666 F.

2d 1359

ATLANTA GAS LIGHT COMPANY, Petitioner,

v.
U. S. DEPARTMENT OF ENERGY, James B. Edwards,
Secretary of
Energy, Economic Regulatory Administration, Hazel
Rollins, Administrator, Respondent.
ENTEX, INC., Petitioner,
v.
U. S. DEPARTMENT OF ENERGY, ECONOMIC
REGULATORY
ADMINISTRATION, Respondent.
LACLEDE GAS COMPANY, Petitioner,
v.
U. S. DEPARTMENT OF ENERGY, James B. Edwards,
Secretary of
Energy, Economic Regulatory Administration, Hazel
Rollins, Administrator, Respondent.
AMERICAN GAS ASSOCIATION, Petitioner,
v.
U. S. DEPARTMENT OF ENERGY, James B. Edwards,
Secretary of
Energy, Economic Regulatory Administration, Hazel
Rollins, Administrator, Respondent.
Nos. 79-2568, 79-3237, 80-1573, 80-7491 and 80-7528.

United States Court of Appeals,

Eleventh Circuit.
Feb. 1, 1982.

Morgan, Lewis & Brockius, John E. Holtzinger, Jr., Karol Lyn Newman,
Irvin N. Shapell, Washington, D. C., for Atlanta Gas Light Co.
Patrick J. Keeley, Michael J. Manning, John M. Simpson, Fulbright &

Jaworski, Washington, D. C., for Entex, Inc.

John A. Myler, Asst. Gen. Counsel, Arlington, Va., for American Gas
Assn.
Bryan, Cave, McPheeters & McRoberts, James J. Murphy, Washington,
D. C., for Laclede Gas Assn.
John L. Gurney, Paul C. Wallach, Marya Rowan, Lynn R. Coleman,
Russell L. Weaver, Thomas H. Kemp, Anne S. Almy, Peter M. Shane,
Dept. of Energy, Margaret A. Weeks, Kathryn A. Oberly, Bingham
Kennedy, Dept. of Justice, Washington, D. C., for respondent.
Petitions for Review of Orders of the U. S. Department of Energy, the
Economic Regulatory Administration.
Before TUTTLE, HATCHETT and ANDERSON, Circuit Judges:
TUTTLE, Circuit Judge:

This case arises out of a pre-enforcement challenge to the constitutionality of

several provisions of the Power Plant and Industrial Fuel Use Act of 1978 (Fuel
Use Act or Act), 42 U.S.C.A. 8301, et seq. (1981), as amended by Omnibus
Budget Reconciliation Act of 1981, Pub.L. No. 97-35, 95 Stat. 617 (1981).
Additionally the petitioners attack the constitutionality of the regulations
promulgated by the Secretary of Energy pursuant to the Fuel Use Act. In this
appeal we consider whether the statute and its accompanying regulations
violate the Due Process Clause of the Fifth Amendment, and whether
Congress, in passing the Act, exceeded the limits of its constitutional authority
as embodied in both the Commerce Clause and the Tenth Amendment. We
conclude that in a pre-enforcement context such as the one presented here, the
Act and its regulations cannot be held to be unconstitutional.

I.
A.
2

On November 9, 1978, the President signed into law five bills in a

comprehensive attempt to improve our nation's energy situation. The Fuel Use
Act, the subject of controversy in the present case, is one of the acts in this
legislative package.1

The purposes of the Fuel Use Act are, inter alia, to conserve natural gas for

The purposes of the Fuel Use Act are, inter alia, to conserve natural gas for
industrial uses for which there are no alternative fuels; to insure that adequate
supplies of natural gas are available for certain essential agricultural uses; and,
to reduce the vulnerability of the United States to energy supply interruptions.
42 U.S.C.A. 8301(b) (1981). The predominant means of effectuating these
goals are the Act's prohibitions on the use of natural gas or petroleum as a
primary energy source in any new electric powerplant or major fuel burning
installations, and the Act's requirement that existing powerplants convert to
coal or other alternative fuels by January 1, 1990. 42 U.S.C.A. 8311, 8341
(1981). In addition, the Act restricts the use of natural gas in outdoor lighting.
42 U.S.C.A. 8372 (1981). This latter provision regulating outdoor lighting is
the focus of the present appeal.

Section 402 of the Act instructs the Secretary of the Department of Energy to
issue a rule prohibiting local gas distribution companies both from providing
natural gas for use in outdoor lighting, 42 U.S.C.A. 8372(b)(1), and from
installing any outdoor lighting fixtures using natural gas. 42 U.S.C.A.
8372(a).2 Violators of Section 402(b)(1) are subject to a fine not to exceed $500
for each outdoor lighting fixture involved. 42 U.S.C.A. 8433 (1981).

The Secretary of Energy is charged with primary responsibility for

administering and enforcing the Act, and is authorized to promulgate
regulations to that end. 42 U.S.C.A. 8372(d), 8431 (1981). In addition, the
Secretary may delegate to the appropriate regulatory authority of the states all
authorities and responsibilities regarding outdoor lighting under Section 402. 3
Persons aggrieved by any final rule or order promulgated by the Secretary
under the Act are granted a statutory right to file a petition for review in the
United States Court of Appeals for the circuit wherein the person resides or has
his or her principal place of business. 42 U.S.C.A. 8412(c) (1981).4

The regulations dealing with outdoor gaslighting were published on May 10,
1979, see 44 Fed.Reg. 27606 (1979), and amended on May 23, 1980. 45
Fed.Reg. 35206 (1980), later codified at 10 CFR 516.10-.47 (1981). In these
regulations, the Secretary issued a rule prohibiting installation of gaslights and
distribution of gas for use in such lights in accordance with the explicit mandate
of Section 402. In addition, the Secretary delegated his authorities and
responsibilities to the appropriate state regulatory authority as permitted by the
Act. Finally, the Secretary promulgated regulations authorizing the Department
of Energy to rescind this delegation if it is found that a state has failed to
comply with the Act or the regulations. See 10 CFR 516.30-.32 (1981).

In August of 1981 Congress passed the Omnibus Budget Reconciliation Act of

1981, Pub.L. No. 97-35, 95 Stat. 617 (1981). Section 1024 of this Act amends
the Fuel Use Act by eliminating the prohibition on distribution of natural gas to
residential users for outdoor lighting purposes in fixtures that were in use
before November 9, 1978. These amendments also require local gas
distribution companies to inform their customers about the amount and cost of
natural gas used in outdoor lighting, and to report to the Secretary on their
methods of dispersing such information.5 Implementing regulations for these
amendments have not yet been published.
B.
8

On July 2, 1979, Atlanta Gas Company (Atlanta Gas) petitioned this Court for
review of the Fuel Use Act regulations published in May, 1979. Petitioners
Laclede Gas Company (Laclede) and the American Gas Association (A.G.A.)
filed briefs amicus curiae. On January 24, 1980, this Court stayed further
proceedings at the request of the government pending further rulemaking by
the Secretary. After the Secretary published the amended regulations in May of
1980, Atlanta Gas filed and was granted a motion to amend its original petition
to incorporate the amendments to the regulations. At that time this Court also
consolidated various petitions for review filed in other circuit courts of appeals
by Laclede, A.G.A., and Entex, Inc.6 Because the petitioners have appealed
directly to this Court from the rules issued by the Secretary of Energy, there is
no record of findings or conclusions of law established by a lower tribunal.

II.
9

Petitioners initially raise a facial attack on Section 402 of the statute and the
accompanying regulations, on the ground that the prohibitions contained therein
exceed the scope of congressional power under the Commerce Clause of the
Federal Constitution.7 They make three objections to the constitutionality of the
Act under the Commerce Clause. First, petitioners note that regulation of the
distribution of natural gas has been a subject of purely local concern historically
left within the purview of state or municipal regulatory authority. In support,
they rely on several relatively old cases in which the United States Supreme
Court declared that in the area of natural gas distribution, interstate commerce
ends when the gas passes into the local mains of private distribution companies.
See, e.g., East Ohio Gas Co. v. Tax Comm'n, 283 U.S. 465, 470-72, 51 S.Ct.
499, 500-01, 75 L.Ed. 1171 (1931); Public Utilities Comm'n v. Landon, 249
U.S. 236, 245, 39 S.Ct. 268, 269, 63 L.Ed. 577 (1919). Second, the petitioners
argue that Congress had no rational basis for finding that the activity of
distributing gas for outdoor lighting purposes affects interstate commerce.
Finally, they assert that the means chosen by Congress under the Fuel Use Act

is not reasonably adapted to the ends set out in the first section of the Act,
namely, to conserve natural gas and to protect industries whose only viable
source of power is natural gas.
10

We agree with the petitioners' framing of the relevant issues in a constitutional

attack upon federal legislation based upon the Commerce Clause. The
constitutionally prescribed inquiry in a Commerce Clause challenge involving
traditionally local activities necessitates at the outset an examination of the
effects of the regulated activity on interstate commerce. United States v. Darby,
312 U.S. 100, 121, 61 S.Ct. 451, 460, 85 L.Ed. 609 (1941). If such effects are
wholly lacking, then the federal law in question must be held unconstitutional.
Additionally the Court must assess the rationality of the congressional
judgment in passing the Act. This involves an inquiry into: (1) whether there is
a rational basis for Congress' determination that interstate commerce is indeed
affected by the regulated activity; and, (2) whether the means chosen are
reasonably adapted to achieve the intended legitimate goal. Hodel v. Virginia
Surface Min. & Rec. Ass'n, --- U.S. ----, 101 S.Ct. 2352, 2360, 69 L.Ed.2d 1
(1981).

11

Nevertheless, we differ with the petitioners on the appropriate result that

follows from this inquiry. The mere fact that an admittedly local or intrastate
activity such as the distribution of natural gas to local customers is affected by
federal regulation does not automatically lead to a judgment that Congress has
overstepped its powers under the Commerce Clause. As the Court said in
United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. 609 (1941), "The
power of Congress over interstate commerce is not confined to the regulation of
commerce among the states. It extends to those activities intrastate which so
affect interstate commerce or the exercise of the power of Congress over it as to
make regulation of them appropriate means to the attainment of a legitimate
end, the exercise of the granted power of Congress to regulate interstate
commerce." Id. at 118, 61 S.Ct. at 459.8 Numerous other cases make it clear
that the federal government may pass legislation to foster and protect the flow
of interstate commerce even though the regulated activity may be purely local
in character. Thus in Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed.
122 (1942), the Court upheld federal legislation setting quotas on the
production of wheat even though the regulations interfered with the wholly
local pursuit of growing wheat for personal consumption. These cases require
that the courts view the regulated activity in the context of the nationwide
movement of commerce to determine whether there exists significant effects on
interstate commerce.

12

In the present case, such effects are beyond dispute. It is of course true that the

distribution of natural gas for outdoor lighting purposes is a local activity in the
sense that its physical starting and ending points are geographically situated
within the borders of a single state. But to so view the activity is to extract it
from its place in interstate commerce and thus ignore its substantial
ramifications for, and effects upon, such commerce. Local gas companies
distribute natural gas to a variety of customers for a variety of uses. And a
significant amount of gas is used to heat the office buildings of countless
corporations, most of which are engaged in interstate, if not international,
commerce. Decisions concerning the local distribution of natural gas thus
directly affect the flow of interstate commerce. More importantly, as natural
gas becomes more scarce, the reverberative adverse effects of decisions to
supply non-necessary uses such as outdoor decorative lights will be felt with
increasing alarm in the commercial community. Even if such effects seem
minor in the context of one local gas company and its clientele, the combined
effect of distribution decisions being made by companies all over the nation is
substantial. See Wickard v. Filburn, 317 U.S. 111, 127-28, 63 S.Ct. 82, 90-91,
87 L.Ed. 122 (1942). To protect against these nationwide effects on interstate
commerce, Congress may pass laws that impinge on intrastate activities. See
United States v. Darby, supra, 312 U.S. at 114, 61 S.Ct. at 457.
13

Petitioners' citation to several relatively old United States Supreme Court cases
does not persuade us to take a different view. Federal Power Comm'n v. East
Ohio Gas Co., 338 U.S. 464, 70 S.Ct. 266, 94 L.Ed. 268 (1950); East Ohio Gas
Co. v. Tax Comm'n of Ohio, 283 U.S. 465, 51 S.Ct. 499, 75 L.Ed. 1171 (1931);
Public Utilities Comm'n of Rhode Island v. Attleboro Steam & Electric Co.,
273 U.S. 83, 47 S.Ct. 294, 71 L.Ed. 549 (1927); Missouri v. Kansas Natural
Gas Co., 265 U.S. 298, 44 S.Ct. 544, 68 L.Ed. 1027 (1924); Public Utilities
Comm'n For the State of Kansas v. Landon, 249 U.S. 236, 39 S.Ct. 268, 63
L.Ed. 577 (1919). In these cases the Court characterized the activity of
distributing natural gas as a purely local affair. They are nevertheless
distinguishable from the present case in two significant respects. First and most
importantly, the cases involved only state regulation of local gas distribution
companies and thus the question of the extent of federal commerce power was
not before the Court.9 The issue presented in each case was whether the activity
of distributing natural gas should be characterized as interstate commerce for
purposes of determining whether the disputed state regulations improperly
interfered with the flow of such commerce.10 In that context, the Court declared
the regulations permissible, holding that the interstate aspect of natural gas
commerce terminated at the local mains. E.g., Public Utilities Comm'n v.
Landon, 249 U.S. 236, 245, 39 S.Ct. 268, 269, 63 L.Ed. 577 (1919). The cases
thus serve merely to delineate the extent of the flow of interstate commerce,
and do not purport to define the extent of Congress' power to regulate activities

affecting such commerce.11 And we have already established that Congress'

power to regulate commerce is not restricted to the regulation of only interstate
activities, but extends to the regulation of local activities affecting interstate
commerce. See p. 1364 supra. The fact that the Supreme Court has
characterized gas distribution as a local activity is thus in no way determinative
of the Commerce Clause issue before us today.
14

Secondly, the Court's characterization of gas distribution as a purely local

activity must be squared with more recent cases firmly establishing that the
activity involved in this case is one in interstate commerce. In Katzenbach v.
McClung, 379 U.S. 294, 85 S.Ct. 377, 13 L.Ed.2d 290 (1964), the Court upheld
the power of Congress to prohibit racial discrimination in any restaurant serving
food that has been shipped in interstate commerce. Id. at 304, 85 S.Ct. at 383384. No party to the present case denies that much of the natural gas supplied to
local customers in one state has been piped from another state. This fact by
itself is sufficient after Katzenbach to justify our understanding of the activity
of gas distribution as one in interstate commerce.

15

With these points made we are left with the determination whether Congress
acted rationally in adopting the Fuel Use Act. In short we believe Congress did
act rationally in seeking to regulate local gas distribution by means of this Act.

16

First, it is clear that Congress had a rational basis for determining that
distributing gas for use in outdoor lights affects interstate commerce. Congress
was aware that a constant supply of natural gas is critical to the continued
operation of many commercial industries in our country. Congressman Dingell,
who introduced Section 402 of the Act, cited a study in support of the statute
demonstrating that seemingly minor steps toward conserving natural gas could
be of great protective benefit to industries that rely on gas for ongoing
operations. Transcript, Joint Conference on Energy, 95th Cong., 1st Sess. 20092011, 2033-2036 (1977). In that study the Commonwealth of Virginia found
that the potential gas savings resulting from a prohibition on natural gas use in
outdoor lighting in the state of Virginia was sufficient to sustain for several
weeks the massive local operations of the Allied Chemical Corporation. In
addition, Congressman Dingell cited statistics established by the Federal
Energy Agency estimating that the potential savings of natural gas due to a
nationwide discontinuance of service to all outdoor lights in this country would
be between 36 and 73 billion cubic feet of gas per year. Transcript, Joint
Conference on Energy at 2034.12

17

Petitioners argue that the relatively small amount of gas savings that would
result from the prohibitions in Section 402, namely, two-tenths of one percent

of all natural gas consumed annually, undercuts any rational basis Congress
may have had in determining that distribution for such consumption affects
interstate commerce. We may quickly dismiss this argument in the light of the
recent Hodel cases, wherein the Supreme Court explicitly declared that the
volume of commerce affected is not the touchstone of the rationality test under
the Commerce Clause. See Hodel v. Indiana, --- U.S. ----, 101 S.Ct. 2376, 2383,
69 L.Ed.2d 40 (1981).
18

Second, we find that the prohibitions contained in Section 402 are reasonably
adapted to the legitimate goal of protecting interstate commerce from the
adverse effects of using natural gas for outdoor lighting purposes. The gas
savings produced by the Act's prohibitions benefit commercial industries by
helping to protect them from the threat of gas shortages in critical periods of the
year. The fact that these savings represent only a small percentage of total gas
consumption does not undercut our judgment of the rationality of the means
employed in this case. In the first place, as just indicated the volume of
commerce involved is not the appropriate focus in determining the rationality
of the congressional action.13 More importantly, the relatively small gas
savings resulting from the Fuel Use Act must be considered as an integral part
of a much broader federal regulatory program aimed at shifting our nation's
energy consumption toward fuels that are more plentiful and accessible than
natural gas. When Section 402 is viewed both in conjunction with the other
provisions of the Fuel Use Act regulating fuel use by local power companies,
see p. 1362 supra, and with the four other bills enacted collectively with the
Fuel Use Act to deal with the national energy situation, see note 1, supra, we
find that Section 402 is a rational part of a larger regulatory scheme the whole
of which is reasonably adapted to the legitimate ends set out in the first
provisions of the Act.14

III.
19

The petitioners also argue that Section 402 and the regulations violate the
Tenth Amendment.15 They rely principally on the case of National League of
Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), where the
Supreme Court acknowledged that "there are limits upon the power of Congress
to override state sovereignty, even when exercising its otherwise plenary
powers to tax or to regulate commerce which are conferred by Art. I of the
Constitution." Id. at 842, 96 S.Ct. at 2470. We cannot agree with petitioners for
the reasons that follow.16

20

The most recent Supreme Court discussion of these Tenth Amendment

limitations can be found in the companion Hodel cases previously mentioned.

In Hodel v. Virginia Surface Min. & Rec. Ass'n, --- U.S. ----, 101 S.Ct. 2352, 69
L.Ed.2d 1 (1981), the Court decided that the success of a claim that the
exercise of congressional commerce power violates the holding in the Usery
case depends on the satisfaction of each of three requirements. "First, there
must be a showing that the challenged statute regulates the 'States as States.'
Second, the federal regulation must address matters that are indisputably
'attributes of state sovereignty.' And third, it must be apparent that the States'
compliance with the federal law would directly impair their ability 'to structure
integral operations in areas of traditional functions.' " Id. at 2366. (Citations to
Usery omitted.) In both Hodel cases, the Court held that the act in question (the
Surface Mining Control & Reclamation Act) did not satisfy the first
requirement of regulating the states as states and thus did not violate the Tenth
Amendment. Id.; Hodel v. Indiana, --- U.S. ----, 101 S.Ct. 2376, 2386, 69
L.Ed.2d 40 (1981). For similar reasons, we also so hold.
21

In the first place, the Fuel Use Act regulations promulgated by the Secretary of
Energy are directed not to the "States as States," but rather to the wholly private
natural gas distribution industry. They prohibit actions taken by private gas
companies. That they pre-empt state regulations contrary to or inconsistent with
their contents does not implicate the Tenth Amendment. As the Court in Usery
ruled:

22

Congressional power over areas of private endeavour, even when its exercise
may pre-empt express state-law determinations contrary to the result that has
commended itself to the collective wisdom of Congress, has been held to be
limited only by the requirement that "the means chosen by (Congress) must be
reasonably adapted to the ends permitted by the Constitution."

23

Id. 426 U.S. at 840, 96 S.Ct. at 2469 (quoting Heart of Atlanta Motel v. United
States, 379 U.S. 241, 262, 85 S.Ct. 348, 360, 13 L.Ed.2d 258 (1964)). See
Hodel v. Virginia Surface Min. & Rec. Ass'n, supra 101 S.Ct. at 2368 (1981)
(Congress does not violate the Tenth Amendment simply because it acts in a
way that displaces states' exercise of police powers).

24

It is true that the Secretary of Energy in accordance with his express statutory
authorization has delegated his administrative and enforcement powers to the
appropriate state regulatory authority. Petitioners interpret this delegation as a
mandatory scheme whereby the states are forced to administer and enforce the
regulatory prohibitions. As such they assert that the Tenth Amendment is
implicated because it coercively appropriates state regulatory power to
accomplish a federal regulatory objective. See District of Columbia v. Train,
521 F.2d 971, 990 (D.C.Cir.1975).17

25

Whatever the force of their contention we do not consider it necessary to reach

it in substance because we disagree with the petitioners' reading of the
delegation provisions. Although the Secretary has delegated his powers under
the Act, the states remain free to reject the delegation and thereby refuse to
enforce the regulations. Should any state so refuse to implement the Act, under
the terms of the Act and the regulations the Secretary can do nothing more than
rescind the delegation. See 10 C.F.R. 516.32 (1981). There is thus no element
of coercion involved in the delegation. Just as in Hodel, the Act merely
"establishes a program of cooperative federalism that allows the states within
limits established by federal minimum standards, to enact and administer their
own regulatory programs, structured to meet their own particular needs." Hodel
v. Virginia Surface Min. & Rec. Ass'n, supra 101 S.Ct. at 2366 (1981). Such a
regulatory scheme thus protects the states' interest in remaining free to
"structure integral operations in areas of traditional governmental functions,"
National League of Cities v. Usery, supra 426 U.S. at 852, 96 S.Ct. at 2474,
without running afoul of Tenth Amendment limitations.

IV.
26

The petitioners also urge this Court to hold the Fuel Use Act unconstitutionally
vague under the Due Process Clause of the Fifth Amendment.18 Essentially the
petitioners complain of substantial uncertainty as to how best to comply with
the prohibitions in Section 402. We do not reach the merits of the petitioners'
due process claim because the issue is not ripe for adjudication at this time.

27

As we have indicated previously, the Secretary of Energy has delegated to the

states his entire authority under the Fuel Use Act. See 10 C.F.R. 516.30
(1981). Under the terms of this delegation, the states have the authority to
promulgate regulations, establish exemption procedures and criteria and issue
exemption orders, and establish enforcement mechanisms and assess civil
penalties. In large part then, the regulations grant to those states that accept the
delegation broad powers to promulgate their own set of regulations and
exemption criteria. Moreover the delegation provisions give the states
substantial flexibility in promulgating these regulations. That the states possess
such regulatory freedom under the Act has been an explicit intention of
Congress and the Department of Energy from the beginning. As the
Department explained in their introductory comment to the proposed rules
published in the Federal Register, "We propose to exercise this option (to
delegate to the states), noting that the congressional conferees, in their
Explanatory Statement for the Act, explicitly encouraged DOE to do so.
Enforcement of the statutory provisions of the Act constitutes a regulatory
activity most appropriately conducted at the State level ... Delegating authority

to the appropriate state regulatory authorities, with minimum Federal guidance,

will allow sensitivity to local conditions."
28

Congress and the Department of Energy clearly intended that the states be the
primary regulators under the Fuel Use Act. Yet the petitioners in the present
case challenge on due process grounds only the federal statute and
implementing regulations, making no claim whatsoever regarding the
vagueness of a particular state's regulatory program. At this time it is not clear
which states have promulgated regulations under the Act, nor even which have
accepted the Secretary's delegation.19 Until the petitioners can show that there
presently exists a set of regulations so vague in their terms that reasonably
intelligent persons would differ as to their meaning and application, then they
have failed to establish a vagueness claim under the Fifth Amendment.
Connally v. General Construction Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70
L.Ed. 322 (1926).

29

The petitioners claim that they are uncertain as to how they must comply with
the prohibitions in Section 402 regarding distribution of gas to residential
customers. In our opinion the claim is not ripe. There is no allegation that a
particular state has indeed enacted a set of vague and uncertain rules. Neither is
there any claim that a state has or will pass regulations holding a gas
distribution company liable retroactively for violations occurring prior to the
promulgation of the state rule. Presumably, a state could, without overstepping
its powers to establish exemption criteria under the federal regulation
concerning delegation, exempt all pre-promulgation violators, thus leaving
parties such as the petitioners in this case with no injury in fact. The contingent
nature of the petitioners' due process claim is of a sort that courts have in the
past avoided until another day. See United Public Workers of America v.
Mitchell, 330 U.S. 75, 85-90, 67 S.Ct. 556, 561-65, 91 L.Ed. 754 (1947). So
shall we today.

30

DISMISSED.

The other four acts are the National Energy Conservation Policy Act, 42
U.S.C.A. 8201-8286b (1981); the Energy Tax Act, 92 Stat. 3174 (codified in
scattered sections of Title 26 of the U.S.Code); the Natural Gas Policy Act, 15
U.S.C.A. 3301-3432 (1981); and the Public Utility Regulatory Policies Act,
16 U.S.C.A. 2601-2645 (1981)

More precisely, the prohibitions in 402 detail several schedules of effective

dates depending on: (1) whether the customer is an industrial or residential

user; (2) whether the gas company was distributing to a particular customer for
gaslighting purposes on November 9, 1978; and, (3) whether the gas is being
used in a municipal outdoor lighting fixture. See 42 U.S.C.A. 8372 (1981).
These scheduling differences are not relevant to the issues before the Court in
this case
Additionally, the 1981 amendments to the Act substantially alter the extent and
timing of prohibition with respect to gas that is distributed to residential
customers.
To avoid confusion, in this opinion discussions of the provisions of the Fuel
Use Act will employ section numbers from the public law, whereas citations to
the Act will refer to section numbers in the official codification.
3

The delegation provision reads:

"(e) Authority may be delegated to the States.(1) Under regulations prescribed by the Secretary, the responsibility and
authority of the Secretary with regard to outdoor lighting under this section may
be delegated to the appropriate regulatory authority of a State if he determines
that such delegation would be consistent with the purposes of this section."
42 U.S.C.A. 8372(e)(1) (1981). Section 402(e)(2) empowers the Secretary to
rescind this delegation "at any time by notifying the State authority of such
rescission." 42 U.S.C.A. 8372(e)(2) (1981).

The statute additionally provides that whenever such a petition is filed, the
court's jurisdiction to review is prescribed by the requirements set out in the
Administrative Procedure Act. 42 U.S.C.A. 8412(c)(2) (1981). See 5
U.S.C.A. 702 (1977). These requirements include all general standing
limitations to federal court jurisdiction. See, e.g., United States v. Students
Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 93 S.Ct.
2405, 37 L.Ed.2d 254 (1973); Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct.
1361, 31 L.Ed.2d 636 (1972)

For reasons that will become clear later in this opinion, these amendments do
not affect the outcome of this case. Petitioners' claims that the amendments
present additional vagueness problems is not persuasive in light of our holding
that a due process challenge to the Act is not ripe at this time. See p. 1369 infra

Laclede Gas Company's petition for review, filed in the United States Court of
Appeals for the Eighth Circuit, was transferred to this Court, docketed as No.

80-7491, and consolidated with this proceeding by order of the Court issued on
July 9, 1980. Entex, Inc.'s petition for review was filed with this Court,
docketed as No. 80-1573, and consolidated with this proceeding on June 24,
1980. The American Gas Association's petition for review, filed in the United
States Court of Appeals for the Fourth Circuit, was transferred to this Court,
docketed as No. 80-7528 and consolidated with this proceeding on July 17,
1980
7

The Commerce Clause empowers Congress "(t)o regulate Commerce with

foreign Nations, and among the several States, and with the Indian Tribes."
U.S.Const. Art. 1, 8, cl. 3
We would admit at the outset some hesitancy in even entertaining jurisdiction
to hear the merits of the Commerce Clause challenge. As previously noted, the
suit is a pre-enforcement challenge. The petitioners in this case have not been
prosecuted for violating any of the statutory provisions or regulations. Indeed
no person has been so prosecuted, as the Act has yet to be enforced. Moreover,
it is unclear at this time whether civil penalties for ongoing violations will be
assessed whenever the Act is enforced. The speculative and contingent nature
of petitioners' future economic injury makes this case of a kind that courts have
in the past treated as unripe for adjudication. See, e.g., United Public Workers
of America v. Mitchell, 330 U.S. 75, 89-90, 67 S.Ct. 556, 564-65, 91 L.Ed. 754
(1947) ("A hypothetical threat is not enough.") Nor does the tenuousness of the
injury end there. The states, if they accept the Secretary's delegation, have full
power to administer and enforce the Act. Presumably one state could decide to
enforce the Act retroactively, whereas another could within its terms grant
immunity to all past violators up to the day the state enforcement regulations
are promulgated. No evidence has been submitted by any party suggesting how
any of the states plan to initiate enforcement of the Act. That the petitioners
come from different states makes it all the more unclear the precise nature and
extent of the injury with which we are dealing under the Commerce Clause
challenge.
Nevertheless, although the injury has not yet occurred but is merely one that the
petitioners allege will occur in the future, this is not dispositive of the standing
or ripeness issue. See Pennsylvania v. West Virginia, 262 U.S. 553, 555, 593,
43 S.Ct. 658, 659, 663-64, 67 L.Ed. 1117 (1923) ("(o)ne does not have to await
the consummation of a threatened injury to obtain preventative relief.")
Moreover, in the present case, the Commerce Clause challenge is unlikely to
change in substance or in clarity by virtue of an actual prosecution. Thus
another of the values inherent in the ripeness doctrine, namely, the need for a
concrete presentation of the issues, would not be served by awaiting
enforcement. See Abbott Laboratories v. Gardner, 387 U.S. 136, 153, 87 S.Ct.

1507, 1517, 18 L.Ed.2d 681 (1967). Finally, the petitioners in this case are
now, and will in the future continue to be the most appropriate parties to raise
the Commerce Clause objection. The Fuel Use Act, in its minimal prohibitive
capacity, operates against local gas distribution companies. The petitioners are
the entities against whom fines will be levied for noncompliance, if and when
the Act is enforced.
In any event, this case is quite similar to two recent Supreme Court decisions in
which the Court heard and determined the merits of a pre-enforcement,
Commerce Clause challenge to other federal statutes and regulations. See Hodel
v. Virginia Surface Min. & Rec. Ass'n, --- U.S. ----, 101 S.Ct. 2352, 69 L.Ed.2d
1 (1981); Hodel v. Indiana, --- U.S. ----, 101 S.Ct. 2376, 69 L.Ed.2d 40 (1981).
Neither of these opinions mentions any standing problems, and so we view
them as adequate precedent for our decision to adjudicate the merits of the
Commerce Clause dispute before us.
8

We recognize that the quoted language in Darby may present a problem of

circular reasoning with respect to the question, "Which intrastate activities are
an appropriate subject of the federal power to regulate interstate commerce?"
Nevertheless, the Darby case at least establishes that the fact that the regulated
conduct in this case is a wholly local activity does not necessarily lead to a
finding that Congress has overstepped its powers under the Commerce Clause.
United States v. Rock Royal Co-operative, Inc., 307 U.S. 533, 569, 59 S.Ct.
993, 1011, 83 L.Ed. 1446 (1939) ("Activities conducted within State lines do
not by this fact alone escape the sweep of the Commerce Clause. Interstate
commerce may be dependent upon them.")

In point of fact one of the cases cited dealt with federal regulations. In Federal
Power Comm'n v. East Ohio Gas Co., 338 U.S. 464, 70 S.Ct. 266, 94 L.Ed. 268
(1950), the Court upheld the extension of federal regulatory power over a gas
company that transported natural gas through interstate pipelines for local
distribution. That case can only support the principles set out in this opinion

10

Since the case of Cooley v. Board of Wardens of the Port of Philadelphia, 53

U.S. (12 How.) 299, 13 L.Ed. 996 (1851), the Supreme Court has recognized a
limitation on State authority to regulate activities in interstate commerce. These
limitations arise by negative implication from the Constitution's express grant
of power to the federal government to regulate interstate commerce, as well as
from considerations of federalism that emanate from the system of government
set up in the Constitution. See L. Tribe, American Constitutional Law 320-326
(1978)

11

See Katzenbach v. McClung, 379 U.S. 294, 302, 85 S.Ct. 377, 383, 13 L.Ed.2d

290 (1964) (line of cases holding that interstate commerce ends when goods
come to rest in state of destination applies to state regulation but not to federal
regulation)
12

Congressman Dingell noted that the value of such gas was, at that time,
between 10 and 15 billion dollars. Transcript, Joint Conference on Energy at
2036

13

Admittedly, the Court in Hodel rejected the "volume of commerce" standard

only in its discussion of the first aspect of the rationality test, namely, whether
Congress had any rational basis for finding that the regulated activity affected
interstate commerce. Hodel v. Indiana, --- U.S. ----, 101 S.Ct. 2376, 2383, 69
L.Ed.2d 40 (1981). We feel it logically appropriate, however, to likewise reject
this standard under the second, "reasonably related" prong of the rationality
test. The Court in Hodel found the congressional act constitutional. If the
volume of commerce involved in that case had been problematic under the
"reasonably adapted" prong of the test, then we suggest that the Court would
have held the Act unconstitutional. In the alternative, the Court's holding can be
viewed as having implicitly determined that the volume was sufficient to satisfy
the "reasonably adapted" test

14

Hodel v. Indiana, --- U.S. ----, 101 S.Ct. 2376, 69 L.Ed.2d 40 (1981) ("It is
enough that the challenged provisions are an integral part of the regulatory
program and that the regulatory scheme when considered as a whole satisfies
this test.") Id. at 2385 n. 17. See Maryland v. Wirtz, 392 U.S. 183, 197 n. 27, 88
S.Ct. 2017, 2024 n. 27, 20 L.Ed.2d 1020 (1968)

15

The Amendment provides: "The powers not delegated to the United States by
the Constitution, nor prohibited by it to the States, are reserved to the States
respectively, or to the people." U.S.Const. amend. 10

16

Just as in the Commerce Clause issue we must initially express our uncertainty
about whether the petitioners have standing to raise the Tenth Amendment
question. None of the petitioners are states or government officials of any kind.
In Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968), the
Supreme Court intimated under its nexus requirement that a private party could
not have standing to assert the interests of the states as protected by the Tenth
Amendment. Nevertheless, we grant standing in this case for two reasons. First,
during the New Deal era the Supreme Court granted such standing by
implication in considering the merits of the Tenth Amendment claims brought
by private parties. See Helvering v. Davis, 301 U.S. 619, 637, 640, 57 S.Ct.
904, 907, 908, 81 L.Ed. 1307 (1937); Steward Machine Co. v. Davis, 301 U.S.
548, 573, 585, 57 S.Ct. 883, 884, 890, 81 L.Ed. 1279 (1937). Second, the Court

in Duke Power Co. v. Carolina Env. Study Group, 438 U.S. 59, 98 S.Ct. 2620,
57 L.Ed.2d 595 (1978), expressly limited the nexus requirement contained in
Flast to taxpayer suits. Since this is not a taxpayer suit, under Duke Power the
petitioners may make constitutional objections based on any of its provisions so
long as they show the requisite injury in fact and its causal relation to the action
in question. Because we have already concluded that injury in fact exists or is
likely to occur in this case, see note 7 supra, we find it necessary to reach the
merits of the Tenth Amendment issue
17

In Hodel the Court similarly indicated that Tenth Amendment problems might
exist where a federal regulatory program requires the states to adopt
implementing regulations. Hodel v. Virginia Min. & Rec. Ass'n, --- U.S. ----,
101 S.Ct. 2352, 2366, 69 L.Ed.2d 1 (1981). In that case the Court held that the
federal statute gave the states a choice as to whether they or the federal
government would administer and enforce the program and thus did not violate
the Tenth Amendment

18

That provision states in pertinent part: "No person shall ... be deprived of ...
property, without due process of law...." U.S.Const. amend. V. The courts have
interpreted this clause to require that statutes be reasonably clear so that persons
of common intelligence do not have to guess at their meaning and differ as to
their application. Connally v. General Const. Co., 269 U.S. 385, 391, 46 S.Ct.
126, 127, 70 L.Ed. 322 (1926)

19

Apparently it is the case that the State of Texas, or rather the Texas Railroad
Commission, has in fact sent a letter to the Secretary of Energy explicitly
rejecting the delegation. The Secretary has not yet, however, rescinded the
delegation