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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 20, 2006 Decided June 9, 2006
No. 05-5302
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC., ET AL.,
APPELLANTS
v.
SAMUEL W. BODMAN,
SECRETARY OF UNITED STATES DEPARTMENT OF ENERGY AND
GEORGE B. BREZNAY, DIRECTOR, OFFICE OF HEARINGS AND
APPEALS OF THE U.S. DEPARTMENT OF ENERGY,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 04cv00382)
Philip P. Kalodner argued the cause and filed the briefs for
appellants.
Stephen C. Skubel, Counsel, U.S. Department of Energy,
argued the cause for appellees. With him on the brief was
2
Thomas H. Kemp, Counsel.
Before: SENTELLE, ROGERS and GRIFFITH, Circuit Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
ROGERS, Circuit Judge: This appeal is the latest iteration in
a series of related lawsuits that involve the question whether
States and federal agencies can obtain refunds under the 1986
Stripper Well settlement.1 Consolidated Edison et al. (“the
Claimants”) appeal the dismissal of their complaint against the
Department of Energy (“DOE”) and its Office of Hearings and
Appeals (“OHA”) on the ground that the district court erred in
holding that the doctrine of issue preclusion barred the suit. In
light of the interpretation by the United States Court of Appeals
for the Federal Circuit of its exclusive jurisdiction of “an appeal
under section 211 of the Economic Stabilization Act of 1970,”
28 U.S.C. § 1295(a)(11), we hold that this court has jurisdiction
to address the preclusion issue and that the district court did not
err. Accordingly, we affirm the dismissal of the complaint.
I.
In the early 1970s, the Organization of Petroleum Exporting
Countries imposed an oil embargo on the United States, which
caused the price of oil to rise dramatically. See Consol. Edison
Co. of N.Y v. Abraham, 271 F. Supp. 2d 104 (D.D.C. 2003). In
response, acting under the Economic Stabilization Act of 1970
(“ESA”), Pub. L. No. 92-210, 85 Stat. 743 (former 12 U.S.C. §
1904 note (1971)), and the Emergency Petroleum Allocation Act
1
See, e.g., Consol. Edison Co. of N.Y. v. O’Leary, 117 F.3d
538, 545 (Fed. Cir. 1997); Consol. Edison Co. v. Herrington, 752 F.
Supp. 1082 (D.D.C. 1990), aff’d, 927 F.2d 1277 (Temp. Emer. Ct.
App. 1991).
3
(“EPAA”), Pub. L. No. 93-159, 87 Stat. 627 (former 15 U.S.C.
§ 751 et seq. (1973)), the DOE imposed price controls on crude
oil sold in the United States between 1973 and 1981. When
certain producers were found to have violated the price controls
and overcharged for crude oil, the DOE obtained refunds from
them. See Consol. Edison Co. v. O’Leary, 117 F.3d 538, 540
(Fed. Cir. 1997). A long-running and complex lawsuit then
commenced regarding the fate of the refunded overcharges. The
parties to this litigation, which was known as the Stripper Well
suit, were the DOE, the fifty States and six Territories and
Possessions (the “States”), and various non-governmental
entities, including refiners, retailers, and utilities. In re Dep’t of
Energy Stripper Well Exemption Litig., 653 F. Supp. 108, 110
(D. Kan. 1986) (“Stripper Well”). In 1986, the parties entered
into a settlement agreement (the “Settlement Agreement”) that
set forth the scheme for allocating the refunded overcharges, and
the district court in Kansas approved the agreement. See id.
By the terms of the Settlement Agreement and the DOE’s
Modified Statement of Restitutionary Policy for Crude Oil
Cases, 51 Fed. Reg. 27,899 (Aug. 4, 1986), the refunded
overcharges would be apportioned between parties and non-
parties to the Stripper Well suit. The non-governmental entities
that were parties received certain funds that had been placed in
escrow and in return waived all existing and future claims to
refunds. See Stripper Well, 653 F. Supp. at 114. The remaining
funds and any money that was yet to be recovered by the DOE
would be split between the government parties, with half going
to the DOE and half going to the States. Id. at 112-13. For
non-parties, the Settlement Agreement directed the DOE to
“establish an initial reserve . . . amounting to twenty percent of
the funds received by the DOE and to disburse the remaining
eighty percent in advance of the implementation of a claims
procedure.” Id. at 114. The DOE and its OHA allocated the
20% portion—the Reserve Fund—among claimants according
4
to a system known as “Subpart V.” See 10 C.F.R. Pt. 205,
subpt. V.
On March 9, 2004, the Claimants, a group of energy utilities
and manufacturers that are entitled to recover from the Reserve
Fund, filed a complaint for a declaratory judgment that the
federal government and State governments, as well as their
respective departments and agencies, are not entitled to recover
from the Reserve Fund because they were parties to the
Settlement Agreement. Alleging that they will be denied more
than $18 million by virtue of past or future distributions to the
federal government and the States, the Claimants also sought an
order prohibiting the DOE from disbursing any funds to
governments and requiring the DOE to seek restitution of funds
already disbursed. The DOE moved to dismiss the complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6) on the
ground the doctrine of issue preclusion barred the Claimants
from re-litigating the matters in their complaint. In response,
the Claimants moved for summary judgment.
The district court dismissed the complaint and denied the
Claimants’ motion for summary judgment, ruling that the
complaint was barred by the issue preclusive effect of
Consolidated Edison Company of New York v. Abraham, 2002
U.S. Dist. LEXIS 26907 (October 16, 2002) (“ConEd IV”),
which it ruled had determined that the States and non-DOE
federal entities were entitled to receive refunds from the Reserve
Fund. Consol. Edison Co. of N.Y. v. Abraham, 2005 WL
736523, *6 (D.D.C. March 31, 2005). In the alternative, the
district court ruled that the Claimants could not prevail on the
merits of their complaint because the DOE’s participation in the
Settlement Agreement did not waive the rights of non-DOE
federal agencies or the States to claim refunds from the Reserve
Fund. Id. Upon the denial of their motion to alter or amend the
judgment under Federal Rule of Civil Procedure 59(e), the
5
Claimants filed simultaneous appeals in this court and the
United States Court of Appeals for the Federal Circuit,
successfully moving to stay the latter appeal until this court
determined whether it has jurisdiction.
II.
Section 5 of the EPAA incorporated the judicial-review
provisions of section 211 of the ESA. See EPAA, Pub. L. No.
93-149, 87 Stat. 627, 633 (1973) (codified as amended at former
15 U.S.C. § 754 (1973)). Section 211 of the ESA placed
exclusive jurisdiction over appeals from the district courts in
“cases or controversies arising under” the ESA in the Temporary
Emergency Court of Appeals (“TECA”). See Economic
Stabilization Act Amendments of 1971, Pub. L. No. 92-210, §
211(a), 85 Stat. 743, 748-49 (1971). That court was dissolved
by Congress and its jurisdiction over ESA issues was transferred
to the Federal Circuit. See Federal Courts Administration Act
of 1992, Pub. L. No. 102-572, § 102, 106 Stat. 4506 (codified as
amended at 12 U.S.C. § 1904 note and 28 U.S.C. § 1295(a)(11)).
Consequently, because the Federal Circuit has exclusive
jurisdiction over appeals “under section 211 of the [ESA],” 28
U.S.C. § 1295(a)(11), the DOE maintains the court must dismiss
the instant appeal for lack of jurisdiction.
A court has jurisdiction to determine its jurisdiction, Nestor
v. Hershey, 425 F.2d 504, 511 (D.C. Cir. 1969); see also Atl.
Richfield Co. v. U.S. Dep’t of Energy, 769 F.2d 771, 778 (D.C.
Cir. 1984), and the jurisdictional issue is a matter of law for this
court to decide. See Atl. Richfield Co., 769 F.2d at 778.
The question whether this court has jurisdiction to address
the DOE’s claim of issue preclusion is resolved by Consolidated
Edison Co. of N.Y. v. Ashcroft, 286 F.3d 600, 603 (D.C. Cir.
2002) (“Ashcroft”). In that case, the court relied on the
6
interpretation of section 211 of the ESA by the Federal Circuit
in Texas American Oil Corp. v. United States Department of
Energy, 44 F.3d 1557 (Fed. Cir. 1995) (en banc). In Texas
American, the Federal Circuit held that its jurisdiction under
section 211 of the ESA is limited to “issue” jurisdiction, not
“case” or “arising under” jurisdiction. Id. at 1564. Affirming
the two-part test adopted by the TECA, the Federal Circuit held
that an issue falls within its exclusive jurisdiction if “(1)
resolution of the litigation must have required application or
interpretation of the EPAA/ESA or its regulations, and (2) the
EPAA/ESA issue must have been adjudicated in the district
court.” Id. at 1563-64; see Ashcroft, 286 F.3d at 603. The
Federal Circuit reaffirmed this test in Consolidated Edison Co.
of New York v. Abraham, 303 F.3d 1310, 1314-15 (Fed. Cir.
2002), and expressly disparaged, as dictum, a statement by the
Tenth Circuit that any controversy involving the interpretation
of the Settlement Agreement was within the exclusive
jurisdiction of the Federal Circuit. Id. (citing In re Dep’t of
Energy Stripper Well Litig., 206 F.3d 1345, 1350 (10th Cir.
2000)).
Analyzing whether a complaint is barred by the doctrine of
issue preclusion does not involve “application or interpretation
of the ESA/EPAA or its regulations,” Texas Am., 44 F.3d at
1563, and hence, “[t]he issue raised here fails the first element
of the Texas American test.” Ashcroft, 286 F.3d at 603. Rather,
issue preclusion analysis requires comparing the issues actually
litigated and determined in an earlier lawsuit with the issues that
the Claimants seek to litigate in their complaint. By the same
token, a court conducting an issue preclusion analysis does not
review the merits of the determinations in the earlier litigation.
Cf. Fogg v. Ashcroft, 254 F.3d 103, 111 (D.C. Cir. 2001). The
issue preclusion analysis is thus “sufficiently separate” from a
substantive determination under the ESA/EPAA that it lies
within this court’s jurisdiction. See Ashcroft, 286 F.3d at 603
7
(citing Bray v. United States, 423 U.S. 73, 75-76 (1975)).
III.
Under the doctrine of issue preclusion, “binding effect [is
to be given] to the first resolution of an issue.” Fogg, 254 F.3d
at 110. “The law of collateral estoppel,” of which issue
preclusion is a part, see Jack Faucett Assocs. v. Am. Tel. & Tel.
Co., 744 F.2d 118, 124 (D.C. Cir. 1984), “is intended to protect
the parties from the burden of relitigating the same issue
following a final judgment and to promote judicial economy by
preventing needless litigation.” Freeman United Coal Mining
Co. v. Office of Workers’ Comp. Program, 20 F.3d 289, 294 (7th
Cir. 1994). Its objective is “judicial finality.” Yamaha Corp. of
Am. v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992).
“When an issue of fact or law is actually litigated and
determined by a valid and final judgment, and the determination
is essential to the judgment, the determination is conclusive in
a subsequent action between the parties, whether on the same or
a different claim.” Fogg, 254 F.3d at 111 (internal quotation
marks omitted) (citing RESTATEMENT (SECOND) OF JUDGMENTS
§ 27 (1981)). In addition, “preclusion in the second case must
not work a basic unfairness to the party bound by the first
determination.” Yamaha, 961 F.2d at 254. Each of these
requirements is met here.
In ConEd IV the parties actually litigated the question of
government claims to the Reserve Fund. The Claimants
concede as much, noting that Claimants had argued that a State-
owned utility, as a “party” to the Settlement Agreement, could
not claim from the Reserve Fund, see Appellant’s Br. at 33-34,
and that Claimants had argued for government party ineligibility
to the Reserve Fund, see id. at 37. If this issue was actually and
necessarily decided, the prior decision would be conclusive and
require dismissal of the Claimants’ complaint, which seeks the
8
opposite result. Resolving that the question of government party
ineligibility was “actually . . . determined” and was “necessarily
determined” is clear upon reviewing the district court’s opinion
in ConEd IV.
ConEd IV involved the Claimants’ challenge to the DOE’s
payment of funds from the Reserve Fund to the Puerto Rico
Electric Power Authority (“PREPA”). The Claimants argued
that “as a governmentally owned utility company, PREPA is
disqualified from receiving any portion of the 20% of crude oil
refunds reserved for individual claimants,” and, “in the
alternative, that even if PREPA is a qualified claimant, OHA
failed to discharge its responsibility to investigate the particulars
of PREPA’s claims.” ConEd IV, 2002 U.S. Dist. LEXIS 26907,
at *6. In rejecting the first claim, the district court addressed the
“variety of contextual arguments” made by Claimants, id. at
*11, and found them to be unsupported by “law, regulatory
decision, or provision of the settlement,” id. at *12. The district
court determined that if the parties to the Settlement Agreement
had intended to waive their rights to recover from the Reserve
Fund “they would have incorporated such a waiver as was
incorporated in the waivers signed by the other
[non-governmental] signatories to the [Settlement]
[A]greement.” Id. at *12 (internal quotation marks omitted).
The district court then analyzed the “only textual support” for
Claimants’ argument, id. at *15, which consisted of two
statements by the Stripper Well district court to the effect that
the Reserve Fund was created to benefit “individuals” and “non-
parties.” Id. at *14 (citing Stripper Well, 653 F. Supp. at 114,
117). The district court determined that the mention of “non-
parties” “does not specifically exclude reimbursement to
party-owned entities” because, in approving the Settlement
Agreement, the Kansas district court was “merely not[ing] that
the [A]greement provides for reimbursement by entities not
entering into the [S]ettlement [A]greement.” Id. at *17-*19.
9
After disposing of the rest of the Claimants’ arguments, the
district court in ConEd IV concluded:
In summary, [Claimants] have presented for the
Court’s review a number of theories in support of
their contention that government-owned utilities are
not entitled to partake in Subpart V refunds. Their
arguments lack legal, textual and factual support. As
such, this Court cannot conclude that Plaintiffs have
presented more than a “scintilla of evidence” in
support of their position.
Id. at *22-*23 (emphasis added).
The Claimants’ suggestion that ConEd IV established only
the rights of “‘governmentally owned’ ‘utilities’” and not of
“‘governmental entities,’” Reply Br. at 13, is untenable. In
ConEd IV, the district court rejected the Claimants’ argument
that the fact that the Settlement Agreement barred
governmentally owned utilities from recovering from an escrow
account created for non-governmental utility companies meant
that the Settlement Agreement also barred governmentally
owned utilities from recovering from the Reserve Fund. ConEd
IV, 2002 U.S. Dist. LEXIS 26907, at *12. The district court
reasoned that the government parties to the Settlement
Agreement had signed no waiver of their rights to
reimbursement from the Reserve Fund and that if these parties
had intended to waive their rights to the Reserve Fund “they
would have incorporated such a waiver as was incorporated in
the waivers signed by the other [non-governmental] signatories
to the [Settlement] [A]greement.” Id. (internal quotation marks
omitted). In other words, in ConEd IV the district court ruled
that the Commonwealth of Puerto Rico, a party to the Settlement
Agreement, did not sub silentio waive its right to claim from the
Reserve Fund. Consistent with this conclusion, the district court
allowed OHA to disburse Reserve Funds to PREPA. The
10
district court could not have done so if PREPA’s state-owned
status precluded recovery because Puerto Rico was barred from
claiming from the Reserve Fund. The proposition that a non-
DOE government party, or its owned entities, may claim from
the Reserve Fund was therefore both actually determined and
necessarily determined by ConEd IV.
Likewise, the Claimants’ suggestion that the district court
in ConEd IV did not resolve the rights of a “government party
. . . which is claiming for itself, and not for individuals to whom
it must pass on any recovered refunds,” Reply Br. at 16, is a
distinction having no support in ConEd IV. It is true that after
noting that OHA was permitted to make refunds conditioned on
the pass-through of the refunds to customers, the district court
pointed out that OHA had exercised its discretion in approving
PREPA’s application and that by so doing OHA had ensured
that “individuals” would receive the benefits of the refunded
amounts. ConEd IV, 2002 U.S. Dist. LEXIS 26907, at *16-*17.
But the district court determined that “the term ‘individuals’ is
not defined in the [S]ettlement [A]greement,” and there was “no
indication” that the Kansas district court, which approved the
Settlement Agreement, used that word to indicate its
understanding that “Subpart V funds not set aside for the State
or federal governments were precluded from being dis[bu]rsed
to state-owned utilities as their government ownership denies
them the ability to claim they are ‘non-parties’ or ‘individuals.’”
Id. at *15. Further, regarding the non-party issue, the district
court stated in ConEd IV that the Settlement Agreement, as
interpreted by the Kansas district court, “does not specifically
exclude reimbursement to party-owned entities.” Id. at *19.
This statement again establishes that, as construed by the
district court in ConEd IV, party-owned entities, such as other
State and federal departments and agencies, may obtain
reimbursement from the Reserve Fund. Id.
11
For these reasons, we conclude that the district court in
ConEd IV actually addressed the issue posed by the Claimants
here—whether States and non-DOE parts of the federal
government, and their departments and agencies, are eligible to
obtain reimbursement from the Reserve Fund—and necessarily
resolved the question in a manner adverse to the Claimants.
Because the other elements for a finding of issue preclusion are
also met, and because the Claimants had “one fair and full
opportunity to prove a claim and [have] failed in that effort,”
they may not re-litigate the claim a second time, see
Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S.
313, 324-25 (1971), and we affirm the dismissal of the
complaint.