Case No. RR265-00004

May 4, 1998

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Supplemental Order

Name of Petitioner:Getty Oil Company/S.O.S. Oil Corporation

Date of Filing: May 22, 1996

Case Number: RR265-4

This Decision and Order concerns an Application for Refund that S.O.S. Oil Corporation (SOS will be used to refer to all related firms), a reseller/retailer of motor gasoline, filed in the Getty Oil Company (Getty) special refund proceeding. In that application, SOS requested a refund of $1,979,994 based upon claims of a disproportionate overcharge and an allocation violation by Getty. On May 3, 1993, SOS's disproportionate overcharge and allocation claims were denied and the firm was granted a volumetric refund of $12,501 ($3,966 in principal and $8,535 in accrued interest). Getty Oil Co./S.O.S. Oil Corp., No. RF265-2300 (May 3, 1993) (unpublished decision). SOS appealed the denial of its disproportionate overcharge and allocation claims to the United States District Court for the District of Columbia. On May 16, 1996, the District Court issued a decision finding that DOE had not adequately dealt with SOS's claims that (1) Getty had other, more appropriate, classes of purchaser into which SOS could have been placed, and (2) one of these alleged classes was a retailer class to which Getty gave various discounts. The court also noted that DOE should have analyzed the SOS application in view of the guidelines for determining class of purchaser that are found in DOE Ruling 1975-2. M. Spiegel & Sons, Inc. v. O'Leary, Civ. Act. No. 93-2301(HHG), 4 Energy Mgmt. ¶ 26,704 (D.D.C. May 16, 1996). It therefore remanded the matter to the Office of Hearings and Appeals for more detailed consideration of SOS's claim in light of Ruling 1975-2.

Upon remand, we asked SOS to specify those portions of the record that it believes supported its claim, and we permitted SOS to supplement the record. Although the District Court directed this Office to apply Ruling 1975-2 to SOS's claim, the submission the firm filed on July 22, 1996, did not address the particulars of that Ruling in any way. Nor did SOS provide any further factual material that would assist us in satisfying the court's remand. The only material that SOS provided were copies of letters from Getty to SOS confirming the terms upon which Getty would deliver gasoline and additional invoices concerning sales to Hy Grade, a wholesale-purchaser/reseller that SOS maintains represents the class of purchaser into which it should have been placed. This submission adds no new information to the record and does not remedy the deficiencies in its presentation noted in the prior Decision. Consequently, we again conclude that SOS has not satisfied its burden of demonstrating an entitlement to a refund based upon a disproportionate overcharge.

Moreover, SOS has indicated that it pursued the same claims that it raises in this proceeding against Getty in a private lawsuit that was settled in 1979. Therefore, after considering the remanded matters, we will also deal with the impact of this settlement on SOS's refund claim. Because the settlement appears to have been accepted by SOS in full satisfaction for all of the claims it makes in the present proceeding, we find that an additional payment to the firm in this proceeding would provide an unwarranted windfall to SOS and is precluded by the doctrine of res judicata.

I. The Getty Refund Proceeding

The Getty proceeding involves approximately $25 million that Getty remitted to the DOE under the terms of a 1979 consent order that settled nearly all compliance disputes involving Getty's sales of crude oil and petroleum products during the period August 19, 1973, through December 31, 1978. On October 24, 1986, the DOE specified the procedures for distribution of the Getty funds. See Getty Oil Co., 15 DOE ¶ 85,064 (1986) (Getty). Evaluating refund applications involves both allocation of an appropriate portion of the consent order fund to each applicant and evaluation of the economic harm or injury suffered by that applicant. In devising the procedures to distribute the Getty funds, we noted that many claimants no longer have available the records necessary to substantiate specific injury from the alleged overcharges. As a result, Getty provided a number of presumptions to aid applicants in establishing their refund claims.

In order to determine the portion of the fund to be allocated to each claimant, we presume that any overcharges were distributed equally over every gallon of regulated products sold by Getty during the consent order period, and we allocated the consent order monies by dividing the value of the fund by the total volume of Getty's sales of covered products during that period. Id. at 88,117. This calculation produces a “volumetric factor” of $0.001526 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. A refund based upon this allocable share is called a "volumetric" refund. We recognized in Getty that the impact of Getty's alleged overcharges on an individual firm may have been greater than the volumetric refund amount. Accordingly, we stated that we would allow any purchaser to file a refund application based on a claim that it sustained a “disproportionate share” of Getty's overcharges. To the extent that a claimant can make this showing, it may receive a refund above the per gallon volumetric refund level.

As the second prong of a refund determination we evaluate injury to the applicant. Not every claimant need prove injury, i.e., that it absorbed the overcharges, in order to receive its allocable share. For example, end-users are presumed to have been injured. Moreover, we adopted presumptions of injury for resellers and retailers. Resellers and Retailers claiming refunds of $5,000 or less are not required to provide a detailed showing of injury. Id. at 88,122. In the Getty proceeding, larger resellers and retailers of motor gasoline may receive 40 percent of their volumetric share without showing that they absorbed the overcharges, up to a maximum of $50,000.

In addition, claims can be filed based upon alleged violations of the allocation regulations. With respect to such claims, the Getty order stipulated that the standards established in analogous refund proceedings will be applied to determine whether an applicant's alleged injury was incurred as a result of failure by Getty to furnish product which it was obliged to supply pursuant to the DOE mandatory allocation regulations, 10 C.F.R. Part 211. Getty, at 88,117. See OKC Corp./Town & Country Mkts., Inc., 12 DOE ¶ 85,094 (1984); Tenneco Oil Co./Research Fuels, Inc.., 10 DOE ¶ 85,012 (1982); Research Fuels, Inc. v. Department of Energy, 977 F.2d 601 (Temp. Emer. Ct. App. 1992).

II. Background

During the relevant period, sales of petroleum products were subject to the Mandatory Petroleum Price and Allocation Regulations. A brief review of the applicable regulations will aid in understanding the issues in this case. Under the price regulations, the prices that a firm could charge were based generally upon the prices it had in effect on May 15, 1973 (the base price). To obtain a firm's maximum lawful selling prices, an amount equal to the firm's increased product costs and allowable increased non-product costs was added to the firm's base prices. 10 C.F.R. §§ 212.82, 212.93. The regulations also prohibited discrimination among purchasers and required similar customers to be treated similarly. Id. § 210.62. Similar customers were to be grouped together into classes of purchaser, as they existed on May 15, 1973, with the same maximum prices for all customers in a given class. Id. §§ 212.31, 212.82(b), 212.93(a). Guidelines concerning application of the class of purchaser concept are found in DOE Ruling 1975-2. The allocation regulations gave each customer the right to purchase the amount of product it purchased from that supplier during the corresponding month of 1972 (after application of the supplier's allocation fraction). Id. § 211.9. New firms could apply for assignment of a supplier and a base period allocation. Id. § 211.12(e). Upon assignment of a new customer, a supplier was not permitted to create a new class of purchaser, but was to place the customer in an existing class of purchaser most appropriate for that customer. See Keystone Oil Co., 10 DOE ¶ 84,004 at 87,014 (1982); cf. Greenbelt Consumer Services, 1 FEA ¶ 20,211 (1974).

This case involves several separately incorporated firms with overlapping ownership. SOS- Gasoline Enterprises (SOS-Gasoline) owned and operated a number or retail outlets. SOS Petroleum, Inc., and MSS Economy Oil Co., Inc. (collectively MSS) were apparently related gasoline jobbers (distributors).(1) During 1974, SOS-Gasoline opened two new retail motor gasoline sales outlets, located in Elmont and Centereach, New York. Neither of these two outlets had a base period supplier or an allocation of motor gasoline. Under these circumstances, SOS-Gasoline sought an allocation and assignment of supplier for these two outlets from the New York Office of the Federal Energy Office (Region II). In March 1974, the firm received two Allocation Orders that required Getty to make available to the two outlets 4,756,726 gallons of motor gasoline annually (1,592,711 gallons for Elmont and 3,164,015 gallons for Centereach). Record at 41-42.

In response to the Allocation Orders, Getty informed SOS that (1) it would sell only premium, not regular, gasoline, (2) delivery would be at Getty's Setauket, New York, terminal, and (3) the price would be Getty's dealer tankwagon price (DTW). SOS July 22, 1996 Submission, Exhibit 1; see also Record at 177. SOS purchased a total of 2,599,029 gallons of motor gasoline from Getty during six months of the consent order period: March 1974, April 1974, May 1974, July 1975, May 1976, and June 1976. According to SOS, it was not economical for it to continue to purchase motor gasoline from Getty because of the prices and conditions that Getty imposed. The firm states that as a result, it ceased purchasing from Getty and instead supplied the two outlets with product which it diverted from its other stations. In April 1976, SOS converted the outlets to Amoco branded stations, and leased them to a third party. Its agreement with Amoco provided that SOS would receive 2.5 cents per gallon sold at the two outlets as a commission. Record at 78-83. The stations were sold in April 1978.

In the present refund proceeding, SOS contends that the price and conditions upon which Getty agreed to supply gasoline violated the regulations. SOS claims that it was (1) incorrectly placed in a class of purchaser applicable to retail dealers, while it should have been placed in a class of purchaser appropriate for jobbers, (2) incorrectly charged DTW prices, which are generally prices for product delivered to retail outlets, whereas here Getty refused to deliver the product,(2) (3) not given "discounts" that it claims were given to other Getty customers, and (4) not allowed to purchase regular gasoline.

On the basis of the foregoing allegations, SOS seeks a larger than volumetric — i.e., a disproportionate — refund based upon 2,599,029 gallons of Getty motor gasoline that SOS purchased. SOS also seeks a refund based upon 21,264,414 gallons of Getty gasoline that it elected not to purchase. SOS maintains that the conditions imposed by Getty constructively denied the firm its allocation, and it seeks a refund based upon profits allegedly lost in the resale of that gasoline through the end of the refund period, December 31, 1978. This period encompasses a period after SOS sold the stations as well as the period during which they were leased to a third party as Amoco stations.

We rejected SOS's disproportionate overcharge and allocation claims in the May 3, 1993 Decision and Order. We found that SOS had failed to demonstrate that Getty had placed it in an incorrect class of purchaser, charged an unlawful price, or violated the regulations by providing only premium gasoline. The District Court found that the May 3 Decision had not adequately considered the SOS claim that Getty had placed it in an incorrect class of purchaser. Specifically, the court stated that the May 3 Decision had not analyzed the evidence submitted by SOS in terms of the factors set out in Ruling 1975-2. The court therefore remanded the matter to us for further, careful consideration of SOS's class of purchaser claim.

III. The Class of Purchaser Issue

A. Class of Purchaser Criteria

Where, as here, the applicant is not relying upon a presumption, but is seeking to prove a disproportionate overcharge, it must present evidence sufficient to convince a reasonable person that it was overcharged. To be sure, our job is to distribute funds that the DOE has collected from firms who violated the regulations, but we cannot do so merely upon the request of an applicant. The burden of demonstrating the right to such a refund rests with the claimant. This is not an easy matter. Refund proceedings are not adversary in nature and are not designed to resolve complicated questions of interpretation of regulations, or questions that are unsettled or ambiguous. Moreover, the firm (Getty in this case) which signed the relevant consent order is not a party to the Subpart V proceeding and is therefore not in a position to contest allegations made by claimants. Consequently, evidence received from claimants must be considered carefully, as it typically presents only one side of what may be a complicated story. For these reasons, most successful disproportionate overcharge showings have included substantial supporting evidence such as a Remedial Order or other formal, written enforcement document containing at least a preliminary determination by DOE of a violation. See, e.g., Texaco Inc./Time Oil Co., 23 DOE ¶ 85,115 (1993) (applicant's alleged overcharge specifically identified in schedule attached to NOPV); Mobil Oil Corp./Atchison, T. & S.F. Ry., 20 DOE ¶ 85,788 (1990) (consent order firm's admission that the applicant had been overcharged and an NOPV); Amtel, Inc./Whitco, Inc., 19 DOE ¶ 85,319 (1989) (ERA audit specifically found that applicant had been overcharged); Standard Oil Co./Army & Air Force Exchange Serv., 12 DOE ¶ 85,015 (1984) (applicant specifically identified as being overcharged in the NOPV). We provide presumptions of injury for refund claimants who lack the records necessary to make overcharge showings in refund cases.(3)

As noted above, sellers of petroleum products were required to place new customers in the existing class of purchaser that most closely fitted them. Ruling 1975-2 gave general guidelines for applying the class of purchaser requirement. It specified four criteria that are generally relevant to class of purchaser determinations: (1) location, (2) type of purchaser, (3) volume, and (4) terms or conditions of sale and delivery. A difference in any one of these criteria alone could warrant placement in a different class of purchaser. These criteria were not intended to be exhaustive, and a seller had wide discretion in how it structured its classes of purchaser. A supplier's determinations were valid as long as they were within the "range of reasonable options." Champlin Petroleum Corp., 4 DOE ¶ 80,101 at 80,522 (1980). Class of purchaser structures were often complex and varied widely from firm to firm, with some suppliers having many classes of purchaser while others had only a few. Considerations relevant to the class of purchaser structure of one firm might not be relevant to the structure of another firm. Thus, in order for us to evaluate a claim that a claimant was placed in the wrong class, the claimant must provide convincing evidence as to how the supplier structured its classes of purchaser and of the characteristics of the customers within the relevant class. In view of the difficulty of making such a showing, very few refund applicants have even attempted to prove a class of purchaser violation. In this case, SOS has provided virtually no evidence of either Getty's class of purchaser structure or the characteristics of the customers with whom it claims it should have been grouped to allow us to make a fully informed determination under Ruling 1975-2.

B. Whether the Outlets Should Have Been Placed in a "Jobber" Class of Purchaser

Getty placed the two SOS retail outlets in a class of purchaser applicable to retail dealers. SOS's primary claim is that because it purchased in large quantities through MSS, it should have been placed in a jobber class of purchaser. SOS refers us to two Getty customers which it contends were in a jobber class of purchaser, Hy Grade Oil Company and S.B. Collins, Inc. Alternatively, the firm contends that it should have been placed in a different retailer class of purchaser which allegedly received discounts and allowances, and also that it was injured because Getty refused to sell it regular gasoline or deliver the product. Although the district court remanded this case for the express purpose of applying Ruling 1975-2, and although SOS was invited to do so, it has made no attempt to justify its class of purchaser contentions by reference to the criteria in that ruling. Accordingly, we must analyze SOS's claim based upon the evidence it submitted.

SOS appears to base its assertion that Hy Grade represents the appropriate class of purchaser upon the favorable price that Getty charged Hy Grade rather than any objective comparison of relevant characteristics of each firm based upon Ruling 1975-2. SOS has submitted copies of delivery tickets which show that Hy Grade purchased premium gasoline in May 1974 at a price 4.65 cents per gallon below that paid by SOS.(4) Record at 213-15. Although invited to do so, SOS has offered no evidence of the characteristics that it alleges make Hy Grade comparable to SOS. We therefore have no basis for concluding that Hy Grade was indeed a comparable firm. Nor has SOS offered evidence on the critical element — Getty's class of purchaser structure. As we noted in the prior Decision, anecdotal evidence concerning a few selected firms is not sufficient; it is necessary to know how Getty treated similarly situated firms.

Nonetheless, some conclusions can be reached. A review of the limited evidence that SOS has submitted indicates that pursuant to Ruling 1975-2, Hy Grade and SOS should not have been placed in the same class of purchaser. The first criterion utilized by the Ruling is "location." Either the location of the seller's distribution point or the buyer's place of business could form a basis for distinguishing between classes of purchaser. In the present case, it appears that both the point of delivery and the customer location of the two firms were different. The delivery tickets issued to Hy Grade and SOS are on different forms which implies that the product was supplied through different Getty terminals. Moreover, SOS is located in New York and Hy Grade is located in New Jersey. Consequently, even if SOS and Hy Grade had obtained gasoline from the same terminal, the difference in customer location alone could have justified their being placed in different classes of purchaser.

The Ruling also specifies "type of purchaser" as a factor in class of purchaser determinations. We found in the May 3, 1993 Decision that Getty properly placed the two stations in a retailer class of purchaser. This determination was based upon the 1974 Allocation Orders which specified that Getty was to supply the two retail outlets. Because SOS arranged for MSS, one of its jobber subsidiaries, to take delivery of gasoline from Getty for distribution to the two retail outlets, SOS claims that MSS, and not the retail outlets, was the entity that Getty should have considered in determining the appropriate class of purchaser.(5) There is simply no basis for this claim that MSS, a corporation separate from SOS-Gasoline, obtained any rights pursuant to the Assignment Orders. Getty's treatment of the Assignment Orders as directing it to supply two retail outlets was consistent with the price and allocation regulations under which retail motor gasoline outlets were treated as separate firms for many purposes, particularly for the allocation and assignment of supplies of motor gasoline.(6) 10 C.F.R. § 211.106. Had Region II intended for MSS itself to receive an allocation, it would have specified MSS as the purchaser in the Assignment Orders. Similarly, had Region II intended the outlets to be supplied through MSS, it would have specified MSS as the supplier.(7) That the Allocation Orders did not do so is therefore significant. Consequently, we find that SOS has failed to demonstrate that Getty violated the regulations in assigning the two retail outlets to its retail outlet class of purchaser.

Ruling 1975-2 also requires the conditions of sale or delivery to Hy Grade be considered.(8) SOS, however, has only provided copies of delivery tickets for Hy Grade. It has provided no information concerning any conditions of sale. For example, SOS has not shown whether Getty's prices to Hy Grade included both state and federal gasoline taxes, as was the case in its sales to SOS. Exclusion of New Jersey state gasoline tax from the price to Hy Grade would account for nearly all of the difference in the prices charged the two firms. Moreover, SOS has not shown that there was no contract between Getty and Hy Grade that could have affected its class of purchaser. Cf. Record at 224-25. As a result, SOS has not sustained its burden of demonstrating that it and Hy Grade purchased product from Getty under conditions of sale that were sufficiently similar for the two firms to be placed in the same class of purchaser.

SOS has similarly failed to provide any evidence to support its claim that Collins, another wholesaler, represents an appropriate class of purchaser.(9) Unlike Hy Grade, Collins may have purchased product at the same terminal as SOS. If that were so, Collins would appear to come closer than Hy Grade to representing an appropriate class of purchaser. But even if the firms purchased from the same terminal, this would not overcome the finding that SOS's outlets were properly placed in a retail dealer class. Moreover, the refund application filed by Collins in the Getty proceeding indicates that Getty charged Collins higher prices than Getty charged SOS!(10) Consequently, had we determined that a retailer class was not appropriate, in order to demonstrate that it had been overcharged, SOS would have to demonstrate that it should have been placed in a class different from Collins.

In sum, after considering the record in view of the principles and criteria set forth in Ruling 1975-2, we find that SOS has wholly failed to demonstrate that Getty violated the regulations by placing SOS in a different class of purchaser from Hy Grade or Collins. On the contrary, the record provides strong support for Getty's placement of the two SOS outlets in its class of purchaser for retail dealers.

C. Whether the Outlets Were Placed in the Correct Retailer Class of Purchaser

Alternatively, SOS contends that even if a retail dealer class of purchaser had been appropriate for its stations, Getty either placed them in the wrong retailer class or failed to provide the customary services and terms of sale applicable to that class. Again, these allegations are simply not supported by evidence.

First, the firm maintains that it should have been placed in a retail class that received competitive concessions. SOS has submitted a list of 144 retail outlets that Getty apparently indicated were in SOS's pricing "circuit" (i.e., location for pricing purposes) on May 15, 1973. Forty-three of these outlets had been receiving discounts on May 15, 1973. In all but two cases (one involving a contractual provision and the other a transportation allowance), these discounts were identified solely as competitive concessions. Record at 184-203.

Ruling 1975-2 explains that competitive concessions were discounts off the normal price voluntarily granted by a supplier (1) to meet a price offered by a competitor in order to retain the customer, or (2) to assist a customer in competing in a "price war" situation. The Ruling, however, distinguishes between the price control period and the period that preceded it, including the May 15, 1973 base date. According to Ruling 1975-2, competitive concessions existing on May 15, 1973, did not form a basis for distinguishing among customers in making class of purchaser determinations under the regulatory program. Thus, a competitive concession in effect for Customer A on May 15, 1973, did not alone allow placing Customer A in a class of purchaser different from Customer B which had received no discount. All comparable customers, both those that had received competitive concessions and those that had not, belonged in the same class of purchaser and had the same maximum lawful selling price.(11) Accordingly, under Ruling 1975-2, SOS's outlets could not have been placed in a class of purchaser that received competitive concessions, because such a class of purchaser was prohibited.

SOS also claims that its outlets should have received volume discounts. The amount of the competitive concessions in effect on May 15, 1973, for ten Getty-supplied retail outlets (which SOS identified) increased as purchase volumes increased, and SOS contends that this constitutes evidence that Getty routinely granted volume discounts.(12) We do not agree. The purchase volumes necessary for these ten outlets to reach the maximum concession were not high enough to warrant a volume discount.(13) More significantly, many of the 101 retail dealers in SOS's pricing circuit that received no discounts were purchasing gasoline volumes at levels significantly above those of these ten outlets.(14) That these outlets purchased relatively high volumes while receiving no discount strongly indicates that Getty was not granting volume discounts to its retail dealer class of purchaser, and that the variation with purchase volume in the amount of competitive concessions at the ten dealers cited by SOS was merely Getty's way of structuring its competitive concessions.

SOS also asserts that its outlets were wrongfully placed in the class of purchaser for branded retail dealers. Once again, however, SOS has not supported this claim with any relevant information. For example, it has not presented any credible evidence that Getty distinguished between branded and unbranded outlets. We agree that if an unbranded class existed and all other relevant factors were equivalent, the two outlets should have been placed in that class. See Atlantic Richfield Co., 6 FEA ¶ 80,629 at 80,633 (1977). Nor has SOS shown that an unbranded class would have been charged lower prices. Getty may have charged the same May 15, 1973 price to both branded and unbranded outlets. Under such circumstances, although charged the same price, each group would have constituted a different class of purchaser based upon different conditions of sale, e.g., the branded class would have the corresponding benefits and obligations of being branded outlets. Without such information, we cannot conclude that SOS experienced an injury even assuming that Getty improperly placed it in a branded class of purchaser.

SOS's next contention, that Getty was required by the regulations to sell it regular gasoline, is also without merit. Prior to the regulatory period, Getty, as part of its marketing strategy, converted its branded retail outlets to make sales of premium gasoline only. Record at 177-78. While SOS has shown that Getty sold some regular gasoline to some customers during the refund period, Getty was widely known throughout the industry as a premium grade reseller that typically did not resell regular gasoline. In particular, SOS has not shown that Getty sold regular gasoline to other retail outlets in SOS's appropriate class of purchaser. While Getty might not have been the firm SOS would have preferred as a supplier, this does not mean that Getty violated the regulations by supplying only premium gasoline to SOS.

SOS's final overcharge allegation relates to Getty's charging SOS a price for delivered product (DTW price) although Getty did not deliver the product. The record indicates that one retail dealer in the same pricing circuit, like SOS, used its own trucks to take delivery of gasoline. That dealer (Fairholme) received a transportation discount of 0.3 cent per gallon. Record at 203. SOS should have received a like discount, and the record indicates that SOS probably did receive a similar transportation discount. SOS indicated in a contemporaneous letter to Region II that it was receiving "a small allowance for delivery costs." See Record at 467. Consequently, we cannot find on the basis of the present record that Getty overcharged SOS by charging a delivered price for product it did not deliver.

Accordingly, SOS has failed to submit evidence to show that Getty either placed the two SOS retail outlets in an inappropriate class of purchaser or that it violated the regulations in any way with respect to its sales of gasoline to SOS.

IV. Alleged Allocation Violation

SOS claims that the terms under which Getty made motor gasoline available to it constructively denied it its allocation. Based upon this contention, the firm seeks a refund for motor gasoline that it did not purchase. The District Court noted in its opinion that this claim rests in part upon SOS's pricing violation claim. In view of the conclusion reached above that there is no evidence that Getty violated the price regulations in its sales to the SOS outlets, a fortiori, the firm's claim of a constructive allocation violation also fails.

Moreover, even if we had found some pricing violation by Getty, this alone would not imply that there had been a constructive denial of SOS's allocation. We have recognized constructive denial of an allocation as a basis for a refund in a few prior cases, but only where the delivery terms imposed by the seller were extremely onerous. See Mobil Oil Corp./Aromalene Oil Co., 20 DOE ¶ 85,155 (1990); Tenneco Oil Co./Kellermyer, Inc., 12 DOE ¶ 85,141 (1984). That is not the case here. Even if SOS had established that it did not receive a transportation discount that it was entitled to, the small amount of any resulting overcharge (apparently 0.3 cent per gallon) would not constitute constructive denial of its allocation. Nor was Getty's failure to supply SOS with regular gasoline (assuming that SOS had demonstrated that it was a regulatory violation) so extreme as to constitute a constructive denial of SOS's allocation.(15) We emphasize that SOS's failure to purchase its full allocation from Getty, standing alone, is not evidence of an allocation violation. Many firms purchased less than their full allocations, and like them SOS may simply have made a discretionary business decision not to purchase gasoline from Getty. Mobil Oil Corp./Flame Gas Co., 20 DOE ¶ 85,350 at 88,810 (1990); Petrolane-Lomita Gasoline Co./Int'l Drilling & Energy Corp., 19 DOE ¶ 85,004 at 85,011-12 (1989). The firm may, for example, have been able to obtain adequate gasoline supplies from other firms at prices more favorable than Getty's lawful prices. SOS has not submitted any evidence to support its position on this point.(16)

Finally, we note that there is no merit whatsoever to SOS's claim for a refund for the period after April 1976, when it began leasing these stations to other parties and they became Amoco branded outlets. Under the Allocation Regulations, the allocation for a retail outlet was transferred to the new operator of the outlet when it was sold or leased. 10 C.F.R. § 211.108(e). Consequently, the allocation for these stations belonged to the lessees, not to SOS.(17) SOS's assertion that it continued to be injured after the inception dates of the leases is wholly without merit.

V. SOS's Settlement with Getty

Even had SOS made the necessary showing that Getty had violated the price regulations in its sales of gasoline to its retail outlets, we would be unable to grant SOS the refund it seeks. According to SOS, "In 1978, SOS and its affiliates filed a lawsuit against Getty claiming damages based on overcharges incurred as a result of Getty's placement of SOS in the wrong class of purchaser and refusal to accord SOS its normal business practices." Record at 84-85. That action was subsequently settled in exchange for a $35,000 payment to SOS. Thus, it appears that SOS has already been compensated by Getty for its alleged regulatory violations, and for this reason alone can no longer claim to be an "injured person" as defined in the Petroleum Overcharge Distribution and Restitution Act of 1986, 15 U.S.C. §§ 4501-07, the statute primarily governing the DOE refund process (PODRA).(18)

Oil overcharge escrow funds are disbursed to compensate parties for injuries that have not otherwise been redressed. It is well settled that where a refund applicant has already received compensation for regulatory violations, whether through litigation or other means, the applicant cannot receive a duplicate recovery for the same violations through a refund proceeding. See, e.g., Hydrocarbon Trading & Transp. Co. v. Department of Energy, Civ. Act. No. 93-841(GK), 4 Energy Mgmt. ¶ 26,692 (D.D.C. May 8, 1995), aff'g Exxon Corp./Hydrocarbon Trading & Transp. Co., 22 DOE ¶ 85,140 at 88,404-07 (1992) (Hydrocarbon Trading). See also Allied Paving Co., 20 DOE ¶ 85,660 at 89,508 (1990) (no refund where firm uninjured because contract had fuel escalator cost clause); Saber Energy, Inc./Duquesne Light Co., 17 DOE ¶ 85,378 at 88,751 (1988) (company already compensated by direct restitution from consent order firm); Beacon Oil Co./Golden Gate Petroleum Co., 16 DOE ¶ 85,240 at 88,464-65 (1987) (reseller received credits compensating it for overcharges).(19)

In Hydrocarbon Trading, the district court held that once a claimant has received compensation for overcharges, it is no longer "injured" as required by both the Subpart V regulations and PODRA. The district court also found that a firm's settlement of a private lawsuit constitutes full satisfaction for any injury the firm may have suffered as a result of the regulatory violations that were the subject of the suit.(20) Hydrocarbon Trading, 4 Energy Mgmt. at 27,418-19. The court concluded that a settlement "extinguish[es] a party's claim to remedies pertaining to `all or any part of the transaction, or series of connected transactions, out of which the action arose.'" Id. at 27,418 (quoting Restatement (Second) of Judgments § 24(1)). See also American Colloid Co. v. Hodel, 701 F. Supp. 1537, 1540-43 (D. Wyo. 1988). Accordingly, the district court found that DOE had properly denied Hydrocarbon's application for refund from funds that the DOE had collected from Exxon to compensate persons who had not obtained private redress for their injuries.

Consequently, allegations that were within the scope of SOS's lawsuit cannot form a proper basis for a second recovery in the Getty refund proceeding. It appears that the entire disproportionate overcharge claim that SOS makes in this proceeding was within the scope of its earlier lawsuit.(21) Therefore, SOS has already received compensation for any injury due to Getty's regulatory violations, and we also conclude on this alternative ground that no disproportionate refund is appropriate.

VI. Conclusion

In sum, we find that SOS's claim for a refund in the Getty proceeding is unsupported. SOS has not sustained its burden of showing that Getty placed it in an incorrect class of purchaser or violated the price or allocation regulations in any other respect. Moreover, the allegations that form the basis for the refund claim have been the subject of private litigation and settlement. Accordingly, SOS has already received full satisfaction of its claim, and no additional refund would be warranted. Accordingly, no refund based upon a showing of disproportionate overcharge is appropriate, and we find that the result reached in the prior determination was correct.

On March 25, 1998, a copy of the determination that appears above was issued to SOS as a Proposed Decision and Order. SOS was informed that it could file a Statement of Objections within 30 days if it wished to contest any portion of the proposed determination. Although more than 30 days have passed, SOS has not filed a Statement of Objections. Under these circumstances, the proposed determination shall be issued as a final Decision and Order of the Department of Energy.

It Is Therefore Ordered That:

The Decision and Order issued to S.O.S. Oil Corporation on May 3, 1993, as clarified above, is hereby affirmed.

George B. Breznay

Director

Office of Hearings and Appeals

Date:May 4, 1998

(1)It is not clear how S.O.S. Oil Corp. is related to SOS-Gasoline and MSS. We also note that M. Spiegel & Sons, which sought judicial review of the prior Order, has submitted no evidence that it succeeded to SOS-Gasoline's right to a Getty refund.

(2)SOS is not consistent in this claim. In some of its submissions, the firm claims that Getty charged it retail prices, i.e., the prices at which Getty retail outlets sold gasoline to the public. There is absolutely no evidence of retail prices being charged to SOS. Instead, the record indicates that SOS was charged prices comparable to the prices that Getty charged other wholesale purchaser resellers that operated retail outlets.

(3)SOS relies to a substantial extent on affidavits of two of the firm's owner/officers. We closely examine such evidence submitted by interested parties. In this case, the affidavits contain clear errors, are self-serving to an unacceptable degree, and are ultimately not convincing. For example, the affidavits claim that it cost SOS 1.75 cents per gallon to transport the gasoline from the Getty terminal to its retail outlets, while contemporaneous records indicate that SOS's delivery cost was 0.65 cent per gallon. Compare Record at 76 with Record at 219. We are therefore unwilling to give these affidavits significant weight. Furthermore, the affidavits also contain several statements concerning aspects of Getty's operations that are typically held confidential by a supplier, such as the allegation that Getty placed SOS in a "branded" class of purchaser or charged the same price as Getty branded dealers, without explaining how the affiants obtained or would know such details. We do not consider such statements to be credible.

(4)SOS's invoice indicates that its price included federal and New York gas taxes of four and eight cents per gallon, respectively. The Hy Grade invoice does not indicate whether it includes gas taxes. Thus, the comparison which SOS wishes us to make cannot be made with any degree of certainty. Furthermore, SOS repeatedly compares the prices it paid for premium gasoline with the prices Hy Grade paid for regular gasoline. This comparison of prices of two different grades of gasoline is not fruitful.

(5)Implicit in this argument is the assumption that Hy Grade was in a jobber class. However, Getty claimed in 1975 not to have such a class, and SOS has submitted no evidence to contradict that claim. Record at 181-82. Consequently, SOS has not shown that Hy Grade was in a jobber class of purchaser.

(6)SOS is correct in its contention that the Allocation Orders do not govern the class of purchaser determination. However, they are determinative in so far as they identify the type of purchaser.

(7)Distributors that were assigned new customers could under the regulations seek an increase in their allocations from their suppliers. See 10 C.F.R. § 211.13(c) (39 Fed. Reg. 1924, 1934 (January 15, 1974)); Cook & Cooley, Inc., Interpretation 75-50 (January 3, 1975).

(8)The record indicates that the SOS retail outlets and Hy Grade purchased similar quantities of motor gasoline. Consequently, the Ruling's third criterion, volume, would not serve to distinguish between them.

(9)Collins, which purchased product at a Getty terminal in New York, demonstrated that it had absorbed the Getty overcharges and obtained a higher refund (but still based upon the volumetric amount) than it would have received under the presumptions of injury. See Getty Oil Co./S.B. Collins, Inc., 18 DOE ¶ 85,023 (1988). As part of our analysis we had compared the prices paid by Collins with average terminal prices for motor gasoline in that locality. SOS contends that by making this comparison we effectively found that Collins was a member of a class of purchaser that purchased at terminal prices. SOS misstates the holding of that case. Collins' class of purchaser was not an issue, and we made no finding concerning whether Collins was charged terminal, DTW, or some other price. The purpose of our inquiry was to determine the cost of product to Collins' competitors. We believed that average terminal prices best reflected that cost.

(10)Collins' refund application (RF265-1673) indicates its gasoline costs (without taxes) per gallon for July 1975, May 1976, and June 1976 were 42.25 cents, 39.9 cents, and 42.9 cents, respectively. SOS's cost for the same months were 38.1 cents, 39.75 cents, and 41.75 cents, respectively. Collins' application does not contain information on its costs during 1974. Moreover, these prices indicate that Collins was also sold only premium motor gasoline. Thus, even if we were to accept SOS's contention that Getty erred in not placing its outlets in the same class of purchaser as Collins, the firm would not have been harmed by that error and it would not constitute a basis for awarding an above volumetric refund.

(11)While the maximum lawful price was the same for all members of a class of purchaser, this did not necessarily require that the same prices be charged to all members of the class. A supplier could charge one member of a class a lower price than other members, but if it did so, the deemed recovery rule would limit the amount of increased product costs that it could "bank" for later recovery. See 10 C.F.R. §§ 212.83(e), 213.93(e). Any variation in prices within a class of purchaser would also have to comply with the requirements of the Robinson-Patman Act.

(12)Ruling 1975-2 stated that the agency would look behind competitive concessions to determine whether they were really granted to meet competition or were in fact customary discounts, such as volume discounts, that might require separate classes of purchaser. The Ruling noted that under the Robinson-Patman Act, volume discounts would have to be justified by cost savings to the supplier.

(13)Most of the ten outlets were required to make purchases of no more than 25,000 gallons monthly to reach the maximum competitive concession. In contrast, a "large" outlet would typically purchase over 100,000 gallons per month. Moreover, there is no consistency in how the purchase volume affected the amount of the competitive concessions at these outlets. For example, one retail outlet (Four Guys Collision) received a competitive concession of 1.0 cent per gallon on purchases of less than 35,000 gallons and 1.5 cents on higher purchases. Another customer (Badalamenti) received a discount of 1.5 cents only if it purchased more than 15,000 gallons in a month. A third (Meri-Jeff Service) received discounts of 1.5 cents, 1.75 cents, or 2.0 cents depending upon its level of purchases. Record at 199-203. This lack of consistency is also indicative that Getty was not granting volume discounts at these outlets.

(14)See, e.g., refund applications filed by: J&J Caporale Service Station, RF265-734 (80,000 gallons per month); Cedar Service Station, RF265-234 (30,000 gallons per month); Ehlwen Service (Central & Clarendon, Valley Stream), RF265-2201 (50,000 gallons per month); Plainview Getty (P. Arato), RF265- 1596 (140,000 gallons per month); Glen Head Getty (formerly DKD Service), RF265-1465 (50,000 gallons per month).

(15)SOS exaggerates the hardship posed by Getty's refusal to supply regular gasoline. It claims that it was necessary to exchange 90 percent of the Getty-supplied premium motor gasoline with other firms for regular grade gasoline, and that it lost about 1.75 cents per gallon on the exchanges. Record at 81-82. This argument is not convincing. The two retail outlets and MSS, a distributor with substantial allocations from other suppliers, were under common control. SOS has not explained why, e.g., MSS did not purchase all regular gasoline from its suppliers and exchange some of that regular for SOS's premium gasoline. The premium gasoline that MSS received in exchange could then be used to meet its customers' premium gasoline requirements.

(16)Moreover, the firm's claim of damages resulting from the alleged denial by Getty of its allocation is grossly inflated. As noted above, the Assignment Orders gave no rights to MSS. Consequently, there is no merit in SOS's claim insofar as it seeks a refund for lost profits attributable to MSS. SOS would, at most, be entitled to a refund based upon lost profits at the retail level. SOS has not established how much the allegedly lost profits at the retail level might have been. Specifically, the record indicates that the outlets obtained some motor gasoline supplies from other suppliers. An analysis of lost profits would have to take into account these additional supplies, and SOS has not provided any details concerning them. Moreover, SOS bases its calculation of lost profits on its alleged maximum lawful markup of seven cents per gallon, with an assumption that there were no overhead costs. See Tenneco Oil Co./Kellermyer, Inc., 12 DOE ¶ 85,141 at 88,439 (1984). The firm has not submitted any evidence, however, that market conditions would have permitted it to recover this full markup, which would have been unusual in the industry. For example, in 1977 the average retail markup in New York City was 4.02 cents per gallon. Platt's Oil Price Handbook and Oilmanac at 105 (1977 price edition).

(17)The record indicates that SOS purchased product for these outlets in May and June 1976, after they had been leased. These purchases are an anomaly. It is unclear to us whether these were spot purchases or whether SOS misrepresented to Getty that it still operated the two outlets and had the allocation for them.

(18)In view of the result we reached in the May 3, 1993 Decision and Order, we did not consider it necessary to reach the issue of the effect of the settlement on SOS's eligibility to receive a refund. Because the District Court required a more thorough and painstaking review, we shall address this issue as well.

(19)Even if a private lawsuit is unsuccessful, a refund may be barred by collateral estoppel. See Apex Oil Co./Go-Tane Service Stations, Inc., RF342-278, slip op. at 14-15 (July 7, 1995) (Proposed Decision); Apex Oil Co/Kickapoo Oil Co., RF 342-284, slip op. at 4-5 (Sept. 11, 1995) (Proposed Decision).

(20)Thus, the amount received in settlement of the litigation is immaterial to whether the firm retained a right to receive a refund.

(21)The record does not indicate whether the alleged constructive allocation violation was explicitly part of SOS's lawsuit. However, it is clear that the alleged allocation violation arises from the same facts as the alleged pricing violation. This was correctly noted by the District Court: "SOS's allocation violation claim rests on its allegation of pricing violations." Slip op. at 8-9. Consequently, under the traditional application of the doctrine of res judicata, SOS cannot raise a claim based upon identical facts following its settlement of the litigation.