Court Opinion

ID: 9308754
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:22:14.34604+00
Date Added: 2024-06-11T17:14:03.401963
License: Public Domain

CHRISTENSEN,
dissenting.
The majority opinion well states the case and defines the basic issue on the appeal. I fully agree that this Court has jurisdiction to decide the issue for the reasons there stated.
But I can find no real basis either in the text and context of the federal legislation involved, or in developments following its expiration, for holding that by discontinuing federal oil controls Congress intended to continue them in effect indefinitely in curtailment of the ordinary police powers of the states and commonwealth.
There is in my judgment no warrant for us to disregard decisions of this Court and the Supreme Court to the contrary in a case admittedly in point, on the theory that they have been superseded by a later decision which I believe to be clearly distinguishable.
And to affirm in this situation the establishment by the district court’s flawed declaratory judgment of a system of state constraints of uncertain extent without the benefit of congressional processing, definition and approval, appears to me not only improvident, but beyond the judicial as distinguished from the legislative function.
No one has suggested, nor could it reasonably be thought, that immediately before adoption of the Economic Stabilization Act of 1971 (ESA) and the Emergency Petroleum Allocation Act of 1973 (EPAA) state regulations affecting the oil industry had been preempted by Congress. It also must be clear that post-expiration legislation actually passed by Congress concerning possible future emergencies, standing alone, had no such effect. The most that can be said about the latter developments *1520is that related comments of individual members throws light upon whether in enacting and amending the EPAA and then permitting it to expire in restoration of a market free from the comprehensive federal controls theretofore existing, Congress intended also that the market be free from all non-federal controls.
Federal controls, as our decisions demonstrate time and time again, were of emergency origin and sustained and interpreted in light of the emergency. See, e.g., Condor Operating Co. v. Sawhill, 514 F.2d 351 (TECA), cert. denied, 421 U.S. 976, 95 S.Ct. 1975, 44 L.Ed.2d 467 (1975). The very names of the Act and of this Court underscore their transitory nature and purpose. Nowhere in their terms or history was there a suggestion that they were occasioned by, or designed to deal with, problems of state laws, or that there were any such problems except perhaps in the sense that they had proved incapable of coping with emergent shortages.
The congressional findings explaining the basis of the EPAA pointed out that shortages of crude oil, residual fuel oil and refined petroleum products had caused, or were likely to cause, severe economic dislocation and hardship. Congress, accordingly, determined that the best method of averting or minimizing the national threat was to grant the President specific “temporary authority” to deal with the shortages and dislocations. It is paradoxical that expiration of such temporary emergency measures, designed and administered for another purpose, should have the effect of permanently constraining the ordinary exercise of the police powers of state governments which presented no problem within the recognition of Congress except in emergency context and which had nothing to do with the adoption of the Act.
The prevailing opinion cites subsequent congressional support for a “free market,” but expressions along this line were focused on freedom from the pervasive federal controls theretofore existing. It is true that some individual members specifically advocated preemption of state regulations while others took the view that there was and should be no such preemption. But we are concerned not with individual beliefs or desires, but an institutional intent to preempt, which is not proved by the failure of legislation which would have established it, nor by the subsequent enactment of legislation negating it. The record of institutional intent indicates no more.
The Standby Petroleum Allocation Act of 1982 (SPAA) as passed by Congress contained a plain preemption provision. However, Congress failed to override a presidential veto and the act never became law. Thereafter, Congress passed and the President signed the Energy Emergency Preparedness Act (EEPA). 42 U.S.C. §§ 6281-82. Included was this provision:
No State law or State program in effect on the date of enactment of this part, or which may become effective hereafter, shall be construed to be superseded by any provision of this part.
42 U.S.C. § 6282(c)(2). In a memorandum submitted to Congress, the Attorney General concluded that there was no federal law that preempted state regulation of petroleum prices or allocation. Attorney General’s Memorandum of Law 70-74 (Nov. 24, 1982).
Senator James McClure, Chairman of the Senate Energy Committee, introduced legislation in the 98th Congress to expand the President’s powers to deal with an energy emergency. This bill contained an express preemption provision like that of the vetoed SPAA, except that it also would have given the President affirmative authority to exempt from preemption certain state laws and regulations he found not to be in conflict with the federal authority. The administration responded:
We think this reverses the presumption that ought to apply to State and local laws, and represents an unwarranted departure from principles of Federalism.1
This bill died in committee.
I do not find the post-expiration circumstances persuasive of preemption, and *1521would adhere to the view this Court and the Supreme Court expressed in Mobil Oil Corp. v. Tully, 653 F.2d 497 (TECA 1981), vacated and remanded, 455 U.S. 245, 102 S.Ct. 1047, 71 L.Ed.2d 120 (1982). See also Mobil Oil Corp. v. Tully, 499 F.Supp. 888 (N.D.N.Y.1980), aff'd, 653 F.2d 497, supra.
In Tully, the district court held that because a state antipassthrough rule effectively regulated oil prices, the state statute had been preempted by the EPAA, and issued an injunction permanently enjoining enforcement of that rule. 499 F.Supp. 888. On appeal this Court affirmed, 653 F.2d 497, concluding:
Any attempt by New York State to affect the structure of prices charged by the oil companies pursuant to federal regulation is barred by conflict with the federal scheme. The EPCA expires by its terms on September 30, 1981. 15 U.S.C. § 760g. In the meantime, the goals to control the impact of OPEC determinations regarding production and prices are viable. At the present time price decontrol has been determined by the President to be the best method to achieve an enunciated goal. The state statute under attack here is an instrument of price control and in conflict with the objectives of the program. See Ray v. Atlantic Richfield, 435 U.S. 151, 178, 98 S.Ct. 988, 1004, 55 L.Ed.2d 179 (1978). When the statute expires in September 1981, it will signal the end of federal concern in this area. Until that time the state statute is in conflict with the federal statute and regulations.
653 F.2d at 502.
A petition for certiorari was filed with the Supreme Court. On October 13, 1981, two weeks after expiration of regulatory authority under the EPAA, the Supreme Court asked the parties for their views on whether expiration of the statute mooted the case. The parties responded that there were some pre-expiration questions that survived, such as the extent of the oil companies’ tax liability, and therefore the case was not entirely moot. On February 22, 1981, the Supreme Court per curiam vacated and remanded the case for reconsideration in light of the expiration of federal price authority under the EPAA. It stated:
[TECA] affirmed the district court’s decision, but noted that the federal statute would expire by its own terms in September 1981, and that expiration of the Act “will signal the end of federal concern in this area.” ...
New York State tax officials then appealed TECA’s decision to this Court. We now vacate the judgment and remand the case to TECA for reconsideration in light of the expiration of federal price control authority.
The normal rule in a civil case is that we judge it in accordance with the law as it exists at the time of our decision____ The expiration date for the federal statute has come and gone; the only barrier to the enforcement of the antipassthrough provision no longer exists. However, the injunction entered by the district court and affirmed by TECA did not terminate on October 1, 1981, the date that TECA acknowledged to signal the end of federal concern in the area. Thus, in its present form the declaration of the invalidity of the antipassthrough provision and the accompanying injunction against enforcing it have no current validity and must be set aside.
455 U.S. at 246-47, 102 S.Ct. at 1048-49. (Citations and footnote omitted).
In a footnote the very point controlling here was emphasized by the Supreme Court:
To be sure, the expiration provision contained in the EPAA states that “such expiration shall not affect any action or pending proceedings, administrative, civil, or criminal, not finally determined on such date, nor any administrative, civil, or criminal action or proceeding, whether or not pending, based upon any act com*1522mitted or liability incurred prior to such expiration date. 15 U.S.C. § 760g. Whatever bearing this saving clause may have upon other aspects of the case, it surely cannot mean that, despite the expiration of the preempting federal law, New York should be permanently enjoined from enforcing its antipassthrough provision.
455 U.S. at 247 n. 2, 102 S.Ct. at 1049 n. 2.
In support of a contrary view, reliance is placed in the prevailing opinion upon statements from the dissent of Justice Stevens in Tully and upon the later 5-4 decision in Transcontinental Gas Pipe Line Corp. v. State Oil and Gas Board, 474 U.S. 409, 106 S.Ct. 709, 88 L.Ed.2d 732 (1986). There the issue was the validity of a Mississippi “ratable-take” order requiring an interstate natural gas pipeline to purchase gas proportionally from all the owners of a common gas pool. Prior to 1978, federal jurisdiction over wellhead sales of the natural gas in question had been both plenary and preemptive. In the Natural Gas Policy Act of 1978, however, Congress terminated the authority of the Federal Energy Regulatory Commission to regulate such sales. The state argued that Congress’ withdrawal of federal authority cleared the way for the state, in the exercise of its historical police powers, to impose its ratable-take without conflicting with any remaining federal regulatory jurisdiction. The Court concluded that “[i]n light of Congress’ intent to move toward a less-regulated national natural gas market, its decision to remove jurisdiction from FERC cannot be interpreted as an invitation to the states to impose additional regulations.” 106 S.Ct. at 717.
The majority sees support for their position in the phrasing of its statement of the question, which they quote:
The proper question in this case is not whether FERC has affirmative regulatory power over wellhead sales of § 107 (high cost) gas, but whether Congress, in revising a comprehensive federal regulatory scheme to give market forces a more significant role in determining the supply, the demand, and the price of natural gas, intended to give the states the power it had denied FERC.
I see in this question quite the opposite, specifying as it does the revision of a .comprehensive regulatory scheme rather than its termination, which distinction is the same as the one we and it had already drawn in Tully in sustaining the injunction while controls under the EPAA were being phased out, and the expiration of all controls which would “signal the end of federal concern in this area.” The Supreme Court’s answer to the quoted question makes this determinative distinction even clearer:
The answer to the latter question must be in the negative. First, when Congress meant to vest additional regulatory authority in the states it did so explicitly. See §§ 503(c) and 602(a), 15 U.S.C. §§ 3413(c) and 3432(a). Second, although FERC may now possess less regulatory jurisdiction over the “intricate relationship between the purchasers’ cost structures and eventual costs to wholesale customers who sell to consumers in other states,” Northern Natural, [Gas Co. v. State Coporation Comm’n of Kansas], 372 U.S. [84] at 92 [83 S.Ct. 646, 651, 9 L.Ed.2d 601], than it did under the old regime, that relationship is still a subject of deep federal concern. FERC still must review Transco’s pricing practices, even though its review of Transco’s purchasing behavior has been circumscribed ... In light of Congress’ intent to move toward a less-regulated national natural gas market, its decision to remove jurisdiction from FERC cannot be interpreted as an invitation to the states to impose additional regulations.
106 S.Ct. at 717.
The majority sees the possibility of over 50 individual regulatory schemes frustrating Congress’s goal of allowing market forces to regulate the supply and price of petroleum products. I apprehend no such problem. Puerto Rico, because of its isolation, and the essentially local nature of its oil business, presents a peculiar sitúa*1523tion. The district court found that no state had adopted similar regulations. There are already constitutional limitations on the exercise of their police power, including the Commerce and Due Process clauses, and Congress, of course, has the power to deal with any concern of this nature in light of the Supremacy Clause. Whether this need be done, and if so, when and how, are legislative questions which Congress has not seen fit to act upon.
On the other hand, the problems that will be created by judicially declared preemption in the context of the expired EPAA are far-reaching and intractable, as the courts try to solve them without congressional guidance but in view of the declaratory judgment of the district court herein affirmed.2
Since, as we have held, this Court has appellate jurisdiction following the supposed expiration of the EPAA over the present issue of state law preemption, it necessarily will continue to have such jurisdiction of all future appeals involving the extent of that preemption in other cases long after adjudications of the validity and effect of the regulations and programs under ESA and the EPAA have been fully completed.
This, also, will be a consequence I think Congress did not intend, as I believe it did not intend from the expiration of those federal controls to constrain ordinary exercise of state police power under the criteria laid down by the district court’s declaratory judgment, or at all, in the context of the EPAA.
For the foregoing reasons I feel constrained to dissent.

. Energy Emergency Preparedness Act Amendments of 1983; and the International Energy *1521Agency Program: Hearing before the Senate Committee on Energy and Natural Resources, 98th Cong., 1st Sess. 612 (Oct. 19, 1983).

. While the judgment itself is relatively brief, it permits the implementation of the mentioned local laws only "in accord with federal law as described in this opinion and order” and "as long as the implementation is consistent with our findings and conclusions." (These consist of 38 pages of printed material). 640 F.Supp. 474, 515.