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AMOCO OIL CO. v. ZARB

October 16, 1975

AMOCO OIL COMPANY, Plaintiff,
v.
FRANK G. ZARB, et al., Defendants. STANDARD OIL COMPANY OF CALIFORNIA, et al., Plaintiffs, v. WILLIAM E. SIMON, et al., Defendants. EXXON CORPORATION, et al., Plaintiffs, v. WILLIAM E. SIMON, et al., Defendants. MOBIL OIL CORPORATION, Plaintiff, v. FRANK G. ZARB, et al., Defendants. TEXACO, INC., Plaintiff, v. WILLIAM E. SIMON, et al., Defendants. DOME PETROLEUM CORPORATION, Plaintiff, v. WILLIAM E. SIMON, et al., Defendants. THE STANDARD OIL COMPANY, et al., Plaintiffs, v. FEDERAL ENERGY ADMINISTRATION, et al., Defendants. SUN OIL COMPANY, Plaintiff, v. FRANK G. ZARB, et al., Defendants



The opinion of the court was delivered by: FLANNERY

 Thomas A. Flannery / UNITED STATES DISTRICT JUDGE

 These matters come before the court on plaintiffs' motions for a preliminary injunction making conditional the payment of oil import license fees pending final judicial determination of the legality of the license fee program. Upon consideration of the pleadings and memoranda submitted by plaintiffs, the defendants' opposition thereto, and the arguments of counsel thereon, this court makes the following findings of fact and conclusions of law.

 1. Plaintiffs in these consolidated cases are corporations engaged in the production and distribution of petroleum products and in the importation into the United States of substantial volumes of crude oil and petroleum products.

 2. Defendant William E. Simon, the Secretary of the Treasury of the United States, is the governmental official primarily responsible for administration of the oil import system and its impact upon the economy. Defendant Frank G. Zarb ("Administrator") is the administrator of defendant Federal Energy Administration ("FEA"), a federal agency, and in that capacity has the duty of implementing the system of import license fees on the importation of crude oil and petroleum products which was instituted by Presidential Proclamation No. 3279, as amended.

 3. The system of oil import license fees which is the subject matter of these actions was established by Presidential Proclamation No. 3279, as amended ("Proclamation"). The primary statutory provision relied on as authorizing the Proclamation was 19 U.S.C. § 1862(b) (1970).

 4. Section 3(a)(1) of the Proclamation imposes certain fees for the issuance of import licenses. Most crude oil, unfinished oils, and finished petroleum products cannot be imported into the United States without such licenses. Base fees range from $.21 to $.63 per barrel. In addition to the base license fee, a supplemental fee of $1.00 per barrel was imposed on all imports during the period February through May 1975, and a supplemental fee of $2.00 per barrel is imposed on all imports into the United States on and after June 1, 1975.

 5. The fees imposed under the Proclamation are not designed to raise revenue for the United States government, but to reduce the volume of petroleum imported by plaintiffs and other similarly situated parties. The government permits the oil importers, currently operating under stringent price controls, to pass through the expense of the license fees to consumers; the increased price paid by consumers should reduce the consumption of petroleum products, thereby reducing the need for imported oil. Thus, the fees here in issue are an integral part of the administration's energy program.

 6. Under the Proclamation and regulations issued thereunder by the FEA, an importer must pre-pay all license fees or post a bond to guarantee payment of all fees in order to obtain a license for the importation of crude oil and petroleum products. All fees must be paid by the end of the month following the month in which crude oil and petroleum products are imported. See 10 C.F.R. § 213.35(a)(4) (1975).

 7. If a party owing license import fees fails to tender payment to the government, defendants may proceed against the sureties on the bonds posted to guarantee import fee payments, the Administrator may refuse to grant further applications for additional import licenses until the fees due are paid, and, should a bond be terminated prior to payment of the fees due, or should the face value of the bond be reduced below the amount of outstanding liability for payment of fees due under the license issued pursuant to the bond, defendants would immediately revoke the party's license. See 10 C.F.R. §§ 213.35(a)(4), (b)(2) (1975).

 8. Shortly after the January 23, 1975 amendments to the Proclamation, substantially increasing oil import license fees, the validity of the license fee system was challenged in a group of related cases filed in the United States District Court for the District of Columbia.

 On February 21, 1975, the district court issued an opinion in the consolidated cases styled Massachusetts v. Simon, Civil Action No. 75-0219 (D.D.C. February 21, 1975), upholding the President's authority to impose the license fee program.


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