Exxon Corp. v. Federal Energy Office

394 F. Supp. 662, 1974 U.S. Dist. LEXIS 7565
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 17, 1974
DocketCiv. A. No. 74-931
StatusPublished

This text of 394 F. Supp. 662 (Exxon Corp. v. Federal Energy Office) 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
Exxon Corp. v. Federal Energy Office, 394 F. Supp. 662, 1974 U.S. Dist. LEXIS 7565 (D.C. Cir. 1974).

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

AUBREY E. ROBINSON, JR., District Judge.

This matter came before the Court on plaintiff’s motion for a preliminary injunction. The Court having considered the motions, pleadings, affidavits and briefs filed by the plaintiff, the defendants and the interveners, and having heard oral arguments of counsel for all parties, makes the following Findings of Fact and Conclusions of Law:

FINDINGS OF FACT

1. Plaintiff Exxon Corporation (“Exxon”) is a corporation organized and existing under the laws of the State of New Jersey. Exxon’s principal place of business is in New York. Exxon is engaged in the business of producing, refining, and selling crude oil and petroleum products in the United States and various other countries.

2. Defendant Federal Energy Office (“FEO”) was established by Section 1 of Executive Order 11748 and had the responsibility for interpreting, implementing, administering and enforcing the provisions of the Emergency Petroleum Allocation Act of 1973, P.L. 93-159, 87 Stat. 627 (“Petroleum Act”).

3. On June 27, 1974, (39 F.R. 23185), the Federal Energy Administration (“FEA”) was established by Executive Order 11790 pursuant to the authority of the Federal Energy Administration Act of 1974, P.L. 93-275, 88 Stat. 96. The FEO was abolished by Section 5 of Executive Order 11790. All [663]*663powers conferred upon the President by the Petroleum Act were delegated to the Administrator of the FEA by Section 2 of Executive Order 11790.

4. Defendant John C. Sawhill was the Acting Administrator of the FEO and is presently the Administrator of the FEA. Defendant Sawhill, as Administrator of the FEA, has been delegated all powers and duties conferred upon the President by the Petroleum Act. Defendant Sawhill, furthermore, is vested with all powers conferred by the Federal Energy Administration Act of 1974.

5. Defendant John W. Weber is the Assistant Administrator of the FEA, formerly of the FEO, for Operations, Regulation and Compliance with administrative responsibility for, among others, the crude oil allocation program administered by the FEA.

6. Intervener Independent Refiners Association of America (“IRAA”) is a non-profit corporation organized and existing under the laws of the District of Columbia. The IRAA is an association of independent petroleum refiners who refine crude oil. The members of IRAA are corporate entities organized, existing and operating in the various States.

7. Ashland Oil, Inc. (“Ashland”) is a refiner of crude oil and as such is an “independent refiner” as that term is defined in Section 3(3) of the Petroleum Act.

8. Pursuant to the Petroleum Act and the delegations of authority contained in the Executive Orders, the FEA issued regulations to provide for, among others, the allocation of crude oil.

9. The FEA issued 10 C.F.R. § 211.-64(a) (39 F.R. 1932, January 15, 1974), as amended (39 F.R. 3908, January 30, 1974), as revised 10 C.F.R. § 211.63(a) (39 F.R. 17288, May 14, 1974) (herein the “December 1 Regulation”). The December 1 Regulation provides, in pertinent part, that all supplier/purchaser relationships in effect under contracts for sales, purchases, and exchanges of domestic crude oil on December 1, 1973, are to remain in effect for the duration of the mandatory allocation program. The December 1 Regulation applies to all contracts for sales, purchases and exchanges within the whole petroleum industry.

10. Pursuant to the December 1 Regulation, Exxon is required to sell approximately 130,000 barrels of crude oil per day to other refiners. Under the December 1 Regulation, Exxon is also entitled to receive, through contracts for purchases or exchanges in existence on December 1, 1973, approximately 868,-000 barrels of crude oil.

11. The FEA also issued 10 C.F.R. § 211.65 (39 F.R. 1927, January 15, 1974), as amended (39 F.R. 17288, May 10, 1974) (herein the “Buy/Sell Regulation”). The Buy/Sell Regulation provides for the mandatory allocation of crude oil among refiners existing within the refining sector of the petroleum industry.

12. Under the Buy/Sell Regulation the FEA issues a buy/sell list on a quarterly basis which sets forth the purchase opportunities and sales obligations of all domestic refiners. The first buy/sell list was in effect for the period of February 1 through April 30, 1974, and then was extended on a pro-rata basis for the month of May, 1974.

13. Under the buy/sell list mentioned in paragraph 11 above, Exxon was obligated to sell approximately 1,000 barrels of crude oil per day.

14. The Buy/Sell Regulation was amended on May 10, 1974, and, in accordance therewith, the FEO issued a buy/sell list on June 7, 1974 (39 F.R. 20276), as amended (39 F.R. 22354, June 21, 1974), for a period of June 1 through August 31, 1974.

15. Under the buy/sell list issued for the period of June 1 through August 31, 1974, Exxon is obligated to sell approxi[664]*664mately 95,000 barrels of crude oil per day.

16. Exxon sought administrative relief from the FEO from the provisions of the December 1 Regulation. The request for administrative relief from the FEA eventually took the form of a request for an exception from the December 1 Regulation.

17. Exxon’s request for an exception described in paragraph 15 above was denied by the FEA on June 14, 1974. Exxon appealed the decision of the FEA and such appeal was denied on June 26, 1974, by the FEA.

18. Section 4(a) of the Petroleum Act directed the FEO to issue regulations to provide for the mandatory allocation of, among others, crude oil.

19. Sections 4(b) (1) (A) through (I) of the Petroleum Act set forth broad objectives which the regulations, mentioned in paragraph 17 above, were to provide for to the maximum extent practicable.

20. Section 4(c) of the Petroleum Act provides in pertinent part, that the regulations mentioned in paragraph 17 above, to the extent practicable and consistent with the objectives of Sections 4(b) and 4(d) of the Petroleum Act, should result in the allocation of crude oil to each small and independent refiner in an amount not less than the amount sold or otherwise supplied to such refiners during the corresponding period of 1972, adjusted to take into account any existing overall shortages. The terms “small refiners” and “independent refiner” are specifically defined in Section 3 of the Petroleum Act.

21. Exxon, by its motion for a preliminary injunction, requests an injunction against its obligation to sell approximately 130,000 barrels of crude oil per day under the December 1 Regulation. In the alternative, Exxon requests an injunction against its obligation to sell 95,000 barrels of crude oil per day under the Buy/Sell Regulation.

22. The December 1 Regulation and the Buy/Sell Regulation were implemented by the FEA to accomplish different objectives. The December 1 Regulation was implemented to continue supplier/purchaser relationships existing on December 1, 1974, within the whole petroleum industry and prevent a disruption in the existing distribution system for domestic crude oil.

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394 F. Supp. 662, 1974 U.S. Dist. LEXIS 7565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/exxon-corp-v-federal-energy-office-cadc-1974.