MGPC, Inc. v. Department of Energy

673 F.2d 1277, 1982 U.S. App. LEXIS 21748
CourtTemporary Emergency Court of Appeals
DecidedFebruary 17, 1982
DocketNo. 10-33
StatusPublished
Cited by26 cases

This text of 673 F.2d 1277 (MGPC, Inc. v. Department of Energy) is published on Counsel Stack Legal Research, covering Temporary Emergency Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MGPC, Inc. v. Department of Energy, 673 F.2d 1277, 1982 U.S. App. LEXIS 21748 (tecoa 1982).

Opinions

DUNIWAY, Judge:

The Department of Energy appeáls from an order by the district court styled a preliminary injunction. We find that the order is appealable as a final order, and we reverse. In the alternative, we find that the district court acted beyond its jurisdiction, and we order that a writ of mandamus issue. We vacate the order of the district court and direct that the action be dismissed with prejudice.

[1279]*1279I. Facts.

MGPC, Inc., the plaintiff, was formerly named McCulloch Gas Processing Corporation. Apparently, before this action was filed, it yielded to the current mania for acronyms, and changed its name. In any event, its previous name described its business. It receives natural gas and processes it, some of the products being the same as some of the products of petroleum.

Since price controls were imposed upon petroleum products, the Department of Energy and its predecessor agencies have been trying to develop and refine regulations that deal with the special case of gas processors, and to apply these regulations to MGPC. The Cost of Living Council, on August 19, 1973, promulgated Phase IV pricing regulations, 6 C.F.R. Part 150, Subpart “L,” 38 Fed.Reg. 22536 (Aug. 22,1973). The Federal Energy Office, successor to the Cost of Living Council, republished the pricing regulations, 10 C.F.R. Part 212, Subpart “E,” on January 15,1974. Both regulations dealt with “refiners,” but also were made applicable to gas processors. However, they were “not well suited” to them. See 39 Fed.Reg. 32719 (Sept. 10,1974). See also Twin City Barge & Towing Corp. v. Schlesinger, Em.App., 1979,603 F.2d 197,200. On December 24,1974, new regulations, specifically applicable to gas processors, were issued, as Subpart “K” of 10 C.F.R. Part 212. Later, on May 29,1975, the Federal Energy Administration published ruling 1975-6, 40 Fed.Reg. 23272 (May 29, 1975), and formulae for computing “increased product costs” were promulgated December 2, 1975, FEA Ruling 1975-18, 40 Fed.Reg. 55860. See also FEA’s Class Exception (2 FEA ¶ 84,-901) requiring gas producers to apply certain parts of Subpart “K” retroactively to August 19, 1973; and see McCulloch Gas Processing Corp. v. Dep’t of Energy, Em. App., 1981, 650 F.2d 1216.

This case concerns, to a limited extent, the validity of MGPC’s pricing for the period August, 1973 to February, 1975. There have been five audits by the Department and its predecessors of MGPC’s pricing during that period. On the basis of the last one, the Department issued a Notice of Probable Violation by MGPC in January, 1978. This is the first step in the enforcement proceeding authorized in 42 U.S.C. § 7193. In January, 1979, the Department issued a Proposed Remedial Order. (See 42 U.S.C. § 7193(a).) It alleged overcharges by MGPC of approximately $3,773,000.00. In December, 1980, the Department’s Office of Enforcement moved to amend the proposed order by reducing the charged amount of overcharges to $2,200,000.00.

As required by 42 U.S.C. § 7193(c), MGPC filed objections to the proposed remedial order in February, 1979. As required in subsection (c), MGPC also asked for an evidentiary hearing on nine issues and filed a discovery motion, seeking to submit 42 interrogatories, and seeking to depose some 65 part or present Department employees. The Office of Hearings and Appeals (OHA) waived certain technical irregularities in the request for an evidentiary hearing but, nevertheless, found it improper as to six of the nine issues, because those issues involved either questions of law or else did not require live testimony. A hearing was scheduled for August 26, 1980, on the remaining three issues, and then rescheduled for October 7, 1980, by agreement of the parties and at the request of MGPC. The OHA refused to allow MGPC to call Departmental personnel as witnesses. It granted MGPC’s request for its auditors’ work papers but refused to allow the discovery of other documents requested, including “all documents generated by the DOE and its predecessors construing” some twenty-one words and phrases as to which MGPC claimed that agency usage was not the same as industry usage or that there has been inconsistent agency interpretation. OHA said that no specific instances of inconsistent interpretation has been given and that industry usage could not be determined from Departmental files. OHA refused to allow the requested depositions on the ground that MGPC had failed to show that they would lead to admissible evidence, and it sustained objections to all but 12 of the proposed 42 interrogatories. The 12 interrogatories were answered.

[1280]*1280Eight days before the rescheduled hearing, MGPC moved that OHA reconsider its rulings and for a stay of the hearing in the interim. Four days before the hearing date it filed this action in the district court for the District of Wyoming and won a temporary stay. Since then there has been a series of four more temporary restraining orders, and, finally, the “preliminary injunction,” from which the appeal is taken. The agency process has been frozen at its present status since October, 1980.

II. The Decision of the Trial Court.

The district court’s order prohibits OHA from conducting its hearings pending further order of the court, prohibits it from penalizing MGPC for not attending the hearing, prohibits the enforcement of OHA’s previous orders concerning the hearings or any other matters, and orders further “that the Secretary of Energy shall promptly appoint an independent administrative law judge for the sole purpose of supervising such further documentary and deposition discovery as the administrative law judge determines is appropriate and reasonable to develop fully all facts relevant to the claims of either the Plaintiff or Defendants in [the present case] and related cases, and to preserve for disposition on the merits of the matter such testimony and evidence, both orally and documentary. All discovery shall be completed by May 1, 1981. Counsel in the case shall co-ordinate their discovery efforts and shall utilize personnel of the Defendants so that the on-going administrative proceedings are not hampered by the discovery proceedings. The Court defines an independent administrative law judge as one who is not and has not been an officer or employee of the Department of Energy or any of its predecessor agencies, and is engaged in administrative law work for some other branch of the federal government.” •

The district court chose not to use the authority given it by 12 U.S.C. § 1904 note section 211(c) to certify the question to this court as a substantial constitutional issue.

There has been no decision by OHA on the merits of the Proposed Remedial Order.

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Bluebook (online)
673 F.2d 1277, 1982 U.S. App. LEXIS 21748, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mgpc-inc-v-department-of-energy-tecoa-1982.