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UNITED REF. CO. v. DOE

January 17, 1980

UNITED REFINING COMPANY Plaintiff
v.
DEPARTMENT OF ENERGY and CHARLES W. DUNCAN Defendants



The opinion of the court was delivered by: WEBER

The plaintiff has sued for relief by declaratory judgment and injunction against certain petroleum pricing regulations established by the Department of Energy (DOE) (10 C.F.R. § 212.83(d)(1)). Its complaint basically alleges that the regulations were improperly adopted under the Administrative Procedure Act, as amended, 5 U.S.C. § 551 et seq. (1966) and the Emergency Petroleum Allocation Act, as amended, 15 U.S.C. § 751 et seq. (1973), and exceed the statutory authority.

The DOE has responded by a motion to dismiss for failure to pursue the available administrative remedies and because the controversy was not ripe for judicial review.

 The administrative enforcement process has already begun. On October 13, 1977 the DOE issued an "Issue Letter" to which United responded on the merits. On April 17, 1978 the DOE then issued a "Notice of Probable Violation" (NOPV). (We will attempt to keep the jungle of acronyms cleared here, but the parties are familiar with them and we are compelled by an instinct for space saving to employ them).

 Plaintiff's response to the DOE proceedings raised the issues on which it relies here, the procedural and substantive invalidity of the regulation. DOE apparently will proceed administratively on the assumed validity of the regulations which it is proceeding to enforce and never reach the issue which United seeks to raise here directly. When the matter is ripe for judicial review in the DOE's opinion the issue raised here will be again before the court.

 We believe that judicial deference to the doctrines of exhaustion of the administrative procedure and ripeness for review are inapplicable here.

 We feel that it is highly advantageous in the efficient conduct of the business of the courts to face the immediate legal issues, which might be dispositive of the whole lawsuit, and that this conclusion is well supported by simple common sense as well as sound judicial precedent. If the regulations were not properly adopted, or are outside the statutory authority, this is a matter that can be attacked directly without consideration of the mountains of evidence that will be required to be produced before the administrative agency to determine whether plaintiff has complied with the extremely complex regulatory scheme.

 This rationale is supported by the doctrine of bypassing the administrative process where there is no clear Congressional mandate requiring administrative exhaustion. The most prominent landmark here is Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S. Ct. 1507, 18 L. Ed. 2d 681 (1967), (of which we have a poignant personal recollection), where the Court found no clear and convincing evidence of a clear Congressional purpose to exclude review by the Courts, and required the trial courts to restrict access to judicial review only on a showing of clear and convincing evidence of a legislative intent to preclude judicial review.

 We find that judicial restraint is not mandated by the statute here. The Economic Stabilization Act, which controls United's case, specifically provides that:

 
"Any person suffering legal wrong . . . arising out of this title, or order, or reputation 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 . . ." See 12 U.S.C. § 1904, note § 210(a).

 In Standard Oil Co. v. Federal Energy Administration, 440 F. Supp. 328, 358 (N.D.Ohio 1977) the Court held that the "suffering legal wrong" language of the Economic Stabilization Act is identical to the "suffering legal wrong" language of the Administrative Procedure Act construed by the Supreme Court in Abbott. The Standard Oil court found that the judicial review provisions of the Economic Stabilization Act, the additional statutory authority for judicial review of F.E.A. decisions in the Federal Energy Administration Act, and the legislative history of the Economic Stabilization Act, the Emergency Petroleum Allocation Act, and the Federal Energy Administration Act, "contain no suggestion that Congress intended to preclude pre-enforcement, declaratory judgment, judicial review of the FEA's final decisions." 440 F. Supp. at 359.

 Even as a matter of judicial discretion we are of the opinion that the administrative framework set up for enforcement proceedings and the requirement that administrative remedies be exhausted are not properly considered here. Plaintiff United seeks judicial preenforcement relief and challenges the procedural and substantive validity of DOE's fictitious recovery rule. This is a purely legal issue. We do nothing to resolve this legal issue if we require United to wait and appeal a final decision by DOE that United has violated the rule. Whether United has violated the rule is irrelevant; the validity of the fictitious recovery rule itself is contested. This determination is not properly left hanging pending the exhaustion of enforcement proceedings. *fn1"

 
"A Court should not stand aside just because there is available to the plaintiffs some collateral agency proceedings that hold out the possibility of some kind of relief." Phillips Petroleum Co. v. Federal Energy Administration, 435 F. Supp. 1239, 1248 (D.Del.1977), citing Greene v. United States, 376 U.S. 149, 84 S. Ct. 615, 11 L. Ed. 2d 576 (1964).

 In Pennzoil Co. v. Department of Energy, 466 F. Supp. 238, (D.Del.1979), plaintiff brought suit for judicial determination of the validity of a DOE ruling and DOE moved to dismiss. The Court held that the oil company was not required to exhaust administrative remedies before seeking judicial determination of the rule's validity because the exception procedure "provides no means of attacking the general application, or validity, of ...


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