Rio Grande v. Dep't of Energy

• Decision Date: 04 December 2000
• Docket Number: PLAINTIFFS-APPELLANT,V,No. 99-1528,DEFENDANT-APPELLEE,99-1528
• Citation: 234 F.3d 1
• Parties: (Fed. Cir. 2000) THE RIO GRANDE, EL PASO AND SANTA FE RAILROAD COMPANY AND BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY,DEPARTMENT OF ENERGY,
• Court: U.S. Court of Appeals — Federal Circuit

Page 1

234 F.3d 1 (Fed. Cir. 2000)

THE RIO GRANDE, EL PASO AND SANTA FE RAILROAD COMPANY AND BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, PLAINTIFFS-APPELLANTS,

V.

DEPARTMENT OF ENERGY, DEFENDANT-APPELLEE.

No. 99-1528

U.S. Court of Appeals, Federal Circuit

December 4, 2000

Appealed from: United States District Court for the District of Columbia, Judge Henry H. Kennedy, Jr.

William H. Bode, Bode & Beckman, of Washington, Dc, argued or plaintiffs-appellants.

Don W. Crockett, Attorney, Office of General Counsel, United States Department of Energy, of Washington, Dc, argued for defendant-appellee.

Before Mayer, Chief Judge, Newman, and Schall, Circuit Judges.

Schall, Circuit Judge.

The Rio Grande, El Paso and Santa Fe Railroad Company and the Burlington and Santa Fe Railway Company (collectively, "Santa Fe") ¹ appeal the decision of the United States District Court for the District of Columbia upholding the denial by the Office of Hearings and Appeals ("OHA") of the Department of Energy ("DOE") of Santa Fe's July 30, 1990 application for an above-volumetric refund from the Shell Oil Co. ("Shell") restitution fund pursuant to the Petroleum Overcharge Distribution and Restitution Act of 1986 ("PODRA"). The Rio Grande, El Paso & Santa Fe R.R. Co. v. Dep't of Energy, No. 97-2574(HHK) (D.D.C. May 13, 1999) ("Santa Fe V"). The district court sustained OHA's February 3, 1993 final decision on the ground that Santa Fe is no longer "injured" within the meaning of PODRA because of Santa Fe's 1980 settlement of its overcharge action against Shell. Id. at 6-9. We agree that, in light of the 1980 settlement, Santa Fe cannot pursue its above-volumetric refund claim. We therefore affirm.

BACKGROUND

I.

Under the Economic Stabilization Act of 1970 ("ESA"), 12 U.S.C. § 1904 note (1976), and the Emergency Petroleum Allocation Act of 1973 ("EPAA"), 15 U.S.C. § 751 et seq. (1982), DOE was given the responsibility of promulgating and enforcing the Mandatory Petroleum Price and Allocation Regulations ("MPPAR"). See Siegel Oil Co. v. Richardson, 208 F.3d 1366, 1367-68 (Fed. Cir. 2000) (providing an overview of the statutory and regulatory framework). The regulations established ceiling prices for crude oil and other petroleum products, 10 C.F.R. pt. 212 (1981), as well as a mandatory system for allocation of these products between historical suppliers and purchasers, 10 C.F.R. pt. 211 (1981). The MPPAR required, in part, that refiners be subject to a mandatory petroleum pricing rule, which, in general, meant that refiners could not charge a price for a "covered product" in excess of the "base price" for that product, as established during a certain initial period. 10 C.F.R. § 212.83(a)(1) (1981). These regulations were in effect from August 19, 1973 through January 27, 1981. 10 C.F.R. pts. 211-212 (1982). The ESA provided both public and private enforcement mechanisms in order to implement the price control program. Under § 209 of the ESA, the President could use either federal district courts or administrative agencies, with subsequent judicial review, to implement the program. Under § 210 of the ESA, private litigants were authorized to sue in federal district courts for violations of the ESA, EPAA, or the MPPAR. ²

In 1979, DOE promulgated the "Subpart V" regulations that established procedures for the distribution of funds collected from companies by DOE pursuant to the ESA or EPAA. 10 C.F.R. pt. 205, subpt. V (1999). In 1986, Congress enacted PODRA, 15 U.S.C. §§ 4501-4507 (1998), to facilitate the distribution of these funds "in accordance with subpart V regulations." 15 U.S.C. § 4502(b)(1)(A)-(C). Under these procedures, OHA was tasked with identifying and providing restitution to those claimants who were injured by any actual or alleged violations of the ESA, EPAA, and the MPPAR. 15 U.S.C. § 4501(a)(1); 10 C.F.R. § 205.280.

II.

On January 10, 1978, Santa Fe filed a private overcharge action under § 210 of the ESA against Shell in the United States District Court for the Northern District of Illinois. Santa Fe alleged that Shell had overcharged it in sales of diesel fuel from Shell's Wilmington, California and Ciniza, New Mexico refineries. On March 24, 1980, the district court granted Shell's motion for partial summary judgment, finding that Santa Fe's claims were time-barred under the applicable statute of limitations. Thereafter, on June 6, 1980, Santa Fe settled its suit with Shell. Subsequently, as a result of the settlement, the district court dismissed Santa Fe's action with prejudice under Fed. R. Civ. P. 41(a). Atchison, Topeka & Santa Fe R.R. Co. v. Shell Oil Co., No. 78 C 85 (N.D. Ill. June 20, 1980) (Stipulation and Order) ("Santa Fe I").

The settlement of June 6, 1980 (the "1980 settlement"), labeled "RELEASE," stated that:

Santa Fe and Shell desire to settle [case No. 78 C 85 in the United States District Court for the Northern District of Illinois] and end the lawsuit.

.....

In consideration of the sum of Ten Dollars ($10.00) . . . and for other good and valuable consideration . . . Santa Fe hereby fully releases and forever discharges Shell, including each of its subsidiaries, and affiliates, and each of its and their directors, officers, agents, employees, and representatives, past and present, from all claims, demands, suits and causes of action in law, equity, or otherwise, accrued or unaccrued, or howsoever arising, known or unknown, arising from the sale and supply by Shell of petroleum products to Santa Fe occurring prior to the date of the filing of the above-captioned lawsuit.

Santa Fe further acknowledges that the payment of any sum or other consideration by Shell is made without any admission of liability, that Shell denies any liability for any claims, demands, or causes of action by Santa Fe against Shell hereinbefore described.

Pursuant to the 1980 settlement, Shell paid Santa Fe $550,000.

III.

Almost seven years later, on March 26, 1987, DOE and Shell entered into a Consent Order settling claims by DOE regarding Shell's crude oil and refined petroleum product operations during the Consent Order period of January 1, 1973, through January 27, 1981. Shell Oil Co., 18 DOE (CCH) ¶¶ 85,492, 88,796 (1989). Shell did not acknowledge any specific violation of the MPPAR, but agreed to pay approximately $20 million plus accrued interest to DOE for distribution to parties injured by Shell's alleged violations, thus creating the "Shell restitution fund." Id. at 88,796-88,797. OHA, on January 13, 1989, instituted a special refund proceeding in accordance with Subpart V to facilitate distribution of the Shell restitution fund to former Shell purchasers. Id. at 88,797- 88,802.

OHA first established a presumption that the Shell restitution fund should be dispersed equally among all of Shell's sales of refined petroleum products during the Consent Order period-the "volumetric presumption." Id. at 88,797. Under the volumetric presumption, a claimant, upon proving the number of gallons purchased from Shell during the Consent Order period, was "not required to submit any further evidence of injury." Id. at 88,798-88,799. The claimant could then obtain a refund amount determined by multiplying the number of gallons bought from Shell during the Consent Order period by the volumetric factor of $0.000226 per gallon. ³ Id. at 88,797-88,799. However, a claimant could attempt to demonstrate that its injuries were in excess of the amount it could obtain under the volumetric presumption by requesting an "above-volumetric" refund. See id. at 88,800-88,802. Under an above-volumetric refund claim, a claimant bore the burden of demonstrating that it was injured by overcharges from Shell, and that its injuries resulted in a specific amount of monetary harm. Int'l Drilling & Energy Corp. v. Watkins, 920 F.2d 14, 18 (Temp. Emer. Ct. App. 1990). ⁴ In order to receive an above-volumetric refund, a claimant had to prove that it had paid a refiner an amount that exceeded the Maximum Allowable Price under the MPPAR. Id.

IV.

On July 30, 1990, Santa Fe submitted to OHA an above-volumetric refund claim under PODRA and Subpart V, seeking $2,963,935 plus interest from the Shell restitution fund. Santa Fe based its request for an above-volumetric refund upon the contention that it was overcharged by Shell in its purchases of diesel fuel from Shell's refineries in Wilmington and Ciniza, the same claim Santa Fe had made in its private action against Shell under § 210 of the ESA in 1978. OHA denied the request, giving Santa Fe a refund based only on the volumetric presumption. Shell Oil Co./The Atchison, Topeka, & Santa Fe R.R. Co., 22 DOE (CCH) ¶¶ 85,245, 88,655-88,656 (1993) ("Santa Fe II"). OHA determined that, during the Consent Order period, Shell had discontinued the production of a lower grade of diesel fuel at its Wilmington and Ciniza refineries and then produced and sold a higher grade fuel. Id. at 88,653-88,655. OHA concluded that this increase in quality of diesel fuel justified Shell's increase in the diesel fuel's price per gallon. Id. at 88,655. Such an increase in price, OHA reasoned, was not in violation of the MPPAR. Id.

Santa Fe moved for reconsideration on the principal ground that, regardless of a change in fuel grade or quality, any price increase was a violation of the MPPAR. Shell Oil Co./The Atchison, Topeka, & Santa Fe R.R. Co., 24 DOE (CCH) ¶¶ 85,102 (1994) ("Santa Fe III"). OHA again denied Santa Fe's claim. In so doing, it set forth as an additional ground for denial the 1980 settlement with Shell. OHA held that the settlement barred Santa Fe from seeking an above-volumetric refund claim under PODRA, and thus provided an "independent basis" for rejecting Santa Fe's claim. Id. at 88,329. ⁵ OHA found that Santa Fe already had litigated the same claim it was pursuing under PODRA in its suit against Shell in the Northern District of Illinois, and that the private suit had been settled and...