Federal Energy Administration v. Algonquin SNG, Inc.

426 U.S. 548, 96 S. Ct. 2295, 49 L. Ed. 2d 49, 1976 U.S. LEXIS 130
Supreme Court of the United States·Decided June 17, 1976·No. 75-382·Published·Cited by 169 cases

Opinion

Mr. Justice Marshall

delivered the opinion of the Court.

Section 232 (b) of the Trade Expansion Act of 1962, 76 Stat. 877, as amended by § 127 (d) of the Trade Act of 1974, 88 Stat. 1993, 19 U. S. C. § 1862 (b) (1970 ed., Supp. IV), provides that if the Secretary of the Treasury finds that an “article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security,” the President is authorized to

“take such action, and for such time, as he deems necessary to adjust the imports of [the] article and its derivatives so that . . . imports [of the article] will not threaten to impair the national security.” 1

*551 All parties to this case agree that § 232 (b) authorizes the President to adjust the imports of petroleum and petroleum products by imposing quotas on such imports. What we must decide is whether § 232 (b) also author *552 izes the President to control such imports by imposing on them a system of monetary exactions in the form of license fees.

I

The predecessor statute to § 232 (b) was originally enacted by Congress as § 7 of the Trade Agreements Extension Act of 1955, c. 169, 69 Stat. 166 (see n. 21, infra), and amended by § 8 of the Trade Agreements Extension Act of 1958, Pub. L. 85-686, 72 Stat. 678. The advisory function currently performed under § 232 (b) by the Secretary of the Treasury was performed by the Director of the Office of Defense Mobilization (ODM) under the 1955 and 1958 statutes. But, like § 232 (b), those statutes allowed the President, on a finding that imports of an article were threatening “to impair the national security,” to “take such action as he deem[ed] necessary to adjust the imports of [the] article . . . In 1959, President Eisenhower, having been advised by the Director of ODM that “ 'crude oil and the principal crude oil derivatives and products are being imported in such quantities and under such circumstances as to threaten to impair the national security/ invoked the 1958 version of the provision and established the Mandatory Oil Import Program (MOIP). Presidential Proclamation No. 3279, 3 CFR 11 (1959-1963 Comp.). The MOIP, designed to reduce the gap between domestic supply and demand by encouraging the development of domestic production and refinery capacity, imposed a system of quotas on the importation of petroleum and petroleum products. The program was not wholly successful, however, and in the face of domestic consumption which continued to grow faster than domestic production, Presidents Kennedy, Johnson, and Nixon each felt compelled to amend it by raising the permissible quota levels. App. 211-212.

*553 In light of a Cabinet task force conclusion that the MOIP, as then constituted, was not fulfilling its objectives, 2 President Nixon, acting pursuant to § 232 (b), radically amended the program in 1973. Presidential Proclamation No. 4210, 3 CFR 31 (1974). The President suspended existing tariffs on oil imports and provided “for a gradual transition from the existing quota method of adjusting imports of petroleum and petroleum products to a long-term program for adjustment of imports of petroleum and petroleum products through . . . the institution of a system of fees applicable to imports of crude oil, unfinished oils, and finished products . . . .” Id., at 32. This amended program established a gradually increasing schedule of license fees for importers. With respect to crude oil, the fee was scheduled to increase from an initial 10% cents per barrel on May 1, 1973, to 21 cents per barrel on May 1, 1975. With respect to most finished petroleum products, the fee was to rise gradually from 15 cents per barrel on May 1, 1973, to 63 cents per barrel on November 1, 1975. 3 Id., at 36. While initially some oil imports were exempted from the license fee requirements, the exemption levels were scheduled to decrease annually so that by 1980 the fees would be applicable to all oil imports.

President Nixon’s 1973 program apparently did not wholly fulfill the objectives to which it was directed. Accordingly, the Secretary of the Treasury, acting pursuant to § 232 (b), see n. 1, supra, initiated an investigation on January 4, 1975, “to determine the effects on the national security of imports of petroleum and petroleum products.” Memorandum from Secretary of the Treasury Simon to Assistant Secretary of the Treasury *554 MacDonald (Simon Memorandum), App. 154. While § 232 (b) directs the Secretary “if it is appropriate [to do so, to] hold public hearings or otherwise afford interested parties an opportunity to present information and advice” as part of such an investigation, 19 U. S. C. § 1862 (b) (1970 ed., Supp. IV), the Secretary found that such procedures would interfere with “national security interests” and were “inappropriate” in this case. Simon Memorandum, App. 154. The investigation therefore proceeded without any public hearing or call for submissions from interested nongovernmental parties.

The Secretary submitted a report on his investigation to President Ford on January 14, 1975. Intimating that the measures then in force under § 232 (b) had indeed not solved the problems to which they were directed, the Secretary indicated that the United States’ dependence on foreign oil had continued to increase since 1966 and that foreign sources currently accounted for well over a third of domestic consumption. The Secretary concluded that

“crude oil, principal crude oil derivatives and products, and related products derived from natural gas and coal tar are being imported into the United States in such quantities as to threaten to impair the national security [and] the foregoing products are being imported into the United States under such circumstances as to threaten to impair the national security.” App. 133.

On the basis of these findings, the Secretary recommended to the President 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 . . . .” Ibid.

*555 The President agreed with the findings of the Secretary’s investigation and concluded that it was “necessary and consistent with the national security to further discourage importation into the United States of petroleum, petroleum products, and related products . . . Presidential Proclamation No. 4341, 3A CFR 2 (1975).

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Federal Energy Administration v. Algonquin SNG, Inc., 426 U.S. 548, 96 S. Ct. 2295, 49 L. Ed. 2d 49, 1976 U.S. LEXIS 130 (1976).

426 U.S. 548 (Federal Energy Administration v. Algonquin SNG, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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