Petition for Writ of Certiorari — Dyke v. Gulf Oil Corp.

Office-Supreme VLourt, Uo.

84-20 FILED

~ JL 5 1984

ia iicieciistiblinmalaetdnnin 1 ALEXANDER L. STEVAS,

In the Supreme Court

of the United States

OCTOBER TERM, 1983

RICHARD W. DYKE, dba Western Stations Co.,

COLVIN OIL COMPANY, and

F. 0. FLETCHER, INC., dba Fletcher Oil Company,

Petitioners,

vs.

GULF OIL CORPORATION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE TEMPORARY EMERGENCY

COURT OF APPEALS OF THE UNITED STATES

JOHN L. SCHWABE

Counsel of Record

NEVA T. CAMPBELL

SCHWABE, WILLIAMSON,

WYATT, MOORE & ROBERTS

Suite 1800, PacWest Center

1211 S.W. Fifth Avenue

Portland, Oregon 97204

Telephone: (503) 222-9981

Attorneys for Petitioners

Ea ee ee TR SES a NT

STEVENS-NESS LAW PUB. CO., PORTLAND, OR. 97204 7-84

QUESTIONS PRESENTED

I

Whether the Emergency Petroleum Allocation

Act of 1973 gives the trial court discretion to award

reasonable attorney’s fees to prevailing plaintiffs who

have established their right to recover overcharges .

although they have not established a right to treble

damages?

II

Whether, under the mutuality doctrine of Illinois

Brick, it is proper to deny standing to a plaintiff who

was damaged by purchasing defendant’s product

through a third party under a preexisting cost-plus

contract when the statute has been construed to allow

defendants to avoid liability to direct purchasers who

resold under such contracts on the ground that they

suffered no damage?

Til

Whether the appeals court contravened established

principles of judicial review by interpreting the State

of Oregon’s choice of law on applicable limitations

periods in a manner contrary to the interpretation of

the highest court of the State of Oregon?

LIST OF PARTIES AFFECTED

The caption of the case in this Court contains the

names of all parties involved in this appeal, except for

the following amici curiae who addressed the first

question presented :

Independent Oil and Tire Co.

Shepherd Brothers Service Stations

U. S. Oil Company, Inc.

The United States of America was an Intervenor

solely on a constitutional issue not raised in this peti-

tion.

Petitioners have no parent corporations, subsidi-

aries and affiliates.

TABLE OF CONTENTS

QUESTIONS PRESENTED

LIST OF PARTIES AFFECTED —_____.

TABLE OF CONTENTS

TABLE OF AUTHORITIES CITED ~ _.

a

JURISDICTION __ atte dae

STATUTORY PROVISIONS INVOLVED __

STATEMENT OF THE CASE

REASONS FOR GRANTING THE WRIT

I.

Il.

ITI.

The Trial Court must have the discretionary

power to award attorney’s fees to a prevail-

ing plaintiff under the EPAA in order to

carry out the congressional intent of a re-

medial statute and a a enforcement

mechanism _ EL ed Pe

The decision below violates the mutuality doc-

trine of Illinois Brick by rejecting the offen-

Sive use of pass-on —— it had — the

defensive use of pass-on _ oni

The decision below contravenes established

principles of judicial review by interpreting

the State of Oregon’s choice of law on appli-

cable limitations periods in a manner con-

trary to the interpretation of the highest

court of the State of Oregon ___- SiN rien nO

iii

11

iv

Page

a ne eee ae

APPENDIX SS. separately bound

Opinion of the Temporary Emergency

Court of Appeals — ——$$$________-—— A1-82

Judgment of the ssid eames

Court of Appeals -. : _ A83-84

Denial of Defendant’s Petition for Rehear-

LT REE NE CED On ee A85-86

Denial of Plaintiff’s Petition for Rehear-

ing and Suggestion for Rehearing En Banc A87 -88

Findings of Fact and Conclusions of Law

of the District Court — $_$_$__ .______ A89-126

Opinion of the District Court on Attorney

| pees enaered aeaemicnn Sey Bernice alee ieee men A127-146

Opinion of the District Court on Statutes

Or ac nsnsconiecisminseeriamenteneee A147-162

TABLE OF AUTHORITIES CITED

Page

CASES

Ashland Oil Co. v. Union Oil Co., 567 F.2d 984

(TECA 1980) _ Ree Sa We _ 9

Dyke v. Gulf Oil il Corp, 571 F. Supp 7 780 (D. Or.

1983) _ aa si _ 2,11, 14

Dyke v. Gulf Oil on Civil No. 77-10 PA dap

Or. June 20, 1983) _ OS cael 2

Dyke v. Gulf Oil Corp., Civil No. 77-10 PA /(D

Or. March 8, 1982) 2

Dyke v. Gulf Oil setters 601 F.2d 557 | (TCA

1979) _ ean ete ie _ 10, 14

Eastern Air Lines, Inc. v. Atlantic Richfield, 609

F.2d 497 (TECA 1979) 13

Erwin v. Thomas, 264 Or. 454, 506 P2d 494

(19738) bcastadanann Raeies . 16,17

Forsyth v. Cessna Aircraft Company, 5 520 F.2d

608 (9th Cir. 1975) 16

Gulf Oil Corporation v. Richard W. Dyke, et al.,

4 Energy Mgmt (CCH) 9 26, 485 (April

A: Rea wernt Re HM 1,2

Hanover Shoe, Inc. v. United Shoe Machinery

Corp., 392 U.S. 481, 88 S. Ct. 2224, 20

L.Ed.2d 1231 (1968) =. 13

Illinois Brick Co. v. Illinois, 431 U.S. 720, 97

S.Ct. 2061, 52 L.Ed.2d 707 (1977) __ 11, 12,18

TABLE OF AUTHORITIES (Cont.)

In re Beef Industry Antitrust Litigation, 600

F.2d 1148, 1164 n. 20 (5th Cir. 1979), cert.

denied, 449 U.S. 905, 101 S.Ct. 281, 66 L.

Ed.2d 137 (1980) __.. . 13

Takahashi v. Loomis Armored Car Service, 625

F.2d 314 (9th Cir. 1980) is 18

Tomlin v. Boeing, 650 F.2d 1065 (9th Cir. 1981) 17

Tower v. Schwabe, 284 Or. 105, 585 P.2d 662

(1978) _.. wei 16

Vandevoir v. Southeastern Seana’ Lines, 152

eb Fy, Ls S| | er 16

STATUTES

Economie Stabilization Act, Pub. L. No. 92-210,

85 Stat. 837 focsiins 12 U.S.C. § 1904 note

_ 2,3, 4, 5, 8, 9, 10

ena WS _...... 8, 4, 6, 8, 9, 10

TINE TEI ceccesssincncinvsinininciendatccttnameasiaaeee a 8

Section 210(b) isa eee a

fs ELS re ME SIREN

RRL | | a nee ie eT

Section 211(g) 2

Emergency Petroleum Allocation Act of 1973,

Pub. L. No. 93-159, 87 Stat. 627 (1973), 15

U.S.C. § 751 et seq. _______ 2, 4, 5, 6, 7, 10, 18, 14

renee WE) enneennncsnis acca

STATUTES (Contd. )

Page

15 U.S.C. § 754(a) 2

Or. Rev. Stat. § 12.080(2) 5

Wash. Rev. Stat. § 4.16.130 5

CONGRESSIONAL MATERIALS

H. R. Rep. No. 93-531, 93d Cong., 1st Sess., re-

printed in 1973 U.S. wesOnitie & Ad. News

2582, 2583 _

vii

10

ee kd bem >

Iu the Supreme Cowt

of the United States

OCTOBER TERM, 1983

RICHARD W. DYKE, dba Western Stations Co.,

COLVIN OIL COMPANY, and

F. 0. FLETCHER, INC., dba Fletcher Oil Company,

Petitioners,

vs.

GULF OIL CORPORATION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE TEMPORARY EMERGENCY

COURT OF APPEALS OF THE UNITED STATES

Petitioners respectfully petition for a writ of

certiorari to the Temporary Emergency Court of

Appeals of the United States.

REPORTS

The opinion of the three judge panel of the Tempo-

rary Emergency Court of Appeals is not yet officially

reported. It is unofficially reported at 4 Energy

eT

2

Mgmt. (CCH) § 26,485. The slip opinion including

concurring and dissenting opinions is included in the

appendix. A. 1. The District Court’s June 20, 1983

Findings of Fact and Conclusions of Law, which was

reversed in part, has not been reported. It is included

in the appendix. A. 89. The opinion of the District

Court on attorney’s fees, which was reversed in part,

is officially reported at 571 F. Supp. 780 (D. Or.

1983). It has been included in the appendix. A. 127.

The March 8, 1982 opinion of the District Court on

statutes of limitations, which was reversed in part,

has not been reported. It is included in the appendix.

A. 147.

JURISDICTION

Following oral argument on March 19, 1984, the

Temporary Emergency Court of Appeals rendered

and entered its decision on April 17, 1984. The dis-

senting and concurring opinions were filed on April

27, 1984. Plaintiffs’ timely petition for rehearing and

suggestion for rehearing en banc was denied on May

29, 1984. A. 87. Defendant’s timely petition for re-

hearing was denied on June 4, 1984. A. 85.

This Court has jurisdiction pursuant to Section

211(g) of the Economic Stabilization Act (12 U.S.C.

§ 1904 note), as amended, and as incorporated into

the Emergency Petroleum Allocation Act of 1978,

Section 5(a), 15 U.S.C. § 754(a). Section 211(g)

provides:

3

“Within. 30 days after entry of any judgment or

order by the Temporary Emergency Court of Ap-

peals, a petition for writ of certiorari may be filed

in the Supreme Court of the United States.”

STATUTORY PROVISIONS INVOLVED

This case was brought pursuant to Section 210 of

the Economic Stabilization Act (““ESA’’), as amended,

Pub. L. No. 92-210, 85 Stat. 848 (1971), 12 U.S.C. §

1904 note:

Ҥ 210. Swits for damages or other relief

“(a) Any person suffering legal wrong because

of any act or practice arising out of this title, or any

order or regulation issued pursuant thereto, may

bring an action in a district court of the United

States, without regard to the amount in controversy,

for appropriate relief, including an action for a de-

claratory judgment, writ of injunction (subject to

the limitations in Section 211, and/or damages.

“(b) In any action brought under subsection (a)

against any person renting property or selling goods

or services who is found to have overcharged the

plaintiff, the court may, in its discretion, award the

plaintiff reasonable attorney’s fees and costs, plus

whichever of the following sums is greater:

“(1) an amount not more than three times

the amount of the overcharge upon which the

action is based, or

“(2) not less than $100 or more than $1,000;

“except that in any. case where the defendant es-

tablishes that the overcharge was not intentional and

4

resulted from a bona fide error notwithstanding the

maintenance of procedures reasonably adapted to

the avoidance of such error the liability of the de-

fendant shall be limited to the amount of the over-

charge: Provided, That where the overcharge is not

willful within the meaning of Section 208(a) of this

title, no action for an overcharge may be brought by

or on behalf of any person unless such person has

first presented to the seller or renter a bona fide

claim for refund of the overcharge and has not re-

ceived repayment of such overcharge within ninety

days from the date of the presentation of such claim.

“(c) For the purpose of this section, the term

‘overcharge’ means the amount by which the consid-

eration for the rental of property or the sale of goods

or services exceeds the applicable ceiling under regu-

lations or orders issued under this title.”

Section 210 of the ESA was incorporated into the

Emergency Petroleum Allocation Act of 1973

(“EPAA)”, Pub. L. No. 93-159, 87 Stat. 627, 15

U.S.C. § 751, et seq., by Section 5(a) of the Act which

provides in part:

“|. [S]ection 205 through 211 of the Economic

Stabilization Act of 1970 (as in effect on the date

of enactment of this Act) shall apply to the regula-

tion promulgated under Section 4(a), to any order

under this Act, and to any action taken by the Presi-

dent (or his delegate) under this Act, as if such

regulation had been promulgated, such order had

been issued, or such action had been taken under the

Economic Stabilization Act of 1970...”

The Oregon statute of limitations the District

5

Court held applicable to Fletcher is Or. Rev. Stat. §

12.080(2) which provides:

“12.080 Action on certain contracts or liabilities.

“(2) An action upon a liability created by statute,

other than a penalty or forfeiture, excepting those

mentioned in ORS 12.110;”

“shall be commenced within six years.”

The Washington statute held applicable by the ap-

peals court is Wash. Rev. Stat. § 4.16.180' which pro-

vides:

“Actions for relief not otherwise provided for. An

action for relief not hereinbefore provided for, shall

be commenced within two years after the cause of

action shall have accrued.”

STATEMENT OF THE CASE

The jurisdiction of the district court was invoked

under Section 211(a) of the Economic Stabilization

Act, 12 U.S.C. § 1904 note, as incorporated into the

Emergency Petroleum Allocation Act, 15 U.S.C. §

754(a). Section 211(b) (2) vests exclusive appellate

jurisdiction over all such controversies in the Tempo-

rary Emergency Court of Appeals (TECA).

On January 1, 1974 Gulf changed plaintiffs and

1 The appeals court actually cited Wash. Rev. Stat. § 12.16.-

130, but that citation is apparently an error. A. 43.

6

all of its other Gulf branded jobbers in its San Fran-

cisco Retail Marketing District from branded to un-

branded status. Gulf continued to supply them with

gasoline but they could no longer operate under Gulf’s

brand, accept Gulf credit cards, or have other ameni-

ties of the brand. A. 94.

Because of their changed status, the newly un-

branded jobbers were to receive new prices from Gulf,

according to the EPAA and the regulations thereunder.

Most of the reclassified jobbers received prices based

on those Gulf had been charging an existing unbranded

jobber. For plaintiffs, though, Gulf created new prices

it derived from an oil journal publishing spot purchase

prices. A. 103-104, 115. Gulf claimed at the time that

the “new item-new market” rule justified the use of

two different methods to set prices for these jobbers.

As a result of the change, the other jobbers’ prices

went down approximately one to two cents a gallon.

A. 98, 102. Plaintiffs’ prices went wp approximately

two to three cents a gallon, in spite of their loss of

branded services. A. 97, 100, 103. Plaintiffs claimed

Gulf had violated the petroleum pricing regulations.

Plaintiffs sent 90-day demand letters to Gulf for

the overcharges as required by § 210, but Gulf did not

respond. A. 105. In 1977 plaintiffs filed actions for

overcharges from 1974 to 1977. The cases were con-

solidated for trial. At trial, Gulf admitted that its use

of the new item-new market rule was unjustified. A.

104.

ae ae

7

On September 12, 1983 the trial court entered

judgment awarding overcharges of $2,000,000 to Dyke,

$790,000 to Fletcher and $745,000 to Colvin. Plaintiffs

also received prejudgment interest of $557,588.38,

$408,471.69 and $200,568.99 and attorney’s fees of

$385,500, $191,000 and $173,500, respectively. A. 5.

Gulf appealed to the Temporary Emergency Court

of Appeals, which in part reversed the District Court.

The appeals court eliminated Fletcher’s award on

standing and statute of limitations grounds and re-

versed the award of prejudgment interest and attor-

ney’s fees. It remanded the case to the district court for

consideration of additional evidence Gulf had proffered

as to what existing prices were appropriate for plain-

tiffs, A. 54.

The appeals court subsequently denied both parties’

timely petitions for rehearing and plaintiffs’ sugges-

tion for rehearing en bane. A. 85, 87.

REASONS FOR GRANTING THE WRIT

!

The Trial Court must have the discretionary power

to award attorney’s fees to a prevailing plaintiff

under the EPAA in order to carry out the

congressional intent of a remedial statute and a

private enforcement mechanism

Reversing the District Court’s discretionary award

of attorney’s fees to the prevailing plaintiffs, the panel

majority held that no such discretion existed because

8

Gulf’s overcharges were unintentional, bona fide error

and in spite of reasonable procedures to avoid over-

charges. A. 38.

The ruling is contrary to the language and struc-

ture of § 210(b) of the ESA and the intent of Congress

to provide a remedial statute and private enforcement

mechanism in § 210.

Section § 210(b), quoted at pages 3-4, swpra, pro-

vides that in any action brought under subsection (a)

the court may award attorney’s fees to the plaintiff.

The “bona fide error” exception, limiting liability to

the amount of the overcharge, does not apply to at-

torney’s fee awards but only to the additional provision

for treble damages or an amount between $100 and

$1,000, if greater.

The appeals court rejected this interpretation, hold-

ing that attorney’s fees and costs may not be awarded

unless treble damages are authorized as well.

2 This ruling ignored the trial court’s refusal to find bona

fide error by Gulf. The panel majority made a de novo finding

“upon examination of the record” that any overcharges were

the result of bona fide error. A. 38. Gulf requested a finding

of good faith error; plaintiffs opposed the finding and the

trial court refused to make it. It was Gulf’s burden to prove

bona fide error since plaintiffs sent 90-day demand letters in

accordance with § 210. Gulf did not even appeal the District

Court’s refusal to find bona fide error; it contended on appeal

only that a finding of unintentional conduct was sufficient

alone to remove the District Court’s discretion. A. 4. Since the

trial court specifically refused to make a finding of good faith

error, an award of attorney’s fees is appropriate on the record

even based on the three-part test applied by the appeals court.

9

Such an interpretation of the statute is not only

contrary to the language and structure of § 210, but

it also runs counter to the goal of § 210 to provide for

remedial recovery of overcharges. The Temporary

Emergency Court of Appeals has described § 210 as

providing “compensatory relief” and “remedial re-

covery.” Ashland Oil Co. v. Union Oil Co., 567 F.2d

984, 990 n. 12 (TECA 1980). The award of over-

charges is hardly compensatory when seven years of

attorney’s fees, made necessary by defendant’s “ag-

gressive and persistent” defense (A. 138), are sub-

tracted.

Based on the legislative history of the EPAA, the

appeals court has also recognized the critical private

enforcement mechanism Congress expected § 210 to

provide. Ashland, 567 F.2d at 990 n. 11. The District

Court accordingly explained its award of attorney’s

fees:

“Obviously, the statute is remedial in nature. It

does create a private right of action for damages.

Where a bona fide claim is made and rejected, the

only choice that a plaintiff has is to seek recourse by

suit. And if attorneys’ fees are not allowed under

those circumstances, that certainly tends to dis-

courage enforcement of — private enforcement,

which Congress has determined is necessary.” [Em-

phasis added.] (Vol. 25, Tab 329, pp. 1166-67)

In passing emergency legislation to deal with a

national crisis, Congress recognized that the govern-

ment’s resources would be inadequate for proper en-

10

forcement. F R. Rep. No. 93-531, 93d Cong., 1st Sess.,

reprinted in 1973 U.S. Code Cong. & Ad. News 2582,

2583. The majority opinion, however, has construed the

governing statute to deny not only the recovery of

reasonable attorney’s fees, but also the necessary costs

of the litigation itself. The factors of a defendant’s in-

tentional conduct, bona fide error and reasonable pro-

cedures are relevant only to the ‘punitive’ treble dam-

ages.

The panel majority fails to address the facts that

plaintiffs submitted 90-day demand letters to Gulf,

that Gulf finally acknowledged it had improperly cre-

ated a new class of purchaser and that plaintiffs had

to take Gulf to court to recover the overcharges.

Congress intended § 210 as a compensatory statute

and as encouragement to private enforcement of the

EPAA and ESA. The decision in this case undercuts

that intent by denying to prevailing plaintiffs the right

to recover attorney’s fees and costs, even when the trial

court believes that is warranted. The error should be

corrected and the trial court’s decision that an award

3 Plaintiffs have also twice briefed and argued before the

appeals court issues going to the heart of enforcement of the

statutes and regulations. In Dyke v. Gulf Oil Corp., 601 F.2d

557 (TECA 1979), Gulf did not prevail in its attempt to

make the DOE a party in all private enforcement actions. In

this appeal, Gulf sought to establish that the EPAA and the

ESA are unconstitutional. The appeals court in its opinion

utilizes arguments raised by plaintiffs on “report and wait”

and severability in rejecting Gulf’s position. A. 19 n. 24, 27-28.

11

of attorney’s fees was appropriate should be given

effect.

The decision below violates the mutuality doctrine of

ILLINOIS BRICK by rejecting the offensive use of pass-on

though it had approved the defensive use of pass-on

Under contracts in existence at the time of the

change to unbranded status, Gulf sold gasoline to

Tesoro Petroleum Corporation which then resold it to

Fletcher for Gulf’s sale price plus a fixed markup of

$.00375 per gallon. Prior to execution of both the Gulf-

Tesoro and the Tesoro-Fletcher contracts, Gulf knew

that Fletcher would be the party receiving and retail-

ing the gasoline.®

4 The panel majority’s reference to an abuse of discretion

on the amount awarded by the trial court is based on an

another incorrect reading of the record. A. 39 n. 38. The panel

majority’s reference to amounts over $499,531.36 as being a

bonus is incorrect, as that figure was sought for Dyke alone.

Fletcher and Colvin also had fees. Plaintiffs did request a

bonus, but the District Court denied it and substantially re-

duced the requested hourly rates. Dyke v. Gulf Oil Corp., 571

F. Supp. 780, 783-86 (D. Or. 1983). A. 138-146. Dyke received

$385,500, Fletcher received $191,000 and Colvin received

$173,500. Gulf did not even appeal whether the hours and

hourly rates for Oregon set by the District Court were reason-

able. Attorney’s fees on appeal are also appropriate.

5 Gulf representatives investigated Fletcher’s station loca-

tions and explained the ramifications of Fletcher’s anticipated

use of the Gulf brand. As part of the transaction, Gulf estab-

lished a special procedure for Fletcher to transmit its Gulf

credit card sales invoices directly to Gulf, for which Gulf

allowed Tesoro credit on Tesoro’s open account. Notices of

12

Although the appeals court recognized that a pass-

on defense may be asserted where there is, as here, a

preexisting functional equivalent of a cost-plus con-

tract (A. 47-50), it nevertheless held that Fletcher had

no standing to sue because it did not purchase directly

from Gulf. A. 40-42.

The incongruous result is that if Tesoro had sued

Gulf, Gulf could have successfully raised the pass-on

defense because Tesoro, due to its preexisting cost-plus

contract with Fletcher, would have suffered no dam-

age. Yet, under the panel majority’s holding, Fletcher,

the party which did suffer the damage, cannot sue be-

cause it is an indirect purchaser. The panel majority’s

analysis is contrary to decisions of this Court and the

Fifth Cireuit and is fundamentally unfair.

A basic principle underlying the defensive or of-

fensive use of the pass-on theory is mutuality; you

cannot have one without the other. In Illinois Brick Co.

v. Illinois, 431 U.S. 720, 97 S. Ct. 2061, 52 L. Ed. 2d

707 (1977), this Court held that if a pass-on theory

may not be used defensively by a violator against a

direct purchaser, then that theory may not be used

price changes came directly from Gulf to Fletcher, not through

Tesoro. Fletcher took delivery of product directly from termi-

nals in Oregon and Washington designated by Gulf, not Tesoro.

Gulf included Fletcher in meetings held with all of Gulf’s

branded jobbers. When Gulf applied to the Department of

Energy to withdraw as a supplier from certain West Coast

locations, Fletcher received a copy of Gulf’s application in

which Gulf’s Legal Department requested the DOE to termin-

ate its supply obligation to “Tesoro Fletcher.” A. 111.

13

offensively by an indirect purchaser against the viola-

tor. 431 U.S. at 735; 97 S. Ct. at 2069. See In re Beef

Industry Antitrust Litigation, 600 F.2d 1148, 1164 n.

20 (5th Cir. 1979), 449 U.S. 905, 101 S. Ct. 281, 66

L.E..2d 137 (1980). The Temporary Emergency Court

of Appeals recognized the defensive use of the pass-on

theory in Eastern Air Lines, Inc. v. Atlantic Richfield,

609 F.2d 497 (TECA 1979). It followed this Court’s

rulings in Hanover Shoe, Inc. v. United Shoe Machin-

ery Corp., 392 U.S. 481, 88 S. Ct. 2224, 20 L. Ed. 2d

1231 (1968), and Jllinois Brick, supra. The court also

found support for its analysis in the In re Beef In-

dustry case, supra, which involved the offensive use of

the pass-on theory. It adopted the principles of those

antitrust cases for actions under the EPAA. 609 F.2d

at 498-499,

The case at bar is apparently the first case before

the appeals court to present an issue of offensive use

of the pass-on theory. Unfortunately, the panel ma-

jority totally ignored the rulings of the Supreme Court

and the Fifth Circuit relied on by another panel in

Eastern. Rather than applying the pass-on concepts

developed in Hanover, Illinois Brick and In re Beef

Industry, the panel majority held that because the

EPAA expired in 1981 and it was exercising its juris-

diction under a savings clause, it would not “expand

the statutes” to allow recovery by indirect purchasers.

A. 42.

Recognizing the offensive use of pass-on in cases

of preexisting cost-plus contracts does not “expand”

14

the statute. It allows the party who was overcharged

to recover from the violator and prevents the violator

from escaping justice. If “expansion” of the statute is

involved at all, it was expanded in 1979 with recogni-

tion of defensive pass-on. Offensive pass-on is merely

its necessary corollary. No principle of law denies a

plaintiff equal treatment under the law or renders de-

cisions of the Supreme Court inapplicable merely be-

cause 2 appellate court is considering a case under

a savings clause.®

The decision below contravenes established principles

of judicial review by interpreting the

State of Oregon's choice of law on applicable

limitations periods in a manner contrary to the

interpretation of the highest court of the

State of Oregon

On appeal Gulf did not challenge the trial court’s

analysis of Oregon choice of law. A. 14. In deciding

an issue not raised on appeal, the appeals court an-

alyzed Oregon choice of law contrary to the decisions of

the Oregon Supreme Court, the highest court of the

6 Fletcher brought its action against Gulf in October 1977.

Had it not been for an interlocutory appeal, Dyke v. Gulf Oil

Corp., 601 F.2d 557 (TECA 1979), and other delays that

occur in a complex suit against a large corporate defendant,

the case could have been resolved before expiration of the

EPAA. The District Court found that plaintiffs’ attorneys

“worked efficiently and expeditiously and in a timely and

cvoperative manner.” 571 F. Supp. 780, 786 (D. Or. 1983).

15

State of Oregon. Its opinion does not even mention

the Oregon Supreme Court cases on the issue.

As a preliminary matter, it should be noted that

the appeals court based its decision on incorrect facts.

The three “facts” the appeals court relied upon in

utilizing the Washington statute of limitations are

that Fletcher is a Washington resident, most of its

gasoline was purchased in Washington and all of the

gasoline was sold there. A. 45.

The statement that all of Fletcher’s gasoline was

sold in Washington is 12,000,000 gallons incorrect.

Fletcher sold Gulf gasoline to stations in Oregon, in

Portland, Hubbard, Canby, The Dalles, Haines, La-

Grande, Pendleton and Umatilla during the overcharge

period.

Fletcher purchased more gasoline in Oregon than

in Washington in 1974’ and approximately 40% of

its gasoline in Oregon during the entire overcharge

period. Gasoline purchased in Washington was some-

times taken to Oregon to be sold.

Finally, Fletcher is not a Washington resident.

Fletcher is an Idaho corporation, a fact admitted by

7 The limitations period ran from the first overcharge in

January 1974. A. 47. Oregon clearly had the most significant

relationship at that time, according to the appeals court cri-

teria. Just because later the preponderance of purchases

shifted to Washington does not mean the limitations period

should shift, particularly when Washington has only a two-

year statute.

16

Gulf in its answer to the complaint. The place of in-

corporation determines residency. Vandevoir v. South-

eastern Greyhound Lines, 152 F.2d 150, 152 (7th Cir.

1945).

These gross errors, however, are basically irrele-

vant to the Oregon Supreme Court’s choice of law

analysis. Before examining the parties’ contacts in each

state, it is necessary under Oregon law first to deter-

mine whether there is a conflict with the interests and

policies of another state. Unless there is such a conflict,

the law of the forum applies. Tower v. Schwabe, 284

Or. 105, 585 P.2d 662, 663 (1978) ; Erwin v. Thomas,

264 Or. 454, 506 P.2d 494, 496 (1973).

Oregon’s choice of law process on limitations peri-

ods addresses two questions: (1) is a conflict with the

interest and policies of another state involved and, if

so, (2) which state has the most significant relation-

ship? ® The opinion of the appeals court is unclear. The

court either ignored the first step entirely or applied

the ‘most significant relationship” test twice. A. 45.

The interests and policies of the State of Washing-

ton are not involved here. The defendant Gulf is not a

Washington resident and Washington courts are not

involved. Those are the state interests a court examines

when choosing a limitations period (A. 158-159), since

the function of limitations periods is to protect a state’s

8 The Ninth Circuit has also recognized that Oregon law

involves this two-step process. Forsyth v. Cessna Aircraft

Company, 520 F.2d 608, 611-12 (9th Cir. 1975).

17

courts and defendants from stale claims. Tomlin v.

Boeing, 650 F.2d 1065, 1070-71 (9th Cir. 1981).

There are no Washington interests or policies in-

volved. The underlying cause of action is not based on

state law but on a federal statute. Washington has no

interest in barring Fletcher’s claims. The Oregon Su-

preme Court in Erwin held:

“Washington policy cannot be offended if the

court of another state affords rights to a Washington

woman which Washington does not afford, so long as

a Washington defendant is not required to respond.

“The state of Washington appears to have no material

or urgent policy or interest which would be offended

by applying Oregon law.” 506 P.2d at 496.

The only result of applying the Washington statute

of limitations to Fletcher is to limit the liability of a

Pennsylvania wrongdoer. This is not a case of forum

shopping by a nonresident plaintiff whose cause of ac-

tion has no connection to the forum. Fletcher was over-

charged for millions of gallons of gasoline purchased

in Oregon. The Oregon district court already had be-

fore it two similar cases filed by Dyke and Colvin

arising out of the same basic fact situation. Gulf made

one decision to overcharge all three plaintiffs alike, in

both Oregon and Washington. It is logical that the

same limitation period — that of the forum — be

applied to all overcharges.

In deciding an issue not raised on appeal, the ap-

peals court misread the record, disregarded the de-

18

ference to be accorded a district court judge in inter-

preting questions of local law,° and analyzed Oregon

choice of law contrary to the decisions of the highest

court of the State of Oregon and contrary to the Ninth

Circuit which has interpreted Oregon law in conform-

ity with the Oregon Supreme Court.

CONCLUSION

The Temporary Emergency Court of Appeals has

seriously misconstrued two provisions of the Emer-

gency Petroleum Allocation Act of 1973. Although the

Act has now expired, the court’s holdings improperly

denying attorney’s fees and standing will, unless cor-

rected, be applied by all of the district courts in the

many private enforcement actions under the Act which

remain pending throughout the country. Each of those

misconstructions of the Act means that in this and

other cases the Act will not be properly applied to

carry out its remedial purpose. The appeals court’s

errors should be promptly corrected.

The court’s third error, failure to follow the Oregon

Supreme Court’s decisions, should also be corrected.

When it undertook to reexamine the district court’s

analysis of Oregon law, a point not raised on appeal,

the federal appeals court omitted the crucial first step

in that analysis as adopted and applied by Oregon’s

9 Takahashi v. Loomis Armored Car Service, 625 F.2d 314,

316 (9th Cir. 1980).

19

highest court. As a consequence, it applied another

state’s statute of limitations under circumstances

where the Oregon courts would not have done so.

Respectfully submitted,

JOHN L. SCHWABE

(Counsel of Record

for Petitioners)

NEVA T. CAMPBELL

SCHWABE, WILLIAMSON,

WYATT, MOORE & ROBERTS

Suite 1800, PacWest Center

1211 S.W. Fifth Avenue

Portland, Oregon 97204

July 5, 1984