The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge
Plaintiffs, who are utilities and manufacturers in the energy industry, have filed suit to require the United States Department of Energy and two senior department officials (collectively, "DOE") to complete the distribution of crude oil overcharge refunds to more than 56,000 end users of oil products found by the DOE to be entitled to such restitution.*fn1 They complain that (1) the DOE's Office of Hearings and Appeals ("OHA") has improperly limited refunds for private-party claimants to no more than 20% of the recovered overcharges designated for restitution (with 80% going to the States and the federal government), (2) the DOE has a duty to complete the distribution of overcharge refunds to private parties, even if only the 20% set-aside, and (3) proceeds from a legal settlement in 1984 between the United States and Marc Rich & Co. A.G. and Marc Rich & Co. International (collectively, "Marc Rich Companies") should be included in the 20% reserve funds.
Pending before the Court are the DOE's motion to dismiss or, in the alternative, for summary judgment and Plaintiffs' motion for partial summary judgment. The DOE seeks to dispose of the entire case, while Plaintiffs request summary judgment only on the second count of their complaint.*fn2 For the following reasons, the Court grants in part and denies in part both the DOE's motion for summary judgment and Plaintiffs' motion for partial summary judgment.
A. Brief History of the Crude Oil Refund Process
Thirty years ago, the Organization of Petroleum Exporting Countries ("OPEC") imposed an oil embargo on the United States, causing the price of crude oil in this country to rise dramatically. Congress responded to this economic crisis by passing the Emergency Petroleum Allocation Act of 1973 ("EPAA"), 15 U.S.C. § 751 et seq.*fn3 Under that statute, the DOE and its predecessor, the Federal Energy Administration, issued price control orders governing the sale and resale of crude and refined oil. The EPAA empowered the DOE to recover overcharge amounts from violators of the price controls, which remained in effect until January 1981.*fn4 The DOE's authority to seek restitution of illegal overcharges was subsequently repealed, barring actions commenced after September 30, 1988, or six years after an alleged price control violation, whichever was later. See 15 U.S.C. § 4504(a)(1). Through this process, the DOE has collected billions of dollars.
In 1986, within the context of a settlement of multi-district litigation in In re Dep't of Energy Stripper Well Exemption Litig. (" Stripper Well "), 653 F. Supp. 108 (D. Kan. 1986), the DOE agreed to a restitutionary policy for cases involving crude oil overcharges that would allow private parties to recoup losses. The parties in the Stripper Well litigation accepted certain funds that had been placed in escrow and waived all existing and future claims to refunds. See id. at 114. For non-parties – such as Plaintiffs in this case – the DOE set up a process for victims of overcharges to submit claims for refunds. To pay such claims, the agreement authorized the OHA to reserve in escrow 20% of all crude oil overcharges recovered from current and future collections by the DOE. See Settlement Agreement IV.B.6, reprinted in 7 Energy Mgmt. (CCH) ¶ 90,509. The remaining 80% would be split equally between the States and the federal government.
In conjunction with the Stripper Well litigation settlement agreement, the DOE adopted a Modified Statement of Restitutionary Policy for Crude Oil Cases ("MSRP"), 51 Fed. Reg. 27,899 (Aug. 4, 1986). The OHA solicited comments concerning the appropriate procedures to be employed, see 51 Fed. Reg. 29,689 (Aug. 20, 1986), and subsequently issued a Notice Explaining Procedures for Processing Refund Applications in Crude Oil Refund Proceedings under 10 C.F.R. Part 205, Subpart V ("Notice"), 52 Fed. Reg. 11,737 (Apr. 10, 1987). The Notice outlined the application process, the nature of proof required to show overcharges, the methodology for the calculation of refunds,*fn5 and the OHA's intention to reserve 20% of the funds for private-party claimants. See id. at 11,737-11,744. The OHA stated, "The remaining 80 percent, and any unclaimed funds, will be divided between the State and Federal governments as representatives of the energy-consuming public." Id. at 11,739. It added, "Under the MSRP, up to 20 percent of the alleged crude oil violation amount may be reserved for the payment of claims to injured persons. For the present time, OHA has decided to reserve the entire 20 percent to ensure that adequate funds will be available for refunds." Id. at 11,744. Furthermore, the OHA announced that it would follow a policy of "full parity," whereby those who received refunds after the Stripper Well litigation would be compensated on the same basis as participants in that settlement. Monies for the States and the federal government have been disbursed as they were collected; other monies have been distributed as claimants have made claims.
The OHA has now processed over 100,000 claims and – based on the parties' representations at a motions hearing held on April 29, 2003 – has 12 initial applications and 13 applications for supplemental refunds remaining.*fn6 The 20% funds are no longer receiving new money, as the program's enforcement ended years ago. As of August 21, 2001, Plaintiffs state that the reserve for restitution to private parties held approximately $262.2 million in four "Crude Tracking-Claimants" accounts and a "Citronelle-End Users" account. Plaintiffs have received approximately $90 million in total by availing themselves of the Notice procedures. In all, as of August 21, 2001, the DOE has apparently distributed more than $610 million to individual end-user claimants.
The Petroleum Overcharge Distribution and Restitution Act of 1986 ("PODRA"), 15 U.S.C. §§ 4501-4507, expressed congressional preference for individual restitution rather than distribution solely to governmental entities. "The PODRA requires the DOE to reserve sufficient funds to make restitution to those who suffered the actual losses, 15 U.S.C. § 4502(c)(1), and to pay the excess to federal and state treasuries 'as indirect restitution[.]'" Texas Am. Oil Corp. v. Dep't of Energy, 44 F.3d 1557, 1568 (Fed. Cir. 1995) ( en banc ). The PODRA directs that "the Secretary [of Energy] shall give primary consideration to assuring that at all times sufficient funds (including a reasonable reserve) are set aside for making such restitution" with the "excess" to be disbursed to government agencies at the State and federal levels. 15 U.S.C. § 4502(c)(1). This principle applies to crude oil refunds as well as refined product refunds. See Texas Am. Oil Corp., 44 F.3d at 1568; see also Getty Oil Co. v. Dep't of Energy, 117 F.R.D. 540, 546 (D. Del. 1987), aff'd, 865 F.2d 270 (TECA 1988) (The "PODRA and its legislative history demonstrate that an acceptable distribution plan for a crude oil overcharge fund must include a mechanism for direct restitution to injured private persons.").
In 1998, Congress repealed those sections of the PODRA that established a procedure for the DOE to reserve a portion of the refined product refunds that was estimated necessary for individual restitution. See 15 U.S.C. § 4502. It specifically provided, however, that the "Secretary [of Energy] shall assure that the amount remaining in escrow to satisfy refined petroleum product claims for direct restitution is allocated equitably among the claimants." 15 U.S.C. § 4502(e). While this action is not directly relevant to this lawsuit for crude oil refunds, Plaintiffs argue that its statement of principle must be applied to their claim for total restitution.
C. Settlement with the Marc Rich Companies
In October 1984, the Marc Rich Companies settled with the United States Attorney for the Southern District of New York certain claims for crude oil overcharges and the failure to pay taxes on the illegal profits gained from these overcharges. Under the terms of the settlement, the Marc Rich Companies paid $150 million to the United States. Plaintiffs assert that the DOE had a statutory obligation under the ...