Case No. RF346-00001
June 13, 2000
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Applications for Refund
Name of Firms: Anchor Gasoline Corporation/
T Paul Landrys Canal Service Station, et al.
Date of Filings: November 9, 1992 et al.
Case Numbers: RF346-0001 et al.
This proceeding involves $3,600,000, plus accrued interest, which Anchor Gasoline Corporation (Anchor) remitted to the Department of Energy under the terms of the September 22, 1988 Consent Order entered into by DOE and Anchor.(1) The Consent Order settled, except for those matters specifically excluded therein, all civil and administrative claims and liabilities regarding Anchors compliance with the Federal Petroleum Price and Allocation Regulations during the period August 19, 1973, through January 27, 1981 (the consent order period). On April 2, 1992, the Office of Hearings and Appeals of the DOE instituted special refund procedures for the distribution of those funds. See Anchor Gasoline Corp., 22 DOE ¶ 85,071 (1992) (Anchor). The special refund procedures allow purchasers of Anchor products which were regulated during the period of price controls (e.g., motor gasoline, propane, middle distillates, natural gas liquids, and natural gas liquid products) to file Applications for Refund from the Anchor consent
order fund.(2) Refunds can be sought only for regulated products purchased between August 19, 1973, and January 27, 1981, the end of the period of petroleum price controls. See Anchor at 88,215. This Decision and Order considers 54 Applications for Refund filed by operators of retail service stations.
Evaluating applications in this proceeding requires that we consider the economic harm or injury suffered by that applicant. Id. at 88,216; see also Sid Richardson Carbon & Gasoline Co., 12 DOE ¶ 85,054 (1984). Firms that were not injured by Anchors pricing practices are ineligible for a refund. Firms that purchased Anchor products either for consumption or for resale are presumed to have been injured, and are eligible for refunds in this proceeding. However, consignee agents did not purchase Anchor products and are presumed to have experienced no injury as a result of Anchors alleged violations. See Anchor at 88,218. Consignee agents sold products pursuant to agreements whereby the supplier established the price to be charged by the consignee and compensated the consignee with a fixed commission based upon the volume of products that it sold. Because they could not purchase or adjust the selling price of these products, consignees could not absorb any overcharges. A consignee may rebut the presumption of non-injury by demonstrating, e.g., that its sales volumes and corresponding commission revenues declined due to the alleged uncompetitive of Anchors pricing practices. See Gulf Oil Corp./C.F. Canter Oil Co., 13 DOE ¶ 85,388 at 88,962 (1986).
After initial inspection of all Applications for Refund filed in the Anchor proceeding, it appeared that many applicants were consignee agents. We surveyed the Applicants by asking the following questions:
(1) Did Anchor/Canal set the retail price of the gasoline, or did you (station operator) set the price?
(2) Did Anchor/Canal send someone to take pump reading?
(3) When you paid Anchor/Canal for the gasoline, did you pay on delivery, or after the gasoline was sold? Did you pay only for the amount that had been sold, according to the pump readings, or did you pay for the entire shipment on delivery?
(4) Did you subtract a set per gallon sales commission from your payment to Anchor/Canal for gasoline?
The responses we received generally indicated that (1) Anchor set the retail price of the gasoline; (2) Anchor/Canal sent someone to take the pump readings; (3) the Applicants paid only for the gasoline actually sold; and (4) a sales commission was given for each gallon of gasoline. From these responses we have concluded that the Applicants listed in the Appendix were consignee agents for Anchor/Canal as defined in 10 C.F.R. § 212.31.(3) Our inquiries to officials at Anchor/Canal confirmed the nature of the transactions described above by the Applicants.
Consequently, in a letter dated March 16, 1995, we sent to each of the Applicants listed in the Appendix to this Decision a draft copy of a Proposed Decision and Order summarizing the findings above and concluding that the Applicants had not rebutted the presumption of non-injury for consignees. The draft Proposed Decision and Order went on to hold that these Applicants were therefore not eligible to receive refunds in the Anchor/Canal proceeding. However, we provided the Applicants with an opportunity to submit evidence to challenge the findings and conclusions made in the draft Proposed Decision and Order.
After considering the evidence before us and the responses we received to the draft Proposed Decision and Order, we are convinced that during the refund period Anchor/Canal retained legal title of the refined petroleum products sold by their outlets and that Anchor/Canal set the selling price for these products. Further, these Applicants were paid on a per gallon basis.(4) Given the characteristics of their business relationship with Anchor/Canal, we find that the Applicants listed in the Appendix were consignees of Anchor/Canal. See 10 C.F.R. § 212.31 (definition of "Consignee Agent").
In establishing the Anchor proceeding, we stated the we would presume that consignees of Anchor/Canal products were not injured by the firm's alleged pricing policies since consignees received a fixed commission based upon the volume of products it sold and never took legal title to the petroleum products or set the selling price of the products. See Anchor, 22 DOE at 88,218. None of the Applicants listed in the Appendix to this Decision has offered sufficient evidence to rebut the presumption of non-injury for consignees. Consequently, we shall deny the Applications for Refund listed in the Appendix to this Decision and Order.(5)
It Is Therefore Ordered That:
(1) The Applications for Refund specified in this Decision and Order are hereby denied.
(2) This is a final Decision and Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: June 13, 2000
(1)Under the terms of the Consent Order, Anchor remitted $7,775,000 to the DOE. In addition, Anchor was required to deposit into the escrow account a percentage of its profits each year until 1994, bringing the total Consent Order funds to a minimum of $9,000,000. Our calculations for this proceeding are based on the assumption that the total refunds remitted will be $9,000,000. These funds have then been divided between Anchors alleged violations regarding refined product sales and crude oil sales. The crude oil portion the Consent Order fund ($5,400,000) will be distributed in accordance with the procedures established in Anchor Gasoline Corp., 22 DOE ¶ 85,071 (1992).
(2)For purposes of this proceeding, any reference to Anchor includes Anchor Gasoline Corporation and its wholly-owned subsidiary, Canal Refining Company (Canal). See Anchor at 88,210. In this Decision we will refer to Anchor and Canal as Anchor/Canal.
(3)Section 212.31 of 10 C.F.R. defines "Consignee Agent" as "a firm which distributes covered products to purchasers pursuant to a contractual arrangement with a refiner under which the refiner retains title to the covered products and specifies the prices to be paid by the purchaser and under which the refiner pays the consignee agent a commission based on the volume of covered products distributed by the consignee agent." 10 C.F.R. § 212.31
(4)In a few instances, applicants informed us that Anchor/Canal permitted them to change product prices within a prescribed range in order to meet prices established by local competitors. Despite this pricing flexibility, the outlet operator was still subject to pricing constraints from Anchor/Canal. Such constraints could only exist if Anchor/Canal continued to own the product after delivery. Similarly, some applicants did not subtract a per gallon sales commission from their payment to Anchor/Canal, rather, a representative from Anchor/Canal performed this calculation for them. In each instance, Anchor/Canal charged only for product actually sold and controlled product pricing within a narrow range. Despite such minor variations in the degree of control exercised by Anchor/Canal, the fundamentals of the relationship between Anchor/Canal and the outlet operator did not change: in no instance did the operator purchase the product outright, nor were they ever free to charge whatever price they desired. Also, none of the applicants were at risk of suffering a loss on product sales since they were guaranteed a per gallon fee for each gallon sold. By comparison, independent resellers purchased product outright upon delivery, were free to establish their own retail prices subject to the price control regime, and were at risk of suffering a loss contingent on market forces. The applicants were clearly not independent resellers and are therefore not eligible for a refund in this proceeding.
(5)We note that we have already granted a number of refunds in this proceeding. We will examine each of the applicants to determine if they were in fact consignees. If we determine that they were consignees we will rescind these refunds and request repayment of the refunds granted to these applicants.
Appendix
CASE NO. APPLICANT CONTACT STREET CITY/STATE RF346-00001 "T" PAUL LANDRY'S CANAL SERV. OR DOROTHY G. LANDRY 2729 ALLAIN JEANERETTE, LA 70545 RF346-00006 SUGARLAND CANAL SERVICE STATN. OR GLENN ROBICHAUX 124-B SYCAMORE ST. RACELAND, LA 70394-2741 RF346-00009 CHARLES CANAL OR CHARLES W. PLAKE 133 ROLAND ST. MONTEGUT, LA 70377 RF346-00010 BROADMOOR CANAL CENTER OR MRS. ALPHONSE ZERINQUE 802 BROADMOOR AVE. HOUMA, LA 70364 RF346-00011 SAMUEL T. HIGGINBOTHAM RT. 1, BOX 14 CHURCH POINT, LA 70525 RF346-00021 WEST PARK CANAL OR ROGER BAILEY 1706 DIVISION AVE. HOUMA, LA 70360 RF346-00025 MORGAN CITY STATION OR GLADYS POLK HC 74, BOX 402K HERBERT, LA 71436 RF346-00026 EAST END CANAL OR JOHN LEJEUNE RT. 3, BOX 159 CHURCH POINT, LA 70525 RF346-00027 VILLE PLATTE CANAL OR LAURA GUILLORY 312 FUSELIER ST. VILLE PLATTE, LA 70586 RF346-00028 BAYOU SERVICE STATION OR LAWRENCE VENABLE 613 E. E ST. RAYNE, LA 70578 RF346-00029 PATTERSON CANAL OR JOHN P. DUFFY 15843 E. MAIN CUT OFF, LA 70345 RF346-00030 JIM'S LEE COTEAU CANAL OR JOSEPH J. GARY HWY. 316 MCINTOSH, FL 32664 RF346-00031 COOPER CANAL STATION OR JULES L. COOPER 1102 WRIGHT AVE. CROWLEY, LA 70526 RF346-00034 ELTON CANAL CENTER OR ROSE FONTENOT PO BOX 4 ELTON, LA 70532 RF346-00035 OPELOUSAS CANAL OR JAMES L. BARRON RT. 7, BOX 180 RGE OPELOUSAS, LA 70570 RF346-00037 LEE STREET CANAL OR ANNABELLE WALKER 2528 GREENWAY DR. ALEXANDRIA, LA 71301 RF346-00038 YOUNGSVILLE CANAL OR CAROL A. DUGAS HWY.92 YOUNGSVILLE, LA 70592 RF346-00040 OPELOUSAS BAYOU STATION OR DANNY MISTRIE PO BOX 91 OPELOUSAS, LA 70570 RF346-00042 BREAUX BRIDGE BAYOU SELF SERVE OR MICHAEL DEVILLE 1020 WILTON TAUZIO RD. BREAUX BRIDGE, LA 70517 RF346-00043 HARRY'S CORNER OR HARRY LELEUX 319 ST. MARY ST. NEW IBERIA, LA 70560 RF346-00045 CENTER STREET CANAL OR MARY JOYCE DORE 6817 LEE STATION RD. NEW IBERIA, LA 70560 RF346-00050 HOPKINS STREET CANAL OR ZODA BOURQUE 1415 O'DONNELL RD. NEW IBERIA, LA 70560 RF346-00051 OPELOUSAS CANAL SERVICE C/O BURNELL VIDRINE 140 CREST VIEW DR. OPELOUSAS, LA 70570 RF346-00052 SUGARLAND CANAL SERVICE STATN. C/O JAY VERRETT 100 LINDA HOUMA, LA 70364 RF346-00053 PORT BARRE CANAL OR JEFFERY L.S. LANCLOS PO BOX 436 PORT BARRE, LA 70577 RF346-00054 PORT BARRE CANAL OR LEE LANCLOS 17457 HWY. 190, PO BOX 436 PORT BARRE, LA 70577 RF346-00055 PATTERSON CANAL OR ED & GLADYS POLK HC 74, BOX 402K HERBERT, LA 71436 RF346-00057 HONDURAS CANAL GAS STATION OR ISSAC SIMS JR. 123 FAIRLANE DR. GRAY, LA 70359 RF346-00058 BONNIES GROCERY OR J.M. MILLER 4419 ST. JOSEPH CARENCRO, LA 70520 RF346-00059 RAYNE CANAL STATION OR APTON GUIDRY RT. 2, BOX 94 DUSON, LA 70529 RF346-00060 CANAL ECONO-CENTER OR APTON GUIDRY RT. 2, BOX 94 DUSON, LA 70529 RF346-00061 LOREAUVILLE CANAL SERVICE STA. OR NICHOLAS J. CROCHET 114 BRECK LOREAUVILLE, LA 70552 RF346-00062 MOSS STREET CANAL OR ARTHUR RODRIQUIZ 100 CARONDELET DR. LAFAYETTE, LA 70501 RF346-00063 LATIO LAIS CANAL STATION OR STEPHEN LATIO LAIS PO BOX 301 DELCAMBRE, LA 70528 RF346-00065 ROCHON'S COMMUNITY CANAL OR DELORES L. ROCHON PO BOX 521 LOREAUVILLE, LA 70552 RF346-00066 MAGNON SOUTH STATE CANAL OR MAXIE MAGNON 11523 MAGNON RD. KAPLAN, LA 70548 RF346-00067 LYDIA CANAL C/O TITUS DUPUIS 2718 JUNCA ST. JEANERETTE, LA 70544 RF346-00068 ST. MARTINVILLE CANAL OR OLEUS CHAMPAGNE 1848 CYPRESS ISLAND HWY. ST. MARTINVILLE, LA 70582 RF346-00070 DELCAMBRE CANAL STATION OR DAISY S. MAGNON 206 W. LAFAYETTE ST. MAURICE, LA 70555 RF346-00071 LYDIA CANAL OR CASTLE MEYERS 409 DOMINQUE JEANERETTE, LA 70544 RF346-00075 HIWAY 14 BY-PASS CANAL OR JESSE FAULK 2214 S. MONTE BLNC DR. ABBEVILLE, LA 70510 RF346-00076 HIGHWAY 14 BY-PASS CANAL OR LORRAINE HEBERT 135 W. VALCOURT ABBEVILLE, LA 70510 RF346-00078 SOUTH STATE CANAL OR RONALD HEBERT 1122 EATON DR. ABBEVILLE, LA 70510 RF346-00081 KAPLAN CANAL OR ERNEST J. ISTRE 813 E. 4TH ST. KAPLAN, LA 70548-4313 RF346-00096 HIGHWAY 14 CANAL SERVICE STATN OR BERTHELINE DEVILLE 1717 E. PINE MEADOW LAKE CHARLES, LA 70611 RF346-00100 JOHNSTON STREET CANAL OR MERELLA GUIDRY RT. 2, BOX 75 DUSON, LA 70529 RF346-00101 HIGHWAY 14 CANAL OR RONALD LAVERQUE & RICHARD DEVILLE 2692 CAROLYN DR. LAKE CHARLES, LA 70611 RF346-00103 AIRPORT ROAD CANAL MATTHEW & RUBY SIMIEN RT. 7, BOX 145 OPELOUSAS, LA 70570 RF346-00104 MILTON CANAL OR DONALD J. BOURQUE 15709 MIRE RD. KAPLAN, LA 70548 RF346-00105 SULPHUR CANAL OR MAX W. FONTENOT 2315 ESTELLE DR. SULPHUR, LA 70663 RF346-00107 HIGHWAY 14 CANAL STATION OR LARRY G. NIPPER PO BOX 101 WATSON, OK 74963 RF346-00108 WELSH CANAL BULK PLANT OR J.W. MCCOWN RT. 2, BOX 845 WELSH, LA 70591 RF346-00111 DEVILLE'S CANAL SERVICE ROBERT DEVILLE OR ESTATE OF RONALD DEVILLE SR. 328 W. PARK MANOR LAKE CHARLES, LA 70611 RF346-00114 FARMERS OIL CO., INC. OR ORVIA L. MECHE 409 PINE ST. WELSH, LA 70591 TOTALS: 54