Algonquin SNG, Inc. v. Federal Energy Administration

518 F.2d 1051, 171 U.S. App. D.C. 113
CourtCourt of Appeals for the D.C. Circuit
DecidedAugust 11, 1975
DocketNos. 75-1202, 75-1206, 75-1281 and 75-1282
StatusPublished
Cited by9 cases

This text of 518 F.2d 1051 (Algonquin SNG, Inc. v. Federal Energy Administration) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Algonquin SNG, Inc. v. Federal Energy Administration, 518 F.2d 1051, 171 U.S. App. D.C. 113 (D.C. Cir. 1975).

Opinions

Opinion for the Court filed by Circuit Judge TAMM.

Dissenting opinion filed by Circuit Judge ROBB.

TAMM, Circuit Judge:

In these consolidated appeals, plaintiffs-appellants Commonwealth of Massachusetts, et a 1. seek to overturn the imposition of license fees for importation of oil and petroleum products as required by certain Proclamations of President Ford and former President Nixon and as implemented through regulations adopted by the Federal Energy Administration (FEA). Appellants assert that the challenged presidential actions were beyond their claimed statutory authority under 19 U.S.C. § 1862(b) (1970) and that the Proclamation and regulations in question were promulgated without adherence to certain procedural prerequisites. We hold today that the executive is without substantive authority to impose license fees of the magnitude at issue here.

I. Factual Background

The operative statute, 19 U.S.C. § 1862(b) (1970), authorizes the President to

take such action, and for such time, as he deems necessary to adjust the imports of [an] article and its derivatives so that . . . imports [of such article] will not so threaten to impair the national security.

A. The Eisenhower and Nixon Programs

The program under which the challenged fees were imposed was initiated in 1959 by President Eisenhower under his section 1862(b) authority in Presidential Proclamation 3279. See 19 U.S.C. § 1862 note. The so-called Mandatory Oil Import Program (MOIP) was based on a determination that foreign petroleum 1 was being imported into the United States in such quantities and at such low costs as to threaten to impair national security by inhibiting the development of domestic production and refinery capacity. Proclamation 3279 required each petroleum importer to secure a license, divided the country into five districts, and established an import quota for each district. The Secretary of Interior was directed to allocate the quota among individuals with an existing refining capacity or import history. Although subsequently amended twenty-five times,2 the MOIP quota system remained in effect from 1959 to May 1, 1973.

[115]*115Proclamation 4210, effective May 1, 1973, announced by former President Nixon, inaugurated a radical change in the system. See 19 U.S.C.A. § 1862 an-not.; 38 Fed.Reg. 10725 (1973). Under this new plan, the quota system was abolished. Instead, the issuance of import licenses was conditioned on a schedule of license fees to be phased in during the period May 1, 1973 through November 1, 1975.3 The impact of the fee system was tempered by a provision that allowed fee-free imports up to a person’s previous quota allocation; these fee-free allocations were to be phased out gradually until 1980, when license fees would be required on all imports covered under the Proclamation. Finally, Proclamation 4210 abolished the tariff on petroleum. Proc. 4210 § 16.

B. The Ford Plan

Section 1862(b) authorizes presidential action only after receipt of advice from the Secretary of the* Treasury that an article is being imported in quantities or under circumstances as to threaten to impair the national security. The Secretary may not transmit such advice to the President under this section until he has made an appropriate investigation to determine the effects on national security, during which he must consult with the Secretaries of Defense and Commerce and other appropriate officers.4 Finally, the Trade Act of 1974, 88 Stat. 1978, effective January 3, 1975, amended section 1862(b) to include the provision that “[t]he Secretary shall, if it is appropriate and after reasonable notice, hold public hearings or otherwise afford interested parties an opportunity to present information and advice relevant to such investigation.”

On January 4, 1975, the day after the amendment became effective, Secretary of the Treasury, William E. Simon, undertook an investigation to determine whether the current level of petroleum imports threatened national security. In a letter delegating the investigation to Assistant Secretary David R. MacDonald, Secretary Simon stated:

In my judgment, national security interests require that the procedures requiring public notice and opportunity for public comment or hearings . not be followed in this case. I further find that it would be inappropriate to hold public hearings, or otherwise afford interested parties an opportunity to present information' and advice relevant to the investigation as provided by Section 232, as amended by the Trade Act of 1974.

J.A. 66.

Thereafter, comments were solicited from the Departments of State, Defense, Interior, Commerce and Labor, the Council of Economic Advisors, and the Federal Energy Administration.5 On January 14, 1975, Secretary Simon reported as the result of his investigation that petroleum products were “being imported into the United States in such quantities as to threaten to impair the national security” and recommended that

appropriate action be taken to reduce imports of crude oil, principal crude oil derivatives and products, and related products derived from natural gas and coal tar into the United States, to promote a lessened reliance upon such im~ [116]*116ports, to reduce the payments outflow and to create incentives for the use of alternative sources of energy to such imports. I understand that a Presidential Proclamation pursuant to [section 1862(b)] is being drafted by the Federal Energy Administration consistent with' these recommendations.
A. 44.

On January 23, 1975, President Ford signed Proclamation No. 4341 which provided for a significant increase in the license fees initially imposed by former President Nixon. First, the fee schedules announced in 1973 were accelerated to their maximum levels of $0.21 per barrel on imported crude oil and $0.63 per barrel on petroleum products. Second, Proclamation 4341 imposed supplemental fees of $3 per barrel on imported crude oil and $1.20 per barrel on petroleum products. The supplemental fee on crude oil was to be instituted in three monthly dollar steps from February to April, while the petroleum products fee was to be added in March and April, 1975.6

On January 27, 1975, plaintiffs-appellants filed suit in district court. Plaintiffs, including eight states and their governors,7 ten utility companies,8 and one member of Congress,9 asserted that the fees imposed by Presidents Nixon and Ford in Proclamations 4210 and 4341 exceeded their authority under 19 U.S.C. § 1862(b), that the Secretary of the Treasury failed to comply with the procedural requirements of that section, and that the government had failed to file a required environmental impact statement.

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Bluebook (online)
518 F.2d 1051, 171 U.S. App. D.C. 113, Counsel Stack Legal Research, https://law.counselstack.com/opinion/algonquin-sng-inc-v-federal-energy-administration-cadc-1975.