Coastal States Gas Corp. v. Department of Energy

495 F. Supp. 1300, 1980 U.S. Dist. LEXIS 9309
District Court, D. Delaware·Decided August 11, 1980·No. Civ. A. 79-267·Published·Cited by 7 cases

Opinion

OPINION

MURRAY M. SCHWARTZ, District Judge.

This dispute arises out of an administrative adjudication within the Department of Energy (“DOE”) concerning certain sales of petroleum products by plaintiff Coastal Corporation (“Coastal”). Presently before the Court are Coastal’s motion for a preliminary injunction and DOE’s motion to dismiss for lack of ripeness.

I. BACKGROUND

On September 6, 1978, DOE’s Office of Special Counsel for Compliance (“OSC”) issued a Proposed Remedial Order (“PRO”) to Coastal in which OSC alleged that 33 sales of petroleum products to 18 separate customers were regulated sales, requiring inclusion of them in Coastal’s monthly reports (Form FEO-96) to DOE and its predecessor agencies. The ensuing Remedial Order (“RO”) proceeding was to be adjudicated by DOE’s Office of Hearings and Appeals (“OHA”).

On November 21, 1978, OHA received written comments from OSC suggesting that all of Coastal’s customers in the 33 transactions be afforded the opportunity to participate in the RO proceeding as “aggrieved parties,” as that term was used in 10 C.F.R. § 205.194, 43 Fed.Reg. 3995 (January 31, 1978). (Doc. No. 8; Exh. D). Coastal’s response to OSC’s comments was received by OHA on December 5, 1978. (Doc. No. 8; Exh. F). In that filing, Coastal notified OHA of its intent to submit substantive comments on the issue on or before December 26,1978. By December 5, however, OHA already had determined that the customers were to be included as aggrieved parties. Coastal was informed of this decision in a December 12, 1978 letter from OHA. (Doc. No. 8; Exh. G).

Coastal filed a December 22, 1978 motion to vacate OHA’s December 12 order (Doc. No. 8; Exh. H), addressing to a limited extent the merits of the customer participation issue and what Coastal perceived as a denial of due process, but noting that its discussion of these issues was not “to be considered as constituting a complete statement of Coastal’s objections to allowing the customers to participate . . . . ” (Id. at 10). OHA’s response was a January 2, 1979 telegram reiterating OHA’s conclusion that the customers should be treated as aggrieved parties, and repeating the warning first contained in the December 12 order that failure by Coastal to serve the customers with copies of its Statement of Objections to the PRO would result in dismissal of those Objections. (Doc. No. 8; Exh. I). Coastal served the customers on January 4, 1979.

Seeking further review of the customer participation decision, Coastal filed on March 20, 1979 a Petition for Special Redress or Other Relief pursuant to 10 C.F.R. § 205.230. (Doc. No. 8; Exh. L). By virtue of 10 C.F.R. § 205.237(b), orders granting or denying such petitions must state that they are final orders of the DOE of which petitioners may seek judicial review. In an April 30, 1979 Decision and Order, OHA rejected the arguments advanced by Coastal and reaffirmed the decision permitting customer participation. (Doc. No. 8; Exh. M). However, OHA did not treat Coastal’s filing as a Petition for Special Redress. Rather, it was restyled as a “Motion to Limit Participation” on the basis that a Petition for Special Redress was appropriate only when no other remedy was available. Here, OHA reasoned, “a remedy was available through a motion filed directly in the enforcement action.” (Id.). Accordingly, the April 30 Decision and Order stated that it was an interlocutory order, subject to appeal only upon the issuance of a final order in the RO proceeding.

Coastal’s final effort to appeal the customer participation decision administrative *1302 ly was a May 30, 1973 Notice of Appeal to the Federal Energy Regulatory Commission (“FERC”). On July 5,1979, FERC rejected Coastal’s appeal for lack of jurisdiction.

Coastal commenced the instant litigation on June 5,1979. Subsequent to the decision by FERC, Coastal filed its motion for a preliminary injunction on July 23, 1979. In support of its request for injunction, Coastal alleged that it has suffered, and will continue to suffer, irreparable harm by virtue of the erroneous inclusion of the customers in the RO proceeding, the failure of DOE to follow its own regulations, and the unauthorized restyling and denial of its Petition for Special Redress.

DOE, in addition to answering the motion for a preliminary injunction, filed a motion to dismiss on August 15, 1979. DOE contends that the Court lacks jurisdiction over this litigation because the controversy is not ripe for adjudication. It argues that Coastal cannot make a concrete showing of harm from OHA’s decision until a final order, adverse to Coastal, emanates from the RO proceeding, and judicial review should await such an outcome.

While these motions were undergoing briefing by the parties, Coastal filed a supplemental complaint on September 5, 1979, alleging that ex parte communications between OHA and OSC and between OHA and one or more of Coastal’s customers had taken place. These communications were said to have led unlawfully to the inclusion of the customers in the RO proceeding and to the decision by OHA to restyle Coastal’s Petition for Special Redress in an effort to preclude judicial review. In addition, Coastal alleged that OHA had prejudged the customer participation issue.

The contentions raised in the supplemental complaint prompted a dispute concerning discovery, culminating in Opinions on October 5 and November 21, 1979, 84 F.R.D. 278, as well as a January 23, 1980 hearing. 1 Thereafter briefing and oral argument on the instant motions took place.

In support of its motion, Coastal contends that its customers were improperly considered aggrieved parties by OHA, since issuance of the Remedial Order proposed by OSC would benefit the customers rather than “adversely affect” them. 10 C.F.R. § 205.2. Inclusion of the customers, it is urged, was therefore a violation by DOE of its own regulations. Coastal also argues that the restyling of its Petition for Special Redress by OHA was in direct violation of DOE’s regulations. Finally, Coastal asserts that the means employed by OHA in arriving at its decision to permit customer participation deprived Coastal of its right to due process.

While DOE disagrees with Coastal’s position that inclusion of the customers was contrary to the governing regulations, its principal argument concerns a purported lack of ripeness in Coastal’s claims. DOE contends that the order permitting customer participation was an interlocutory procedural ruling within an ongoing RO adjudication, and that judicial review of such an order must await a final ruling by the agency on the Remedial Order.

II. DISCUSSION

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Coastal States Gas Corp. v. Department of Energy, 495 F. Supp. 1300, 1980 U.S. Dist. LEXIS 9309 (D. Del. 1980).

495 F. Supp. 1300 (Coastal States Gas Corp. v. Department of Energy) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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