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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1984
- **Citation:** 469 U.S. 852

## Text

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_3089%3A1. Public record. Not legal advice.