Wesreco, Inc. v. United States Department of the Interior

618 F. Supp. 562, 87 Oil & Gas Rep. 163, 1985 U.S. Dist. LEXIS 20811
CourtDistrict Court, D. Utah
DecidedApril 12, 1985
DocketC 84-0126J
StatusPublished
Cited by7 cases

This text of 618 F. Supp. 562 (Wesreco, Inc. v. United States Department of the Interior) is published on Counsel Stack Legal Research, covering District Court, D. Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wesreco, Inc. v. United States Department of the Interior, 618 F. Supp. 562, 87 Oil & Gas Rep. 163, 1985 U.S. Dist. LEXIS 20811 (D. Utah 1985).

Opinion

MEMORANDUM OPINION and ORDER

JENKINS, Chief Judge.

Plaintiffs filed their complaint in this action on February 17, 1984, seeking primarily money damages based on the United States’ sale to them of royalty crude oil between June, 1976 and January, 1981. The sales are alleged to have been in violation of mandatory price regulations established pursuant to the Emergency Petroleum Allocation Act of 1973 (EPAA), 15 U.S.C. § 751 et seq. Defendants move for Summary Judgment or the ground that plaintiffs cannot recover damages from the United States because Congress has not waived sovereign immunity from the asserted claims. Alternatively, defendants move for partial summary judgment on the ground that state statutes of limitation are applicable and, thus, bar some of plaintiffs’ claims for damages.

Following briefing and oral argument on the motion, the court took the matter under advisement. 1 After careful consideration of the pleadings, memoranda, argument and supplemental case law submitted on behalf of the parties, the court issues the following Memorandum Opinion and finds that 1) Congress has waived sovereign immunity for claims against the government of the type before this court, 2) plaintiffs have stated a claim upon which relief can be granted, 3) this court has proper subject matter jurisdiction to entertain this suit, and 4) the applicable statute of limitations provision is 28 U.S.C. § 2401(a).

I. FACTUAL BACKGROUND

Plaintiffs in this action include Wesreco, Inc., dba Western Refining Co., Industrial Energy Partners, Ltd., MM & S Partners and Anna Drake, Trustee in bankruptcy for *565 Western Oil Marketing Company (Western). 2 Defendants are the United States Department of the Interior (DOI) and William Clark, Secretary of the DOI.

Western purchased some six million barrels of federal royalty crude oil 3 from the United States Geological Survey (USGS), a sub-agency of the DOI, between June, 1976 and January 1981. During that period, the Emergency Petroleum Allocation Act of 1973 (EPAA), 15 U.S.C. § 751 et seq. was in effect. The EPAA empowered the President to fix the price of all sales of domestic crude oil. 15 U.S.C. § 753(a). Pursuant to the EPAA, the Department of Energy (DOE) 4 promulgated regulations that established a “two-tier” price structure for the sale of domestic crude. 10 C.F.R. Part 212, Subpart D. Under the two-tier price structure, “new crude” could be sold at the free-market or “upper-tier” price, but “old crude” was limited to a maximum “lower-tier” price. 39 Federal Register 1924 (Jan. 15, 1974); 41 Federal Register 4931 (Feb. 3, 1976.) The regulations also required each oil “producer” to certify to its purchasers the amount and kind of oil it was selling in each price category. The certification was required to be in writing and furnished to the buyer within two months of the month of production and sale. If certifications were not timely or in proper form, regulations required the oil to be deemed “old oil” which, of course, could only be sold at the lower-tier price. 10 C.F.R. § 212.131(a)(6).

Plaintiffs contend that the DOI was expressly subject to the price regulations when it sold royalty crude oil to Western. Western alleges that the DOI consciously and deliberately violated the price regulations when it refused to properly and timely certify the royalty crude it sold to Western, but, nonetheless, charged Western the upper-tier, market level price for the oil instead of the lower-tier, limited price which it should have charged in accordance with the regulations. Western also asserts that the DOI improperly calculated some of the charges and collected administration fees that were in violation of the EPAA regulations. Western seeks, among other things, 5 recovery of the alleged overcharges and unlawful administrative fees. The amounts in controversy for actual damages exceed $32,000,000. 6

Western invokes the jurisdiction of this court under sections 210 and 211 of the Economic Stabilization Act of 1970 (ESA), *566 12 U.S.C. § 1904, which is incorporated in § 5(A)(1) of the EPAA, 15 U.S.C. § 754(a)(1) (hereafter referred to as § 210 and § 211.) Section 210(a) is the private right of action provision that grants “[a]ny person suffering legal wrong because of any act or practice arising out of [the EPAA]” a right to bring a cause of action in the United States District Courts for damages, declaratory judgment or injunctive relief. Section 210(b) expressly contemplates claims for “overcharges”. Section 211 vests the United States Districts Courts with exclusive jurisdiction, without regard to amount in controversy, of any action arising under the EPAA.

For purposes of this Motion, there are no material factual disputes and this court can decide the issues raised as a matter of law.

II. DISCUSSION

This court notes initially that this is an action against the United States. Although plaintiffs’ have named the DOI and Secretary Clark in his official capacity, whether a particular action is one against the United States “is determined not by the party named as the defendant, but by the issues presented and the effect of the judgment.” State of New Mexico v. Donald T. Regan, 745 F.2d 1318, 1320 (10th Cir.1984); Transwestern Pipeline Company v. Kerr-McGee Corporation, 492 F.2d 878, 884 (10th Cir.1974), cert. denied, 419 U.S. 1097, 95 S.Ct. 691, 42 L.Ed.2d 689 (1975). Here, the DOI and the Secretary were clearly acting in an official capacity when they undertook to sell royalty crude oil to Western. The manner in which the crude oil sales were accomplished may have been in violation of certain regulations, but it is not alleged that defendants were acting beyond the scope of their delegated powers in undertaking to sell the crude. For that reason and because the types of relief sought here would necessarily operate against the United States, the present action must be deemed as one against the sovereign. See Hawaii v. Gordon, 373 U.S. 57, 58, 83 S.Ct. 1052, 10 L.Ed.2d 191 (1963).

Having determined that this is an action against the sovereign, the sole issue remaining is whether Western can maintain the present action in this court.

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Bluebook (online)
618 F. Supp. 562, 87 Oil & Gas Rep. 163, 1985 U.S. Dist. LEXIS 20811, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wesreco-inc-v-united-states-department-of-the-interior-utd-1985.