Case No. RC272-00393
October 5, 1998
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Supplemental Order
Names of Applicants:CJC Leasing, Inc. et al.
Date of Filings: September 24, 1998
Case Numbers: RC272-00393 et al.
On July 15, 1988, OHA issued a Decision and Order granting a refund to CJC Leasing, Inc. (CJC), in the Subpart V crude oil refund proceeding. Emery F. Tuttle, 17 DOE ¶ 85,597 (1988) (unpublished appendix). CJC (Case No. RF272-07934) was granted a $13 refund based on purchases of 62,931 gallons of refined petroleum products during the crude oil price control period and a $0.0002 per gallon volumetric amount.
On August 22, 1988, the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) issued a Decision and Order granting a refund to Buckley Mining Corp. (Buckley), an affiliate of CJCs, in the Subpart V crude oil refund proceeding. Village of Arlington Heights, 17 DOE ¶ 85,721 (1988) (unpublished appendix). Buckley (Case No. RF272-07935) was granted a $146 refund based on purchases of 730,347 gallons of refined petroleum products between August 19, 1973, and January 27, 1981 (the crude oil price control period) and a $0.0002 per gallon volumetric amount.
In 1989, Buckley was granted a supplemental refund of $438 and CJC was granted a supplemental refund of $38 based on additional per gallon volumetric amount of $0.0006. Crude Oil Supplemental Refund Distribution, 18 DOE ¶ 85,878 (1989) (unpublished appendix). In 1995, Buckley was granted another supplemental refund of $584 and CJC was granted another supplemental refund of $50 based on a per gallon volumetric amount of $0.0008. Crude Oil Supplemental Refund Distribution, Case No. RB272-00020 (July 25, 1995). Thus, Buckley has received a total of $1,168 and CJC has received a total of $101 in the Subpart V proceeding.
It has come to our attention that two affiliates of Buckleys and CJCs received refunds from the Surface Transporters Escrow and the Rail and Water Transporters Escrow respectively in the Stripper Well refund proceedings. Bayou City Barge Lines, Inc. (Bayou) received a refund under Case No. RF271-00055. Sandersville Railroad Co., 16 DOE ¶ 85,352 (1987) (unpublished
appendix). Service Transport Company (Service), received a refund under Case No. RF270-00243. Smithway Motor Xpress, Inc., 16 DOE ¶ 85,137 (1987) (unpublished appendix). 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 Stripper Well Settlement Agreement (Settlement Agreement). In Re: The Department of Energy Stripper Well Exemption Litigation, 653 F. Supp. 108 (D. Kan. 1986). The escrow accounts were created to refund a portion of the 1.4 billion dollars in crude oil overcharges to eight specified groups of petroleum product purchasers: Refiners, Retailers, Resellers, Agricultural Cooperatives, Airlines, Surface Transporters, Rail and Water Transporters, and Utilities. In creating the escrow accounts, the court announced that "[a]ll parties and claimants receiving refunds under this agreement will waive any further claims to crude oil refunds." 653 F. Supp. at 114.
In order to participate in one of the Stripper Well refund proceedings, Service executed the "Surface Transporters Escrow Settlement Claim Form and Waiver" (Waiver Form). By executing the Waiver Form, Service waived its right to participate in any future refund proceeding based on crude oil overcharges, including this Subpart V proceeding. The waiver provision is found in Paragraph 7(a) of the Waiver Form, which states that the signer:
hereby releases, and waives all [the signer's] existing and future claims whether assertable at law or in equity, and whether known or unknown that fall within any one or more of the following classes ...
(2) all present and future claims asserting rights to share in existing or future monies paid, ordered to be paid, or held for payment as restitution as a result of any judicial or administrative proceeding relating to the federal mandatory allocation and price regulations applicable to crude oil ....
In addition, Paragraph 10 of the Waiver Form provides that:
[the signer] hereby agrees to withdraw and to take all necessary steps to file appropriate withdrawals of any and all claims it now has or hereinafter may have for funds in any Court or agency proceedings, including "Subpart V" proceedings, where such funds are related to Alleged Crude Oil Violations ... [the signer] agrees it will not file any such claims for refund of Alleged Crude Oil Violations in these or similar proceedings in the future.
Paragraph VI.A of the Settlement Agreement states:
The provisions of this Agreement. . . shall be binding upon (1) all the Parties hereto and (2) all Persons executing waivers or releases pursuant to this Agreement, and with respect to such Parties and Persons, their Affiliates, subsidiaries. . . officers, agents, attorneys and any other Persons while acting under their direction or control. As used herein, an Affiliate of any Party includes any Person (and the successors and assigns of such Person) . . . which controls, is controlled by or 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, including, without limitation, the ownership, directory or indirectly (thorough one or more intermediaries), of shares of stock having the right to elect a majority of the Board of Directors of a corporate Person, or the ownership (on the Payment Date), directly or indirectly (through one or more intermediaries), of more than 49 percent of a person.
Settlement Agreement, ¶ VI.A. This language is incorporated in the provisions of Paragraph 9 of the Waiver Form signed by Buckleys and CJCs affiliate, Service.
By choosing to obtain relief from the Surface Transporters escrow, Service waived the rights of its affiliates to receive a refund in the Subpart V crude oil proceeding. Therefore, the OHA will rescind the two Decisions and Orders with respect to the two Subpart V applicants at issue here, and each applicant shall be obligated to remit to the DOE the total amount of the crude oil refund that it received.(1)
It Is Therefore Ordered That:
(1) The Decision and Order issued by the DOE on July 15, 1988, Emery F. Tuttle et al., Case Nos. RF272-07773 et al., is hereby rescinded with respect to CJC Leasing, Inc. (Case No. RF272-07934, redesignated RC272-00393).
(2) The Decision and Order issued by the DOE on August 22, 1988, Village of Arlington Heights et al., Case Nos. RF272-07642 et al., is hereby rescinded with respect to Buckley Mining Corp. (Case No. RF272-07935, redesignated RC272-00394).
(3) The Decision and Order issued by the DOE on April 11, 1989, Crude Oil Supplemental Refund Distribution, Case No. RA272-00002, is hereby rescinded with respect to Buckley Mining Corp. (Case No. RF272-07935, redesignated RC272-00394) and CJC Leasing, Inc. (Case No. RF272-07934, redesignated RC272-00393).
(4) The Decision and Order issued by the DOE on July 25, 1995, Crude Oil Supplemental Refund Distribution, Case No. RB272-00020, is hereby rescinded with respect to Buckley Mining Corp. (Case No. RF272-07935, redesignated RJ272-00065) and CJC Leasing, Inc. (Case No. RF272-07934, redesignated RJ272-00064).
(5) The volume claim approved for Buckley Mining Corp. (Case No. RF272-07935) shall be changed in the Office of Hearings and Appeals database from 730,347 gallons to zero gallons.
(6) The volume claim approved for CJC Leasing, Inc. (Case No. RF272-07934) shall be changed in the Office of Hearings and Appeals database from 62,931 gallons to zero gallons.
(7) CJC Leasing, Inc. shall remit the sum of $101 to the DOE within 30 days. Buckley Mining Corp. shall remit the sum of $1,168 to the DOE within 30 days. Each check shall be made payable to the "U.S. Department of Energy." CJC Leasing, Inc.s check shall prominently display Case Nos. RC272-00393 and RJ272-00064 and Buckley Mining Corp.s check shall prominently display Case Nos. RC272-00394 and RJ272-00065. Each check shall be sent to:
Department of Energy
Office of the Controller
Cash Control Branch
P.O. Box 500
Germantown, MD 20874-0500
In the event that payment is not made within 30 days of the date of this Decision and Order, interest shall accrue on the amount due at the rate generally assessed by the Department of Energy on overdue receivables. Other charges generally assessed on overdue DOE receivables shall also apply.
(8) Upon notification by the Office of the Controller of the receipt of these funds, the Director of Special Accounts and Payroll, Office of the Departmental Accounting and Financial Systems Development, Office of the Controller of the Department of Energy, shall deposit these funds into the deposit fund escrow account maintained at the Department of the Treasury denominated Crude Tracking - Claimants 4, Account Number 999DOE010Z.
(9) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date:October 5, 1998
(1)Since Services signing of the Stripper Well claim form sufficed to waive Buckleys and CJCs Subpart V claims, it is unnecessary to detail the similar effect of Bayous signing of the Stripper Well claim form.
We also note that this Office rescinded the Subpart V refund of another affiliate of Buckley and CJC, Plastics Universal Corp., for the same reason listed in this Decision. See Plastics Universal Corp., Case Nos. RC272-00366 (August 7, 1997).