Case No. RF272-95287

October 3, 2002

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Application for Refund

Supplemental Order

Names of Petitioners:Doskocil for Eastern Express, Inc.

Surface Transporters Escrow/Sawyer Transport, Inc.

Dates of Filings: May 11, 1994

October 2, 2002

Case Numbers: RF272-95287

RR270-00030

This Decision and Order considers and ultimately grants one Application for Refund, releasing a total of $102,239 in the Subpart V crude oil refund proceeding to Doskocil for Eastern Express, Inc. (Eastern), and rescinds a refund previously granted in the Surface Transporters refund proceeding to Sawyer Transport, Inc. (Sawyer). As explained below, after considering the equities, the Office of Hearings and Appeals (OHA) will not require Sawyer to return the refund that was erroneously granted to it.

In 1986, the DOE, the oil industry and a number of other parties entered into a global settlement that resolved the question of who was injured by crude oil overcharges, and in what amount, during the seven- year price control period ending on January 28, 1981. The Final Settlement Agreement was approved by the United States District Court for the District of Kansas, which had jurisdiction over the case known as In Re: The Department of Energy Stripper Well Exemption Litigation, M.D.L. No. 378. The settlement established several escrow accounts for making restitution to members of the industries that had been parties to the litigation, including trucking companies that were eligible for refunds from the “Surface Transporters”escrow. Under the settlement, the OHA was responsible for administering the refund process for Surface Transporters. In addition, the OHA is responsible for administering the Subpart V crude oil refund process pursuant to the Statement of Modified Restitutionary Policy In Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986), which the DOE adopted to implement the settlement and the Petroleum Overcharge Distribution and Restitution Act of 1986, also known as PODRA.

Sawyer filed its claim for a Surface Transporter refund in 1986, and it was assigned OHA Case No. RF270-00731. In correspondence with OHA, Sawyer’s representative, L.K., Inc., asserted that Sawyer’s refund application should also include “Eastern Express, Inc. which Sawyer purchased.” September 3, 1987 letter from L.K., Inc. to OHA. Sawyer did not break down the 41,115,000 gallon

figure that formed the basis for its Surface Transporter refund claim between purchases by Sawyer and Eastern. On October 2, 1987, OHA granted the Sawyer refund claim in a group decision issued under the name of Cooper Jarrett, Inc., OHA Case Nos. RF270-00260, et al.

The pending Doskocil refund application, OHA Case No. RF272-95287, was filed in 1994. In its submission, Doskocil’s representative, Wilson, Keller & Associates, claims that Sawyer was not entitled to receive a refund based on Eastern’s purchases of refined petroleum products because Doskocil, rather than Sawyer, had purchased Eastern’s stock, and Doskocil, not Sawyer, was the successor in interest to Eastern’s refund rights. In refund proceedings based on the Stripper Well settlement, the right to a refund for refined products purchased by a corporation during controls is owned by that corporation since it was injured by the overcharges. When another entity purchases all of that corporation’s capital stock, it also acquires the right to a refund. The right to a refund may also be transferred by a corporation in an asset sale.

We have considered the evidence filed in connection with the Doskocil claim, and we are convinced that the firm is correct in asserting that it, not Sawyer, should receive the refund based on Eastern’s purchases. That evidence traces the ownership history of Eastern’s stock from 1969 though 1983. The record shows that Eastern’s stock was acquired by American Export Industries, Inc. in 1969, which continued operating a trucking business under the Eastern name. In 1976, R-C Motor Lines, Inc. was merged into Eastern. Eastern ceased operating a trucking business in May 1977 when it filed Chapter 11 Bankruptcy. In October 1977, Eastern sold a portion of its Interstate Commerce Commission (ICC) operating rights to Sawyer. Eastern did not sell any of its capital stock to Sawyer, nor did Eastern sell its right to a refund to Sawyer. American Export Industries, Inc. changed its name to AEICOR, Inc. in 1978. In 1983, AEICOR acquired Doskocil, Inc. and changed its name to Doskocil Companies, Inc. The record also indicates that the individual who was the successor in interest to a portion of the Sawyer trucking business at the time of its Surface Transporter refund filing mistakenly believed that its predecessor had acquired Eastern’s stock. However, it was this individual who later discovered the documents that reflected the true ownership history of Eastern’s stock and refund rights, and provided them to Doskocil’s representative, Wilson, Keller. Thus, we find that Doskocil is the owner of the refund rights for Eastern, which also include the refund rights for purchases made by R-C Motor Lines, Inc. Based on the same historical documents, we have also determined that the Surface Transporter refund previously granted to Sawyer should be rescinded.

Doskocil purchased refined petroleum products during the period August 19, 1973 through January 27, 1981 and has requested a refund from crude oil monies available for disbursement by the OHA. Doskocil relies on the presumption of injury for end-users as the basis for its refund claim. Under this presumption, OHA will presume applicants were injured if they were end-users of petroleum products and were not covered by the DOE or its predecessors’ price controls. City of Columbus, Georgia, 16 DOE ¶ 85,550 (1987).

We have reviewed the information submitted by Doskocil and determined that it was an end-user of eligible petroleum products. Doskocil derived its purchase volume claim by consulting actual records or by using reasonable estimation techniques.(1)1/ After considering the Application carefully, we have concluded that a refund is warranted for the purchase volume and in the amount set forth in this Decision. The total volume for which the refund is approved in this Decision is 63,899,451 gallons and the refund granted is $102,239.

The final deadline for the crude oil proceeding was June 30, 1995. It is the current policy of the DOE to pay eligible crude oil refund claimants at the rate of $0.0016 per gallon. We will decide, as we near the resolution of the remaining open claims, whether any further payment is appropriate.

As explained above, we have determined that Sawyer should not have received the1987 Surface Transporter refund in OHA Case No. RF270-00731, and that decision will be rescinded. Nevertheless, we do not believe it would be appropriate to require repayment of a refund that was approved more than 15 years ago. See Certain Teed Corp., 26 DOE ¶ 85,059 (1997) at 88,168 and authorities cited therein.

It Is Therefore Ordered That:

(1) The Application for Refund filed by Doskocil for Eastern Express, Inc. for all available crude oil overcharge funds is hereby approved 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 the refund amount set forth in this Decision and Order from the DOE deposit fund escrow account maintained at the Department of the Treasury denominated Crude Tracking-Claimants IV, Account No. 999DOE010Z, to the applicant or its representative. A refund check for $102,239 shall be sent to the applicant or its representative at the following address:

Doskocil, Inc. or Wilson, Keller & Associates

c/o Peter McMickle

P.O. Box 221145

Memphis, TN 38122

(3) To facilitate the payment of any future refunds, Doskocil 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:

Office of Hearings and Appeals

HG-1/L’Enfant Plaza Building

U.S. Department of Energy

1000 Independence Avenue, S.W.

Washington, D.C. 20585-1615

(4) The Decision and Order issued on October 2, 1987 in Cooper Jarrett, Inc., OHA Case Nos. RF270-00260, et al., is hereby rescinded as to Sawyer Transport in Case No. RF270-00731.

(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: October 3, 2002

(1)Interested parties were given an opportunity to comment on this application. No comments were received.