Crown Central Petroleum Corp. v. Department of Energy

102 F.R.D. 95, 1984 U.S. Dist. LEXIS 17318
CourtDistrict Court, D. Maryland
DecidedApril 24, 1984
DocketCiv. No. H-82-3283
StatusPublished
Cited by13 cases

This text of 102 F.R.D. 95 (Crown Central Petroleum Corp. v. Department of Energy) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crown Central Petroleum Corp. v. Department of Energy, 102 F.R.D. 95, 1984 U.S. Dist. LEXIS 17318 (D. Md. 1984).

Opinion

MEMORANDUM AND ORDER

ALEXANDER HARVEY, II, District Judge.

This is an action for declaratory and other relief filed by Crown Central Petroleum Corporation, which is engaged in the business of refining and marketing petroleum products. Named as defendants are the Department of Energy (hereinafter “DOE”); Donald P. Hodel, the Secretary of Energy; Rayburn D. Hanzlik, the Administrator of the Economic Regulatory Administration (hereinafter “ERA”); Milton C. Lorenz, Special Counsel for compliance of the ERA; and George B. Breznay, Director of DOE’s Office of Hearing and Appeals [96]*96(hereinafter “OHA”). Plaintiff here seeks to compel defendants to produce certain documents which relate to plaintiffs’ compliance with various DOE price and allocation regulations.

The factual background of this dispute is as follows. Plaintiff claims that from March, 1974 through March 15, 1981, either DOE or one of its predecessors had a team of auditors stationed at plaintiff’s headquarters in Baltimore, Maryland. The auditors were to determine whether plaintiff had complied with pertinent federal regulations. The parties agree that subsequent to the creation of the Office of Special Counsel for Compliance (hereinafter “OSC”) in late 1977, the auditors at plaintiff’s offices operated under its auspices.

On December 13, 1977, the Deputy Special Counsel of DOE issued to plaintiff an administrative subpoena seeking various documents concerning plaintiff’s compliance with federal price and allocation regulations. Plaintiff thereafter moved in administrative proceedings before the DOE to quash the subpoena. The parties do not dispute that following negotiations, they entered into an agreement on February 23, 1979 (hereinafter “the Agreement”), whereby plaintiff promised to produce certain documents and to surrender its right to challenge the aforementioned administrative subpoena. Included in the Agreement was the following provision:

In the event that OSC requests the use of Crown’s computer services pursuant to this paragraph, as a condition thereto OSC shall:
(2) provide to Crown copies of all programs or data bases which OSC enters into Crown’s ADP [automated data processing] equipment, together with documentation including, if they exist, program source codes, flow charts, record layouts, JCL [job control language] cards for each Crown or OSC program which OSC wishes to run on Crown’s ADP equipment, an explanation prior to the time a program is run of the purpose and operation of each OSC program and such other similar descriptive materials as reasonably will assure Crown that no unauthorized, improper or illegal use of its ADP equipment is being made; and
(3) provide to Crown copies of all output obtained by OSC from the use of Crown’s ADP equipment.

The Agreement expressly stated that in the event of a dispute as to the obligations of the parties under either the subpoena or the Agreement, the sole remedy would be by way of an action filed in a United States District Court for interpretation and specific performance of the two documents. Plaintiff claims that various letter agreements between the parties subsequently expanded the scope of the aforementioned provision regarding production of documents by OSC. According to plaintiff, the Agreement, as amended, required DOE and OSC to supply plaintiff with copies of all input, output and programs generated from information supplied by plaintiff. Plaintiff contends that DOE and OSC were required to provide said information whether or not any use was made of plaintiff’s computer equipment.

On February 3, 1981, OSC issued to plaintiff a “Notice of Probable Violation” for the audit period August 19, 1973 through December 31, 1978. OSC charged in the Notice that, based on its test samples of 11 months during the audit period, plaintiff was liable to its customers for refunds of at least $79,932,000.00.

After issuance of the Notice, plaintiff, pursuant to applicable regulations, participated in an informal conference, discussed settlement, and submitted additional information to OSC. Plaintiff also filed a formal reply to OSC’s Notice.

Plaintiff asserts that on May 26, 1982, Robert J. McKee, Jr., the Director of ERA’s Philadelphia office, filed with DOE’s OHA a “Proposed Remedial Order” (hereinafter the “PRO”). The PRO directed plaintiff to refund $34,025,000.00, rather than $79,932,000.00 to its customers. Plaintiff claims that it thereafter requested documents related to the PRO which, under [97]*97plaintiff’s reading of the Agreement, DOE and OSC were required to produce. Plaintiff asserts that the responses it received were inadequate.

On July 7, 1982, plaintiff filed three motions in the administrative proceedings pending before the DOE, seeking a remand or rescission of the PRO. These motions were all denied in a decision issued by defendant Breznay on October 21, 1982.

On September 3, 1982, in a letter to DOE’s Freedom of Information Act (hereinafter “FOIA”) Officer, counsel for plaintiff requested the following pursuant to 5 U.S.C. § 552 et seq. and 10 CFR § 1004.1 et seq.: “all documents, whether factual or legal, and all computer input, output and computer programs reviewed or relied upon by the Economic Regulatory Administration in issuing a May 26, 1982 Proposed Remedial Order.” This letter also requested an explanation concerning any documents which were lost, destroyed or not otherwise in ERA’s possession and concerning any documents which were considered to be exempt from production.

On September 23, 1982, DOE advised plaintiff that its request for information was insufficient under the FOIA (1) because plaintiff had requested inspection rather than production of documents and (2) because plaintiff had stated merely that it would pay for copying of the selected documents and had not informed DOE whether it would pay for all necessary copying, and computerized processing and searches.

On September 30, 1982, counsel for plaintiff again sent DOE a request for the production of documents pursuant to the FOIA. Plaintiff asserts that under 5 U.S.C. § 552(a)(6)(A)(i), DOE was required to determine whether it would comply with plaintiff’s request within ten days of receipt thereof.

On November 10, 1982, more than a month after it had sent its second FOIA request to DOE, plaintiff instituted this civil action claiming that DOE had not yet responded to its FOIA request. The complaint seeks declaratory and injunctive relief under the Agreement as amended (Count I) and under the FOIA (Count II).

With the complaint it filed in this Court, plaintiff filed a motion for a preliminary injunction and a request for an expedited hearing. A conference was held in chambers on November 26, 1982, at which time the Court suggested consideration of a stipulation between the parties which would resolve certain matters presented by plaintiff’s motion for a preliminary injunction. Because of the Court’s heavy trial docket, the Court advised counsel that it might be some time before a full evidentiary hearing could be held in connection with plaintiffs motion for a preliminary injunction.

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Cite This Page — Counsel Stack

Bluebook (online)
102 F.R.D. 95, 1984 U.S. Dist. LEXIS 17318, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crown-central-petroleum-corp-v-department-of-energy-mdd-1984.