Case No. RR272-00304
* The original of this document contains information which is arguably confidential under 18 U.S.C. 1905. Such material has been deleted from this copy.
November 14, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Supplemental Order
Name of Petitioner: The Goodyear Tire & Rubber Company
Date of Filing: June 30, 1997
Case Number: RR272-304
This Decision and Order relates to an Opinion issued by the United States Court of Appeals for the Federal Circuit on June 30, 1997 in The Goodyear Tire & Rubber Company v. Dept of Energy, 118 F.3d 1531 (Fed. Cir. 1997). In its Opinion, the Federal Circuit Court of Appeals addressed the claims advanced by The Goodyear Tire & Rubber Company (Goodyear) that the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) had improperly denied a portion of Goodyears claim for a crude oil refund under 10 C.F.R. Part 205, Subpart V. While upholding the majority of OHAs findings with respect to Goodyears claim for a crude oil refund based on its purchases of petroleum products during the period August 19, 1973 through January 27, 1981 (crude oil refund period), the Federal Circuit disagreed with OHA on the issue of whether Goodyear was eligible for a refund based on purchases of butadiene and propylene from two of its suppliers. This supplemental order grants Goodyear a refund for the two products at issue, consistent with the mandate of the Federal Circuit Court of Appeals.
I. Background
On December 22, 1987, Goodyear submitted its Application for Refund in the Subpart V crude oil proceeding being conducted by OHA. In its Application, Goodyear sought a crude oil refund based on its purchases of 2.8 billion gallons of petroleum products during the crude oil refund period. On October 7, 1991, OHA issued a consolidated Decision and Order to Goodyear, two other tire and rubber manufacturers, and three manufacturers of carbon black which resolved a wide range of complex issues surrounding their respective claims for a crude oil refund. See Firestone Tire and Rubber Company, et al., 21 DOE ¶ 85,396 (1991) (1991 Decision). With respect to Goodyear, OHA granted it a refund in the amount of $878,556 based on purchases of 1,098,195,245 gallons of petroleum products. Id. At the same time, OHA denied Goodyears refund claim based on purchases of 1,179,861,246 gallons of petroleum products, and deferred consideration of Goodyears claim for its purchases of butadiene and petroleum wax, totaling XXXXXXXXXXX gallons.
Subsequently, OHA entertained Goodyears claims for its butadiene and petroleum wax purchases, together with a Motion for Reconsideration filed by Goodyear. See The Goodyear Tire and Rubber Company, 24 DOE ¶ 85,039 (1994) (1994 Decision). In the 1994 Decision, OHA denied Goodyear a refund for its purchases of butadiene and petroleum wax, but granted the company an additional $3,554 upon reconsidering that portion of the 1991 Decision pertaining to Goodyears purchases of isoprene.
Litigation ensued regarding the determinations OHA made in the 1991 and 1994 Decisions relating to Goodyears Application for Refund. During the pendency of this litigation, OHA announced that it had acquired additional crude oil overcharge funds for disbursement to applicants in the Subpart V proceeding. See Notice of Issuance of Interim Supplemental Refund Checks in the Crude Oil Overcharge Special Refund Proceeding, 60 F.R. 15562 (March 24, 1995). Accordingly, OHA implemented a supplemental proceeding whereby applicants who had previously received a crude oil refund received another refund based on an additional $0.0008 per gallon for each gallon previously approved. See Crude Oil Supplemental Refund Distribution, 25 DOE ¶ 85,016 (1995). At the same time, OHA also announced that it would begin paying first time crude oil refund recipients at a new, aggregate volumetric rate of $0.0016 per gallon. Id. In Goodyears case, OHA awarded the company an additional $878,556 on July 25, 1995 which represented $0.0008 for each of the 1,098,195,245 gallons it had approved in the 1991 Decision. OHA also awarded Goodyear $3,544 on October 31, 1995 for the 4,442,222 gallons it had approved in the 1994 Decision (4,442,222 times $0.0008 per approved gallon). The additional gallonage at issue in this supplemental order will be paid at the higher rate of $0.0016 per gallon.
On April 17, 1996, the United States District Court for the District of Columbia upheld the 1991 and 1994 Decisions in their entirety. See The Goodyear Tire & Rubber Company v. DOE, 942 F.Supp. 629 (D.D.C. 1996). Specifically, the District Court held that (1) OHA lawfully applied its newly adopted crude oil overcharge refund eligibility rule to Goodyears refund claims, which were filed before the rule was adopted, and (2) OHA did not err in applying that rule in denying the bulk of Goodyears refund claims. On appeal, the Court of Appeals for the Federal Circuit concluded that OHAs application of the crude oil overcharge refund eligibility rule was not unlawfully retroactive and that OHA properly declined to apply a broad, non-specific presumption of overcharge injury based solely on the fact that Goodyears suppliers were affiliates of crude oil refineries. The Federal Circuit also found that substantial evidence existed to support OHAs denial of a presumption with respect to certain purchases of petroleum products, but that substantial evidence was lacking for OHAs finding that Goodyear was not entitled to a presumption of overcharge injury for its purchases of butadiene and propylene from xxxxxxxxxxxxxxxxxxxxxxxxxxx(xxxx) and xxxxxxxxxxxxxxx(xxxxx).
II. Supplemental Refund
1. Butadiene
The record reflects that Goodyear purchased a total of xxxxxxxxxx gallons of butadiene from xxxxx and xxxxxxxxxxx gallons of butadiene from xxxx. The sum of these purchases is 254,756,613 gallons. Based on the current volumetric of $0.0016 per gallon, Goodyear shall receive a refund in the amount of $407,611 (254,756,613 times .0016) for these butadiene purchases.
2. Propylene
According to the record in this case, Goodyear purchased xxxxxxxxxx gallons of propylene during the crude oil priced control period from xxxx and xxxxxxx gallons of propylene from xxxxx during the same period. Based on total propylene purchases of 11,230,694 from these two suppliers, Goodyear will receive a refund in the amount of $17,969 (11,230,694 times $0.0016).
The effect of this supplemental order is to modify two prior decisions in which Goodyear received refunds for its purchases of butadiene and propylene, i.e. the 1991 Decision and the 1994 Decision. To effectuate this relief, it is necessary to modify each of those prior decisions, as reflected in the ordering paragraphs below.
On November 3, 1997, OHA issued a Proposed Decision and Order identical in substance to this final Decision and Order. OHA afforded Goodyear 30 days within which to object to any portion of the Proposed Decision and Order. On November 10, 1997, Goodyear advised OHA in writing that it did not object to the entry of a final order, in the form proposed on November 3, 1997. Accordingly, OHA issues this final order approving a crude oil refund to Goodyear in the aggregate amount of $425,580 based on the companys purchases of butadiene and propylene as discussed above.
It Is Therefore Ordered That:
(1) The Decision and Order issued by the Office of Hearings and Appeals on October 7, 1991, Firestone Tire and Rubber Company, et al., 21 DOE ¶ 85,396 (1991), be and hereby is modified to reflect that The Goodyear Tire & Rubber Company will receive a crude oil refund of $xxx based on Goodyear Tire and Rubber Companys purchases of xxxxxxx gallons of propylene from xxxxxxxxx xxxxxxx and $xxxxxx based on the companys purchases of xxxxxxxxxx gallons of propylene from xxxxxxxxxxxxxxxxxxxxxxxxxx. These amounts will be distributed in the manner set forth in Paragraph 3 below.
(2) The Decision and Order issued by the Office of Hearings and Appeals on May 18, 1994, The Goodyear Tire & Rubber Company, 24 DOE ¶ 85,039 (1994), be and hereby is modified to reflect
that The Goodyear Tire & Rubber Company will be granted a crude oil refund in the amount of $xxxxxxx based on the companys purchases of xxxxxxxxxxx gallons of butadiene from xxxxxxxxx xxxxxxx and a refund in the amount of $xxxxxxx based on purchases of xxxxxxxxxx gallons of butadiene from xxxxxxxxxxxxxxxxxxxxxxxxxx. These amounts will be distributed as specified in Paragraph 3 below.
(3) The Director of Special Accounts and Payroll, Office of Departmental Accounting and Financial Systems Development, Office of the Controller, of the Department of Energy shall take appropriate action to disburse a refund in the aggregate amount of $425,580 from the DOE deposit fund escrow account maintained at the Department of the Treasury denominated Crude Tracking- Claimants IV, Account No. 999DOE010Z, to The Goodyear Tire & Rubber Company, for the approved volumes set forth in the Appendix to this Supplemental Order. The $425,580 should be transferred by wire to The Goodyear Tire & Rubber Companys account as specified in a document being transmitted under separate cover to the Department of Energys Office of the Controller.
(4) To facilitate the payment of future refunds, the applicant shall notify the Office of Hearings and Appeals in the event that there is a change in its address, or if an address correction is necessary. Such notification shall be sent to:
Director of Management Information
Office of Hearings and Appeals
Department of Energy
1000 Independence Avenue, S.W.
Washington, D.C. 20585-0107
(5) The determinations made in this Decision and Order are based upon the presumed validity of the statements and documentary material submitted by the applicant. This Decision and Order may be revoked or modified at any time upon a determination that the basis underlying the refund application is incorrect.
(6) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: November 14, 1997
APPENDIX
The Goodyear Tire & Rubber Company, Case No. RR272-304
PRODUCT SUPPLIER VOLUME REFUND
xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx
Totals: 265,987,307 $425,580