Court Opinion

ID: 9308634
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:20:51.378718+00
Date Added: 2024-06-11T17:14:02.418819
License: Public Domain

POINTER, Judge,
concurring in part, dissenting in part:
A. Disqualification.
I agree that there was no error in denying appellants’ motion for disqualification under 28 U.S.C. § 455(a). I do not, however, find fault in the timing of the motion. Rather, I believe the motion — premised upon gratuitous speculation by opposing counsel as to possible bias of the judge, *724comments which the attorney later acknowledged to have been “totally baseless and unfair” — lacks a sufficiently colorable factual basis for any reasonable question to have been raised concerning the judge’s impartiality.
B. Limitations Period.
I also concur in the conclusion that the government’s claim for restitution was not barred by Alabama’s one-year statute of limitation. As was true with the back pay claims presented by the government in Occidental Life Ins. Co. v. EEOC, 432 U.S. 355, 97 S.Ct. 2447, 58 L.Ed.2d 402 (1977), such a limitations period would frustrate the implementation of national policies involved in the pricing regulations here in issue. The Supreme Court recognized in Occidental that in some circumstances a defense of laches might be appropriate; but the appellants have not here even argued that the trial judge was in error in finding that the defense of laches had not been established.
C. Applicability of Price Controls.
I must respectfully dissent, however, from the affirmance of the ruling that the sales to PETCO in 1974 were not “export sales” exempt from domestic price controls. While the imposition of price controls on these transactions might now appear to have been appropriate as a matter of policy, the regulations in place at the time the sales were contemplated and consummated did not limit the prices that PETCO might be charged, a conclusion which government officials had consistently, if begrudgingly, acknowledged prior to filing of the amended counterclaim in the present litigation in 1978.
The essential facts of the proposed transactions, including the price to be charged PETCO and the importation of a like quality of refined products into the United States, were shown in the applications for export licenses reviewed by the Petroleum Products Exception Committee, which included representatives from the FEO. As the prices exceeded permissible domestic levels, the Department of Commerce contacted FEO’s General Counsel, who offered no objection to the proposed transactions and advised that there appeared to be no legal basis for denying the applications. The export licenses were granted, and there has been no suggestion in this litigation that those licenses were other than valid and proper.
The transactions were later scrutinized by attorneys from a United States Attorney’s office, from the Department of Justice, and from the FEA. In terminating that investigation, it was the opinion of each attorney that “if petroleum was exported pursuant to a valid export license, . . . the FEA price regulations did not apply to that sale.”
Similarly, in an attachment to a letter to a Congressional committee investigating the transactions, the Administrator of the FEA wrote:
Crude oil can be exported only pursuant to a valid export license. The FEA regulations have always provided that crude oil (or any refined product) sold for export is exempt from both FEA allocation and pricing regulations. 10 C.F.R. §§ 211.1(b)(1), 212.53(a). Therefore, assuming there is no other factor bearing on the issue, the sale of crude oil by a U.S. producer to a foreign refiner for export pursuant to a validly issued export license is exempt from U.S. price controls and can occur at whatever price the parties agree upon.
The interpretation of a regulatory system by those charged with its enforcement should be given great deference by the judiciary, e.g., Udall v. Tallman, 380 U.S. 1, 16-17, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965), particularly with respect to a contemporaneous construction by those charged with setting the machinery of a new program in motion, Chemehuevi Tribe of Indians v. Federal Power Comm’n, 420 U.S. 395, 409-10, 95 S.Ct. 1066, 1075, 43 L.Ed.2d 279 (1975). See also Andrus v. Shell Oil Co., 446 U.S. 657, 667-68, 100 S.Ct. 1932, 1938-39, 64 L.Ed.2d 593 (1980). This principle is not vitiated by the fact that the government agency may have at some later time in new interpretations or in the course of litigation attempted to advocate a *725change of its views. See General Electric Co. v. Gilbert, 429 U.S. 125, 141-45, 97 S.Ct. 401, 410-12, 50 L.Ed.2d 343 (1976); Norwegian Nitrogen Produces Co. v. United States, 288 U.S. 294, 53 S.Ct. 350, 77 L.Ed. 796 (1933). Nor, inasmuch as these particular transactions were scrutinized by the affected agencies and found to constitute exempt “export sales”, do I find persuasive the appellees’ efforts to cite as if applicable the interpretation of the regulations given in factually distinguishable situations. Cf. Tesoro Petroleum Corp. Interpretation No. 78-10, Enforcement Manual (CCH) ¶ 56,400 (March 24, 1978) (equal volume exchange); FEA Interpretation 1977-16, 42 Fed.Reg. 31151 (June 20, 1977) (sale to instrumentality of United States for its consumption abroad).
The construction of the regulatory system by the administrative agency prior to the current litigation was, moreover, consonant with — if not mandated by — the language of the regulations, however adequately or inadequately those regulations may have considered the effect of a tri-partite arrangement such as here involved. It can hardly be doubted that the sales by the appellants to PETCO — sales of crude oil produced by a domestic company in the United States to an unrelated foreign company located in the Bahamas, for refining at Bahamian facilities — would in ordinary usage be considered an “export sale,” the words of 10 C.F.R. § 212.53(a). This would be so even though a like quantity of refined products was destined by prearrangement for shipment into the United States — as an “import” free from price controls, to use the words of 10 C.F.R. § 212.53(b)—to a third company which the trial court found, under rulings not challenged in this interlocutory appeal, to be independent from and not an alter ego of the Bahamian company.
To be sure, words like “export sale” or “export trade” are not immune from consideration in the light of recognized principles of statutory and regulatory construction. See, e.g., United States v. Concentrated Phosphate Export Assn., 393 U.S. 199, 89 S.Ct. 361, 21 L.Ed.2d 344 (1968).1 I find unpersuasive, however, appellees’ attempt to disavow its earlier interpretation that these sales to PETCO were “export sales” exempted from price controls, while continuing to acknowledge that they were “exports” exempted from the allocation regulations by 10 C.F.R. § 211.1(b)(1). It is unnecessary to consider the extent to which total congruency between the allocation and price regulations should be required; it is sufficient to note that an inconsistent interpretation such as appellees suggest should hardly be favored. As this Court has said, “Congress was conferring authority ... to regulate only the price of that which it was mandating the President to allocate.” Shell Oil Co. v. FEA, 527 F.2d 1243, 1246 (TECA 1975). One can hardly reconcile the present ruling, treating the transactions for purposes of price controls as if PETCO were a domestic refiner, with the earlier decision of the agency that for purposes of the allocation regulations “it is .. . not appropriate that [PETCO’s refinery] which is located in a foreign country be treated as if it were located in the United States.” See New England Petroleum Corp., 2 FEA ¶ 83,136 at 83,429 (May 2, 1975), aff’d, 2 FEA ¶ 80,468 (August 7, 1975), modified, New England Petroleum Corp. v. FEA, 455 F.Supp. 1280 (S.D.N.Y.1978).
Nor is there merit in the argument that a distinction in treatment of the same trans*726action under the allocation and price regulations can be justified on the basis that the exemption in the former is for “exports” while that in the latter is for “export sales.” The difference is merely stylistic, as demonstrated by the fact that the same subsection of the pricing regulations also exempts sales to a domestic producer certified to be “for export”, 10 C.F.R. § 212.53(a), and the next subsection of the regulations provides an exemption for “imports”, 10 C.F.R. § 212.53(b). Indeed, as appellants note, the purported distinction based upon joinder of the words “export” and “sales” in § 212.-53(a) would presumably mean that appellants’ sales to PETCO were subject to price controls while PETCO’s sales to NEPCO were not — with the bizarre result that, while NEPCO and its domestic customers would have remained subject to the higher prices, the so-called improper profits could have been made by a foreign company such as PETCO but not by domestic companies such as the appellants.
Those writing the regulations have, moreover, shown that they know how to provide special treatment, if that is desired, where there are interrelated transactions. See, e.g., 10 C.F.R. § 212.82 (definition of “Exchange” in price regulations for refiners), § 212.92 (definition of “Matching purchase and sale” in price regulations for resellers and retailers). Indeed, after the transactions now in question had occurred, the regulations concerning export licenses were amended to provide, inter alia, for the consideration of the potential effect upon domestic prices prior to issuance of the license. See 15 C.F.R. § 377.6(d)(1).
D. Propriety of Restitution.
While the sales to PETCO were not, in my view, subject to price controls under the regulations as promulgated and construed by the enforcement agency, the majority’s treatment of the issues concerning a remedy is more disturbing.
The trial court held that the amounts charged PETCO in excess of domestic price levels, estimated at $6,000,000 to $9,000,000, should be paid by the appellant sellers to the United States. The payment is not to be made as a civil penalty or fine; indeed, the trial court absolved the appellants from liability for the relatively modest civil sanctions imposed under 12 U.S.C. § 1904 n. § 208 for violation of the regulations. Rather, the award was described as one of “restitution” under § 209 of the Act, and was ordered paid into the treasury of the United States “because it cannot flow to the wronged individuals and because permitting the retention of the illegal overcharges would utterly frustrate the purposes of the EPAA.” The court reached this conclusion after having decided that (1) restitution should not be made to PETCO, the company charged the excessive price by appellants, because of “unclean hands”; (2) restitution should not be made to NEPCO, which purchased from PETCO the refined products, for a like reason; (3) restitution should not be made to most of NEPCO’s customers because they passed on the overcharges to their customers; and (4) restitution could not, as a practical matter, be fairly apportioned among the vast number of consumers who ultimately bore the damage of higher prices. In a succinct statement of the rationale, the trial judge noted:
“Realistically this holding very simply means that, since the people are sovereign, and where large numbers, here millions, have been injured, the peoples’ institution, the United States government, will recover the disgorged wrongful profits.”
The majority of the opinion of this court concludes, quite correctly in my view, that payment to the treasury of the United States “is not restitution in the true sense of the word or in the objectives of the statutes here involved.” Restitution is a remedy in which restoration of the parties to their prior positions is sought to be effected by measuring relief on the basis of the improper benefits to the wrongdoer rather than on the basis of the damages to the injured party; it does not change traditional concepts as to the identity of the persons committing the wrong or sustaining the injury.
*727Nonetheless, the opinion apparently still leaves standing, under some vaguely defined notion of general equitable principles, the proposition that restitution should be paid to the government, to be held as if a constructive trust subject to directions of DOE. According to the instructions on remand, the government would have a “duty to try to ascertain those overcharged, and refund them, with interest, from the restitution funds;” it is left open for the district court to determine the extent, if any, to which the court would be involved in the implementation of a plan for distributing the amounts paid to the treasury. Any amounts not allocated and distributed to those found to have been overcharged — a task which the trial court has already found to be impracticable — would presumably es-cheat for all practical purposes to the government.
The approach of the majority, while lacking the simplicity and directness of that adopted in the district court, suffers in my opinion from the same fatal flaw — prescribing a judicial remedy for violation of the regulations which is beyond that authorized in the Congressional enactment or the administrative regulations.2 In place of the remedy constructed by the district court, which in essence intermingles the provisions of the Act relating to civil penalties with those relating to restitution, the panel has substituted a remedy which in essence melds the concept of a parens patriae action with that of a fluid recovery. In my opinion neither approach is warranted by applicable law and precedents3 and each would have a far-reaching, untoward jurisprudential consequences.
If, as the district court held, restitution should not or can not be paid to those who purchased the products at an illegally high price — and if it is appropriate that this issue be considered by this court on this appeal — • then I would hold that restitution should not be ordered, even if the result would be the retention of illegal gains.
I do not believe, however, that the question of restitution should be addressed on this interlocutory appeal under 28 U.S.C. § 1292(b). There has been no cross-appeal by the government under § 1292(b), and there is no final judgment in the district court from which appeals might be taken on all issues which bear upon the proper relief, if any, to be granted on proof of statutory violations. Whether, for example, the appellants should have been absolved from liability for any civil penalty is not presently before this court. Nor are the many rulings of the district court — such as the impracticability of determining those who were wronged by the alleged overcharge, the barring of PETCO and NEPCO from any award on the basis of “unclean hands”, and the barring from any award those which passed overcharges through to their customers4 — which may well affect the *728propriety of an award of restitution. I would therefore hold that the question of restitution should not be considered on this appeal and would vacate the permission previously given for interlocutory appeal of this issue as having been improvidently granted.

. In Concentrated Phosphate, sales of phosphate to the Republic of Korea in which an agency of the United States government “selected the commodity, determined the amount to be purchased, controlled the contracting process, and paid the bill,” 393 U.S. at 208, 89 S.Ct. at 366, were held not to be exempt from the anti-trust laws under the Webb-Pomerene Act. The Supreme Court, viewing the transactions as ones in which “the United States was, in essence, furnishing fertilizer to Korea,” concluded that “it stretches neither the language nor the purpose of the Act” to hold that the imputed sales to the United States were subject to the anti-trust laws. Id. Unlike the case sub judice, the court was not in that decision adopting a construction which would be at variance with interpretations adopted by the agency charged with enforcement of the law or in conflict with the other portions of the regulatory system.

. While not mentioned in the opinion of the district court or that of the majority, it may be noted that in 1979 the regulations were amended to provide special procedures for refunds administratively found due to injured persons where either the identity of the persons or the amount of the refunds could not readily be ascertained. 10 C.F.R. § 205.280 et seq., 44 Fed.Reg. 8566. These regulations permit the rejection of claims too small to warrant individual consideration, § 205.286(b), and the payment of undistributed funds to the treasury or in any other manner approved by the OHA, § 205.287(c).

. While there have been cases providing for payment of funds into the treasury for distribution to those injured by statutory violations— such as Hodgson v. Wheaton Glass Co., 446 F.2d 527 (3rd Cir. 1971); Hansen v. United States, 340 F.2d 142 (8th Cir. 1965); Emery v. United States, 186 F.2d 900 (9th Cir. 1951)— these have been situations where the identity of the payees and the amounts to be paid them had been resolved in the judicial proceedings brought by the government. Perhaps the case most nearly offering support for the panel’s approach is the unappealed district court decision in Oakland Raiders v. Office of Emergency Preparedness, 380 F.Supp. 187 (N.D.Cal.1974), directing that the balance of overcharges on football tickets that could not be paid to the persons overcharged be disgorged through reduction in the price of future ticket sales.

. But see Eastern Airlines, Inc. v. Atlantic Richfield Co., 609 F.2d 497 (TECA 1979).