Petroleum Sales, Ltd. v. Mapco Alaska, Inc.
| Decision Date | 17 August 1984 |
| Docket Number | No. 7875,7875 |
| Citation | 687 P.2d 923 |
| Parties | 1984-2 Trade Cases P 66,188 PETROLEUM SALES, LTD. and Willner's Fuel Distributors, Inc., Appellants, v. MAPCO ALASKA, INC., d/b/a North Pole Refinery, Formerly Known As Earth Resources Company of Alaska, Inc., Appellee. |
| Court | Alaska Supreme Court |
Lloyd I. Hoppner, Rice, Hoppner, Brown & Brunner, Fairbanks and Wallace M. Rudolph, Tacoma, Wash., for appellants.
Hal R. Horton, Carol A. Johnson and Philip Blumstein, Birch, Horton, Bittner, Pestinger & Anderson, Anchorage, Richard Haas and Terry Michael Gordon, Lasky, Haas, Cohler & Munter, San Francisco, Cal., Randolph L. Jones, Jr., Tulsa, Okl., for appellee.
Before BURKE, C.J., and RABINOWITZ, MATTHEWS, COMPTON and MOORE, JJ.
This appeal involves an antitrust action by appellants Petroleum Sales, Ltd. (hereinafter "Petroleum Sales") and Willner's Fuel Distributors, Inc. (hereinafter "Willner") against Mapco Alaska, Inc. (hereinafter "Mapco"), the sole oil refinery in the Interior of Alaska, for monopoly pricing.
The primary issue presented on appeal is whether the trial court erred in granting summary judgment in favor of Mapco on the basis that the terms of the settlement release in a prior antitrust action between the same parties bar the instant action. In essence, we are required to determine whether appellants presently allege unlawful acts sufficiently dissimilar from those encompassed in the previous settlement release which give rise to a new actionable claim.
The availability of North Slope crude oil via the Trans-Alaska Pipeline System prompted the construction of an oil refinery in 1977 at North Pole, Alaska by Earth Resources of Alaska, Inc., now Mapco. Although a relatively small refinery, it was designed to supply middle distillates, 1 such as home heating oil, to the Interior of Alaska. Mapco's ultimate goal, as the only Interior refinery, was to supply 100% of the Interior market with its products. Prior to its entrance into the market, major national marketers such as Chevron USA, Inc., Union Oil Co. of California and Texaco, Inc. imported their refined products into the Interior. Tesoro Alaska Petroleum Co. also serviced the Interior from its Kenai refinery and was recognized by Mapco as its prime competitor in supplying refined products.
When the refinery began operating in September 1977, Mapco did not possess a distribution network, storage facility or transportation capacity. Mapco's initial marketing strategy was to utilize existing channels of distribution in order to maximize offtake from its fledgling refinery as quickly as possible. 2 It negotiated contracts to sell its products primarily to the existent major wholesale distributors who sell to smaller distributors or "jobbers" who, in turn, sell to ultimate consumers.
Appellant Petroleum Sales was a jobber supplied by major marketer Union. Appellant Willner, although originally a Texaco jobber, later purchased directly from Mapco.
After considerable negotiation, all major marketers except Tesoro and Shell Oil Co. contracted with Mapco for a projected minimum 3 and maximum gallonage per month. Mapco offered its products at a floating price in parity with Anchorage and other west coast terminals. Initially, discounts of up to four cents per gallon were also offered to these major marketers, in line with leading marketer discounts to their heating fuel jobbers in the Interior market. Discounts were an attempt to bring Mapco prices in line with those available in Anchorage to major marketers, and often included a transportation differential. Various discounts were also offered to other classes of trade such as government, utilities and major industry.
As early as 1977, several jobbers had expressed an interest in buying directly from Mapco, including appellant Willner. Mapco's refinery opened in September 1977.
By June 28, 1978, less than one year after the startup of its refinery, Mapco was supplying 90% of the home heat and diesel fuel requirements of the Interior of Alaska, selling primarily via the major marketers.
In November 1978 Mapco first offered a discount (of approximately one cent per gallon) to all jobbers in order to move excess inventory and also to provide an incentive to new jobbers to capture volumes then unserved and impact imported volumes. 4 Union Oil Co. reacted to this news with a demand that it, too, should be offered the supplemental discount now offered directly to jobbers.
Appellant Willner, a former Texaco jobber, probably tripled its offtake from Mapco as a result of the discount. When Texaco withdrew from the market as an intermediary, Willner's sales options apparently increased.
In January 1979 the jobber discount became a permanent fixture in Mapco's pricing structure. At about this time, the discount to major marketers was decreased from four cents to 3.5 cents per gallon as a business decision. Primarily, the transportation differential was eliminated, an apparent reflection of the fact that Fairbanks pricing was still lower than other U.S. locations, including Anchorage, depending upon the supplier.
In May 1979 appellants and two other local fuel distributors filed an antitrust action against Mapco's predecessor 5--76 Aviation Services, Inc., et al. v. Earth Resources of Alaska, Inc., No. 4FA-79-902, (hereinafter "76 Aviation "). The second amended complaint alleged causes of action pursuant to AS 45.52.010-.030 6 for damages sustained in their business by the elimination of competition.
The complaint alleged that with intent to monopolize the Interior market, Mapco initiated horizontal agreements with existing major marketers not to compete. It also alleged that Mapco targeted competitor Tesoro Oil Co. and its jobbers for elimination by offering discounted prices to unbranded jobbers in exchange for agreements to purchase exclusively from Mapco.
The complaint further alleged that defendant Earth Resources had been successful at that point because it already supplied substantially 100% of all middle distillates in the Interior of Alaska.
In short, the complaint alleged that Mapco had unlawfully conspired and attempted to monopolize and had, in fact, achieved an unlawful monopoly of the Interior market, primarily by means of its unlawful discounting schemes. Appellants sought both injunctive relief and damages in excess of five million dollars.
In response to Mapco's motion for partial summary judgment, appellants also later claimed that they were injured due to the higher price which resulted from Mapco's monopoly scheme.
The case settled before trial in October 1980 and all parties were signatories to a "Settlement Agreement, Release of Claims and Covenant Not to Sue." Mapco's predecessor paid the plaintiffs (including the two present appellants) a substantial sum of money and agreed to withdraw its petition for review of the dismissal of its counterclaim.
Both sides expressly released the other "from any and all claims, equitable and legal, known or unknown, which they presently have ... and each covenant not to sue [the other] based on any such claims existing as of this date." 7
Both sides also "covenant[ed] not to use, directly or indirectly, any of the information generated during the pendency of Case No. 4FA-79-902 [76 Aviation ] in connection with any legal ... action or proceeding; or for any other purpose whatsoever."
As part of the settlement, the parties signed a stipulation and proposed order of dismissal with prejudice encompassing all claims and counterclaims. A judgment of dismissal with prejudice was entered on October 27, 1980.
On February 16, 1982 appellants Petroleum Sales and Willner, as well as two local distributors who were not parties to the prior action, filed the instant antitrust action against Mapco alleging violations of the same antitrust statutory provisions, AS 45.50.562-.566. The instant complaint, like that of 76 Aviation, was prepared by the same law firm and again alleges anticompetitive horizontal agreements between the same parties and the attainment of an unlawful monopoly. Unlike 76 Aviation, unlawful price discounting was not specifically mentioned. Appellants now complain that subsequent unlawful exploitation of that monopoly by unwarranted price increases has damaged them. No injunctive relief was sought; only treble damages pursuant to AS 45.50.576. 8
Mapco counterclaimed for breach of the settlement agreements and requested specific performance of the same. In June 1982 Mapco filed a motion to dismiss or, in the alternative, for summary judgment against appellants on the grounds that the action was barred because of the 76 Aviation settlement release and res judicata. 9
On March 7, 1983 Judge Van Hoomissen issued a memorandum opinion and an order in which he granted Mapco's summary judgment motion and dismissed appellants from the action.
The trial court was unable to discern "any new acts ... since execution of the release which would give rise to a new cause of action, as opposed to one barred by settlement of the prior lawsuit."
This appeal followed.
The issue before us in this appeal poses the question of whether appellants have asserted a claim sufficiently distinct from those which they voluntarily relinquished in settlement of a prior antitrust action against appellee Mapco.
In the prior action, 76 Aviation, appellants complained of injury to their business caused by Mapco's predecessor's alleged violations of AS 45.52.010-. 030. 10 In essence, the complaint alleged that by means of predatory discounting schemes and horizontal agreements with existing marketers, Mapco conspired and attempted to monopolize and did, in fact, achieve a monopoly of the...
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