Source: https://case-law.vlex.com/vid/754-f-2d-379-603005082
Timestamp: 2019-04-21 16:29:48+00:00

Document:
Party Name: CITY OF LONG BEACH, Appellant, v. DEPARTMENT OF ENERGY, et al., Appellees. CHAMPLIN PETROLEUM COMPANY, Appellant, v. DEPARTMENT OF ENERGY, et al., Appellees.
DEPARTMENT OF ENERGY, et al., Appellees.
Temporary Emergency Court of Appeals.
Robert G. Austin, Deputy City Atty., Long Beach, Cal., with whom Robert W. Parkin, City Atty. for Long Beach, Long Beach, Cal., were on the briefs for appellant City of Long Beach.
Joseph C. Bell, Hogan & Hartson, Washington, D.C., with whom Jeffrey N. Gibbs, Washington, D.C., of the same firm were on the briefs for appellant Champlin Petroleum Co.
Samuel Soopper, Washington, D.C., with whom Thomas H. Kemp, Dept. of Energy, Washington, D.C., were on the briefs for appellee Department of Energy.
Before DAUGHERTY, CRAIG and McNICHOLS, Judges.
Company to intervene as a matter of right pursuant to F.R.C.P. Rule 26(a). Champlin Petroleum alleged that the City of Long Beach had acted in part on Champlin's behalf during the proceedings before the OHA and feared that Champlin might in turn be liable to the City of Long Beach. All three parties agreed there was no material issue of fact and submitted the case to the trial court on cross motions for summary judgment. The District Court granted the Department of Energy's motion for summary judgment and denied the City of Long Beach's and Champlin's motions for summary judgment. The City of Long Beach and Champlin Petroleum appeal.
Frequently, the ceiling prices imposed pursuant to 10 C.F.R. Part 212 would not be adequate to cover the costs of production. In such cases, an oil producer could apply to the Department of Energy for "exception relief" from the ceiling prices. Department of Energy Organization Act (DOEOA), § 504, 42 U.S.C. § 7194; 10 C.F.R. § 205.50 (1981), et seq. The DOE could grant exception relief upon a showing of "serious hardship or gross inequity" resulting from the ceiling prices. 10 C.F.R. § 205.50(a)(1). The Department of Energy required the exception relief applicant to file with the DOE detailed data relating to the cost of production. The DOE would use the submitted data to determine the amount of exception relief to which the oil producer would be entitled. The exception relief would issue in the form of an order allowing the oil producer to sell at the upper tier price a certain percentage of the oil produced.
Beginning in 1976, the working interest owners in the Unit found the federal ceiling prices for crude oil produced from the Unit inadequate to cover the costs of production. The City of Long Beach therefore made, from time to time, application for exception relief on behalf of Long Beach and the two other working interest owners (e.g. Champlin and Mobil Oil).
for the period commencing July 1, 1979 and ending December 31, 1979.
The OHA based its decision upon a finding that the operating costs of the Unit had continued to increase at such a rate that the working interest owners had no incentive to continue production without relief from the regulations, and thus that the exception relief previously granted concerning the Unit should be extended. OHA's final decision and order allowed the working interest owners to sell 72.58% of the crude oil produced from the Unit during the July to December period at upper tier ceiling prices. The OHA based its decision upon the data Long Beach submitted to the OHA. The figures Long Beach submitted were admittedly correct. The fault for any error, therefore, rests with the Department of Energy and its Office of Hearings and Appeals. Subsequent to the issuance of the final order of the OHA, the appellants commenced the selling of 72.58% of the crude oil produced from the Unit at the upper-tier prices.
On August 8, 1979, Long Beach sent a letter to OHA alerting the OHA to a possible error in the DOE's calculations of Unit operating cost. More specifically, the OHA had used $8.74 per barrel in calculating the unit operating cost for the period when $8.06 correctly reflected the cost per barrel. Long Beach contended, however, that the OHA should not correct the error because the higher cost figure more accurately reflected the costs appellants were incurring.
On November 15, 1979, Long Beach filed applications for extension of the exception relief for the Unit for another six-month period on behalf of Long Beach and on behalf of the other working interest owners. The OHA on December 21, 1979 issued a proposed decision and order extending the exception relief earlier granted to the City of Long Beach. In the extension, the OHA held that recovery of increased operating expenses could be most effectively accomplished by permitting the City of Long Beach to sell 34.17% of the crude oil produced from the Unit for the benefit of the working interest owners at upper-tier ceiling prices.
To rectify the error, the OHA directed Long Beach to submit a report detailing the revenues received as a result of the claimed excessive relief. The OHA stated that the DOE would thereafter take appropriate action to assure the repayment of any excessive revenues that the working interest owners received. On January 25, 1980, Long Beach objected to the portion of the OHA's order relating to correction of the error in the July, 1979 proceedings. Long Beach essentially argued that the DOE should be estopped from correcting the computational error after substantial reliance by the City.
of the miscalculation on the grounds of estoppel.
During the three and one-half year period between the filing of objections to the proposed order and the issuance of the June 6, 1983 final decision and order, negotiations had been conducted between DOE and Long Beach and between DOE and Champlin, regarding each appellants' compliance with Mandatory Petroleum Allocation and Price Regulations. In February, 1982, a Consent Order was entered into between DOE, Long Beach and the State of California. In July, 1982, a Consent Order was entered into between DOE and Champlin.
After OHA issued the June, 1983 Decision and Order, Long Beach in compliance thereto paid $963,459, into an escrow account held by DOE where the money presumably remains.
16 N.W. 266 (Minn. 1883), Abbett v. Chicago, Milwaukee & St. Paul Railway Co.

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 § 504
 § 7194
 § 205
 § 205
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