Energy Mgt. P 26,436 United States of America v. Uni Oil, Inc., Thomas M. "Mick" Hajecate

710 F.2d 1078, 1983 U.S. App. LEXIS 25285
CourtCourt of Appeals for the Fifth Circuit
DecidedAugust 1, 1983
Docket82-2295
StatusPublished
Cited by8 cases

This text of 710 F.2d 1078 (Energy Mgt. P 26,436 United States of America v. Uni Oil, Inc., Thomas M. "Mick" Hajecate) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Energy Mgt. P 26,436 United States of America v. Uni Oil, Inc., Thomas M. "Mick" Hajecate, 710 F.2d 1078, 1983 U.S. App. LEXIS 25285 (5th Cir. 1983).

Opinion

RANDALL, Circuit Judge:

This appeal comes to us under 18 U.S.C. § 3731 upon an order of the district court dismissing an eighty-four count fraud indictment against two oil companies and five individual defendants. “The gravamen of the ... charge,” as we observed when these proceedings were last before us, “is that [the defendants] purchased ‘old’ oil and resold it as ‘new,’ willfully using fraudulent means to miscertify it, in the process.” United States v. Uni Oil, Inc. (Uni I), 646 F.2d 946, 948 n. 2 (5th Cir.1981), cert. denied, 455 U.S. 908, 102 S.Ct. 1254, 71 L.Ed.2d 446 (1982). The district court dismissed the indictment on the ground that President Reagan’s Executive Order No. 12,287, 3 C.F.R. 124 (1982), reprinted in 15 U.S.C. § 757 note (Supp.V 1981), abolished the distinction between “old” and “new” oil, and therefore abated the prosecution. Because we find that the doctrine of abatement does not apply, we vacate the decision of the district court and order that the indictment be reinstated.

I

We have already recounted the facts of this case in Uni I. Briefly, on March 7, 1979, a federal grand jury in Houston returned an eighty-four count indictment against Uni Oil, Ball Marketing Enterprise, Thomas “Mick” Hajecate, Thomas “Tom” Hajecate, James Fisher, Charles Akin, and Charlie Goss. The eighty-four counts variously alleged that the defendants had violated the Racketeer Influenced and Corrupt Organizations (RICO) statute, 18 U.S.C. § 1962 (1976), the mail fraud statute, 18 U.S.C. § 1341 (1976), the wire fraud statute, 18 U.S.C. § 1343 (1976), and the statute prohibiting the willful making of false or fraudulent statements to a government agency, 18 U.S.C. § 1001 (1976). The government has charged, in essence, that the defendants have engaged in the business of counterfeiting documentation required by the Emergency Petroleum Allocation Act, 15 U.S.C. §§ 751-760h (1976) (partially superseded): the defendants allegedly acquired lower-tier or “old” oil (which was worth about $5 per barrel) for the purpose of falsifying its documentation and reselling it as upper-tier or “new” oil (which was worth about $13 per barrel). See 10 C.F.R. § 212.131 (1979) (superseded).

The defendants objected to the indictment on almost every conceivable ground. Apparently because it found some of the objections persuasive, the district court dismissed the entire indictment on June 5, 1979, without opinion. The government appealed from the dismissal. On that first appeal we found merit in none of the objections, vacated the district court’s order, and *1080 remanded the case for “proceedings consistent with [our] opinion.” Uni I, 646 F.2d at 955.

After receiving the case upon remand, the district court again dismissed the indictment, this time because it thought that the ending of oil price controls constituted a common law abatement. The chronology of this case now becomes important. The indictment was returned in 1979. Under the regulatory scheme then in effect — and with certain exceptions not material here — all domestic crude oil had to be certified as either “old” or “new” before it could be sold. See 10 C.F.R. § 212.131 (1979). The regulations required the industry to maintain accurate records of such sales, and provided that those records were subject to inspection “at any time upon the request” of the Department of Energy. 10 C.F.R. § 210.92 (1979). After an initial period when price controls were mandatory, however, the EPAA provided for a transition period during which the President, by executive order, could end controls. In any event, all controls were to expire automatically on September 30, 1981. See EPAA § 18,15 U.S.C. § 760g (1976) (added by the Energy Policy and Conservation Act in 1975).

Almost immediately after taking office at the beginning of 1981, President Reagan elected to exercise his discretionary authority to end controls early. On January 28, he promulgated Executive Order 12,287, supra, which declared that “[a]ll crude oil and refined petroleum products are exempted from ... price and allocation controls.” The Department of Energy duly issued implementing regulations on March 30 and July 9. See Price and Allocation Regulation Revocation, 46 Fed.Reg. 20,508 (1981); Establishment of a Mechanism for Entitlements Adjustments for Periods Prior to Decontrol of Crude Oil, 46 Fed.Reg. 36,092 (1981). Relying on the new regulations, the defendants moved for a dismissal of the indictment on the ground of abatement. What they had allegedly done, they argued, could no longer be considered a crime.

The district court’s opinion dismissing this indictment for the second time rested upon two bases. First, the court concluded that Executive Order 12,287 had substituted the right to sell oil in a free market for the crime of selling in a controlled market with falsified certificates, just as Title II of the Civil Rights Act of 1964, as construed in Hamm v. City of Rock Hill, 379 U.S. 306, 314, 85 S.Ct. 384, 390, 13 L.Ed.2d 300 (1964), had substituted the federal right to be served at a public lunch counter for the state-law crime of trespass. The application of abatement in this case, according to the district court, rested not upon some notion of “technical abatement,” but rather upon the President’s basic decision to substitute a right for a crime. Second, the court concluded that the application of abatement here was especially appropriate in that it would further the salutary goal of “avoiding the infliction of punishment when to punish would no longer serve any purpose and ‘would be unnecessarily vindictive’ ” (quoting Hamm, supra, 379 U.S. at 313, 85 S.Ct. at 390).

The government has again appealed. It argues, first, that this is a Title 18 fraud, not an abatement case; second, that even if this is an abatement case, only congressional intent matters and Congress does not intend for any prosecutions to abate; and third, that even if executive intent does matter, the Executive also does not and has never intended that this prosecution abate.

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710 F.2d 1078, 1983 U.S. App. LEXIS 25285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/energy-mgt-p-26436-united-states-of-america-v-uni-oil-inc-thomas-m-ca5-1983.