Case No. RF272-86827
March 21, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Petitioner: Valley Camp Coal Company
Date of Filing: March 4, 1991
Case Number: RF272-86827
In this Decision and Order, the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) will determine the eligibility of Valley Camp Coal Company (Valley Camp) for a refund from the crude oil monies currently available for disbursement in a proceeding conducted pursuant to the provisions of 10 C.F.R. Part 205, Subpart V. Valley Camp has applied for a refund for purchases of petroleum products.
Pursuant to current DOE policy, purchasers of refined petroleum products may apply to the OHA for a refund from crude oil overcharge funds collected by the DOE. Statement of Modified Restitutionary Policy to be Implemented in Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986) (MSRP). We have established refund procedures for these funds which have been made available through consent orders entered into by the DOE and several firms that sold crude oil during the price control period. E.g., Berry Holding Co., 16 DOE ¶ 85,405 (1987); A. Tarricone, Inc., 15 DOE ¶ 85,495 (1987); Mountain Fuel Supply Co., 14 DOE ¶ 85,475 (1986). In the Order implementing the MSRP, the OHA stated that it would accept Applications for Refund in the Subpart V crude oil proceeding from injured parties that have not waived their claims by electing to participate in one of the "Stripper Well" refund proceedings. 51 Fed. Reg. 29689 (August 20, 1986); see also Implementation of Special Refund Procedures, 52 Fed. Reg. 11737 (April 10, 1987).
The "Stripper Well" refund proceedings refer to the eight escrow accounts created by the U.S. District Court for the District of Kansas to implement the terms of the Stripper Well Settlement Agreement. See In Re: The Department of Energy Stripper Well Exemption Litigation, 653 F. Supp. 108 (D. Kan. 1986). The escrow accounts were created to refund a portion of the 1.4 billion dollars in crude oil overcharges to eight specified groups of petroleum product purchasers: Refiners, Retailers, Resellers, Agricultural Cooperatives, Airlines, Surface Transporters, Rail and Water Transporters and Utilities.
Valley Camp operated a coal company business during the period of price controls. In its Application for Refund, Valley Camp certified that neither Valley Camp, its parent, nor any affiliates
have elsewhere waived its right to a refund. The statement is incorrect. Valley Camp is a subsidiary of Quaker State Oil Refining Corporation, who chose to participate in the Refiners Escrow.
In order to be considered for a refund from the Refiners Escrow, each claimant was required to submit a validly executed Release of Claims. It is explicitly stated in the Settlement Agreement that [p]rior to the distribution by the Refiners Escrow Agent, the Refiners Escrow Agent shall secure from each Refiner receiving funds hereunder the waiver and release in the form set forth in Attachment A to the Refiners Escrow Agreement. Settlement Agreement ¶ III.A2. The Release of Claims specifically states that the signatory waives the right to obtain future payment of a share of existing or future monies paid or ordered to be paid based upon or arising out of any Alleged Crude Oil Violation by any Person (whether or not such Person is a Participating Person). Refiners Escrow Agreement Attachment A ¶ 3(d). A supplemental agreement between the parties to the Settlement Agreement provides that Each refiner who executes and delivers a counterpart of this Agreement shall be conclusively deemed and considered for all purposes to have simultaneously executed and delivered the Release . . . and it shall not be necessary or required that a Refiner execute and deliver a separate copy of such release. Settlement Agreement, Appendix 1 § 5.3.1. Mr. Gerald W. Callahan, Vice President/Counsel and Corporate Secretary of Quaker State Oil Refining Company, signed this counterpart document.
Paragraph VI.A of the Settlement Agreement makes the provisions of the Agreement, including the waiver provisions, binding on Parties to the Agreement and their affiliates. That paragraph defines affiliate as any Person (and the successors and assigns of such Person) which controls, is controlled by or is under common control with such Party.
Since Valley Camp is an affiliate of Quaker State Oil Refining Company as that term is defined under Paragraph VI.A of the Settlement Agreement, it is bound by all the provisions of the Agreement, including the waiver provisions. Accordingly, Valley Camp Coal Companys crude oil Subpart V claim is barred by the waiver provision and should be denied.
It Is Therefore Ordered That:
(1) The Application for Refund filed on March 4, 1991 by Valley Camp Coal Company for a refund under 10 C.F.R. Part 205, Subpart V is hereby denied.
(2) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: March 21, 1997