Case No. RF272-94734
May 21, 1998
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Petitioner:Better Materials Corporation
Dates of Filing: June 1, 1993
Case Number: RF272-94734
This Decision and Order will consider an Application for Refund filed by Better Materials Corporation (BMC), a purchaser of petroleum products during the period August 19, 1973 through January 27, 1981 (the crude oil price control period). BMC requests a refund from crude oil monies available for disbursement by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) under 10 C.F.R. Part 205, Subpart V.
Pursuant to current DOE policy, purchasers of refined petroleum products may apply to the OHA for a refund from crude oil overcharge funds collected by the DOE. Statement of Modified Restitutionary Policy To Be Implemented In Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986) (the MSRP). In the MSRP, the OHA states that it will accept Applications for Refund in the Subpart V crude oil proceeding from injured parties that had not waived their claims by electing to participate in one of the "Stripper Well" refund proceedings. 51 Fed. Reg. 29689 (August 20, 1986). See also 52 Fed. Reg. 13291 (April 22, 1987); 52 Fed. Reg. 11737 (April 10, 1987).(1)
On June 1, 1993, BMC filed its application for refund in the Subpart V crude oil proceeding. In its application, BMC estimated that it had purchased 14,346,578 gallons of eligible petroleum products during the crude oil price control period.
During our processing of BMCs Subpart V crude oil claim, it became evident that another applicant in the Subpart V crude oil proceeding had the same address and management as BMC. That applicant was the Industrial Trucking Service Corporation (ITSC). OHA had previously granted ITSC a stripper well refund from the Surface Transporters Escrow on September 11, 1987. Industrial Trucking Service Corporation, et al., Case Number RF272-93864. Under the terms of the Stripper Well Settlement Agreement, applicants for refunds from the Surface Transporters Escrow were required to waive their rights to Subpart V refunds. See, e.g., Roberts Dairy Co., 16 DOE ¶ 85,573 at 89,147 (1997);affd Mid-American Dairymen, Inc. v. Herrington, 704 F. Supp. 198 (D. Kan. 1988); affd 878 F.2d 1448 (Temp. Emer. Ct. App. 1989); see also Boise Cascade Corp. 16 DOE ¶ 85,214 (1987);affd In Re: The Department of Energy Stripper Well Exemption Litigation, 707 F. Supp. 1267 (1987).
Moreover, the terms of the Stripper Well Agreement required that this waiver would also apply to both those parties who received refunds from the Stripper Well Escrows and their Affiliates, subsidiaries, member-patrons and their owners, officers, agents, attorneys and any other Persons while acting under their direction or control. Paragraph VI.A of the Settlement Agreement. The Stripper Well Agreement further clarified this language by stating:
As used herein, an Affiliate of any Party includes any Person (and the successors and assigns of such Person) which . . . is under common control with such Party. For this purpose, 'control' means the power (existing on the Payment Date), by contract, partnership agreement, stock ownership or otherwise, to control the policies and business operations of a Person . . .
Id.; See also Greif Board Corp., 20 DOE ¶ 85,014 (1990). Correspondence from BMC indicated that ITSC is a wholly owned subsidiary of BMC. Its representative informed us that BMC has owned all of ITSCs stock since the early 1970s. Therefore, it is evident that ITSC waived its parents right to a Subpart V crude oil refund. Section III.A.1 of the Settlement Agreement; See also City of Columbus, Ohio, 20 DOE ¶ 85,526 (1990); City of Tacoma, 19 DOE ¶ 85,593 (1989); City of Los Angeles, 18 DOE ¶ 85,899 (1989).
It Is Therefore Ordered That:
(1) The Application for Refund filed in the Subpart V crude oil refund proceeding by Better Materials Corporation on June 1, 1993 (Case No. RF272-94734) is hereby denied.
(2) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date:May 21, 1998
(1)1/ The "Stripper Well" refund proceedings refer to the eight escrow accounts created by the U.S. District Court for the District of Kansas to implement the terms of the Settlement Agreement
approved in In Re: The Department of Energy Stripper Well Exemption Litigation, M.D.L. 378 (July 7, 1986). The escrow accounts were created to refund a portion of the 1.4 billion dollars in crude oil overcharges to eight enumerated groups of petroleum product purchasers: Refiners, Retailers, Resellers, Agricultural Cooperatives, Airlines, Surface Transporters, Rail and Water Transporters, and Utilities.