Sun Oil Co. v. Secretary of Department of Energy

483 F. Supp. 9, 1979 U.S. Dist. LEXIS 13378
CourtDistrict Court, S.D. Texas
DecidedMarch 30, 1979
DocketCiv. A. No. 75-H-1458
StatusPublished

This text of 483 F. Supp. 9 (Sun Oil Co. v. Secretary of Department of Energy) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sun Oil Co. v. Secretary of Department of Energy, 483 F. Supp. 9, 1979 U.S. Dist. LEXIS 13378 (S.D. Tex. 1979).

Opinion

MEMORANDUM AND ORDER:

SINGLETON, Chief Judge.

This action is brought by Sun Oil Company of Pennsylvania (Sun) who seeks declaratory relief from an assignment order of the Federal Energy Administration (FEA)1 directing Sun to supply gasoline and heating oil to Oskey Oil Company (Oskey).

It is Sun’s contention that it was denied due process since the FEA’s August 1,1975, Assignment Order was based on the decision of a United States District Court in Kansas in a lawsuit to which Sun was not a party.

The somewhat tortured history of this case has been summarized on prior occasions by this court2 and by the Temporary Emergency Court of Appeals 3 and does not bear repeating in detail here.

Pursuant to the Emergency Petroleum Act of 1973, 15 U.S.C. § 751 et seq., Oskey, a wholesale purchaser-reseller, was being supplied by three oil companies. Oskey and its suppliers had a history of poor relations and in September, 1974, they requested the FEA to terminate their supplier-purchaser relationship and assign Oskey new suppliers. The FEA granted the request and assigned Sun and other oil companies to supply Oskey. Sun successfully appealed this assignment to the FEA Office of Exceptions and Appeals which reestablished Oskey’s original suppliers, one of whom was Farmland Industries, Inc. (Farmland).

When Oskey and Farmland found themselves back where they started, Oskey appealed to the FEA Office of Exceptions and Appeals and Farmland filed suit against the FEA in a United States District Court in Kansas. The FEA Office of Exceptions and Appeals granted Oskey modified relief by assigning Farmland and Sun to supply Oskey. The Kansas court issued a temporary injunction on May 2, 1975, restraining, inter alia, enforcement of the FEA’s order granting Sun’s appeal. In granting Farmland’s request for injunctive relief, the court found that Sun’s appeal was procedurally defective and the FEA therefore exceeded its authority in presuming to [11]*11grant the appeal and in reestablishing Farmland as Oskey’s supplier.4 In addition, the court enjoined enforcement of any subsequent orders flowing from the granting of Sun’s appeal, including the relief granted Oskey by the Office of Exceptions and Appeals.

On June 19, 1975, the FEA issued a Notice of Temporary Assignment and Proposed Permanent Assignment by which Sun was assigned to supply Oskey. This Notice sets out the history of judicial and administrative orders concerning the case to that date and is the basis for the August 1, 1975, permanent assignment order which is the subject of this litigation.

It is clear from this notice that the FEA sought to resolve all issues concerning this matter through adoption of the Kansas court’s decision.

[The] . . . FEA has decided not to appeal the court’s decision and has decided instead to adopt the court’s opinion as controlling with respect to all FEA orders affected thereby and all persons subject to said orders ....

Notice of Temporary Assignment, June 19, 1975 (emphasis added).5 Sun is clearly a person affected by the FEA orders found invalid by the Kansas court. Sun is just as clearly not a party to the Kansas suit6 which is the basis for the FEA’s August 1, 1975, assignment of Sun to supply Oskey.

Prior to the issuance of the August 1, 1975, order, Sun submitted comments to the FEA contending it was violative of Sun’s right to due process to bind Sun to the Kansas decision when it was not a party to that litigation. Sun appealed the August 1, 1975, assignment order and the FEA Office of Exceptions and Appeals denied Sun’s appeal.

The evidence presented in this case, mainly in the form of the various FEA orders, especially the June 19,1975, Temporary Assignment Order, leads this court to the conclusion that Sun was denied due process by the FEA in that Sun was assigned to supply Oskey on the basis of the Kansas decision to which Sun was not a party. See Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971).

The August 1, 1975, assignment order cannot stand. By invalidating that order, this court does not presume to resolve the underlying problem of who should supply Oskey. The Department of Energy (DOE) has that responsibility and is equipped with the authority and means of implementation to assure that Oskey will be adequately supplied.

The Kansas action is still pending and the DOE can seek a final resolution there. In the interim, companies other than Sun are assigned to supply Oskey and those assignments have not been challenged. Finally, the DOE has available the use of exception relief under its regulations which it can and has used in this matter. This court finds the DOE is the proper place to determine Oskey’s suppliers in a manner which affords due process to the parties involved.

Accordingly, it is hereby ORDERED, ADJUDGED, and DECREED that the Federal Energy Administration’s order of August 1, 1975, is INVALID; it is further ORDERED that this case be remanded to the Department of Energy for action consistent with this opinion.

APPENDIX “A”

BEFORE THE FEDERAL ENERGY ADMINISTRATION

IN RE: SUPPLY OF OSKEY GASOLINE AND OIL COMPANY

NOTICE OF TEMPORARY ASSIGNMENT

AND PROPOSED PERMANENT ASSIGNMENT

I. Introduction

This Notice is being issued to all persons readily identifiable to the Federal Energy [12]*12Administration (FEA) as persons which will be affected by the temporary and proposed permanent assignment orders attached hereto. It is intended to fulfill the notice requirements of 10 C.F.R. § 205.33 with respect to such assignments. The assignment orders attached hereto are being proposed in response to various past and present applications for assignments of suppliers by the Oskey Gasoline and Oil Company (Oskey) as well as in response to a complicated series of administrative and judicial actions which have cast considerable uncertainty over the validity and the viability of the supplier/purchaser relationships existing between Oskey and its suppliers.

Most of the factual background against which these assignment orders are being proposed is set forth in detail in the Exception Decision and Order issued on April 9, 1975 by FEA’s Office of Exceptions and Appeals, Washington, D.C., granting Os-key’s request for exception administrative relief. Oskey Gasoline and Oil Co., II C.C. H.Fed.Energy Guidelines, P83,114 (April 9, 1975). Many of the facts contained in that decision are repeated here in an abbreviated form for the convenience of those persons who may be affected by the proposed assignment orders.

Oskey is a nonbranded wholesale purchaser-reseller of gasoline, No. 2 heating oil and diesel fuel, as defined in § 211.51, and is a reseller as defined in § 212.31 of the FEA regulations.

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Related

Standard Oil Co. v. Federal Energy Administration
440 F. Supp. 328 (N.D. Ohio, 1977)
Sun Oil Co. v. Federal Energy Administration
572 F.2d 867 (Temporary Emergency Court of Appeals, 1978)

Cite This Page — Counsel Stack

Bluebook (online)
483 F. Supp. 9, 1979 U.S. Dist. LEXIS 13378, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sun-oil-co-v-secretary-of-department-of-energy-txsd-1979.