734 F.2d 797 (Fed. Cir. 1984), 9-80, Gulf Oil Corp. v. Dyke

Docket Nº:9-80, 9-81.
Citation:734 F.2d 797
Party Name:GULF OIL CORPORATION, Defendant-Appellant and Cross-Appellee, v. Richard W. DYKE, dba Western Stations Co., Colvin Oil Company, and F.O. Fletcher, Inc., dba Fletcher Oil Company, Plaintiffs-Appellees and Cross-Appellants, United States of America, Intervenor.
Case Date:April 17, 1984
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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Page 797

734 F.2d 797 (Fed. Cir. 1984)

GULF OIL CORPORATION, Defendant-Appellant and Cross-Appellee,

v.

Richard W. DYKE, dba Western Stations Co., Colvin Oil Company, and F.O. Fletcher, Inc., dba Fletcher Oil Company, Plaintiffs-Appellees and Cross-Appellants,

United States of America, Intervenor.

Nos. 9-80, 9-81.

Temporary Emergency Court of Appeals.

April 17, 1984

Argued March 19, 1984.

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[Copyrighted Material Omitted]

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Jack D. Fudge and Michael L. Hickok, McCutchen, Black, Verleger & Shea, Los Angeles, Cal., on the brief for appellant/cross-appellee.

John L. Schwabe and Neva T. Campbell, Schwabe, Williamson, Wyatt, Moore & Roberts, Portland, Or., on the brief for appellees/cross-appellants.

John R. Knight, Edward T. Cotham, Jr. and Bradley Ford Stuebing, Gulf Oil Corporation, Houston, Tex., on the brief for appellant/cross-appellee.

Larry P. Ellsworth, Asst. General Counsel, David Engels and Marcia K. Sowles, Dept. of Energy, and Richard K. Willard, Acting Asst. Atty. Gen., Anthony J. Steinmeyer and Douglas Letter, Attys., Dept. of Justice, Washington, D.C., on the brief for the United States.

William H. Bode, John E. Varnum and Tobey B. Marzouk, Spriggs, Bode & Hollingsworth, Washington, D.C., on the brief for amici curiae, Independent Oil and Tire Co., Shepherd Brothers Service Stations, and U.S. Oil Co., Inc.

John A. Evans, Marathon Petroleum Co., Findlay, Ohio, William C. Streets and Gail F. Schulz, Mobil Oil Corporation, Fairfax, Va., R. Bruce McLean, P.C., Daniel Joseph, P.C., Warren E. Connelly, P.C., and David A. Holzworth, Akin, Gump, Strauss, Hauer & Feld, Washington, D.C., on the brief for amici curiae, Marathon Petroleum Co. and Mobil Oil Corp.

Before CHRISTENSEN, ESTES and ZIRPOLI, Judges.

ESTES, Judge:

This is an action for overcharges under § 210(b) of the Economic Stabilization Act of 1970 ("ESA"), 12 U.S.C. § 1904 note, as incorporated in the Emergency Petroleum Allocation Act ("EPAA"), 15 U.S.C. § 751 et seq. brought by Plaintiffs-Appellees and Cross-Appellants Richard W. Dyke, dba Western Stations Co., Colvin Oil Company, and F.O. Fletcher, Inc., dba Fletcher Oil Company (hereinafter "Dyke" when referred to collectively; "Richard W. Dyke" when referring to plaintiff Dyke singularly), against Defendant-Appellant and Cross-Appellee Gulf Oil Corporation (hereinafter "Gulf"). 1 Gulf also filed a counterclaim for unpaid bills for gasoline in the sum of $728,753.78 against Richard W. Dyke only, 2 which was not contested. 3 Dyke alleged that Gulf overcharged it in sales of gasoline from Gulf to Dyke between January 1974 and January 1977. An Amended Judgment entered on September 12, 1983 4 in the United States District Court for the District of Oregon was awarded to plaintiffs against Gulf in amounts as follows:

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In addition to the $4,716,184.28, total of the above sums, the Amended Judgment also awarded costs and post-judgment interest to plaintiffs at the rate of 10.58 percent against Gulf. Gulf appeals from this judgment. Dyke has filed a cross-appeal contending the district court incorrectly computed the prejudgment interest which Dyke was awarded.

In October of 1972, Gulf's board of directors decided to divest Gulf of all its marketing activities in its San Francisco Retail Marketing District, which included northern California, northern Nevada, Oregon and Washington. The decision to divest followed losses by Gulf of $31.7 million in 1971 and $37 million in 1972 in the Northwest. 5 The passage of the EPAA, however, forced Gulf to continue to supply its customers in the area and to place its purchasers into classes which would maintain the customary price differentials in existence on May 15, 1973. 6 Gulf continued to supply all of its jobber customers in the area, but converted all of the branded jobbers 7 to unbranded jobbers on January 1, 1974. Before 1974, Gulf had supplied only one jobber in the district on an unbranded basis. 8

On May 15, 1973, Richard W. Dyke, Colvin, and Fletcher all purchased gasoline from Gulf as resellers-retailers as defined in 10 C.F.R. § 212.31. Gulf was a refiner as defined in the same section. Richard W. Dyke and Colvin were among those purchasers who were branded jobbers on May 15, 1973 and converted to unbranded jobbers on January 1, 1974.

The other jobbers in the district who were reclassified from branded to unbranded on January 1, 1974, were placed in the Armour class of purchaser to reflect their new status. Richard W. Dyke and Colvin, however, were given base prices reflecting those published in Platt's Oilgram for May 15, 1973 for Portland and Eugene, Oregon and Seattle/Tacoma, Washington. Gulf reasoned that its jobbers in Oregon and Washington comprised a substantially different market from those in northern California and should constitute a separate class with a different base price. Gulf relied on the new item/new market rule 9 to justify its use of Platt's Oilgram in establishing a base price for Richard W. Dyke and Colvin, which is an exception to the rule that base prices must correspond to a

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price actually charged the most similar existing class on May 15, 1973. 10

Richard W. Dyke filed a complaint on January 4, 1977 and ceased paying for gasoline received from Gulf on December 16, 1976, yet continued to receive gasoline without payment until January 28, 1977. Colvin's complaint was filed on October 11, 1977. Fletcher filed its complaint on October 20, 1977. The three cases were consolidated, with Richard W. Dyke proceeding to judgment first. The decision and findings in Richard W. Dyke were binding on Colvin and Fletcher.

The case was originally assigned to Chief Judge Skopil. 11 An interlocutory appeal was filed by the Department of Energy ("DOE") contesting their joinder in the cases. The DOE was released from further participation in the cases by this Court's decision and mandate and the district court order which followed. 12 On remand, new Chief Judge Burns granted a six-month stay in the proceedings before Judge Owen M. Panner was assigned to the cases in July, 1980. 13 Judge Panner lifted the stay on July 21, 1980. 14

Trial before the court began on November 17, 1981. The trial was conducted in stages with succeeding orders entered as follows: In Phase 1, Gulf's use of the Platt's Oilgram prices as base prices for the plaintiffs was held improper. November 17, 1981; Record at Vol. 4, Tab 47. In Phase 2, the unbranded Armour class of purchasers and its corresponding base price was held proper for the plaintiffs. November 20, 1981; Record at Vol. 4, Tab 49. In Phase 3, the method of calculating the overcharges was decided, prejudgment interest was awarded to the plaintiffs, and the selection of the appropriate statute of limitations was made. January 20, 1982; Record at Vol. 7, Tab 67. In Phase 4, plaintiff Fletcher was held to be the real party in interest. April 15, 1982; Record at Vol. 7, Tab 80. In Phase 5, attorney's fees were awarded the plaintiffs. May 27, 1982; Record at Vol. 8, Tab 93.

The calculation of prejudgment interest was referred to a magistrate on June 1, 1982. 15 The magistrate entered his Findings and Recommendations on September 9, 1982, and they were adopted by the district court on October 26, 1982. 16 The district court entered its Findings of Fact and Conclusions of Law on June 20, 1983 17 and filed a separate opinion on the issue of attorney's fees on August 23, 1983. 18 571 F.Supp. 780. The Amended Judgment was entered on September 12, 1983. 19 Gulf filed its Notice of Appeal in this Court on October 6, 1983. Dyke filed its Notice of Cross-Appeal in this Court on October 20, 1983.

ISSUES

The issues on appeal, as stated by Gulf in its brief filed November 14, 1983, are as follows:

1. Whether overcharges can be refunded under the EPAA without any determination that sales exceeded the "maximum allowable prices" permitted under the governing Refiner Price Rule;

2. Whether prejudgment interest can ever be awarded on overcharge refunds under the EPAA;

3. If such prejudgment interest is ever recoverable, whether it can be awarded where the amount of overcharges to be

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refunded was unliquidated and became certain only by trial;

4. Whether attorney's fees may be awarded under the EPAA where the overcharges were found to be unintentional;

5. Whether attorney's fees awardable under the EPAA may substantially exceed those actually charged;

6. Whether appellee Fletcher lacks standing as an indirect purchaser to sue Gulf for overcharges under the EPAA;

7. Whether application of the two-year Washington statute of limitations to Fletcher frustrates national policy under the EPAA;

8. Whether the passing-on defense is available in this EPAA case because all parties were subject to Federal Price Regulations, and the trial court specifically quantified the amount of overcharges actually passed through; and

9. Whether the trial court abused its discretion by making a class of purchaser determination contrary to the Pretrial Order without considering evidence offered in support of a motion to reopen trial of that issue. 20

Dyke states in its brief that the issue on the cross-appeal is: Whether the Trial Court erred in its calculation of prejudgment interest. 21

Gulf's Motion to Dismiss

Gulf, without raising the question in the lower court, was given leave to file an untimely Motion to Dismiss the Cross Appeal of Dyke, which challenges the subject-matter jurisdiction of this Court following the recent Supreme Court decision in I.N.S. v. Chadha, 462 U.S. ---, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983). Dyke has opposed the motion and contended that the Chadha...

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