Court Opinion

ID: 9308615
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:20:42.152358+00
Date Added: 2024-06-11T17:14:02.518586
License: Public Domain

CHRISTENSEN, Judge,
concurring and dissenting.
I concur in the excellent opinion of Judge Lacey stating the case and sustaining the rulemaking procedures on this appeal. I feel constrained, however, to dissent from Part II, which sustains the district court’s holding that regulations allocating domestic crude oil entitlements for use of petroleum substitutes (synthetic fuels) are within DOE’s statutory authority to allocate old oil under the EPAA, 15 U.S.C. §§ 751-760h (1976).
The EPAA did not vest express authority in the Department of Energy or its predecessors to regulate synthetic fuels or crude oil substitutes as part of the petroleum allocation and pricing program. Indeed, defendants concede that DOE is without such regulatory authority. Nor can it be reasonably contended in view of the express provision of the Act, its legislative history and the prior decisions of this court, that any implied authority was granted to DOE or its predecessors to indirectly regulate the synfuels industry any more than any other industry involving other non-petroleum products.
The doctrine of implied powers rests upon unexpressed authority necessary or convenient for the exercise of authority expressly granted. As we said in Marathon Oil Co. v. FEA, 547 F.2d 1140, 1145 (Em.App.1976), the agency has those powers “necessarily implied for the exercise of the authority expressly granted over the allocation and pricing of petroleum products or oil.” In Mobil Oil Corp. v. Federal Energy Administration, 566 F.2d 87, 93 (Em.App.1977), this court declared that Congress intended to confer authority that was “imperative for the achievement of an agency’s ultimate purpose.” In NAACP v. FPC, 425 U.S. 662, 96 S.Ct. 1806, 48 L.Ed.2d 284 (1976), the Supreme Court held that the FPC had no authority to prohibit its regulatees from engaging in discriminatory practices except insofar as these affected the establishment of rates. The Court noted that the “public interest” language in the empowering statute was too vague a basis upon which to imply such broader authority. The general “words take meaning from the purposes of the regulatory legislation,” which were in that case to regulate electricity and natural gas prices. 425 U.S. at 669-70, 96 S.Ct. at 1811-1812. See also FCC v. Midwest Video Corp., 440 U.S. 689, 99 S.Ct. 1435, 59 L.Ed.2d 692 (1979). Cf. United States v. Midwest Video Corp., 406 U.S. 649, 664, 92 S.Ct. 1860, 1869, 32 L.Ed.2d 390 (1972), where it was stated in upholding certain agency authority that “avoidance of adverse effects is itself the furtherance of statutory policies,” that statement being made, however, in connection with recogni*1128tion of jurisdiction on the part of the Commission over CATV transmissions and with reference to the exercise of that authority, id. at 663-64, 92 S.Ct. at 1868-1869, and not concerning an industry not the object of regulatory powers on the part of the agency, as here. Here, the purported justification for allocations of entitlements to members of the synfuels industry does not relate to any authority to regulate that industry but instead rests upon the claimed lessening of the impact of the regulations upon an industry over which it has not been granted regulatory authority. I find the position of DOE as quoted in the majority opinion internally inconsistent, at times a mere play on words, and essentially unsatisfactory (and the majority opinion is somewhat unclear as to what part of this position it has embraced):
In allocating crude oil entitlements for the use of petroleum substitutes, DOE has simply exercised its authority to allocate price-controlled crude oil.... The regulations at issue here do not allocate, impose price controls on, or otherwise exercise regulatory authority over petroleum substitutes: the product allocated is price-controlled crude oil, a product expressly subject to DOE’s regulatory power.
Moreover, there is here an implicit concession tending to compromise the validity of the claimed authority. If DOE has no regulatory authority over petroleum substitutes, can it accomplish such regulation under the guise of regulating crude oil? If the device for conferring benefits created as part of its authority to regulate crude oil is used to subsidize an industry over which it has no regulatory power and as to which the “entitlements” are entirely out of context and cannot be used except as a cash equivalent, would such subsidy be any less justifiable if cash were directly awarded by DOE? Could such an extension of the entitlements program to synthetic fuels properly render the extension a part of a legitimate system for the regulation of crude oil?
It seems confusing for the majority opinion to cite Pasco, Inc. v. Federal Energy Administration, 525 F.2d 1391 (Em.App. 1975), and Condor Operating Company v. Sawhill, 514 F.2d 351 (Em.App.), cert. denied, 421 U.S. 976, 95 S.Ct. 1975, 44 L.Ed.2d 467 (1975). Those cases held that as part of the allocation authority expressly granted by the EPAA the allocation of economic advantage of old oil through the entitlements program within the petroleum industry does not constitute an impermissible subsidy. This proposition does not support this court’s conclusion that to the extent “the regulations force a subsidy, it is a permissible one, consistent with the purposes of the EPAA.” Those earlier cases prove only that insofar as DOE’s entitlements regulations require certain crude oil refiners to subsidize certain other crude oil refiners, the regulations do not establish an impermissible subsidy. It does not necessarily follow that other industries not covered by the EPAA can be added to the same program and as to them also the subsidy becomes permissible.
The open-ended nature of the purported authority in view of the reasons recited in its support is indeed sweeping. If such subsidies can be granted by DOE to industries over which it has been granted no regulatory power merely because this would help achieve some of the broadly stated objectives of the EPAA (e. g., the “minimization of economic distortions” and the avoidance of “unnecessary interference with market mechanisms”), any other industry, whether or not directly involving substitutes for petroleum, could be subsidized through crude oil “entitlements” for they too could be shown to be the victims of “economic distortions” or “interference with market mechanisms” occasioned by DOE’s allocation program.
The broad statements of objectives set out in the EPAA, 15 U.S.C. § 753(b)(l)(I) (1976), in my opinion, were intended to guide the agency in the exercise of powers expressly or impliedly granted to it by the Act, not to grant sweeping additional au*1129thority of the kind approved by the majority opinion.
That there is no overpowering public interest commending such an expansive interpretation of DOE’s powers is indicated by its recent proposal to virtually abandon the “standards and criteria governing the qualification of alternate fuels as petroleum substitutes under the case-by-case determination” because, among other reasons, they “have not best furthered the purposes of the EPAA.” Notice of Proposed Rulemak-ing and Public Hearing, 46 F.R. 19450, 19451 (Mar. 30, 1981).