runs to stills of each

refiner and the denominator of which was

the runs to stills of all domestic

refiners in the month involved.

The mechanism by which the cost of

each refiner's crude oil was spread pro

rata to all domestic refiners was the

Entitlements Program promulgated by DOE's

predecessor in 1974. (39 Fed. Reg. 42,246,

formerly 10 CFR Sec. 211.67).

The Entitlements Program was adopted

to equalize the acquisition cost of crude

oil to all refiners; without such

equalization, some refiners would have had

a lower crude cost by virtue of having a

predominant supply of ceiling priced crude

Oil, while others would have a higher

crude cost because of a predominant supply

of unregulated imported crude.

In addition to spreading to all

refiners the costs of each refiner, and

indeed as a result of such spread, the

Entitlements Program left all refiners

with an approximately equal per gallon

cost of crude oil.

Such equalization of the acquisition

cost of crude oil had a further critical

effect. As the Department of Energy's

adjudicative body, the Office of Hearings

and Appeals ("OHA") found on two separate

occasions after hearing extensive expert

testimony, it enabled refiners to pass on

to their customers almost 95% of the

increased acquisition cost of crude oil,

absorbing only slightly more than 5% of

the increased cost. (Report to the Court

in In re The Department of Energy Stripper

Well Exemption Litigation, ("Report in

Stripper Well"), 7 Energy Mgmt. (CCH) par.

90,507; 341 Tract Unit of the Citronelle

Field, ("341 Citronelle"), 24 DOE (CCH)

par. 81,035 (OHA 1994).

As a result of this "pass through",

the purchasers of refined oil products,

such as the Utilities and Manufacturers,

paid to the refiners from whom they

purchased product all increases in the

acquisition cost of crude oil by any

refiner, including such increases as were

permitted by virtue of the adoption by any

or all refiners of a TIP Program.

When, as was the case here, it was

recognized that the TIP Program

participant (i) had not indeed incurred

some of the costs on the basis of which it

had increased its crude oil prices (such

as Windfall Profits Taxes never actually

paid because of the Net Income Limitation)

or (ii) later recovered some of the costs

on the basis of which it had increased its

crude oil prices (such as prepaid expenses

and inventory and Windfall Profits Taxes

and Severance Taxes paid), the increase in

prices which the TIP participant had

effectuated became to that extent

overcharges which had effected all

purchasers of refined product from all

refiners to the same per gallon extent.

Neither the defendant here, nor the

District Court, questioned the accuracy of

the above explanation of the impact of

overcharges by any producer on purchasers

of product from all refiners. Indeed, it

is the basis of OHA's unvarying practice

in the case of recovery in a public

enforcement action pursuant tc ESA Section

209 of allocating to all purchasers of

refined product recovered overcharges from

any crude oil producer, regardless of

whether their purchases were from the

refiner who paid the overcharge initially

or from a refiner who paid a pro rata

share of the overcharge by virtue of the

Entitlements Program.

Chevron's merit defense is that it

never received the benefit of the $205

million recertification because the

January 1981 Entitlements List was never

implemented because of deregulation, and

that accordingly it has no obligation to

make restitution to the extent to which

the recertification reflected overcharges.

Utilities and Manufacturers maintain that

(i) domestic refiners including Chevron

did indeed recover in January 1981 sales

the $205 million increase in price by

Chevron, and (iii) Chevron either did

receive or specifically waived the only

portion of the $205 million to which it

would have been entitled had the January

Entitlements Program been implemented in

the ordinary course, such having occurred

in the settlement of In re The Department

E z Stri Wel] z ;

Litigation, ("Stripper Well") 653 F. Supp.

108 (D. Kan. 1986).

Chevron's pro rata share of crude

oil refined by all domestic refiners was

8% (Final Settlement Agreement in Stripper

Well, 7 Energy Mgmt (CCH) par. 90,509 at

90,680). Accordingly, if, as plaintiffs

contend, the $205 million in Chevron's

increased price was recovered in January,

1981 by domestic refiners, only 8% of it

was recovered by Chevron itself, and 92%

by other domestic refiners; Chevron would

receive, and in plaintiffs' view did

receive, the 92% recovered by other

refiners in the implementation of the

Entitlements Program (through the Stripper

Well Settlement.)

If therefore, as the District Court

apparently believed, ESA Section 210

permits only those who purchased directly

from Chevron to recover, Chevron would be

obligated to make restitution under ESA

Sec. 210 only for 8% of its overcharges,

rather than the 100% for which it would

clearly be obligated to make restitution

in a public ESA Sec. 209 action.

3. The Facts With Regard to the

: . Limi L

The instant Complaint was filed March

25, 1998, less than six years following

the first public notice of the facts with

regard to the alleged overcharges; that

notice occurred as the result of a Federal

DOE had, on March 26, 1992-issued a

Proposed Remedial Order ("PRO") initiating

a public enforcement action against

Chevron pursuant .to ESA Section 209 (57

Fed. Reg. 20475).

(Plaintiffs were, by intervention,

parties in the DOE public enforcement

action, and filed the instant Complaint

only after the DOE abandoned its

enforcement action, and after plaintiffs'

challenge to that abandonment was

dismissed on the basis that the DOE's

discretionary decision to drop the Section

209 enforcement action was not appealable

by potential beneficiaries of that action.

Consolidated Edison Co. of New York v.

O'Leary, 131 F. 3d 1475 (Fed. Cir. 1997);

had the DOE persisted in that public

enforcement action and succeeded, in

accordance with the ESA Section- 209

mandate that funds recovered in a public

enforcement action be used for

"restitution", plaintiffs and the class

would have recovered the amounts which

they seek in the instant private action.

In rejecting the plaintiffs' challenge to

the abandonment of DOE's public

enforcement action, the Federal Circuit

pointed out that the Utilities and

Manufacturers had available a private

cause of action under ESA Section 210.)

Prior to the enactment of the

Petroleum Overcharge Distribution and

Restitution Act ("PODRA") October 21,

+ 2 EES Ga

1986, 15 U.S.C.A. Section 4504, there was

no limitation period specified in federal

law for either Section 209 or Section 210

actions. The Courts imposed no limitation

on Sec. 209 actions, and applied "the most

closely analogous state statute of

limitations," in Section 210 cases. Bond

v. Texaco, 647 F. Supp 1135, 1137 (D.D.c.

1986). In doing so, in actions in the

District of Columbia, "The District of

Columbia recognizes the so-called

discovery rule as to the inception of the

limitations period, i.e. the cause of

action accrues for limitation purposes not

when the injury first occurred, but when

the plaintiff discovered, or by the

exercise of due diligence should have

discovered, the facts giving rise to the

claim." In Bond v. Texaco, the Court held

that the limitations period began, at the

earliest, at the time the DOE issued the

then-equivalent of a PRO. id

PODRA provided for a six year

limitation for public ESA Section 209

actions; it was silent as to Section 210

private actions. 15 U.S.C.A. Section 4504.

Were the six year statute of limitations

to be here applied to this Section 210

action and the "discovery rule" honored,

all elements of the Chevron overcharge

would be within the limitation period.

ARGUMENT

Here, a local rule permitting the

Court of Appeals to issue unpublished

dispositions not citable as precedent was

grossly misused to affirma District Court

decision as to matters of first impression

without binding the Court of Appeals to

the precedential impact of such decisions.

The characterization of such an

appellate determination as "not adding

significantly to the body of law," the

requisite under Federal Circuit Rule 47.6

for a non-precedential decision, is so

unjustified as to suggest a denial of the

right to appeal.

The misuse here of a rule permitting

a non-precedential disposition (i) should

be remedied, and (ii) provides a needed

opportunity for this Court to review the

use of similar rules by the various

federal Courts of Appeals.

This Court should preclude such non-

precedential disposition rules, inter alia

(i) because they eliminate the discipline

to decide cases on a consistent basis

which is imposed by the precedential

implications of Courts of Appeals’

dispositions, (ii) because of the variance

in the rules of the various Circuits with

regard to the persuasive impact of

unpublished dispositions , and (iii)

because of the significant variance in the

use of such rules by the various Circuits.

The District Court here faced, and

decided, whether knowingly or not, two

issues of first impression in private

actions pursuant to ESA Section 210 to

recover crude oil overcharges:

(i) whether there is indeed a private

cause of a action to recover crude oil

overcharges passed through all refiners,

or whether the provision for a private

cause of action pursuant to ESA Section

210 is ineffective to provide such, and

(ii) whether, in light of the

creation in PODRA, 15 U.S.C. Sec. 4504, of

a 6 year limitation period for parallel

public enforcement actions pursuant to ESA

Sec. 209, it is appropriate to adopt the

Same 6 year limitation period for private

actions under ESA Sec. 210.

By affirming the District Court

decision, the Court of Appeals. has

presumably affirmed either or both the

District Court holdings, i.e. (i) that the

private cause of action supposedly

‘ g

provided by ESA Section 210 is a toothless

tiger because end users of oil products

injured by crude oil overcharges passed on

to the refiner from whom they purchased

product cannot recover from the crude oil

producer who overcharged, and (ii) that

the private cause of action provided by

ESA Section 210 is available only within a

state limitation period shorter than that

available in the supposedly parallel ESA

Section 209 public enforcement action. In

the absence of a Court of Appeals opinion,

it is not possible to determine whether

the Court of Appeals agreed with the

District Court as to both holdings, or

only as to one, and if only as to one, to

which one. It is likely that the Court of

Appeals affirmed at least on the first of

these two holdings (i) in light of the

fact that it was this issue to which the

questions on oral argument were directed,

and (ii) in light of the fact that

elimination of the six year limitation

period alone would not have provided a

basis for dismissal of the Complaint; at

least one of the elements of violation

occurred within the three year District of

Columbia limitation period.

” E 1

with regard to crude oil overcharges

The District Court here interpreted

the Sec. 210 requirement that a private

cause of action is available only "against

any person renting property or selling

goods or services who is found to have

overcharged the plaintiff" as permitting

suit only by "direct purchasers of

Chevron's crude oil." (Appendix, p. 9a).

If literally applied. such an

interpretation would preclude any action

to recover crude oil overcharges by

private purchasers of refined product to

which, as OHA has found, 95% of the

increased price of crude oil was passed

through, because the direct purchaser of

Chevron's crude was Chevron itself. But

even if, as the Court would presumably

hold, direct purchasers from Chevron as a

refiner were permitted to seek recovery

for the affect on them of the Chevron

crude oil price increases, purchasers of

only 8% of the product affected would be

entitled to recover, inasmuch as Chevron

sold only 8% of the product which had been

uniformly affected by tthe additional

charges, with the balance being borne on

product sold by other domestic refiners.

Because no Court has ever faced the

issue of interpreting the statutory

District Court relied on the

interpretation of the language in

connection with what are generally

referred to as "refined product" cases.

Refined product violations are

violations by refiners, resellers or

retailers as to refined product. e.g.

gasoline, home heating oil, residual fuel

oil etc., and affect only the customers of

the particular refiner, reseller or

retailer. For example, if a refiner sets a

price of gasoline in excess of the

applicable ceiling price and then sells

the gasoline, the only persons possibly

affected are the reseller, retailer and

end user customers purchasing such. I n

contrast, crude oil violations are

violations of the regulations by either a

producer of crude oil or a reseller of

crude oil. Because of the. Entitlements

Program, regardless of which refiner

initially purchases the crude oil, any

higher price is borne by all domestic U.S.

refiners in proportion to their percentage

of national refinery production.

Moreover, because the Entitlements

Program leaves all refiners with

essentially the same acquisition cost of

crude oil, and because the cost of crude

oil is the overwhelmingly important

component cost of refined product, as OHA

has found, the market price of refined oil

products reflected 95% of the essentially

uniform crude oil cost to all refiners, so

that 95% of the crude oil Overcharge was

borne by the purchasers of the refined

product made with such crude oil.

In the refined product cases, the

Courts have interpreted the Sec. 210

language permitting its use only against

persons "found to have overcharged the

plaintiff" as permitting suit only against

the immediate seller and have denied the

right of a purchaser to sue a remote

seller, albeit recognizing that if there

waS a cost-plus contract requiring pass-

through (Arnson Vv. General Motors

Corporation, 377 F. Supp. 209 (N.D. Ohio

1974)), a situation in which the impact of

overcharges on a "remote" purchaser could

be determinable in advance (Gulf Oil Corp.

v. Dyke, 734 F. 2d 797, 809 (TECA 1984) or

the functional equivalent of a —

contract (Eastern Air Lines Inc.

Atlantic Richfield Co., 609 F. 2d 497, ae

(TECA 1979), pass-through can be

recognized.

No court has faced or dealt with an

assertion in a Section 210 case involving

crude oil overcharges, as here made by

plaintiffs, that the Entitlements Program

was in fact the "functional equivalent" of

a cost-plus contract; it automatically

passed on the overcharges by any producer

to all refiners, and by virtue of

equalizing the acquisition cost of crude

oil to all refiners, assured that any

overcharge would (to the extent of some

95%) be passed on to end user purchasers.

The Entitlements Program met the

requirements for functional equivalence to

a cost-plus contract because, (i) unlike

the situation in Eastern Air Lines, it was

"pre-existing", i.e. it existed before the

recertification (rather than requiring

approval of an administrative agency, as

in Eastern Air Lines ), and (ii) unlike

the situation in Gulf Oil, the essentially

100% nature of the pass-through was

"capable of determination in advance"

(rather than requiring a case-by-case

determination as to whether the

competitive market situation was one in

which the overcharged party was able to

pass-through, as in Gulf Oil).

2. No Court, other than the District

5 ; ar :

In the period from the enactment of

ESA Sections 209 and 210 in 1971 and until

mo)

the enactment of PODRA in 1986, there was

no limitation period set forth in the

Statute either for Section 209 or 210

actions. The Courts treated Sec. 209

actions seeking either "injunctive relief"

or "restitution" as equitable actions not

subject to any statute of limitations,

Citronelle-Mobile Gathering Inc. Vv.

Edwards, 669 F. 2d 717, 721 (TECA 1982),

cert. denied 459 U.S. 877 (1982), and

"borrowed" state limitation periods as to

ESA Section 210 actions seeking to recover

the amount of "overcharge", characterizing

_ them as legal in nature. The distinction

made sense prior to the termination of

price regulation in January, 1981 when the

DOE pursuant to Section 209 could either

seek to enjoin the alleged illegal pricing

or could seek restitution by requiring the

violator to adjust its future prices so as

to refund the overcharge to its customers.

But with the end of regulation, an

enforcement action for restitution sought

the exact same damages as would be sought

in a private Section 210 action; the only

difference was that in a Section 209

action, the recovery went initially to the

DOE, and then by disbursement to the

injured end users, while in a Section 210

action the very same recovery went to the

end user plaintiffs directly. The proof of

the identity of the two actions here is

demonstrated by the fact that the items of

recovery sought: by the DOE in its

abandoned Section 209 action against

Chevron are precisely the same as that

sought in the instant Section 210 action.

Congress recognized this conversion

of what had been equitable actions under

Section 209 into actions for damages by

specifying a 6 year limitation period in

PODRA (15 U.S.C. Section 4504); its

failure to specify the same limitation

period for Section 210 actions presumably

reflected a view that such actions were

unlikely to be brought, both (i) because

it had been five years since deregulation,

and (ii) because of an assumption that DOE

would vigorously prosecute Section 209.

actions and that the same recoveries would

thereby be available to end users.

The use of state limitations for

Section 210 actions was never very

Satisfactory, as attested to by the

struggles which the courts had in

determining (i) which States' statute to

apply (e.g. Kellermyer v, Blue Flame Gas

Corp., 797 F. 2d 983 (TECA 1986), Gulf

Qil_v. Dyke, supra), (ii) which of the

limitation periods of the State to apply

(e.g. Sousa v. BP Oiid Inc,, 1995 WL 842003

(D. Mass. 1995), and (iii) whether, in

light of the provision permitting treble

damages in Section 210 actions, to apply a

penal or a "compensatory" limitation

period, or both (e.g. Sinclair Oil Corp.

v. Atlantic Richfield Co., 720 F. Supp.

894, 905-6 (D. Utah 1989), Ashland Oil Co.

of Cal. v. Union Oi] Co. of Cal., 567 F.

2d 984, 991 (TECA 1977).

No Court, to the best of Petitioners’

knowledge, has yet considered whether the

Six year period specified for 209 actions

in PODRA, 15 U.S.C.A. Sec. 4504, enacted

October 21, 1986, is now properly applied

to 210 actions, at least those involving

crude oil overcharges where, by virtue of

the Entitlements Program, the impact of

the alleged overcharges necessarily affect

every purchaser in every state.

B. By Barring the Citation of Its

If the Federal Circuit did indeed

decide one or both of the issues of first

impression before the Court, it misused

its own rule, and indeed, the purported

justification for un-published, non-

Citable decisions as promulgated by the

various Courts of Appeals, i.e. that, as

Federal Circuit Rule 47.6 puts it, the

decision is not one "adding significantly

to the body of law." (Indeed, in the Court

of Appeals for the District of Columbia

Circuit, the standards require publication

of an opinion in a "case of first

impression," the necessary inference being

that in such cases there should be a

written opinion, D.C. Circuit Rule 36.)

If, on the other hand, the Federal

Circuit decided the case on some other

basis, e.g. that despite the statutory

provision permitting an independent

private cause of action, it will not

permit such where DOE has determined not

to complete a public enforcement action,

it has violated the rule of law.

In either event, the Court has

avoided the discipline which stems from

the precedential effect of a decision.

The rules of the various Circuits

vary widely as to the standards for

publication. Thus, for example, the First

Circuit explicitly provides a preference

for publication, Rule 36, while other

Circuits do not, and the D.C. Circuit

rules suggest that there be opinions

written and published in cases of first

impression, Rule 36, while others do not.

Moreover, a recent study comparing

the percentage of decisions published in

the Eighth and Tenth Circuits during the

first six months of the year 2000 shows a

44% publication rate in the Eighth Circuit

and a 21% publication rate in the Tenth

Circuit. The study suggests clearly

different criteria for publication in the

two Circuits studied. ("'Unpublished'

Opinions as the Bulk of the Iceberg..."

Law Library Journal, Vol. 93:4 p. 589 et

seq.)

With regard to the citation of

unpublished decisions, at least five of

the Circuits permit the citation of

unpublished decisions, (1) for their

"persuasive" effect (Fifth Circuit Rule

47.5.4 and Tenth Circuit Rule 36.3), (ii)

because a party believes the unpublished

decision has "precedential value" (Sixth

Circuit, Rule 28 (g), and Fourth Circuit

Rule 36 (c)), and (ii) in the case of the

District of Columbia Circuit, after

January 1, 2002, unpublished decisions

"may be cited as precedent" (Rule 28).

In contrast, the Federal Circuit has

adopted the more restrictive rule,

precluding citation of any opinion or

order designated not to be cited as

precedent. (Federal Circuit Rule 47.6.)

It would seem self-evident that a

rule which precludes citation is less

likely to insure judicial self-discipline

than rules which provide that dispositions

can be cited as either precedential or

persuasive.

Even if non-publication is justified,

it is hard to see any justification for

precluding the citing of such decisions,

particularly in the current era when

"unpublished" opinions are in fact widely

and generally available.

In essence, the "non-citation" rule

of the Federal Circuit has converted an

appeal process into a certiorari process,

with the Court not bound by its own

determinations. Such significantly

impinges on the right to appeal which

Congress clearly recognized in providing

for appeal to the Federal Circuit as a

matter of right, ESA Section 211.

III THE EMASCULATION OF THE PRIVATE CAUSE

CIRCUIT AND TECA'S REPEATED ASSURANCE OF

THE AVAILABILITY OF A PRIVATE CAUSE OF

ACTION _

Although the issue of the extent of

the availability of ESA Section 210 to

recover crude oil overcharges is, as above

noted, a matter of first impression, two

lines of decisions provide compelling

reasons for the reversal of the District

Court determination that those injured by

crude oil overcharges through the

mechanism of the Entitlements Program are

without the standing to bring a private

cause of action under Section 210.

A. TECA, the Federal Circuit's

In Gulf Oil] Corp. v. Dyke, supra, 734

F. 2d at 809, TECA articulated the

principle that the passing oon of

overcharges is properly recognized where

it occurred pursuant to a "pre-existing

functional equivalent of a cost-plus

contract" (i) pursuant to which the

immediate purchaser from the overcharger

"would necessarily pass through any

overcharge received", and (ii) by virtue

of which "the effect of the overcharge

to...(the remote purchaser) must be

capable of determination in advance,"

quoting its prior decision in Eastern

Airlines v. Atlantic Richfield Co,, 609 F.

2d 497, 498 (TECA 1979). 734 F. 2d at 809.

Plaintiffs here have alleged in their

Complaint the facts that establish that

the DOE's Entitlement Program was the

"functional equivalent of a cost-plus

contract", and that the "effect of the

overcharge...(on plaintiffs was) capable

of determination in advance," thus meeting

the requirement as set forth in Gulf Oil

Corp. v. Dyke. for an "indirect purchaser"

to recover overcharges by a remote

producer.

B. The Federal Circuit (and TECA

In Consolidated Edison Co, of New

York v. O'Leary, 131 F. 3d 1475 (Fed. Cir.

1997), the Federal* Circuit denied an

appeal by essentially the same Utilities

and Manufacturers from the dismissal by

OHA of an ESA Section 209 public

enforcement action initiated by the

Secretary of Energy's enforcement arm

against Chevron for the same alleged oil

overcharges which are the subject of the

instant action. In doing so, the Court

relied extensively on the availability of

the alternative remedy provided by ESA

Section 210 pursuant to which the

Utilities and Manufacturers could seek the

Same recoveries directly in a private

cause of action. To the same effect, see

; Lid i Edi : FN Yor]

O'Leary, 117 F. 3d 538, 544 (Fed. Cir.

1997) ("If plaintiffs have been injured by

(crude oil) overcharges, Congress created

a generous private remedy for private

litigants in Section 210"); Getty Oil Co.

v. Department of Energy, 865 F. 2d 270,

275 (TECA 1988) ("Since private would-be

intervenors (in a Section 209 proceeding

involving crude oil overcharges) are

afforded a statutory remedy under Section

210 to recover over-charges, they may not

intervene in DOE's enforcement...").

IV DECISIONS OF THIS COURT REOUTRE THE

UTILIZATION OF THE LIMITATION PERIOD

SPECIFIED FOR ESA SECTION 209 ACTIONS FOR

PRIVATE ACTIONS PURSUANT TO ESA SECTION

210 TO RECOVER CRUDE OTL OVERCHARGES

As this Court has noted, although the

state-borrowing doctrine may not be

lightly abandoned, the borrowing of a

federal statute of limitations may be

appropriate "when a rule from elsewhere in

federal law provides a closer analogy then

available state statutes, and when the

federal policies at stake and_ the

practicalities of litigation make that

rule a significantly more appropriate

vehicle for interstitial lawmaking". Reed

v. United Transportation Union, 488 U.S.

319, 324, 102 L. Ed. 2d 665, 109 S. Ct.

621 (1989), quoting DelCostello v.

Teamsters, 462 U.S. 151, 172, 76 L.Ed. 2d

476, 103 S.Ct. 2281 (1983).

In Lampf£ v. Gilbertson, 501 U.S. 350,

aee°S, 24335 &. BG. 26 Bad, 2131 8.Ce. 2773

(1991), this Court suggested "a

hierarchial inquiry for ascertaining the

appropriate limitations period for a

federal cause of action where Congress has

not set the time within which such an

action must be brought."

All three of the determinations

outlined by the Court in lLampf here

Support the selection of the federal six

year limitation period:

(i) because of the part contract,

part penalty nature of the cause of

action, reference “to state limitation

periods results in uncertainty as to the

applicable limitation period, with some

courts selecting a contract limitation

period, some a penalty limitation period,

and some a "catch-all" limitation period,

F. Supp. at 1138; the result is

inconsistency and lack of predictability;

(ii) "the geographic nature of the

claim" i.e. that in a crude oil overcharge

situation, because of the Entitlements

Program, the injury to consumers occurred

in all of the States; the result of

reference to State limitation periods

"would present the danger of forum

shopping" as well as the complexity of a

State determining whether it should look

to a State of violation and if so, to what

other State (See also Agency Holding Corp.

v. Malley-Duff & Associates Inc,, 483 U.S.

143, 154 (1987));

and (iii) "an analogous federal

source truly affords a 'closer fit' with

the cause of action than does any

available state-law source." It is hard to

imagine a closer fit than the parallel

public enforcement action under’ ESA

Section 209.

In Lampf v. Gilbertson, 501 U.S. 350,

357 (1981), the Court rejected reference

to a state statute of limitations for

private causes of action brought pursuant

to Section 10b of the Securities Exchange

Act of 1934 and utilized the federal

limitations period provided for public

enforcement actions under that Act, a

situation remarkably close to the one

presented here.

The Court in Lampf v. Gilbertson

identifies the relevant factors in

determining whether the federal source

affords a "closer fit" as "commonality of

purpose and similarity of elements" (501

U.S. at 358). The purpose of Section 209

in the post-regulatory period is the same

as of Section 210, i.e. the recovery of

overcharges and their restitution to those

injured, and the elements of the damage

claim are precisely the same. A "closer

fit" could hardly be imagined.

CONCLUSION

For the reasons above stated, a writ

of certiorari should be granted.

spe ully submitted,

E Kabhne,

Philip P. Kalodner

208 Righters Mill Rd.

Gladwyne PA 19035

(610) 649-8749

Attorney for Petitioners

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not

citable as precedent. It is a public record. This disposition

will appear in tables published periodically.

United States Court of Appeals

For the Federal Circuit

01-1565

CONSOLIDATED EDISON COMPANY OF NEW YORK,

INC., LONG ISLAND LIGHTING COMPANY, ORANGE

AND ROCKLAND UTILITIES, INC., SAN DIEGO GAS &

ELECTRIC COMPANY, INTERNATIONAL PAPER

COMPANY, CHAMPION INTERNATIONAL

CORPORATION, WESTVACO CORPORATION, and

WEYERHAUSER COMPANY,

Plaintiffs-Appellants,

CHEVRON U:.S.A., INC.

Defendant-Appellee.

Judgment

ON APPEAL from the UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF

COLUMBIA

InCASENO(S) _-98-CV-764

This CAUSE having been heard and considered, it is

ORDERED and ADJUDGED:

Per Curiam: (MAYER, Chief Judge, RADER and

DYK, Circuit Judges):

AFFIRMED. See Fed. Cir. R. 36.

ENTERED BY ORDER OF THE COURT

DATED: April 5, 2002

Jan Horbaly, Clerk

United States Court of Appeals

For the Federal Circuit

ORDER

A combined petition for panel rehearing and for

rehearing en banc having been filed by the APPELLANTS,

and the petition for rehearing having been referred to the

panel that heard the appeal, and thereafter the petition for

rehearing en banc having been referred to the circuit judges

who are in regular active service,

UPON CONSIDERATION THEREOF, it is

ORDERED that the petition for panel rehearing be,

and the same hereby is, DENIED and it is further

ORDERED that the petition for rehearing en banc be,

and the same hereby is, DENIED.

The mandate of the court will issue on May 20, 2002.

FOR THE COURT

Jan Horbaly

Clerk

Dated: May 13, 2002 Filed: May, 13, 2002

cc: Philip P. Kalodner

Robert M. Westberg

CONSOLIDATED EDISON V CHEVRON, 01-1565

(DCT — 98-CV-764)

i Note: Pursuant to Fed. Cir. R. 47.6, this order is not

' citable as precedent. It is a public record.

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

CONSOLIDATED EDISON

COMPANY OF

NEW YORK, INC., ET AL.,

Plaintiffs,

Vv.

No.

ee a a a a

Civil Action

98-0764 (RWR)

CHEVRON U.S.A., INC.,

Defendant.

Nee ee ie ee”

MEMORANDUM OPINION

Plaintiffs sued Chevron U.S.A., Inc. (“Chevron”)

under section 210 of the Economic Stabilization Act

(ESA”),' for damages based on Chevron’s alleged

' Economic Stabilization Act Amendments of 1971, Pub. L.

92-210, 85 Stat. 743 (codified at 12 U.S.C. § 1904 note

(continued)

overcharges for crude oil. Chevron has moved to dismiss

plaintiffs’ complaint, asserting that plaintiffs lack standing,

that their claim is barred by the applicable statute of

limitations, and the plaintiffs’ allegations fail to state a claim

for relief under section 210. Because plaintiffs lack standing

and, alternatively, because plaintiffs’ claim is barred by the

applicable statute of limitations, the complaint will be

dismissed.”

(1976)), as incorporated in the Emergency Petroleum

Allocation Act of 1973 (“EPAA”), Pub. L. 93-159, 87 Stat.

627 (codified at 14 U.S.C. §§ 751-760h (1982)). Section 210

of the ESA provides a private right of action to any “person

suffering legal wrong because of any act or practice arising

out of the [ESA or EPAA] or any order or regulation issued

pursuant thereto.” See Consolidated Edison v. O’Leary, 131

F. 3d 1475, 1478 (D.C. Cir. 1997).

* Having concluded that plaintiffs do not have standing to

bring this section 210 claim against Chevron and,

alternatively, that the section 210 claim is time-barred, the

Court need not address the Rule 12 (b) (6) motion to dismiss

for failure to state a claim for relief under section 210.

BACKGROUND

The Economic Regulatory Administration (“ERA”),

an office in the Department of Energy (“DOE”), was

responsible for enforcing the mandatory price and allocation

regulations issued by the DOE under the EPAA and the ESA.

The ERA would investigate alleged EPAA violations and

issue proposed remedial orders (“PROS”) to firms or

individuals believed to have engaged in those violations. If

the recipient of a PRO contested the allegation of a violation,

it could obtain an evidentiary hearing before the Office of

Hearings and Appeals (“OHA”), the office with the authority

to evaluate PROs and determine whether the remedial order

should be issued.

In March 1992, the ERA issued a PRO to Chevron.

The PRO, which was published in the Federal Register in

May 1992, alleged that during the period of petroleum price

controls ending in 1981, Chevron had received excess

revenue from the DOE’s Tertiary Incentive Program (“TIP”)

and that Chevron should be required to disgorge the excess

revenue.2 Chevron contested the PRO and, after briefing and

3 Under the TIP, “oil producers were eligible for financial

benefits if they engaged in tertiary recovery projects, L.e.,

projects using methods such as thermal, chemical, or

miscible gas processes to recover crude oil that could not be

(continued)

an evidentiary hearing, the OHA concluded that the PRO

issued to Chevron could not be sustained and that no

remedial order should be issued to Chevron.*

The same companies who are plaintiffs in this case,

with the sole exception of Westvaco Corporation

(“Westvaco”), challenged the OHA’s decision by filing a

lawsuit in this district court seeking to compel DOE to issue

a remedial order. See Consolidated Edison Company of New

York, et al.. v. O’Leary, Civil Action No. 96-1149 (TPJ).

United States District Judge Thomas Penfield Jackson held

that plaintiffs as private parties lacked standing to challenge

the results of public enforcement proceedings, and he

dismissed that lawsuit. See Memorandum and Order entered

January 13, 1997, Exh. 1 to Chevron’s Reply (“Jackson

Opinion”). Judge Jackson’s decision was affirmed by the

United States Court of Appeals for the District of Columbia

Circuit. See Consolidated Edison v. O’Leary, 131 F. 3d 1475

(D.C. Cir. 1997). Plaintiffs, now joined by Westvaco, then

recovery techniques.” See Consolidated Edison, 131 F. 3d at

1477.

* The OHA’s decision is not binding in this proceeding.

“[{A]n enforcment proceeding under section 209 is neither a

prerequisite nor a bar to a private action under section 210.”

See Consolidated Edison, 131 F. 3d at 1478.

(D.C. Cir. 1997). Plaintiffs, now joined by Westvaco, then

filed this lawsuit under section 210, and defendant moved to

dismiss.

DISCUSSION

1. STANDING

Defendant argues that plaintiffs do not have standing

to sue under section 210 because plaintiffs were not direct

purchasers of Chevron’s crude oil. “Section 210 (b) of the

ESA authorizes suits for overcharges ‘ . . . against any person

renting or selling goods or services who is found to have

overcharged the plaintiff.” Gulf Oil Corp. v. Dyke, 734

F.2d 797, 807 (Temp. Emer. Ct. App. 1984). An indirect

purchaser has no standing to sue under section 210. Id.; see

also Stertz v. Gulf Oil Corp., 685 F.2d, 1367, 1369 n.3

(Temp. Emer. Ct. App. 1981); Bond v. Texaco, Inc., 647 F.

Supp. 1135, 1137 (D.D.C. 1986).

Plaintiffs in this case were indirect purchasers.

Indeed, plaintiffs admitted as much in their prior lawsuit

before Judge Jackson. See Jackson Opinion, at 3 n.2

(“Plaintiffs contend that, as indirect purchasers of Chevron’s

products, they have no right of action under ESA § 210”).

Although it is undisputed that plaintiffs purchased refined

product from domestic refiners, plaintiffs now argue that they

Chevron because “every refiner [is] an agent of the

overcharging producer.” See Plaintiff's Response, at 40.

Plaintiffs cite no factual basis or legal authority for their

current position, which is clearly inconsistent with the

position they took before Judge Jackson. Plaintiffs’

argument that they should be deemed direct purchasers with

standing under section 210 is without merit.

Plaintiffs also argue that they should be allowed to

sue Chevron under section 210 even if they were indirect

purchasers. Plaintiffs assert that none of the reported cases

holding that only direct purchasers have standing under

section 210 involved purchasers or crude oil. Plaintiffs cite

no case law which holds that indirect purchasers of crude oil

have standing under section 210. Indeed, the Temporary

Emergency Court of Appeals note in a case involving crude

oil purchases that only direct purchasers have standing to sue

under section 210. See Stertz v. Gulf Oil Corp., 783, F.2d

1064, 1066 n.2 (Temp. Emer. Ct. App. 1986).

The law is well-established that, as _ indirect

purchasers, plaintiffs lack standing to sue Chevron under

section 210. Plaintiffs’ arguments to the contrary are

unsupported by lega! precedent and are unpersuasive.

Il. STATUE OF LIMITATIONS

“Because the ESA [and] EPAA . . . do not contain

specific statutes of limitation, [the court] must apply the most

10a

closely analogous state of statute of limitations to causes of

action arising under the Acts.” Gulf Oil Corp. v. Dyke, 734

F.2d at 807 (citing Ashland Oil Co. of California v. Union

Oil Co. of California, 567 F.2d 984 (Temp. Emer. Ct. App.

1977)). The statute of limitations for section 210 lawsuits in

the District of Columbia is, at most, three years. See Bond,

647 F. Supp. At 1138 (§ 210 actions most analogous to

actions for a statutory penalty or forfeiture, actions on a

simple express or implied contract, or actions for which a

limitation is not otherwise specially prescribed).

Notwithstanding clear legal authority that the most

analogous state statue of limitations governs section 210

cases, plaintiffs argue that the six-year statute of limitations

for suits by the DOE under the Petroleum Overcharge

Distribution and Restitution Act (“PODRA”), 15 U.S.C. §

4501 et seq., should apply. Plaintiffs present no case law or

other legal authority to support their argument that the

PODRA statute of limitations should apply to a section 210

lawsuit. Instead, plaintiffs argue that no court has decided

whether the six-year statue of limitations from PODRA

should apply. See Plaintiffs’ Response, at 44. Although it

may be accurate that no court has specifically addressed

whether PODRA’s statute of limitations should apply to a

section 210 action, federal courts have continued to apply the

most analogous state statute of limitations since PODRA was

enacted in October 1986. See Ashland Oil Co. v. Cotton

Petroleum Corp., 808 F.2d 62, 63 (Temp. Emer. Ct. App.

lla

1986) (decided in December 1986); Stertz v. Gulf Oil Corp.,

1988 WL 83188, *2 (E.D.N.Y. 1988).

Additionally, “one of the goals of the national energy

policy [is] ‘to wind up regulation of the oil industry ....

Kellermyer v. Blue Flame Gas Corp., 797 F.2d 983, 985

(Temp. Emer. Ct. App. 1986) (quoting Johnson Oil Co. v.

Dept. of Energy, 690 F.2d 191, 196 (Temp. Emer. Ct. App.

1982)). Based on the national energy policy, the court in

Kellermyer held that a longer statue of limitations “would be

much more likely to frustrate the clearly expressed goals of

the federal statute than would the more restrictive [statue of

limitations].” Kellermyer, 797 F.2d at 986.

Plaintiffs also argue that, even if the three-year statute

999

of limitations applies, they were not aware of the precise

breakdown between principal and interest of Chevron’s

Windfall Profits Tax recoveries until less than three years

before they filed this lawsuit. Plaintiffs concede that the

PRO included sufficient information regarding the amounts

of prepaid expenses and severance tax refunds claimed by

plaintiffs in this case as overcharges. The PRO also

informed plaintiffs that the ERA proposed over $94 million

as an increase in tertiary incentive revenue, a decrease of

over $51 million in recoverable allowed expense, and a

proposed restitutionary penalty of $125 million.

Plaintiffs received additional information when the

OHA published an interlocutory order in August 1993 which

detailed an $84 million windfall profit tax credit taken by

12a

Chevron in 1983084. The interlocutory order was published

to the public and was not subject to confidentiality or other

restrictions.

“The District of Columbia recognizes the so-called

‘discovery’ rule as to the inception of the limitations period,

i.e., the cause of action accrues for limitations purposes not

when the injury first occurred, but when the plaintiff

discovered, or by the exercise of due diligence should have

discovered, the facts giving rise to a claim.” Bond, 647 F.

Supp. at 1139 (citing Kelton v. District of Columbia, 413

A.2d 919, 921 (D.C. 1980); Dawson v. Eli Lilly & Co., 543

F. Supp. 1330, 1333 (D.D.C. 1982)). As was the case in

Bond, plaintiffs in this case had sufficient knowledge of the

facts giving rise to their section 210 claim by no later than

the publication of the August 1993 interlocutory order.

Because plaintiffs did not file this lawsuit until more than

three years later, their claim is time-barred and must be

dismissed.”

> Plaintiffs argue that they could not have filed their lawsuit

until they knew the allocation of principal and interest for

each element of their overcharge claim because a plaintiff is

required to plead a “sum certain” for the alleged overcharge,

citing Dempsey v. Rhodes Oil Co., 620 F.2d 274 (Temp.

Emer. Ct. App. 1980). Plaintiffs’ reliance on Dempsey is

misplaced. In Dempsey, the court specifically excepted from

(continued)

13a

CONCLUSION

Plaintiffs are indirect purchasers of Chevron’s

products and, as a result, do not have standing under section

210. Even if plaintiffs had standing under section 210, their

claim would be barred by the three-year statute of limitations.

Defendant’s motion to dismiss will be granted by the

accompanying final order.

SIGNED this 5" day of July, 2001.

RICHARD W. ROBERTS

United States District Judge

the “sum certain” rule the situation in which “the seller has

information necessary to a determination of the total

overcharge, and this information is not available to the

buyer.” Id. At 277. To the extent that plaintiffs allege they

were unable to obtain certain information regarding elements

of the total overcharge, plaintiffs would benefit from the

Dempesy exception to the “sum certain” rule and, therefore,

would have been able to file their section 210 claim based on

the information they had in August 1993.

6 |

14a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

CONSOLIDATED EDISON )

COMPANY OF )

NEW YORK, INC., ET AL., )

)

Plaintiffs, )

)

v. ) Civil Action No.

) 98-0764 (RWR)

CHEVRON U.S.A., INC., )

)

Defendant. )

)

FINAL ORDER

In accordance with the accompanying Memorandum

Opinion, it is hereby

ORDERD that defendant Chevron U.S.A., Inc.’s Motion to

Dismiss [6] be, and hereby is, GRANTED.

This is a final appealable order

SIGNED this 5" day of July, 2001.

RICHARD W. ROBERTS

United States District Judge

15a

ECONOMIC STABILIZATION ACT AMENDMENTS

OF 197]

“Sec. 209. Injunctions and other relief

“Whenever it appears to any person authorized by the

President to exercise authority under this title that any

individual or organization has engaged, is engaged, or is

about to engage in any acts or practices constituting a

violation of any order or regulation under this title, such

person may request the Attorney General to bring an action

in the appropriate district court of the United States to enjoin

such acts or practices, and upon a proper showing a

temporary restraining order or a preliminary or permanent

injunction shall be granted without bond. Any such court

may also issue mandatory injunctions commanding any

person to comply with any such order or regulation. In

addition to such injunctive relief, the court may also order

restitution of moneys received in violation of any such order

or regulation.

“Sec. 210. Suits for damages or other relief

“(a) Any person suffering legal wrong because of

any act or practice arising out of this title, or any order or

regulation issued pursuant thereto, may bring an action in a

district court of the United States, without regard to the

amount in controversy, for appropriate relief, including an

action for a declaratory judgment, writ of injunction (subject

to the limitations in section 211), and/or damages.

l6a

“(b) In any action brought under subsection (a)

against any person renting property or selling goods or

services who is found to have overcharged the plaintiff, the

court may, in its discretion, award the plaintiff reasonable

attorney’s fees and costs, plus whichever of the following

sums is greater:

“(1) an amount not more than three times the

amount of the overcharge upon which the action is

based, or

“(2) not less than $100 or more than $1,000;

except that in any case where the defendant establishes that

the overcharge was not intentional and resulted from a bona

fide error notwithstanding the maintenance of procedures

reasonably adapted to the avoidance of such error the liability

of the defendant shall be limited to the amount of the

overcharge: Provided, That where the overcharge is not

willful within the meaning of section 208(a) of this title, no

action for an overcharge may be brought by or on behalf of

any person unless such person has first presented to the seller

or renter a bona fide claim for refund or the overcharge and

has not received repayment of such overcharge within ninety

days from the date of the presentation of such claim.

“overcharge’ means the amount by which the consideration

for the rental of property or the sale of goods or services

exceeds the applicable ceiling under regulations or orders

issued under this title.

17a

“Sec. 211. Judicial review

“(a) The district courts or the United States shall

have exclusive original jurisdiction of cases or controversies

arising under this title, or under regulations or orders issued

thereunder, notwithstanding the amount in controversy;

except that nothing in this subsection (h) of this section

affects the power of any court of competent jurisdiction to

consider, hear, and determine any issue by way of defense

(other than a defense based on the constitutionality of this

title or the validity of action taken by any agency under this

title) raised in any proceeding before such court. If in any

such proceeding an issue by way of defense is raised based

on the constitutionality of this title or the validity of agency

action under this title, the case shall be subject to removal by

either party to a district court of the United States in

accordance with the applicable provisions of chapter 89 of

title 28, United States Code.

18a

EMERGENCY PETROLEUM ALLOCATION

ACT OF 1973

Sec. 5(a) (1) Except as provided in paragraph (2), (A)

sections 205 through 207 and sections 209 through 211 of the

Economic Stabilization Act of 1970 (as in effect on

November 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 extent such sections apply to functions under the

Economic Stabilization Act of 1970.

19a

PETROLEUM OVERCHARGE DISTRIBUTION AND

RESTITUTION ACT OF 1986

§ 4504. Statute of limitation

(a) In general

(1) Except as provided in subsection (b) of this section,

the commencement of a civil enforcement action shall be

barred unless such action is commenced before the later of —

(A) September 30, 1988; or

(B) six years after the date of the violation upon

which the action is based.

(2) For purposes. of paragraph (1), the term

“commencement of a civil enforcement action” means—

(A) the signing and issuance of a proposed remedial

order against any person for filing with the Office of

Hearings and Appeals of the Department of Energy; or

(B) the filing of a complaint with the appropriate

district court of the United States.

(3) For purposes of this section, the term “civil

enforcement action” means an administrative or judicial civil

action by the Secretary under the Emergency Petroleum

Allocation Act of 1973 [15 U.S.C.A. § 751 et seq.] or the

Economic Stabilization Act of 1970 (or the regulations issued

thereunder) for the enforcement of any violation of such Acts

or regulations.

(b) Exceptions

(1) In computing ‘the periods established in

subparagraphs (A) and (B) of subsection (a)(1) of this

section, there shall be excluded any period—

(A) during which any person who is or may become

the subject of a civil enforcement action is outside the

United States, has absconded or concealed himself, or is

not subject to legal process;

(B) during which facts material to the establishment

and maintenance of a civil enforcement action could not

be known;

(C)occurring before full compliance with any

subpoena or special report order issued to any person

under section 772 of this title, and such additional period

(not to exceed 12 calendar months) after such compliance

for the Secretary to consider the results thereof and

commence a civil enforcement action;

(D)during the pendency of any relevant criminal

action under the Acts or regulations described in

subsection (a)(1) of this section during which a civil

enforcement action is held in abeyance as a result of

prosecutorial discretion and with or without a stay, and

such additional period (not to exceed 12 calendar months)

after a final judicial order or dismissal of such criminal

action to commence a civil enforcement action;

(E) before the issuance of an order that constitutes

final agency action on a request for adjustment from any

2la

rule, regulation, or order under section 7194 of Title 42,

and such additional period (not to exceed 12 calendar

months) to commence a civil enforcement action; or

(F) of extension, to which the Secretary and the

defendant have consent in writing, before the expiration

of the time periods prescribed in subsection (a)(1) of this

section.

(2) The provisions of subsection (a) of this section shall

not affect or apply to any civil enforcement action

commenced before, on, or after October 21, 1986, and

remanded by the Office of Hearings and Appeals, the Federal

Energy Commission, or the court for further action of any

kind.

(3) The provisions of subsection (a) of this section shall

not apply to any agency orders issued under the Acts or

regulations described in subsection (a)(1) of this section or to

regulations issued under this chapter, other than a proposed

remedial order subject to this section.

(1) It is the intent of the Congress that—

(A)the Secretary and the Administrator of the

Economic Regulatory Administration shall, to the

greatest extent possible and within the time frames

specified on September 12, 1986, by such Administrator

to the Committee on Energy and Commerce of the House

of Representatives, commence civil enforcement actions

22a

with respect to all cases known by such Administrator as

of October 21, 1986, and designated by such

Administrator as “prelitigation cases,” unless such an

action is found not to be warranted;

(B) the Secretary and such Administrator not delay

civil enforcement actions so as to cause the limitation in

subsection (a)(1) of this section to apply to any such case;

(C)any negotiations for the purpose of settlement of

alleged violations not delay the commencement of a civil

enforcement action; and

(D)the Department of Justice cooperate in ensuring

that activities necessary, including the enforcement of

subpoenas, to commence civil enforcement actions are

carried out in a timely manner.

(2) Any failure to comply with the time frames described

in paragraph (1)(A) shall not be considered for any purpose

in any administrative or judicial proceeding subsequently

commenced.

(d) End of investigations and audits

Notwithstanding any other provisions of law, the

Secretary shall not initiate, after January 1, 1987, any audit or

investigation of alleged civil violations of the Acts or

regulations described in subsection (a)(1) of this section for

the purpose of commencement of any civil enforcement

action. Nothing in this subsection shall affect or apply to any

audit or investigation conducted with respect to any civil

enforcement action commenced (within the limitation

23a

established by subsection (a)(1) of this section) before, on, or

after October 21, 1986. Nothing in this subsection shall limit

the authority of the Secretary to continue any audit or

investigation initiated before January 1, 1987.

24a

FEDERAL COURTS ADMINISTRATION ACT

OF 1992

Sec. 102. Abolition of Temporary Emergency Court of

Appeals

(a) APPEALS UNDER ECONOMIC STABILIZATION

ACT—Section 211 of the Economic Stabilization Act of

1970 (Public Law 91-379; 84 Stat. 799) is amended by

striking subsections (b) through (h) and inserting the

following:

“(b) Appeals from orders or judgments entered by a

district court of the United States in cases and controversies

arising under this title shall be brought in the United States

Court of Appeals for the Federal Circuit if the appeal is from

a final decision of the district court or is an interlocutory

appeal permitted under section 1292 (c) of title 28, United

States Code.”

(b) JUDICIAL REVIEW OF EMERGENCY ORDERS

UNDER THE NATURAL GAS POLICY ACT—Section 506

is amended—

(1) in the first sentence, by striking “the

Temporary Emergency Court of Appeals, established

pursuant to section 211(b) of the Economic Stabilization

Act of 1970,.as amended,” and inserting “the United

States Court of Appeals for the Federal Circuit”; and

25a

(2) by striking “Temporary Emergency Court of

Appeals” each place it appears and inserting “United

States Court of Appeals for the Federal Circuit.”

of title 28, United States Code, is amended—

(1) by striking “and” at the end of paragraph (9);

(2) by striking the period at the end of paragraph

(10) and inserting a semicolon; and

(3) by adding at the end of the following new

paragraphs:

“(11) of an appeal under section 211 of the

Economic Stabilization Act or 1970;

“(12) of an appeal under section 5 of the

Emergency Petroleum Allocation Act of 1973:

“(13) of an appeal under section 506 (c) of the

Natural Gas Policy Act of 1978; and

“(14) of an appeal under section 523 of the

Energy Policy and Conservation Act.”

(d) ABOLITION OF COURT—The Temporary

Emergency Court of Appeals created by section 21 1(b) of the

Economic Stabilization Act of 1970 is abolished, effective 6

months after the date of the enactment of this Act.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.