Opinion ID: 328659
Heading Depth: 2
Heading Rank: 2

Heading: The Ford Plan

Text: 6 Section 1862(b) authorizes presidential action only after receipt of advice from the Secretary of the Treasury that an article is being imported in quantities or under circumstances as to threaten to impair the national security. The Secretary may not transmit such advice to the President under this section until he has made an appropriate investigation to determine the effects on national security, during which he must consult with the Secretaries of Defense and Commerce and other appropriate officers. 4 Finally, the Trade Act of 1974, 88 Stat. 1978, effective January 3, 1975, amended section 1862(b) to include the provision that (t)he Secretary shall, if it is appropriate and after reasonable notice, hold public hearings or otherwise afford interested parties an opportunity to present information and advice relevant to such investigation. 7 On January 4, 1975, the day after the amendment became effective, Secretary of the Treasury, William E. Simon, undertook an investigation to determine whether the current level of petroleum imports threatened national security. In a letter delegating the investigation to Assistant Secretary David R. MacDonald, Secretary Simon stated: 8 In my judgment, national security interests require that the procedures requiring public notice and opportunity for public comment or hearings . . . not be followed in this case. I further find that it would be inappropriate to hold public hearings, or otherwise afford interested parties an opportunity to present information and advice relevant to the investigation as provided by Section 232, as amended by the Trade Act of 1974. 9 J.A. 66. 10 Thereafter, comments were solicited from the Departments of State, Defense, Interior, Commerce and Labor, the Council of Economic Advisors, and the Federal Energy Administration. 5 On January 14, 1975, Secretary Simon reported as the result of his investigation that petroleum products were being imported into the United States in such quantities as to threaten to impair the national security and recommended that 11 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, to promote a lessened reliance upon such imports, to reduce the payments outflow and to create incentives for the use of alternative sources of energy to such imports. I understand that a Presidential Proclamation pursuant to (section 1862(b)) is being drafted by the Federal Energy Administration consistent with these recommendations. 12 A. 44. 13 On January 23, 1975, President Ford signed Proclamation No. 4341 which provided for a significant increase in the license fees initially imposed by former President Nixon. First, the fee schedule announced in 1973 was accelerated to their maximum levels of $0.21 per barrel on imported crude oil and $0.63 per barrel on petroleum products. Second, Proclamation 4341 imposed supplemental fees of $3 per barrel on imported crude oil and $1.20 per barrel on petroleum products. The supplemental fee on crude oil was to be instituted in three monthly dollar steps from February to April, while the petroleum products fee was to be added in March and April, 1975. 6 14 On January 27, 1975, plaintiffs-appellants filed suit in district court. Plaintiffs, including eight states and their governors, 7 ten utility companies, 8 and one member of Congress, 9 asserted that the fees imposed by Presidents Nixon and Ford in Proclamations 4210 and 4341 exceeded their authority under 19 U.S.C. § 1862(b), that the Secretary of the Treasury failed to comply with the procedural requirements of that section, and that the government had failed to file a required environmental impact statement. 15 In a February 21st Order, the district court found jurisdiction under 28 U.S.C. §§ 1331 and 1340 and rejected the contention that the action was barred by the Tax Anti-Injunction Act, 26 U.S.C. § 7421 (1970). Although finding that appellants would suffer irreparable injury by the implementation of the program, the court refused to grant injunctive relief. The court found that the scope of presidential authority under section 1862(b) encompassed the power to impose license fees, a regulatory measure enacted for the protection of national security. J.A. 290. The court also held that the Secretary of the Treasury had fulfilled the procedural requirements of section 1862(b) and that the failure to file an environmental impact statement was excused by an emergency situation. J.A. 293. Final judgment was entered on March 11, 1975, 10 and this appeal followed. On February 27, 1975, appellants also filed, pursuant to 15 U.S.C. § 766(i)(2)(A), a Petition for Review of emergency regulations promulgated by the Federal Energy Administration to implement the Ford supplemental fee program. See 40 Fed.Reg. 10437 (1975). In both appeals, now consolidated, appellants renew the contentions made to the district court. 11