license fee, the Court cautioned that its conclusion does not mean that "any action the President might take, as long as it has even a remote impact on imports, is also so authorized." Id . (emphasis in original).
Algonquin is not dispositive of the instant action. The import fee approved by the Supreme Court in that case directly affected the price of imported oil relative to domestic oil. Standing alone, the import fee component of the PIAP would have a similar effect. In the context of the PIAP mechanism as a whole, however, the import fee has no "initial and direct impact on imports" similar to that of the fee approved in Algonquin . Nor is it intended to have such a result. The purpose and effect of the entitlements component of the PIAP mechanism is to neutralize the "initial and direct impact" that the fee standing alone would have on oil imports. Under the system as outlined above, the $.10 per gallon conservation fee imposed on all gasoline is used to offset the initial import fee in its entirety. No monetary burden is imposed on imported oil that is not imposed on domestic oil. Thus the effect of the PIAP is to impose a $.10 per gallon conservation fee on all gasoline sales. Any impact on imports will be indirect and will result from the general gasoline conservation fee, not from the initial import fee.
To determine whether the Trade Expansion Act authorizes the PIAP, the Court must look to the design of the program as a whole.Analysis of the manner in which PIAP would function belies Defendants' contention that it is structured to lower demand for imported oil in particular rather than demand for oil generally. Two aspects of the program undercut Defendants' argument. First, as discussed above, the initial import fee is completely offset by the entitlements mechanism. Second, assuming a stable level of domestic oil production, the per barrel import fee would decrease if the level of imports rose.
The rationale underlying PIAP thus reduces to the contention that TEA empowers the President to impose a $.10 per gallon "conservation fee" on all gasoline so as to lower demand for the product. The TEA provides no such authority.
TEA does not authorize the President to impose general controls on domestically produced goods either through a monetary mechanism or through a quantitative device. The statute provides for regulation of imports. A regulation on imports may incidentally regulate domestic goods. The regulation of domestic oil contemplated by PIAP, however, is not incidental to regulation of imported oil. Rather, it is a primary purpose of the program, and is essential to the goal of reducing demand for all gasoline regardless of its source. Moreover, the impact of the oil conservation fee is greater on domestically produced oil than on imported oil since the former comprises roughly sixty (60) per cent of all crude oil utilized today, and Defendants acknowledge that the PIAP's effect on import levels will be slight.
In Algonquin , the Supreme Court indicated that TEA does not authorize "any action the President might take, as long as it has even a remote impact on imports." Any possible benefits of the PIAP on levels of oil imports are far too remote and indirect for the TEA alone to support the program. The remoteness of the program's effect on imports is apparent from three factors. First, the quantitative impact of the program on import levels will admittedly be slight. Second, the program imposes broad controls on domestic goods to achieve that slight impact. Third, Congress has thus far denied the President authority to reduce gasoline consumption through a gasoline conservation levy.
PIAP is an attempt to circumvent that stumbling block in the guise of an import control measure. TEA alone does not sanction this attempt to exercise authority that has been deliberately withheld from the President by the Congress.
The Government asserts that, even if the TEA does not provide authority for the entitlements portion of the PIAP, Presidential authority for that portion of the Program may be derived from the Emergency Petroleum Allocation Act (EPAA), 15 U.S.C. § 751, et seq . Thus, it is alleged that the TEA permits the imposition of the import fee,
and the EPAA authorizes the entitlement program. While the Court has doubts about the applicability of the EPAA in the instant litigation, it need not rule on this matter because of noncompliance with the procedural requirements of the statute.
Section 5 of the EPAA provides that: Sections 205 through 207 and sections 209 through 211 of the Economic Stabilization Act of 1970 [(ESA)]... shall apply... to any order under this Chapter and to any action taken by the President (or his delegate) under this Chapter as if... such action had been taken under the Economic Stabilization Act of 1970...
15 U.S.C. § 754(a)(1) (emphasis added). Section 207 of the ESA, 12 U.S.C. § 1904 note, states that
(a) The functions exercised under this title are excluded from [the Administrative Procedure Act] except as to the requirements of sections 552, 553, and 555(e) of Title 5...
(c) To the maximum extent possible, the President or his delegate shall conduct formal hearings for the purpose of hearing arguments or acquiring information bearing on a change or proposed change in... prices... which have or may have a significantly large impact upon the national economy..
Section 553 of the Administrative Procedure Act (APA) establishes rule making procedures. It provides for, inter alia , notice of proposed rule making, 5 U.S.C. § 553(b), the opportunity for interested parties to participate in the rule making, 5 U.S.C. § 553(c), and publication or service of a substantive rule at least thirty days before its effective date, 5 U.S.C. § 553(d).
The Government supports its assertion by stating that (1) the President is not an "agency" within the meaning of the APA and (2) when Congress enacted Section 207 of the ESA, the President had already delegated his authority under the ESA to the Cost of Living Council, and thus Section 207 imposed no procedural responsibility on the President. The Government contends further that separation of powers principles compel a conclusion that the EPAA imposes no procedural requirements on the President.
The Government's reliance on the definition of "agency" in the APA and the legislative history of the ESA is misplaced.The Court need not scrutinize either of those statutes in the instant case to ascertain to whom their procedural requirements apply. Rather, the Court must only look at the principle statute in question, the EPAA. That statute states, in no uncertain terms, that Section 207 of the ESA and Section 553 of the APA apply to any action taken by the President . Thus, a condition precedent to the exercise of authority granted by the EPAA is compliance with those sections of the ESA and APA. The President can derive no authority for the gasoline conservation fee from the EPAA.
Defendants finally contend that, because of the national security aspects presented by this nation's consumption of imported oil, the President has authority, independent of Congress, to impose a gasoline conservation fee. The extent of the "inherent" nature of Presidential power was delineated by the Supreme Court in Youngstown Sheet & Tube Co. v. Sawyer , 343 U.S. 579, 72 S. Ct. 863, 96 L. Ed. 1153 (1952). The Court stated that
In the framework of our Constitution, the President's power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make the laws which the President is to execute. The first section of the first article says that "All legislative Powers herein granted shall be vested in a Congress of the United States...."... Article I goes on to provide that Congress may "make all laws which shall be necessary and proper for carrying into Execution the foregoing Powers...."
Id ., at 587-588, 72 S. Ct. at 867. It is clear that Congress, not the President, must decide whether the imposition of a gasoline conservation fee is good policy.
On this issue, Congress has already spoken.The Energy Policy and Conservation Act, (EPCA) 42 U.S.C. § 6201, et seq ., gives the President the authority to prescribe a "plan which imposes reasonable restrictions on the public or private use of energy which are necessary to reduce energy consumption." 42 U.S.C. § 6262(a)(1). Section 202 of that Act provides that
(2) An energy conservation contingency plan under this section may not --
(A) impose rationing or any tax, tariff, or user fee;
(B) contain any provision respecting the price of petroleum products...
42 U.S.C. § 6262(a)(2). Congress has thus precluded the use of demand-side disincentives to lower overall gasoline consumption.
It is imperative to note that the EPCA is not effective until the President has found the existence of a severe energy supply interruption. 42 U.S.C. § 6261(b). Thus, even in times of severe energy supply interruptions, the President may not use monetary measures to decrease demand. The imposition of the gasoline conservation fee is contrary to manifest Congressional intent.
This Court cannot, should not, and does not question the determination of the President that, given the extent of United States dependence on foreign oil, any significant interruption of imported oil could have severe consequences for national security. The President's determination that the level of oil imports, coupled with the unprecedented increase in oil prices has had a dramatic impact on the economic well-being of the United States, is also not questioned by this Court. What is required of the Court, a duty the Court does not shirk, is to determine whether the President's action falls within the relevant statutory authority granted him by the Congress of the United States. In making that determination, clear expressions of statutory purposes cannot be ignored, laudable purposes notwithstanding.Existing statutes cannot be used for purposes never contemplated by Congress and in ways contrary to congressional intent.
Any doubts concerning this proposition were laid to rest by the Supreme Court of the United States in Youngstown Sheet & Tube Co. v. Sawyer, supra . The Court was confronted with a similar argument by the Government to justify seizures of steel plants pursuant to executive order in the face of an impending strike which threatened severe economic consequences and our national security. The Court struck down the order because:
[the] President's order does not direct that a congressional policy be executed in a manner prescribed by Congress -- it directs that a presidential policy be executed in a manner prescribed by the President.
Id ., at 588, 72 S. Ct. at 867.
The gasoline conservation fee at issue in the instant litigation does not fall within the inherent powers of the President, is not sanctioned by the statutes cited by Defendants, and is contrary to manifest Congressional intent. The Court has no choice but to grant Plaintiffs the relief they seek.
Accordingly, it is by the Court this 13th day of May, 1980,
DECLARED, that the Petroleum Import Adjustment Program is unlawful; and it is
ORDERED, that Defendants, their agents, employees, successors, attorneys and all those in active concert or participation with them be, and they hereby are, enjoined from implementing or otherwise giving effect to the Petroleum Import Adjustment Program set forth in Proclamation 4744 (45 Fed.Reg . 22864; April 3, 1980), as amended by Proclamations 4748 (45 Fed.Reg . 26371, April 15, 1980) and 4751 (45 Fed.Reg . 27905; April 25, 1980).
Consolidation of the hearing on the application for preliminary relief with trial on the merits having been ordered by the Court on May 12, 1980, the foregoing constitutes the Court's Findings of Fact and Conclusions of Law pursuant to Rule 52(a) of F.R.Civ.P.