Court Opinion

ID: 9308721
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:21:47.758787+00
Date Added: 2024-06-11T17:14:03.194576
License: Public Domain

ON PETITION FOR REHEARING
PER CURIAM.
This opinion arises from a petition for rehearing filed by Appellant Department of Energy (DOE) from an order of this court of March 27, 1985, dismissing the appeal for lack of finality. United States Department of Energy v. West Texas Marketing Corp., 763 F.2d 1411 (Em.App.1985). The underlying facts of this appeal are outlined in those opinions.
In its petition for rehearing, DOE presented information which leads us to the conclusion that unless this court decides the issue of the subordination of DOE’s claim, the amount of that claim will never be finally determined and the DOE will have no real opportunity to pursue this matter on appeal. This allows us to decide the merits of this appeal under the collateral order doctrine developed in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed.2d 1528 (1949). See also Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978); Gillespie v. United States Steel Corp., 379 U.S. 148, 85 S.Ct. 308, 13 L.Ed.2d 199 (1964); United States v. Texas Energy Petroleum Corp., 719 F.2d 394 (Em.App.1983); In re Exennium, 715 F.2d 1401 (9th Cir.1983); Sun Oil Co. of Pa. v. Federal Energy Administration, 572 F.2d 867 (Em.App.1978); Hines v. D’Artois, 531 F.2d 726 (5th Cir.1976).
Appellee West Texas Marketing (WTM) does not assert that the decision of the lower court does not come under the collateral order doctrine. Instead, in its Reply to Petition for Rehearing, WTM concedes that “in the absence of other mooting factors, the Orders of the Bankruptcy Court and the District Court appealed from were and are final as a matter of practical effect.” WTM does, however, allege “specifically” one mooting factor for consideration by this court. A priority tax claim in the amount of $40,734,614.82 has been filed on behalf of the United States by the Internal Revenue Service.1 If as little as 20 percent of this claim is allowed by the Bankruptcy Court, then the DOE will receive nothing regardless of whether its claim is classified as a penalty or as restitution. We disagree with WTM’s assertion that in the interests of judicial economy we should consider the orders of the Bankruptcy Court and the District Court as non-final until the pending tax claims have been resolved. The existence of the tax claim does not moot the issue of whether the DOE’s $22,612,-941.52 claim is a penalty; it merely raises the possibility of mootness at some unde*1426fined future date.2 Indeed, WTM has cited no authority to show that the mere possibility of future mootness vitiates the collateral order doctrine. We therefore feel compelled to decide the issue before us.
WTM asserts that the claim of DOE is for a penalty given fourth priority under 11 U.S.C. § 726(a)(4). DOE alleges that the claim is for restitution and thus is entitled to second priority as a general unsecured claim under 11 U.S.C. § 726(a)(2).
The DOE’s claim is clearly for restitution and not for a penalty. The Emergency Petroleum Allocation Act of 1973, as amended, 15 U.S.C. § 751 et seq., has specific sections which deal with civil and criminal penalties. See 15 U.S.C. § 754(a)(3). The DOE did not seek these penalties. Instead, the DOE sought restitution under the authority of § 209 of the Economic Stabilization Act of 1970, 12 U.S.C. § 1904 note, as incorporated in the Emergency Petroleum Allocation Act of 1973, as amended, 15 U.S.C. § 754(a)(1). This statute states “the court may order restitution of moneys received in violation of any such order or reglation.” (emphasis added) By virtue of the statutory scheme and the regulations issued pursuant thereto, DOE may collect such restitution on behalf of persons suffering loss from overcharges through remedial orders, consent decrees, or actions in the district court. 10 C.F.R. §§ 205.192-205.199J; see also Subpart V (Special Procedures for Distribution of Refunds). New York Petroleum Corp. v. Ashland Oil, Inc., 757 F.2d 288 (Em.App.1985); Sauder v. Department of Energy, 648 F.2d 1341, 1348-1349 (Em.App.1981).
To be allowed in bankruptcy a claim does not have to be first reduced to judgment, as already recognized by the Bankruptcy Court in allowing DOE’s claim subject to the determination of amount. It is manifest that whatever its amount is, DOE’s claim is not one for “any fine, penalty or forfeiture, or for multiple or exemplary, or punitive damages,” and thus cannot lawfully be relegated to the fourth priority. Fourth priority in bankruptcy is defined as:
“[Pjayment of any allowed claim, whether secured or unsecured, for any fine, penalty or forfeiture, or for multiple or exemplary, or punitive damages, arising before the earlier of the order for relief or appointment of the trustee, to the extent that such fine, penalty, forfeiture, or damages are not compensation for actual pecuniary loss suffered by the holder of such claim.” 11 U.S.C. § 726(a)(4):
By the clear wording of the statute, the question of whether a claim is for “compensation for actual pecuniary loss suffered by the holder of such claim” only arises when a penalty is involved. As no penalty is involved here whether the DOE suffered actual pecuniary loss is immaterial. WTM’s opinion as to the effectiveness of DOE in distributing funds collected to the actual parties who were overcharged cannot change the restitutionary character of DOE’s claim.
DOE’s motion for reconsideration is hereby GRANTED. Upon reconsideration, it is hereby ORDERED:
The portion of our ruling of March 27, 1985, upholding the Temporary Emergency Court of Appeals’ jurisdiction to decide this appeal is hereby confirmed.
The portion of our ruling of March 27, 1985, dealing with the finality of the lower court’s order is hereby vacated.
The rulings of the district court and the bankruptcy court that the DOE’s claim was for a penalty rather than for restitution are hereby reversed.
This appeal is remanded to the district court and the bankruptcy court for further proceedings in harmony with this opinion, including expeditious determination of the amount of the priority tax claim of the United States and the amount of DOE’s *1427claim for restitution, subject only to the possible mooting of the latter issue should the priority claim of the United States be allowed in sufficient amount.
Jurisdiction of this appeal is hereby retained until further action by this court.
Judge SEAR dissents and files a dissenting opinion.

. In its Reply to Petition for Rehearing, WTM alleges a tax priority claim of $43,235,547.82. However, an examination of their Attachment A reveals the true amount of the tax priority claim to be $40,734,614.82. This amount excludes the $2,500,933.00 which is listed separately from the priority claims as an unsecured general cláim.

. The pretrial conference, set for April 26, 1985, referred to in WTM’s Reply to Petition for Rehearing has been postponed indefinitely.