In re the Department of Energy Stripper Well Exemption Litigation, M.D.L. No. 378

GRANT, Judge,

concurring.

I concur fully in the judgment of the court affirming the ruling of the district court. My separate writing is solely a re*1485flection upon the scope of our review of that lower court decision.

Resolution of the issue below, whether the Department of Energy had violated the terms of the Final Settlement Agreement, required examination of the provisions of that Agreement. The Settlement Agreement is, of course, a contract; the court’s determination whether its terms are ambiguous is a matter of law subject to plenary de novo review by an appellate court. Kern Oil & Refining Co. v. Tenneco Oil Co., 840 F.2d 730, 736 (9th Cir.1988); In re Raymark Industries, Inc., 831 F.2d 550, 553 (5th Cir.1987); Teton Exploration Drilling v. Bokum Resources Corp., 818 F.2d 1521, 1526 (10th Cir.1987); Arkansas Rice Growers Co-op Ass’n. v. Alchemy Industries, Inc., 797 F.2d 565, 567 (8th Cir.1986). If the trial court finds that the contract is unambiguous, it must then go on to declare its meaning. Such a declaration is also a conclusion of law and may be reviewed de novo. However, if the plain meaning of the contract’s provisions is not clear, causing the factfinder to seek the intent of the parties by reference to extrinsic evidence necessary for interpretation of the contract, the appellate court must review that finding of fact under the clearly erroneous standard. LaSalle National Bank v. Service Merchandise Co., 827 F.2d 74, 78 (7th Cir.1987); RCI Northeast Service Div. v. Boston Edison Co., 822 F.2d 199, 202 (1st Cir.1987); In re Cement and Concrete Antitrust Litigation, 817 F.2d 1435, 1443 (9th Cir.1987).

Before finding that DOE did not violate any provision of the Settlement Agreement, the district court examined the pertinent paragraphs in light of the parties’ interpretation. Turning to the Energy Regulations of 10 C.F.R. Part 205, Subpart Y as the only evidence extrinsic to the Agreement that was necessary for interpretation of the contract, it found no basis under the contract for the States’ position. This court’s de novo review of the Agreement confirms the lower court analysis. After considering the contested clauses and reading the contract as a whole, we agree that the language of the Agreement is unambiguous and that no provision has been violated by DOE’s adoption of a particular refund formula. The Agreement requires that DOE process the applications for refunds pursuant to existing Subpart V regulations. It further states that nothing in the Agreement may be construed to amend the Subpart V Regulations. Agreement at 11 IV.B.l. A thorough review of the Agreement and the regulations makes clear that neither document delineates the allocation formula to be used by DOE for its refunds. By obvious implication, the precise process for distribution was left to DOE’s discretion; nothing in either document contradicts such an understanding or suggests a different intention by the parties to the Agreement. In light of the clarity of language in the Agreement, this court affirms the district court’s holding that DOE’s implementation of a particular formula did not violate the Agreement.

When making its determination, the district court examined the Subpart V regulations as well as the Agreement. Appellate review of a district court’s analysis of the language of a statute or regulation is also de novo. In re Cement and Concrete Antitrust Litigation, 817 F.2d at 1443. Nevertheless, this court has long recognized the judicial deference to be accorded to an agency’s interpretation of the regulations it is charged with administering. In re Dept. of Energy Stripper Well Exemption Litigation, 690 F.2d 1375, 1392 (TECA 1982). The judicial function is accomplished when there is found to be a rational basis for the conclusions approved by the agency. City of Long Beach v. Department of Energy, 754 F.2d 379, 386 (TECA 1985). Accord, Union Oil Company v. Department of Energy, 688 F.2d 797, 807 (TECA 1982), cert. denied, 459 U.S. 1202, 103 S.Ct. 1186, 75 L.Ed.2d 433 (1983).

Recognizing in the early stages of this multi-district litigation that the DOE’s Office of Hearing and Appeals “has developed procedures for refund claims in overcharge cases and is better equipped than the Court to make preliminary findings concerning the particular impact of overcharges of various parties,” the district court referred to the OHA the question of *1486the appropriate method for effecting restitution to the victims of the overcharges. In re The Department of Energy Stripper Well Exemption Litigation, 578 F.Supp. 586, 596 (D.Kan.1983). Thereupon OHA held hearings, submitted reports and a Statement of Restitutionary Policy, and offered recommendations; it then established a restitutionary policy using the specific procedures for processing refund applications found in 10 C.F.R. Part 205, Subpart V. After long negotiations, the parties approved the Final Settlement Agreement, which required DOE to issue a Modified Statement of Restitutionary Policy establishing that refund applications would be processed pursuant to the existing Subpart Y regulations. Agreement at ¶ IV.B.I.

The DOE, following this mandate, issued the Modified Statement of Restitutionary Policy and solicited comments concerning the appropriate procedures to be employed in calculating refunds. On April 10, 1987, OHA issued a “Notice Explaining Procedures for Processing Refund Application in Crude Oil Refund Proceedings Under 10 CFR Part 205, Subpart V.” 52 Fed.Reg. 11737. The Notice presented a “full parity” approach to allocating overcharges, and explained the reason for selecting such a method:

The “full parity” approach compensates refund recipients in M.D.L. 378 and in Subpart V proceedings on an equal footing and most fairly and equitably effectuates restitution for the injury they suffered as a result of crude oil overcharges. It is also the most administratively efficient for Subpart V proceedings since it tends to eliminate repetitive reapplications and obviates the need to consider nettlesome questions of “upstream” overcharge absorption by middlemen in the oil distribution chain.

52 Fed.Reg. at 11741.

As the district court states, and as we confirm after a full review of the record, neither the Final Settlement Agreement nor the Subpart V regulations provide a particular formula that DOE must employ in calculating refunds in the crude oil refund proceedings. The approach adopted by DOE after receiving comments from interested parties is a reasonable and efficient method of apportioning the overcharge funds. Because we find a rational basis for the conclusions of DOE, we affirm the court’s analysis of the Subpart V regulation.

In conclusion, this court has reviewed de novo the district court’s interpretations of the Final Settlement Agreement and the Subpart V regulation, mindful of the deference to be paid DOE’s interpretation of its regulations. Perhaps this concurrence states the obvious by pointing out that the court followed the appropriate standard of review in arriving at its holding. Nevertheless, because I approached the issue from that perspective, I have written separately to delineate our role in reviewing the district court’s holding. Our de novo review clearly results in the affirmation of the district court’s order.