July 25, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Application for Refund

Name of Applicant: The Byerlite Company

Date of Filing: June 20, 1994

Case Number: RF272-97060

This Decision and Order will consider an Application for Refund filed by the Byerlite Company (Byerlite), a producer of asphalt products. In its Application, Byerlite requests a refund from crude oil overcharge funds from the Office of Hearings and Appeals pursuant to 10 C.F.R. Part 205, Subpart V. As explained below, we will deny the Application.

Formerly, purchasers of refined petroleum products during the crude oil price control period could apply for a refund from crude oil overcharge funds.(1)51 Fed. Reg. 27899 (August 4, 1986). The Department of Energy collected these funds through consent orders with certain 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). The Office of Hearings and Appeals established procedures for the Subpart V crude oil proceeding. Among those procedures, we stated that we would accept Applications for Refund from injured parties that had not waived their claims by participating in one of the "Stripper Well" refund proceedings. 51 Fed. Reg. 29689 (August 20, 1986); 52 Fed. Reg. 11737 (April 10, 1987).

The "Stripper Well" refund proceedings were created to carry out the terms of the Settlement Agreement reached in The Department of Energy Stripper Well Exemption Litigation, 653 F. Supp. 108

(D. Kan. 1986). The Settlement Agreement established escrow accounts to refund crude oil overcharges to eight groups of petroleum product purchasers: Refiners, Retailers, Resellers, Agricultural Cooperatives, Airlines, Surface Transporters, Rail and Water Transporters, and Utilities.

In creating the escrow accounts, the court announced that "all parties and claimants receiving refunds under this agreement will waive any further claims to crude oil refunds." 653 F. Supp. at 114. Following the court's holding, the Settlement Agreement provides that the settling parties waive their right to participate in any future refund proceeding based on crude oil overcharges. Settlement Agreement, Paragraph III.A.1, 6 Fed. Energy Guidelines ¶ 90,509 at 90,660. Furthermore, this waiver provision is binding not only on the settling parties, but on their affiliates as well. Settlement Agreement, Paragraph VI.A, "Agreement Binding on Parties and their Affiliates," 6 Fed. Energy Guidelines at 90,667.

As defined in Paragraph VI.A of the Settlement Agreement, an affiliate of a party

includes any Person ... which controls, is controlled by or is under common control with such party. For this purpose, "control" means the power (existing on the Payment Date) to control the policies and business operations of a person, including ... the ownership ... of shares of stock ... of more than 49 percent of a person....

The Settlement Agreement goes on to define the "Payment Date" as "the date on which funds are distributed to all of the Parties or their Escrows." Paragraph III.B.1.b, 6 Fed. Energy Guidelines at 90,654. The court directed the transfer of funds to the escrows in an Order dated August 7, 1986. In Re: The Department of Energy Stripper Well Exemption Litigation, 3 Fed. Energy Guidelines ¶ 26,568. Therefore, August 7, 1986 is the Payment Date. Any firm that was an affiliate of a party to the Settlement Agreement on August 7, 1986 is bound by the waiver provision.

According to its Application, Byerlite is no longer in business, having been dissolved on April 20, 1988. While it was in business, it was a subsidiary of the Koppers Company.(2)Another subsidiary of the Koppers Company, Kaiser Sand & Gravel (Kaiser), executed a Stripper Well Surface Transporter Claim Form and Waiver. Kaiser Sand & Gravel, 16 DOE ¶ 85,281 (1987).

In terms of the Stripper Well Settlement Agreement, Byerlite was an affiliate of Kaiser. Both the Settlement Agreement and the Waiver and Release forms required of all Stripper Well applicants have been held to contain "very clear and unambiguous provisions … that the one who executes the waiver releases all claims of affiliates to further recovery of overcharges in Subpart V proceedings." Mid- American Dairymen, Inc. v. Herrington, 878 F.2d 1448 (Temp. Emer. Ct. App. 1989) (emphasis in the original); see also In Re: The Department of Energy Stripper Well Exemption Litigation, 707 F. Supp. 1267 (D. Kan. 1987).

By choosing to obtain relief from the Surface Transporters escrow account, Kaiser waived the rights of all its affiliates, including Byerlite's, to participate in the Subpart V crude oil proceeding. Koppers Company, 24 DOE ¶ 85,084 (1994). We will therefore deny Byerlite's Application for Refund.

It Is Therefore Ordered That:

(1) The Application for Refund filed by the Byerlite Company (Case No. RF272-97060) is hereby denied.

(2) This is a final Order of the Department of Energy.

George B. Breznay

Director

Office of Hearings and Appeals

Date: July 25, 1997

(1)The crude oil price control period extended from August 19, 1973 through January 27, 1981.

(2)Telephone statement of Karen Mance, Hanson Pittsburgh, to the OHA, July 22, 1997. Mance also stated that Hanson Pittsburgh bought a firm called Beazer East in October 1991. Beazer East had purchased Koppers in June 1988.