Case No. RF346-00001

June 13, 2000

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Applications for Refund

Name of Firms: Anchor Gasoline Corporation/

“T” Paul Landry’s Canal Service Station, et al.

Date of Filings: November 9, 1992 et al.

Case Numbers: RF346-0001 et al.

This proceeding involves $3,600,000, plus accrued interest, which Anchor Gasoline Corporation (Anchor) remitted to the Department of Energy 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 of the DOE instituted special refund procedures for the distribution of those funds. See Anchor Gasoline Corp., 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 considers 54 Applications for Refund filed by operators of retail service stations.

Evaluating applications in this proceeding requires that we consider the economic harm or injury suffered by that applicant. Id. at 88,216; see also Sid Richardson Carbon & Gasoline Co., 12 DOE ¶ 85,054 (1984). Firms that were not injured by Anchor’s pricing practices are ineligible for a refund. Firms that purchased Anchor products either for consumption or for resale are presumed to have been injured, and are eligible for refunds in this proceeding. However, consignee agents did not purchase Anchor products and are presumed to have experienced no injury as a result of Anchor’s alleged violations. See Anchor at 88,218. Consignee agents sold products pursuant to agreements whereby the supplier established the price to be charged by the consignee and compensated the consignee with a fixed commission based upon the volume of products that it sold. Because they could not purchase or adjust the selling price of these products, consignees could not absorb any overcharges. A consignee may rebut the presumption of non-injury by demonstrating, e.g., that its sales volumes and corresponding commission revenues declined due to the alleged uncompetitive of Anchor’s pricing practices. See Gulf Oil Corp./C.F. Canter Oil Co., 13 DOE ¶ 85,388 at 88,962 (1986).

After initial inspection of all Applications for Refund filed in the Anchor proceeding, it appeared that many applicants were consignee agents. We surveyed the Applicants by asking the following questions:

(1) Did Anchor/Canal set the retail price of the gasoline, or did you (station operator) set the price?

(2) Did Anchor/Canal send someone to take pump reading?

(3) When you paid Anchor/Canal for the gasoline, did you pay on delivery, or after the gasoline was sold? Did you pay only for the amount that had been sold, according to the pump readings, or did you pay for the entire shipment on delivery?

(4) Did you subtract a set per gallon sales commission from your payment to Anchor/Canal for gasoline?

The responses we received generally indicated that (1) Anchor set the retail price of the gasoline; (2) Anchor/Canal sent someone to take the pump readings; (3) the Applicants paid only for the gasoline actually sold; and (4) a sales commission was given for each gallon of gasoline. From these responses we have concluded that the Applicants listed in the Appendix were consignee agents for Anchor/Canal as defined in 10 C.F.R. § 212.31.(3) Our inquiries to officials at Anchor/Canal confirmed the nature of the transactions described above by the Applicants.

Consequently, in a letter dated March 16, 1995, we sent to each of the Applicants listed in the Appendix to this Decision a draft copy of a Proposed Decision and Order summarizing the findings above and concluding that the Applicants had not rebutted the presumption of non-injury for consignees. The draft Proposed Decision and Order went on to hold that these Applicants were therefore not eligible to receive refunds in the Anchor/Canal proceeding. However, we provided the Applicants with an opportunity to submit evidence to challenge the findings and conclusions made in the draft Proposed Decision and Order.

After considering the evidence before us and the responses we received to the draft Proposed Decision and Order, we are convinced that during the refund period Anchor/Canal retained legal title of the refined petroleum products sold by their outlets and that Anchor/Canal set the selling price for these products. Further, these Applicants were paid on a per gallon basis.(4) Given the characteristics of their business relationship with Anchor/Canal, we find that the Applicants listed in the Appendix were consignees of Anchor/Canal. See 10 C.F.R. § 212.31 (definition of "Consignee Agent").

In establishing the Anchor proceeding, we stated the we would presume that consignees of Anchor/Canal products were not injured by the firm's alleged pricing policies since consignees received a fixed commission based upon the volume of products it sold and never took legal title to the petroleum products or set the selling price of the products. See Anchor, 22 DOE at 88,218. None of the Applicants listed in the Appendix to this Decision has offered sufficient evidence to rebut the presumption of non-injury for consignees. Consequently, we shall deny the Applications for Refund listed in the Appendix to this Decision and Order.(5)

It Is Therefore Ordered That:

(1) The Applications for Refund specified in this Decision and Order are hereby denied.

(2) This is a final Decision and Order of the Department of Energy.

George B. Breznay

Director

Office of Hearings and Appeals

Date: June 13, 2000

(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 $9,000,000. These funds have then been divided between Anchor’s alleged violations regarding refined product sales and crude oil sales. The crude oil portion the Consent Order fund ($5,400,000) will be distributed in accordance with the procedures established in Anchor Gasoline Corp., 22 DOE ¶ 85,071 (1992).

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

(3)Section 212.31 of 10 C.F.R. defines "Consignee Agent" as "a firm which distributes covered products to purchasers pursuant to a contractual arrangement with a refiner under which the refiner retains title to the covered products and specifies the prices to be paid by the purchaser and under which the refiner pays the consignee agent a commission based on the volume of covered products distributed by the consignee agent." 10 C.F.R. § 212.31

(4)In a few instances, applicants informed us that Anchor/Canal permitted them to change product prices within a prescribed range in order to meet prices established by local competitors. Despite this pricing flexibility, the outlet operator was still subject to pricing constraints from Anchor/Canal. Such constraints could only exist if Anchor/Canal continued to own the product after delivery. Similarly, some applicants did not subtract a per gallon sales commission from their payment to Anchor/Canal, rather, a representative from Anchor/Canal performed this calculation for them. In each instance, Anchor/Canal charged only for product actually sold and controlled product pricing within a narrow range. Despite such minor variations in the degree of control exercised by Anchor/Canal, the fundamentals of the relationship between Anchor/Canal and the outlet operator did not change: in no instance did the operator purchase the product outright, nor were they ever free to charge whatever price they desired. Also, none of the applicants were at risk of suffering a loss on product sales since they were guaranteed a per gallon fee for each gallon sold. By comparison, independent resellers purchased product outright upon delivery, were free to establish their own retail prices subject to the price control regime, and were at risk of suffering a loss contingent on market forces. The applicants were clearly not independent resellers and are therefore not eligible for a refund in this proceeding.

(5)We note that we have already granted a number of refunds in this proceeding. We will examine each of the applicants to determine if they were in fact consignees. If we determine that they were consignees we will rescind these refunds and request repayment of the refunds granted to these applicants.

Appendix

CASE NO. APPLICANT CONTACT STREET CITY/STATE
RF346-00001"T" PAUL LANDRY'S CANAL SERV.OR DOROTHY G. LANDRY  2729 ALLAINJEANERETTE, LA 70545
RF346-00006SUGARLAND CANAL SERVICE STATN.OR GLENN ROBICHAUX  124-B SYCAMORE ST. RACELAND, LA 70394-2741
RF346-00009CHARLES CANALOR CHARLES W. PLAKE  133 ROLAND ST. MONTEGUT, LA 70377
RF346-00010BROADMOOR CANAL CENTER OR MRS. ALPHONSE ZERINQUE  802 BROADMOOR AVE. HOUMA, LA 70364
RF346-00011SAMUEL T. HIGGINBOTHAM    RT. 1, BOX 14CHURCH POINT, LA 70525
RF346-00021WEST PARK CANAL OR ROGER BAILEY  1706 DIVISION AVE. HOUMA, LA 70360
RF346-00025MORGAN CITY STATION OR GLADYS POLK  HC 74, BOX 402K HERBERT, LA 71436
RF346-00026EAST END CANAL OR JOHN LEJEUNE  RT. 3, BOX 159 CHURCH POINT, LA 70525
RF346-00027VILLE PLATTE CANAL OR LAURA GUILLORY  312 FUSELIER ST. VILLE PLATTE, LA 70586
RF346-00028BAYOU SERVICE STATION OR LAWRENCE VENABLE  613 E. E ST.RAYNE, LA 70578
RF346-00029PATTERSON CANAL OR JOHN P. DUFFY  15843 E. MAINCUT OFF, LA 70345
RF346-00030JIM'S LEE COTEAU CANAL OR JOSEPH J. GARY  HWY. 316MCINTOSH, FL 32664
RF346-00031COOPER CANAL STATION OR JULES L. COOPER  1102 WRIGHT AVE. CROWLEY, LA 70526
RF346-00034ELTON CANAL CENTER OR ROSE FONTENOT  PO BOX 4ELTON, LA 70532
RF346-00035OPELOUSAS CANAL OR JAMES L. BARRON  RT. 7, BOX 180 RGE OPELOUSAS, LA 70570
RF346-00037LEE STREET CANAL OR ANNABELLE WALKER  2528 GREENWAY DR. ALEXANDRIA, LA 71301
RF346-00038YOUNGSVILLE CANAL OR CAROL A. DUGAS  HWY.92 YOUNGSVILLE, LA 70592
RF346-00040OPELOUSAS BAYOU STATION OR DANNY MISTRIE  PO BOX 91OPELOUSAS, LA 70570
RF346-00042BREAUX BRIDGE BAYOU SELF SERVEOR MICHAEL DEVILLE  1020 WILTON TAUZIO RD. BREAUX BRIDGE, LA 70517
RF346-00043HARRY'S CORNER OR HARRY LELEUX  319 ST. MARY ST. NEW IBERIA, LA 70560
RF346-00045CENTER STREET CANAL OR MARY JOYCE DORE  6817 LEE STATION RD. NEW IBERIA, LA 70560
RF346-00050HOPKINS STREET CANAL OR ZODA BOURQUE  1415 O'DONNELL RD. NEW IBERIA, LA 70560
RF346-00051OPELOUSAS CANAL SERVICE C/O BURNELL VIDRINE  140 CREST VIEW DR. OPELOUSAS, LA 70570
RF346-00052SUGARLAND CANAL SERVICE STATN.C/O JAY VERRETT  100 LINDAHOUMA, LA 70364
RF346-00053PORT BARRE CANAL OR JEFFERY L.S. LANCLOS  PO BOX 436PORT BARRE, LA 70577
RF346-00054PORT BARRE CANAL OR LEE LANCLOS  17457 HWY. 190, PO BOX 436PORT BARRE, LA 70577
RF346-00055PATTERSON CANAL OR ED & GLADYS POLK  HC 74, BOX 402K HERBERT, LA 71436
RF346-00057HONDURAS CANAL GAS STATIONOR ISSAC SIMS JR.  123 FAIRLANE DR. GRAY, LA 70359
RF346-00058BONNIES GROCERY OR J.M. MILLER  4419 ST. JOSEPH CARENCRO, LA 70520
RF346-00059RAYNE CANAL STATION OR APTON GUIDRY  RT. 2, BOX 94DUSON, LA 70529
RF346-00060CANAL ECONO-CENTER OR APTON GUIDRY  RT. 2, BOX 94DUSON, LA 70529
RF346-00061LOREAUVILLE CANAL SERVICE STA.OR NICHOLAS J. CROCHET  114 BRECKLOREAUVILLE, LA 70552
RF346-00062MOSS STREET CANAL OR ARTHUR RODRIQUIZ  100 CARONDELET DR. LAFAYETTE, LA 70501
RF346-00063LATIO LAIS CANAL STATIONOR STEPHEN LATIO LAIS  PO BOX 301DELCAMBRE, LA 70528
RF346-00065ROCHON'S COMMUNITY CANALOR DELORES L. ROCHON  PO BOX 521LOREAUVILLE, LA 70552
RF346-00066MAGNON SOUTH STATE CANALOR MAXIE MAGNON  11523 MAGNON RD. KAPLAN, LA 70548
RF346-00067LYDIA CANALC/O TITUS DUPUIS  2718 JUNCA ST. JEANERETTE, LA 70544
RF346-00068ST. MARTINVILLE CANAL OR OLEUS CHAMPAGNE  1848 CYPRESS ISLAND HWY.ST. MARTINVILLE, LA 70582
RF346-00070DELCAMBRE CANAL STATION OR DAISY S. MAGNON  206 W. LAFAYETTE ST. MAURICE, LA 70555
RF346-00071LYDIA CANALOR CASTLE MEYERS  409 DOMINQUEJEANERETTE, LA 70544
RF346-00075HIWAY 14 BY-PASS CANAL OR JESSE FAULK  2214 S. MONTE BLNC DR. ABBEVILLE, LA 70510
RF346-00076HIGHWAY 14 BY-PASS CANALOR LORRAINE HEBERT  135 W. VALCOURT ABBEVILLE, LA 70510
RF346-00078SOUTH STATE CANAL OR RONALD HEBERT  1122 EATON DR. ABBEVILLE, LA 70510
RF346-00081KAPLAN CANALOR ERNEST J. ISTRE  813 E. 4TH ST. KAPLAN, LA 70548-4313
RF346-00096HIGHWAY 14 CANAL SERVICE STATNOR BERTHELINE DEVILLE  1717 E. PINE MEADOW LAKE CHARLES, LA 70611
RF346-00100JOHNSTON STREET CANAL OR MERELLA GUIDRY  RT. 2, BOX 75DUSON, LA 70529
RF346-00101HIGHWAY 14 CANAL OR RONALD LAVERQUE & RICHARD DEVILLE2692 CAROLYN DR. LAKE CHARLES, LA 70611
RF346-00103AIRPORT ROAD CANAL MATTHEW & RUBY SIMIEN  RT. 7, BOX 145 OPELOUSAS, LA 70570
RF346-00104MILTON CANALOR DONALD J. BOURQUE  15709 MIRE RD. KAPLAN, LA 70548
RF346-00105SULPHUR CANALOR MAX W. FONTENOT  2315 ESTELLE DR. SULPHUR, LA 70663
RF346-00107HIGHWAY 14 CANAL STATIONOR LARRY G. NIPPER  PO BOX 101WATSON, OK 74963
RF346-00108WELSH CANAL BULK PLANT OR J.W. MCCOWN  RT. 2, BOX 845 WELSH, LA 70591
RF346-00111DEVILLE'S CANAL SERVICE ROBERT DEVILLE OR ESTATE OF RONALD DEVILLE SR.328 W. PARK MANOR LAKE CHARLES, LA 70611
RF346-00114FARMERS OIL CO., INC. OR ORVIA L. MECHE  409 PINE ST.WELSH, LA 70591
TOTALS:54