Case No. RF346-00016

September 26, 2001

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Applications for Refund

Names of Firms: Anchor Gasoline Corporation/

Lawtell Highway Canal, et al.

Dates of Filings: December 23, 1992, et al.

Case Numbers: RF346-16, et al.

This proceeding involves $3,600,000, plus accrued interest, which Anchor Gasoline Corporation (Anchor) remitted to the Department of Energy (DOE) 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 Anchor’s 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 (OHA) of the DOE instituted special refund procedures for the distribution of those funds. See Anchor Gasoline Corporation, 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 concerns ten Applications for Refund.

I. Background

Evaluating applications in this proceeding involves both an allocation of an appropriate portion of the consent order fund to each applicant, and an evaluation of economic harm or injury suffered by that applicant. Id. at 88,216; see also Sid Richardson Carbon and Gasoline Co., 12 DOE ¶ 85,054 (1984). In order to determine the portion of the fund to be allocated to each claimant, we assume that any overcharges were distributed equally over every gallon of regulated products sold by Anchor during the consent order period and allocated the consent order monies accordingly, i.e., by dividing the value of the fund by Anchor’s total sales of covered products during the period. Anchor at 88,216. This calculation produces a “volumetric factor” of $0.006942 per gallon. When that factor is multiplied by an applicant’s total eligible purchases, the result is a claimant’s allocable share of the consent order fund. Unless an applicant demonstrates that it was disproportionately affected by Anchor’s alleged practices, it cannot receive a refund greater than this allocable share of the consent order fund. Id. at 88,216.

Resellers and retailers claiming refunds of less than $10,000 in principal, those who have elected to limit their refunds to $10,000, end users, cooperative and certain types of regulated firms are presumed to have been injured by Anchor’s alleged overcharges, and are not required to submit a detailed showing of injury. Mid-level resellers and retailers whose full volumetric refunds exceed $10,000 may elect to receive 40 percent of their full volumetric share up to $50,000 without providing detailed demonstrations of injury. Id. at 88,218. To qualify for a refund, such an applicant must only submit a schedule of its monthly purchases of Anchor refined petroleum products during the consent order period.

II. Analysis

Three of the applicants listed in the Appendix to this Decision and Order are resellers that have claimed refunds of less than $10,000 in principal. Four of the applicants are resellers that have elected to receive the greater of $10,000 or 40 percent of their volumetric share. The three remaining applicants are end users of Anchor products.(3) All of the applicants have submitted monthly schedules of their Anchor purchases or have elected to rely on the Anchor volumes provided by the DOE. We have reviewed these Applications and have found them meritorious.(4)

The seven successful applicants in this proceeding that were not end-users of Anchor refined products (product resellers) qualify for refunds in part because they have successfully established that they were not consignee-agents of Anchor. During the consent order period, these applicants were not subject to Anchor’s authority when they established their retail product prices, the applicants paid in full (or were billed, in full) for Anchor product upon delivery, none had the progress of their product sales monitored by Anchor after delivery, and none received a per-gallon, sales commission from Anchor. These facts are critical to drawing the distinction between Anchor consignee-agents, which sold refined product on behalf of Anchor without assuming ownership of the product, and truly independent resellers that purchased Anchor product outright, assumed full market risks, and were vulnerable to overcharge injury.

Accordingly, we find that the firms listed in the Appendix to this Decision should receive refunds of their full volumetric allocation of the Anchor consent order fund. (5) In addition, the firms should receive a proportionate share of the interest accrued on the consent order funds. The total volume approved in this Decision is 12,433,068 gallons. The total amount of refunds approved in this Decision is $146,137, representing $86,308 in principal and $59,829 in interest. See Appendix.

Although we have carefully examined each applicant’s claim and supporting data, the determinations reached in this Decision are based on the representations made in the Applications. If the factual basis underlying any of our determinations in this Decision is later shown to be inaccurate, this Office has the authority to order appropriate remedial action, including rescission or reduction of the refunds ordered.

It Is Therefore Ordered That:

(1) The Applications for Refund specified in the Appendix to this Decision and Order are hereby granted as set forth in Paragraph (2) below.

(2) 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 from the DOE deposit fund escrow account maintained at the Department of Treasury and funded by Anchor Gasoline Corporation (Consent Order No. 999DOE035W) the amounts listed in the Appendix to this Decision and Order to the appropriate applicants. The checks should be made payable to and addressed to the applicants.

(3) The determinations made in this Decision and Order are based upon the presumed validity of statements and documentary material submitted by the applicants. The determinations may be revoked or modified at any time upon a finding that the factual basis underlying any of the Applications for Refund is incorrect.

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

George B. Breznay

Director

Office of Hearings and Appeals

Date: September 26, 2001

(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 the minimum of $9,000,000. These funds were then divided between Anchor’s alleged violations regarding refined product sales and crude oil sales. The crude oil portion of the Consent Order fund ($5,400,000) will be distributed in accordance with the procedures established in Anchor Gasoline Corporation, 22 DOE ¶85,071 (1992). See also A. Tarricone, Inc., et al., 15 DOE ¶85,495 (1987).

(2)For purposes of this proceeding, any reference to Anchor includes Anchor Gasoline Corporation and its wholly-owned subsidiary, Canal Refining Company. See Anchor at 88,210.

(3)Stelly Construction, Inc.,(RF346-20), Gragnon Wholesale, Inc. (RF346-39) and Van Mol Farms (RF346-56) consumed the Anchor product they purchased in the operation of their businesses.

(4)On March 16, 1995, a Proposed Decision and Order was issued which explored the implications of the fact that the majority of Anchor retailers were actually Anchor consignees, and therefore are not eligible for a refund from the Anchor consent order escrow fund. Consignees essentially functioned as sales agents for Anchor, never taking title to the product they sold. As we explain below, the applicants in this proceeding have demonstrated that they were independent resellers or end-users during the consent order period.

(5)For the applicants that have elected to accept the greater of $10,000 or 40 percent of their allocable share, we have reduced their purchase volumes accordingly.

 

Appendix

 

 

Case No.

 

Applicant

 

Address

 

Volume

(gallons)

 

Principal

 

Interest

 

Refund

 

RF346-16

 

Lawtell Highway Canal

 

c/o Athry Mae Richard

400 Beauch St.

Church Point, LA 70525

 

388,301

 

$2,695

 

$1,863

 

$4,558

 

RF346-19

 

Daigle=s Canal

 Station

 

c/o Eunice Daigle

926 W. Plaquemine

Jennings, LA 70546

 

 

885,000

 

$6,143

 

$4,247

 

$10,390

 

RF346-20

 

Stelly Construction, Inc.

 

c/o Micki Babineaux

P.O. Box 46

Arnaudville, LA 70512

 

413,736

 

$2,872

 

$1,986

 

$4,858

 

RF346-39

 

Gragnon Wholesale, Inc.

 

c/o Paul G. Landry

P.O. Box 1151

Franklin, LA 70538

 

179,000

 

$1,242

 

$857

 

$2,099

 

RF346-56

 

Van Mol Farms

 

c/o Ray Van Mol

6716 Old BR. Hwy

Alexandria, LA 71302

 

150,542

 

$1,045

 

$722

 

$1,767

 

RF346-69

 

Comeaux Seafood

 and Grocery

 

c/o Elaine Guidry

Rt. 4, Box 162

New Iberia, LA 70560

 

1,440,507

 

$10,000

 

$6,916

 

$16,916

 

RF346-72

 

Pelican Oil Co.

 

c/o Ronald J. Guidry

825 W. 1st St.

P.O. Box 301

Kaplan, LA 70548

 

3,954,480

 

$27,452

 

$18,988

 

$46,440

 

RF346-83

 

Bernard=s Service

 Station

 

c/o Lee Bernard

501 S. Kibbe

Erath, LA 70533

 

1,185,000

 

$8,226

 

$5,688

 

$13,914

 

RF346-85

 

Interest, Inc.

 

c/o Lee Monlezun

915 Treasure Lane

Lake Charles, LA 70605

 

2,395,995

 

$16,633

 

$11,646

 

$28,279

 

RF346-93

 

Staggs Tire Centre

 

c/o William L. Stagg

2045 8th Street

Lake Arthur, LA 70549

 

1,440,507

 

$10,000

 

$6,916

 

$16,916

 

Totals

 

10

 

 

 

12,433,068

 

$86,308

 

$59,829

 

$146,137