Appendix — Dyke v. Gulf Oil Corp.

84-09 | ‘it

2 0 JUL 5 1984

ALEXANDER L. STEVAS,

WMT ky Uo,

ED

In the Supreme Cowt

of the United States

—_

OCTOBER TERM, 1983

RICHARD W. DYKE, dba Western Stations Co.,

COLVIN OIL COMPANY, and

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

Petitioners,

vs.

GULF OIL CORPORATION,

Respondent.

APPENDIX TO

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

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

APPENDIX

TABLE OF CONTENTS

PAGE

Gulf Oil Corporation v. Richard W.

Dyke, dba Western Stations Co.,

Colvin Oil Company, and F. O.

Fletcher, Inc., dba Fletcher

Oil Company F.2d

(TECA 1964) (SLip OpPinion) ...... 220 1

Gulf Oil Corporation v. Richard W.

Dyke, dba Western Stations Co.,

Colvin Oil Company, and F. O.

Fletcher, Inc., dba Fletcher

Oil Company Nos. 9-80, 9-81

(TECA April 17, 1984) (Judgment) ..... 83

Gulf Oil Corporation v. Richard W.

Dyke, dba Western Stations Co.,

Colvin Oil Company, and F. O.

Fletcher, Inc., dba Fletcher

Oil Company Nos. 9-80, 9-81

(TECA June 4, 1984) (Order

denying petition tor rehearing) ...... 85

Gulf Oil Corporation v. Richard W.

Dyke, dba Western Stations Co.,

Colvin Oil Company, and F. O.

Fletcher, Inc., dba Fletcher

Oil Company Nos. 9-80, 9-81

(TECA May 29, 1984) (Order

denying petition for rehearing

and suggestion for rehearing

Se eee Se eee ee ee ee 87

Richard W. Dyke, dba Western

Stations Co., Colvin Oil

Company, and F. O. Fletcher,

Inc., dba Fletcher Oil

Company v. Gulf Oil Corporation,

"Findings of Fact and Conclusions

of Law" (D. Or. June 20, 1983) ....... 89

Richard W. Dyke, dba Western

Stations Co., Colvin Oil

Company, and F. O. Fletcher,

Inc., dba Fletcher Oil

Company v. Gulf Oil Corporation,

571 F.Supp. 780 (D. Or. 1983)

(attorney fees) .....--ceeeeseeeeees 127

Richard W. Dyke, dba Western

Stations Co., Colvin Oil

Company, and F. O. Fletcher,

Inc., dba Fletcher Oil

Company v. Gulf Oil Corporation,

"Opinion" (statute of limitations)

(D. Or. March 8, 1982) .....-----e-- 147

ii

TEMPORARY EMERGENCY

COURT OF APPEALS

OF THE

UNITED STATES

Nos. 9-80, 9-81

GULF OIL CORPORATION,

DEFENDANT-APPELLANT and CROSS-APPELLEE,

Vv.

RICHARD W. DYKE, dba WESTERN STATIONS CO.,

COLVIN OIL COMPANY, and F. O. FLETCHER, INC.,

dba FLETCHER OIL COMPANY,

PLAINTIFFS-APPELLEES and CROSS-APPELLANTS,

UNITED STATES OF AMERICA,

INTERVENOR

Appeals from the United States District Court

for the District of Oregon

(Nos. 77-10-PA, 77-791-PA, 77-849-PA)

(Argued: March 19, 1984 Decided: April 17, 1984)

JACK D. FUDGE and MICHAEL L. HICKOK,

McCutchen, Black, Verleger & Shea, Los

Angeles, California, on the brief for

Appellant/Cross-Appellee.

JOHN L. SCHWABE and NEVA T. CAMPBELL,

Sehyabe, Williamson, Wyatt, Moore &

Roberts, Portland, Oregon, on the brief for

Appellees-Cross-Appellants.

JOHN R. KNIGHT, EDWARD T. COTHAM, JR. and

BRADLEY FORD STUEBING, Gulf Oil

Corporation, Houston, Texas, on the brief

for Appellant/Cross-Appellee.

Al

LARRY P. ELLSWORTH, Assistant General

Counsel, DAVID ENGELS and MARCIA K. SOWLES,

Office of General Counsel, Department of

Energy, and RICHARD K. WILLARD, Acting

Assistant Attorney General, ANTHONY J.

STEINMEYER and DOUGLAS LETTER, Attorneys,

Department of Justice, Washington, D.C., on

the brief for the United States.

WILLIAM H. BODE, JOHN E. VARNUM and

TOBEY B. MARZOUK, Spriggs, Bode &

Hollingsworth, Washington, D.C., on the

brief for Amici Curiae, Independent Oil and

Tire Co., Shepherd Brothers Service

Stations, and U.S. Oil Company, Inc.

JOHN A. EVANS, Marathon Petroleum Company,

Findlay, Ohio; WILLIAM C. STREETS and

GAIL F. SCHULZ, Mobil Oil Corporation,

Fairfax, Virginia; R. BRUCE MCLEAN, P.C.,

DANIEL JOSEPH, P.C., WARREN E.

CONNELLY, P.C., and DAVID A. HOLZWORTH,

Akin, Gump, Strauss, Hauer & Feld,

Washington, D.C. on the brief for Amici

Curiae, Marathon Petroleum Company and

Mobil Oil Corporation.

Before CHRISTENSEN, ESTES, and ZIRPOLI,

Judges.

Majority opinion filed by Judge Estes.

Concurring opinion filed by Judge

Christensen. *

Concurring and dissenting opinion filed by

Judge Zirpoli.*

*Opinions filed April 27, 1984.

A2

ESTES, Judge:

This is an action for overcharges

under § 210(b) of the Economic Stabiliza-

tion Act of 1970 ("ESA"), 12 U.S.C. § 1904

note, as incorporated in the Emergency

Petroleum Allocation Act ("EPAA"), 15

U.S.C. § 751 et seg. brought by Plaintiffs-

Appellees and Cross-Appellants Richard W.

Dyke, dba Western Stations Co., Colvin Oil

Company, and F. O. Fletcher, Inc., dba

Fletcher Oil Company (hereinafter "Dyke"

when referred to collectively; "Richard W.

Dyke" when referring to plaintiff Dyke

singularly), against Defendant-Appellant

and Cross-Appellee Gulf Oil Corporation

(hereinafter "Gulf").+ Gulf also filed a

1 independent Oil and Tire Co.,

Shepherd Brothers Service Stations and U.S.

Oil Company, Inc. have filed a joint brief

as Amici Curiae on the prejudgment interest

and attorneys’ fees questions presented by

this appeal. &

A3

counterclaim for unpaid bills for gasoline

in the sum of $728,753.78 against

Richard W. Dyke only,” which was not

3 Dyke alleged that Gulf

contested.

overcharged it in sales of gasoline from

Gulf to Dyke between January 1974 and

January 1977. An Amended Judgment entered

4 in the United States

on September 12, 1983

District Court for the District of Oregon

was awarded to plaintiffs against Gulf in

amounts as follows:

2Record at Vol. 1, Tab 2.

SRecord at Vol. 1, Tab 3, p. 1.

tRecord at Vol. 11, Tab 161. The

Original Judgment entered August 25, 1983

(Id. at Tab 157) and first Amended Judgment

entered August 26, 1983 (Id. at Tab 158)

were set aside by Order of September 2,

1983 (Id. at Tab 160).

A4

Prejudg-

ment Attorney's

Overcharges Intere: t Fees

Richard W. $1,264,555.Z2 $ 557,588.38 $385,500

Dyke, dba

western

Stations Co.

Colvin Oil 745,000.00 200 ,568.99 173,500

Company

F.O. Fletcher, 790,000.00 408 ,471.69 191,000

Inc., dba

Fletcher Oil

Company

$2,799,555.22 $1,166,629.06 $750,000

In addition to the $4,716,184.28, total of

the above sums, the Amended Judgment also

awarded costs and post-judgment interest to

plaintiffs at the rate of 10.58 percent

against Gulf. Gulf appeals from this

judgment. Dyke has filed a cross-appeal

contending the district court incorrectly

computed the prejudgment interest which

Dyke was awarded.

In October of 1972, Gulf's board of

directors decided to divest Gulf of all its

marketing activities in its San Francisco

Retail Marketing District, which included

northern California, northern Nevada,

A5

Oregon and Washington. The decision to

divest followed losses by Gulf cf $31.7

million in 1971 and $37 million in 1972 in

the Northwest. > The passage of the EPAA,

however, forced Gulf to continue to supply

its customers in the area and to place its

purchasers into classes which would main-

tain the customary price differentials in

existence on May 15, 1973.° Gulf continued

to supply all of its jobber customers in

the area, but converted all of the branded

jobbers’ to unbranded jobbers on January l,

1974. Before 1974, Gulf had supplied only

>Findings of Fact and Conclusions of

Law ("FFCL"), Record at Vol. 11, Tab 147,

pp. 4-5.

610 C.F.R. § 212.

7Gulf's branded jobbers received free

painting of service stations, hauling

allowances and the privilege of honoring

Gulf credit cards. FFCL, supra, at 4.

Dyke and Colvin were Gulf branded jobbers

before January 1, 1974. Id.

A6

one jobber in the district on an unbranded

basis.®

On May 15, 1973, Richard W. Dyke,

Colvin, and Fletcher all purchased gasoline

from Gulf as resellers-retailers as defined

in 10 C.F.R. § 212.31. Gulf was a refiner

as defined in the same section. Richard W.

Dyke and Colvin were among those purchasers

who were branded jobbers on May 15, 1973

and converted to unbranded jobbers on

January 1, 1974.

The other jobbers in the district who

were reclassified from branded to unbranded

on January 1, 1974, were placed in the

Armour class of purchaser to reflect their

new status. Richard W. Dyke and Colvin,

however, were given base prices reflecting

those published in Platt's Oilgram for

May 15, 1973 for Portland and Eugene,

SEFCL, supra, at 5-6. The unbranded

jobber was Armour Oil Co., which purchased

gasoline from Gulf's northern California

terminals only. Id.

A7

Oregon and Seattle,/Tacoma, Washington.

Gulf reasoned that its jobbers in Oregon

and Washington comprised a substantially

different market from those in northern

California and should constitute a separate

class with a different base price. Gulf

relied on the new item/new market rule? to

justify its use of Platt's Oilgram in

establishing a base price for Richard W.

Dyke and Colvin, which is an exception to

the rule that base prices must correspond

to a price actually charged the most

Similar existing class on May 15, 1973, 19

°FFCL, supra, at ll. The new item-new

market rule, 10 C.F.R. § 212.111, allowed

sellers to use a market price as the base

price for a product in certain instances

rather than the price actually charged the

most similar class of purchasers on May 15,

1973. Gulf later conceded that its use of

the new item-new market rule was improper.

FFCL, supra, at ll.

10pacific Supply Co-Op v. Shell Oil

Co., 697 F.2d 1084 (Em.App. 1982).

A8

Richard W. Dyke filed a complaint on

January 4, 1977 and ceased paying for

gasoline received from Gulf on December 16,

1976, yet continued to receive gasoline

without payment until January 28, 1977.

Colvin's complaint was filed on October 11,

1977. Fletcher filed its complaint on

October 20, 1977. The three cases were

consolidated, with Richard W. Dyke

proceeding to judgment first. The decision

and findings in Richard W. Dyke were

binding on Colvin and Fletcher.

The case was originally assigned to

Chief Judge Skopil.?2 An interlocutory

appeal was filed by the Department of

Energy ("DOE") contesting their joinder in

the cases. The DOE was released from

further participation in the cases by this

Court's decision and mandate and the

llercL, Supra, at iz, fn. 2.

AY

district court crder which followed. 4 On

remand, new Chief Judge Burns granted a

six-month stay in the proceedings before

Judge Owen M. Panner was assigned to the

13 Judge Panner lifted

14

cases in July, 1980.

the stay on July 21, 1980.

Trial before the court began on

November 17, 1981. The trial was conducted

in stages with succeeding orders entered as

follows: In Phase 1, Gulf's use of the

Platt's Oilgram prices as base prices for

the plaintiffs was held improper.

November 17, 1981; Record at Vol. 4,

Tab 47. In Phase 2, the unbranded Armour

class of purchasers and its corresponding

lepecord at Vol. 1, Tab 8, June 29,

1979; Record at Vol. 17, Tab 263,

August 16, 1979. See, Dyke v. Gulf Oil

Corp., 60i F.2d 557 (Em.App. 1979).

13eFcL, supra, at 12, n. 2. Judge

Panner began dut,; as U.S. District Judge on

March 24, 1980.

14

Record at Vol. i, Tab 14.

A1O

base price was held proper for the

plaintiffs. November 20, 1981; Record at

Vol. 4, Tab 49. In Phase 3, the method of

calculating the overcharges was decided,

prejudgment interest was awarded to the

plaintiffs, and the selection of the

appropriate statute of limitations was

made. January 20, 1982; Record at Vol. 7,

Tab 67. In Phase 4, plaintiff Fletcher was

held to be the real party in interest.

April 15, 1982; Record at Vol. 7, Tab 80.

In Phase 5, attorney's fees were awarded

the plaintiffs. May 27, 1982; Record at

Vol. 8, Tab 93.

The calculation of prejudgment

interest was referred to a magistrate on

June 1, 1982.?> The magistrate entered his

Findings and Recommendations on

September 9, 1982, and they were adopted by

lSRecord at Vol. 8, Tab 94.

All

the district court on October 26, 1982.1

The district court entered its Findings of

Fact and Conclusions of Law on June 20,

198327 and filed a separate opinion on the

issue of attorney's fees on August 23,

1983.28 The Amended Judgment was entered

on September 12, 1963." Gulf filed its

Notice of Appeal in this Court on

October 6, 1983. Dyke filed its Notice of

Cross-Appeal in this Court on October 20,

1983.

16, ova at Vol. 9, Tab 126; Vol. 10,

Tab 129.

17 Record at Vol. 11, Tab 147.

18. aed at Vol. 11, Tee 155-

13, cord at Vol. 11, Tab 161.

Al2

ISSUES

The issues on appeal, as stated by

Gulf in its brief filed November 14, 1983,

are as follows:

| Whether overcharges can be

refunded under the EPAA without any

determination that sales exceeJed the

"maximum allowable prices" permitted under

the governing Refiner Price Rule;

Ze Whether prejudgment interest can

ever be awarded on overcharge refunds under

the EPAA;

x If such prejudgment interest is

ever recoverable, whether it can be awarded

where the amount of overcharges to be

refunded was unliquidated and became

certain only by trial;

4. Whether attorney's fees may be

awarded under the EPAA where the

overcharges were found to be unintentional;

Al3

Ss. Whether attorney's fees awardable

under the EPAA may substantially exceed

those actually charged;

6. Whether appellee Fletcher lacks

standing as an indirect purchaser to sue

Gulf for overcharges under the EPAA;

Fx Whether application of the

two-year Washington statute of limitations

to Fletcher frustrates national policy

under the EPAA;

8. Whether the passing-on defense is

available in this EPAA case because all

parties were subject to Federal Price

Regulations, and the trial court

specifically quantified the amount of

overcharges actually passed through; and

9. Whether the trial court abused

its discretion by making a class of

purchaser determination contrary to the

Pretrial Order without considering evidence

Al4

offered in support of a motion toc reopen

; 20

trial of that issue.

Dyke states in its brief that the

issue on the cross-appeal is: Whether the

Trial Court erred in its calculation of

21

prejudgment interest.

Gulf's Motion to Dismiss

Gulf, without raising the question in

the lower court, was given leave to file

an untimely Motion to Dismiss the Cross

Appeal of Dyke, which challenges the

subject-matter jurisdiction of this Court

following the recent Supreme Court decision

in I.N.S. v. Chadha, U.S. , 103

S.Ct. 2764, 77 L.Ed.2d 317 (1983). Dyke

has opposed the motion and contended that

the Chadha decision did not invalidate the

20nrief of Defendant-Appellant and

Cross-Appellee Gulf ("Gulf's Br.") at 3-4.

2lerief of Plaintiffs-Appellees and

Cross-Appellants Dyke, et al. ("Dyke's

es oe a

A15

statutes. The United States has filed a

motion to intervene on the question of the

constitutionality of the statutes pursuant

to 28 U.S.C. § 2403 and has also argued

that the statutes remain valid. ?? Gulf

contends that because the applicable

statutes granting jurisdiction to this

Court contain inseverable and

unconstitutional legislative veto

provisions, the legislation is void and

this Court has no jurisdiction over the

cross-appeal. It has been determined that

Gulf's motion raises a jurisdicticnal

22warathon Petroleum Company and Mobil

Oil Corporation have filed a joint brief as

Amici Curiae in support of Gulf's position

that this case should be dismissed for lack

of subject-matter jurisdiction.

Al16

question which we must decide. 7? After

23culf has placed itself in the

anomalous position of moving to dismiss

only Dyke's cross-appeal on the basis that

the statutory authority for the

cross-appeal is unconstitutional. Since

Gulf's appeal also depends on the validity

of the EPAA and EPCA, any holding of this

Court dismissing the cross-appeal because

of the unconstitutionality of the EPAA or

EPCA would also necessitate the dismissal

of Gulf's appeal. Dyke has maintained that

the constitutional issues raised by Gulf

are not in reality directed at the

subject-matter jurisdiction of this Court,

but rather at the decision on the merits of

the District Court below. See, Memorandum

filed by Dyke, et al., December 28, 1983

and Memorandum filed by Dyke, et al.,

January 10, 1984. Dyke maintains that such

an argument must first be raised in the

District Court below. See, United States

v. Empire Gas Corp. 547 F.2d 1147, 1153

(Em.App. 1976), cert. denied, 430 U.S. 915,

97 $.Ct. 1326, Si L.Eé.26 592. Guift*s

motion does have such bearing on the

subject-matter jurisdiction and the very

Viability of this Court as to mandate

consideration here. We have a "duty to

observe questions relating to jurisdiction

whenever they may appear." McWhirter

Distributing Co. v. Texaco, Inc., 668 F.2d

S11, 525 n. 22 (Em.App. 1981), citing

Condor Operating Co. v. Sawhill, 514 F.2d

351, 354 (Em.App., cert. denied, 421 U.S.

976, 95 S.Ct. 1975, 44 L.Ed.2d 467 (1975)).

see also, Exxon Corp. v. F.E.A., 516 F.2d

1397 (Em.App. 1975).

Al7

examination of the statutes, their

legislative histories, prior decisions and

the arguments of counsel, we conclude that

the unconstitutional legislative vetoes

contained in the EPAA and EPCA are

severable, leaving the remaining sections

of the legislation intact and operable,

including the sections conferring

jurisdiction of this appeal upon this

Court.

Als

Neither the EPAA nor the EPCA contains

a severability clause.**

The absence of

such a clause, however, is in no way

dispositive of the question of

severability. E.E.0.C. v. Hernando Bank,

Inc., 724 F.2d 1188, 1190 (Sth Cir. 1984).

Indeed, "the ultimate determination of

severability will rarely turn on the

presence or absence of such a clause."

United States v. Jackson, 390 U.S. 570, 585

n. 27, 88 S.Ct. 1209, 1218, 20 L.Ed. 138

24 owever, the ESA, which was the

precursor of the EPAA and EPCA, does

contain a severability clause at

Section 220. We are also most persuaded by

the language of Section 21l(g) of the ESA

that Congress intended this Court to sever

unconstitutional portions of the statutes

and leave the remainder intact: "[T}he

Temporary Emergency Court of Appeals, and

the Supreme Court upon review of judgments

and orders of the Temporary Emergency Court

of Appeals, shall have exclusive

jurisdiction to determine the

constitutional validity of any provision of

this title or of any regulation issued

under this title. (Emphasis Added.) This

Court was given full authority to determine

the unconstitutionality of one provision of

a statute without the requirement of

invalidating the whole statute as a result.

Alg

(1968). The proper test is that "[uJ]nless

it is evident that the legislature would

not have enacted those provisions which are

within its power, independently of that

which is not, the invalid part may be

dropped if what is left is fully operative

as a law." Buckley v. Valeo, 424 U.S. 1,

108, 96 S.Ct. 612, 677, 46 L.Ed.2d 659

(1976), quoting Champlin Refining Co. v.

Corporation Commission, 286 U.S. 210, 234,

52 S.Ct. 559, 565, 76 L.Ed. 1062 (1932).

In order to determine whether Congress

would have enacted the remainder of the

EPAA and EPCA had it known that the

one-house veto provisions were

unconstitutional, we must examine the

language and legislative history of the

Acts. E.E.0O.C. v. Hernando Bank, supra,

at 1190; Muller Cptical Co. v. E.E.0O.C.,

574 F.Supp. 946 (W.D. Tenn. 1983).

"Congressional intent and purpose are

best determined by an analysis of the

A20

language of the statute in question.”

E.E.O.C. v. Hernando Bank, supra, at 1190.

The stated purpose of the EPAA is as

follows:

See. 2s+s2+

(b) The purpose of this Act

is to grant to the President of

the United States and direct him

to exercise specific temporary

authority to deal with shortages

of crude oil, residual fuel oil,

and refined petroleum products or

dislocations in their national

distribution system. The

authority granted under this Act

shall be exercised for the

purpose of minimizing the adverse

impacts of such shortages or

dislocations on the American

people and the domestic economy.

The EPAA also states that it was

enacted in the midst of circumstances which

"constitute a national crisis which is a

threat to the public health, safety, and

welfare," EPAA § 2(1), and that its purpose

is to provide for "equitable distribution

of crude oil, residual fuel oil, and

refined petroleum products at equitable

prices among all... . sectors of the

A21

petroleum industry." EPAA, as amended, 15

U.S.C. § 753(b)(1)(F) quoted in United

States v. Heller, 726 F.2d 756 (Em.App.

1983). (Emphasis added. ]

The purpose of the EPCA is stated, in

part, in the Act as follows:

Sec. 2. The purposes of

this Act are <--

(1) to grant specific

standby authority to the

President, subject to

congressional review, to impose

rationing, to reduce demand for

energy through the implementation

of energy conservation plans, and

to fulfill obligations of the

United States under the

international energy

program.

While the stated purposes of the EPCA

include a reference to the conyressional

veto, it does not follow that the veto

provisions are inseverable. The intention

of Congress to review the President's

actions through the veto is obvious from

the face of the legislation. Our task is

to determine "whether Congress would have

enacted the remainder of the statute([s]

A22

without the unconstitutional [veto]

provisions." Consumer Energy Council of

America v. F.E.R.C., 673 F.2d 425, 442

(D.C. Cir. 1982), aff'd sub non, U.S.

6 aoe &.Ct. 3556, 77 L.84.24 1402

(1983).

Gulf cites numerous portions of the

legislative history in an attempt to prove

that the compromise between the flexibility

desired by the Executive and the oversight

demanded by Congress was an extremely

fragile one which could not have been

enacted absent the legislative veto

provisions. In none of these references,

however, do we find a clear indication that

the EPAA or EPCA would not have been passed

without such vetoes. E.E.0.C. v. Hernando

bank, supra, at 1191. The mere presence of

continued and heated debates prior to the

passage of the Acts cannot provide the

evidence necessary for us to conclude that

the legislative vetoes are inseverable and

A23

that the sections in which they appear, as

well as the sections conferring

jurisdiction on this Court, must be

invalidated. See, Allen v. Carmen,

F.Supp. , No. 83-3099 (D.D.C., Dec. 30,

1983), and United States v. Sutton,

F.Supp. _, No. 82-C-1069-BT (N.D. Okla.

Apr. 4, 1984).

We also are not persuaded by the

reference to the veto provisions in the

legislative history which describe their

operation. Such descriptions are not

helpful in determining what Congress would

have intended had it known the iegislative

vetoes were invalid. Consumer Energy

Council of America v. F.E.R.C., supra, 673

F.2d at 442. We therefore conclude that it

is not evident that Congress would have

declined to enact the EPAA and EPCA without

the legislative veto provisions.

We reach this conclusion because,

contrary to Gulf's contention, the question

A24

is not whether Congress would have enacted

these exact statutes had it known at the

time of enactment that the legislative veto

provisions were invalid, but rather,

whether Congress would have preferred these

statutes, after severance of the

legislative veto provisions, to no statutes

at all.

We must next determine if what remains

in the Acts is "fully operative as a law."

Buckley v. Valeo, supra, 424 U.S. at 109,

96 S.Ct. at 564. The legislative veto

provision of the EPAA appears in

A25

Section 4(g)(2).7> Once the veto is

severed, the remainder of Section 4(9g)(2)

gives the President limited decontrol

authority over crude oil, residual fuel

oil, or any refined petroleum product after

making specific findings that regulation of

such oil or product is no longer necessary

under the Act, that no shortage exists and

that exempting such oil or product will not

have an adverse impact on the supply of

other oil or products. Without the veto,

a ae

The veto provision of

Section 4(g)(2) of the EPAA is as follows:

Such as amendment shall take effect on

a date specified in the amendment, but

in no case sooner than the close of

the earliest period which begins after

the submission of such amendment to

the Congress and which includes at

least five days during which the House

was in session and at least five days

during which the Senate was in

session; except that such amendment

shall not take effect if before the

expiration of such period either House

of Congress approves a resolution of

that House stating in substance that

such House disapproves such amendment.

(Emphasis added. )

A26

Section 4(g)(2) is "fully operative as a

law." Id.

Similarly, the legislative veto

provisions contained in the EPCA, once

removed, leave the remainder of the Act

"fully operative as «| lew." id... in. fact,

the hard-fought compromise between the

Executive and Congress over pricing and

decontrol, which Gulf contends demonstrates

the inseverability of the vetoes, is

maintained after severance. Without the

vetoes, Sections 401 and 455 of the EPCA

resemble "report and wait" procedures

A27

specifically approved in Chadha. 7° I .N.3.

v. Chadha, supra, 103 S.Ct. at 2776 n. 9,

and Sibbach v. Wilson & Co., 312 U.S. 1, 61

S.Ct. 422, 85 L.Ed. 479 (1941).

From the beginning of price controls

under federal statutes and regulations,

courts have resolved challenges to their

constitutionality. See, Amalgamated Meat

Cutters and Butcher Workers of North

America v. Connally, 336 F.Supp. 737

26F i ther House of Congress could

unilaterally veto an amendment proposed by

the President by following the procedures

for congressional review contained in § 551

of the EPCA. When the legislative veto in

§ 551(c)(1) is excised from the section a

fully workable "report and wait" procedure

is preserved. The President could still

propose an amendment to the Congress, but

Congress would be able to prevent its

effectiveness by passing legislation

contrary to the amendment within specified

time periods. Thus, Congress would still

retain the opportunity to review

Presidential proposals, but would only be

able to disapprove of such actions through

use of the constitutional legislative

process. Such a procedure is not only

workable, but preserves to the greatest

extent possible the compromise between

Congress and the Executive intended in the

leqislation.

A28

(D.D.C. 1971); Consumers Union of U.S.,

Inc., v. Sawhill, 525 F.2d 1068 (Em.App.

1975). These challenges have escalated

enormously since the enactment of the EPAA

and EPCA. See, Condor Operating Co. v.

Sawhill, 514 F.2d 351 (Em.App.), cert.

denied, 421 U.S. 976, 95 S.Ct. 1975, 44

L.Ed.2d 467 (1975); Cities Service Co. v.

F.E.A., 529 F.2d 1016 (Em.App. 1975), cert.

denied, 426 U.S. 947 (1976), the

authorities therein, and their progeny.

The scope of these attacks has been

unreasonably broad. The statutes have been

upheld because "[a] limit in time, to tide

over a passing trouble, well may justify a

law that could not be upheld as a permanent

change." Block v. Hirsh, 256 U.S. 135, 65

L.Ed. 865 (1921). As the program under the

law winds down in th? wake of decontrol,

this latest and broadest attack also is

without merit.

A29

Therefore, we conclude that the

unconstitutional legislative veto

provisions of the EPAA and EPCA are

severable, leaving the remainder of the

Acts intact and with no effect on this

Court's jurisdiction. Gulf's Motion to

Dismiss the Cross-Appeal is DENIED.

Computation of Maximum Allowable Price in

Determining Overcharges

Gulf contends that the District Court

did not determine that its prices charged

to Dyke exceeded the "maximum allowable

price." Such a finding, Gulf states, is

necessary before concluding that

overcharges have occurred. "Maximum

aliowable price" is defined in the

regulations as:

wa the weighted average

price at which the covered

product was lawfully priced on

May 15, 1973, computed in

accordance with the provision of

[10 C.F.R.] § 212.83(a), plus

increased product costs and

increased non=-product costs

A30

incurred between the month of

measurement and the month of May

2973..". 36 6.2:2: Jc22e ee:

See also, Wellven, Inc. v. Gulf Oil Corp.,

F.2d , Nos. 3-35, 3-36 (Em.App.

Feb. 10, 1984).

Gulf cites our decision in Longview

Refining Co. v. Shore, 554 F.2d 1006

(Em.App. 1977), cert. denied, 434 U.S. 836,

98 S.Ct. 126, 54 L.Ed.2d 98 (1977), as

requiring specific findings by the district

court establishing the existence of

overcharges in a sum certain before a

plaintiff may recover. 554 F.2d at 1012.

While such specific findings are indeed

required by Longview, the findings which

sunposedly established the maximum

allowable price in Longview were

"defectively general and all-inclusive."

Id. at 1018. We hold that the District

Court's findings and method of computing

overcharges in this case, although

erroneous as to class of purchaser base

A31

price for reasons hereafter to be

discussed, were otherwise sufficient under

the regulations.

The District Judge used the following

formula to compute overcharges:

"The proper method in this

case for calculating the

overcharges is to subtract the

court-ordered May 15, 1973 prices

to Dyke from the May 15, 1973

prices imputed to Dyke based on

Platt's Oilgram. If Gulf did not

actually pass through its full

cost increment to Dyke in a

month, the cost increment

difference is to be subtracted

from the overcharge calculated on

May 15 prices. The difference

shall be multiplied by the volume

of each grade of gasoline sold to

Dyke in each month. .. ." FECL,

Record at Vol. 11, Tab 147,

p. 19.

Using this formula, the parties then

stipulated the amount of the overcharges.

Id. at p. 20.

This method employs both May 15, 1973

base prices and Gulf's stated increased

costs to arrive at the maximum allowable

price. Using the figures provided oy Gulf,

A32

the district court was able to determine

the costs Gulf elected to pass through each

27

month as well as the dates on which Gulf

did not charge Dyke the full amount of

28 Gulf was

increased costs available.

given credit for these undercharges to Dyke

in computing total overcharges. Thus the

findings sufficiently found all of the

elements of the maximum allowable price

calculations as a basis for determining

that sales exceeded the "maximum allowable

prices” permitted under the governing

Refiner Price Rule.

Prejudgment Interest

We hold that this case is not an

appropriate one in which to award

prejudgment interest. Accordingly, we need

not reach the question of whether

27Record at Vol. 17, Tab 292.

2814.

A33

prejudgment interest may ever be awarded in

an overcharge case under the EPAA.

Recently, we declined to award prejudgment

interest in two cases because the amount

claimed was not for a “liquidated or

readily liquidatable sum." Eastern Air

Lines, Inc. v. Atlantic Richfield Co., 712

F.2d 1402, 1410 (Em.App.), cert. denied,

U.S. , 104 S.Ct. 278, 78 L.Ed.2d

258 (1983); Zahir v. Shell Oil Co., 718

F.2d 1567, 1573 (Em.App. 1983). In

addition, prejudgment interest is not

appropriate in this case b::cause the

ultimate amount of the overcharge was the

"subject of great uncertainty, "*? requiring

extensive testimony and arguments from

counsel before the court could select even

a method for calculating the alleged

overcharges. Following our decision in

Eastern Air Lines, supra, Gulf filed a

29%eastern Air Lines, supra, at 1410.

A34

motion to amend the Findings of Fact and

Conclusions of Law to delete the award of

prejudgment interest. °° In an Order dated

August 24, 1983, Judge Panner denied the

motion, stating only, "The motion to deny

an award of prejudgment interest is DENIED

because Magistrate Juba was able to

determine appropriate amounts with

certainty. Therefore, Eastern Air Lines

n3l

does not control. While it is true that

the magistrate was able to ultimately

determine an amount certain to be applied

as prejudgment interest following the

judge's ruling, certainty in calculating

interest on a definite sum is not what

Zahir and Eastern require. Rather, we

again, hold that in this case, where the

amount claimed to be due varied and was

30necord at Vol. 16, Tab 254.

Slrecord at Vol. 16, Tab 256, p. 2.

A35

uncertain, it is "inequitable and unjust"

to award prejudgment interest. °*

Attorney's Fees

The district judge awarded Dyke

$750,000 in attorney's fees, °* finding that

our recent decision of Eastern Air Lines,

supra, was not controlling. In Eastern Air

Lines, we conducted an extensive study of

§ 210(b) of the ESA°* and the limitations

on a judge's discretion in awarding

attorney's fees imposed by that section:

; [T]o deprive the

court of its discretionary power

32 eastern Air Lines, supra, at 1410.

33 Record at Vol. il, Taw 164.

34

Although the district judge stated

that "TECA was not required in [Eastern Air

Lines] to carefully analyze the language of

the statute authorizing attorneys’ fees"

(Record at Vol. 11, Tab 155, p. 3), we

believe our analysis in Eastern was

thorough and is controlling.

A36

to award treble damages and

attorney's fees, the defendant

making the overcharge must prove

thac (1) the overcharge was not

intentional, and (2) the

overcharge resulted from a bona

fide error notwithstanding

(3) the maintenance by the

defendant of procedures

reasonably adapted to the

avoidance of such error.

"In the absence of such

proof by the defendant the court

in its discretion may award

treble damages and attorney's

fees if it finds the overcharge

was intentional or resulted from

reprehensible or criminal

conduct, or lack of procedures

reasonably adapted to the

avoidance of erroneous

overcharges, or bad faith, or

where required by equity and the

ends of justice." Eastern Air

Lines, supra, at 1412; second

paragraph quoted in, Wellven,

Inc. v. Gulf Oil Corp., supra.

The Findings of Fact and Conclusions

of Law contain the express finding that any

overcharges by Gulf were not intentional.

4 In light of the circumstances and

lack of guidelines at the time Gulf's

decision was made, I find that the

A37

overcharges were not intenticnal." FFCL,

Record at Vol. 11, Tab 147, pp. 21-22.°>

In view of the findings made by the

district judge that the overcharge was not

intentional and, although not in the

"precise language"*°

of § 210(b), the

finding that Gulf maintained "procedures

reasonably adapted to the avoidance” of an

overcharge, >” as well as our conclusion

upon examination of the record that any

overcharges were the result of a bona fide

error, we hold that it was plain error to

award any attorney's fees in this case. In

3350 also, Record at Vol. 25,

Tab 329, p. 1158, 1.17. In Longview

Refining Co. v. Shore, supra, at 1014,

n. 20 (Em.App. 1977), this Court warned,

"Fundamental fairness requires that the

regulations be clear so that men of common

intelligence need not guess at the meaning

and differ as to the application. Boyce

Motor Lines v. United States, 342 U.S. 337,

72 S.Ct. 319, 96 L.Ed. 367 (1952);" also

Standard Oil Co. v. D.O.E., 596 F.2d 1029,

10en, OG. G7.

365 astern Air Lines, supra, at 1412.

3714.

A38

any event, the amount of attorney's fees

awarded here was so excessive as to

constitute a clear abuse of ei eivetion.””

ne The attorney's fees awarded in

this case were grossly excessive anda

clear abuse of the judge's discretion. The

last-submitted affidavit of plaintiff's

counsel in support of the motion for

attorney's fees included in the record

reflects a requested bonus payment of

$84,600.00. The requested fees were

$397,641.60 and stated expenses were

$17,289.76 The total of submitted fees,

expenses and bonus through March 10, 1983

was $499,531.36. Record at Vol. ll,

Tab 144. Judge Panner made an award of

attorney's fees in the amount of

$750,000.00, supra, and Record at Vol. ll,

Tab 161, representing a bonus payment of

$250,468.84 more than the total of fees,

expenses and bonus in the affidavit.

Including the bonus of $84,600.00 which was

requested in the affidavit, the total bonus

to plaintiffs' attorneys was $335,068.64.

Additionally, the itemized billing

statements submitted by plaintiffs' counsel

include substantial charges made for the

Amici Curiae brief filed on behalf of these

plaintiffs on January 12, 1983 in Eastern

Air Lines v. Atlantic Richfield Co., supra,

before this Court. The Amici brief urged

the same positions on the prejudgment

interest and attorney's fees issues as

plaintiffs have argued in the present case.

In Eastern Air Lines, these positions were

rejected by this Court.

A39

Plaintiff Fletcher's Standing to Sue

Gulf claims that Plaintiff Fletcher

has no standing to sue under ESA § 210 for

overcharges because Fletcher was an

indirect purchaser from Gulf. The contract

for sale of gasoline was between Gulf and

Tesoro Petroleum Corporation. Tesoro then

resold the gasoline to Fletcher.°”

Section 210(b) of the ESA authorizes suits

for overcharges ".

against any person

renting or selling goods or services who is

found to hav. overcharged the plaintiff."

[Emphasis added.] We hold that, on the

basis of our examination of the record and

as a matter of law, Fletcher was an

indirect purchaser from Gulf. Indeed,

plaintiffs' counsel classified Fletcher in

3° etcher paid Tesoro Gulf's sales

price plus a fixed markup of $.00375 per

gallon. FFCL, supra, at 14. We are not

convinced that the “unique relationship"

the district court found between Gulf,

Tesoro and Fletcher (Id. at 12-15) requires

a determination that Fletcher was anything

other than an indirect purchaser from Gulf.

A40

this statement to Judge Panner: "That's a

question of whether Fletcher is entitled as

a subjobber and has standing to bring this

matter in the first place." Record at

VGA 2a 7 SO: See, @. 223,44. #1.

Fletcher was an indirect purchaser

with no standing to sue for overcharges,

and we so hold. See, Palazzo v. Gulf Oil

Corp., 4 Energy Mgt. 7 26,448 (Em.App.

1983), cert. denied, Ui

(No. 83-6145, 52 U.S.L.W. 3631, Feb. 27,

1984); Arnson v. General Motors Corp., 377

F.Supp. 209 (N.D. Ohio 1974). When

Congress created the Temporary Emergency

Court of Appeals as "a court of special and

"40

limited jurisdiction which should

"Strictly construe [its] statutory grants

Micuecn, ne... ¥

1193, 1196 (Em.App. 197

cited therein.

D,.O.8.,; 626 F.46

9), and authorities

A4l1

na it did not authorize

of jurisdiction,

recovery of overcharges by indirect

purchasers. The EPAA expired by its own

terms in September 1981. We will not

expand the statutes while exercising our

jurisdiction under the savings clause. 15

U.S.C. § 7GGg.

Statute of Limitations

In addition to our foregoing holding

that Plaintiff Fletcher does not have

standing to sue Gulf, we hold that any

claim by Fletcher would also be barred by

the applicable statute of limitations.

tlunited States v. Cooper, 482 F.2d

1393, 1398 (Em.App. 1973), approved by the

Supreme Court in Bray v. United States, 423

U.S. 73, 96 S.Ct. 307, 309, 46 L.Ed.2d 215

(1975).

A42

Because the ESA, EPAA and EPCA do not

contain specific statutes of limitation, we

must apply the most closely analogous state

statute of limitation to causes of action

arising under the Acts. Ashland Oil Co. of

California v. Union Oil Co. of California,

367 F.2d 984 (Em.App. 1977), cert. denied,

435 U.S. 997 (1978); Colorado Petroleum

Preducts Co. v. Husky Oil Co., 646 F.2d 555

(Em.App. 1981).

The district judge applied the Oregon

six-year statute of limitations to

Plaintiff Fletcher. *? We hold that this

was plain error and that the Washington

two-year statute of limitations** should be

applied to Fletcher.

425; Rev. Stat. § 12.080 (1983).

43wash. Rev. Code § 12.16.130 (1962).

A43

Plaintiff Fletcher is a Washington

44 'Fletcher purchased 60 percent

resident.

of its gasoline in Washington and 40

percent in Oregon. *” All of Fletcher's

gasoline was sold in Washington. 7° Gulf is

a Pennsylvania corporation. *’ Under

Oregon's “borrowing statute," Or. Rev.

Stat. § 12.260, when two nonresidents bring

a cause of action in an Oregon court whi--h

arose in another state, the Oregon court

will apply the foreign state's statute of

limitations if it is shorter than Oregon's.

The district judge held that although

the "borrowing statute" might be

applicable, his decision should also be

governed by general Oregon choice of law

445FCL, Record at Volume li, Tab 147,

App. A, p. 2.

4354.

4674.

47g.

eH

A44

standards. *® Under Oregon law, when more

than one state has an interest ina

controversy, the law of the state which has

the "most significant relationship" to the

controversy will be applied. *” The

district judge found that Washington had no

true interest in the controversy.~° We

disagree. Plaintiff Fletcher is a

Washington resident. Most of the gasoline

was purchased in Washington, and all of it

was sold there. We hold that, as between

Washington and Oregon, Washington had the

more significant relationship to the

controversy. Oregon's "borrowing statute"

is applicable, and the shorter Washington

two-year statute of limitations should

apply to Fletcher.

4854. at 4.

49.8 citing Fisher v. Huck, 50 Or.

App. 635, 624 P.2da 177 (1981).

9054. at 6.

A45

The district judge also declined to

apply Washington's two-year statute of

limitations because he found that

two-year limitation places a bar on

recovery inconsistent with federal

31 we have already held that "/a]

policy."

two-year statute is certainly not

inconsistent with national energy policy

seeking to wind up regulation of the oil

industry -- ‘temporary’ ab initio."

Johnson Oil Co. v. DOE, 690 F.2d 191, 196

(Em.App. 1982). See also, Ashland Oil Co.

v. Union Oil Co. of California, supra;

Siegel Oil Co. v. Gulf Oil Corp., 701 F.2d

149, 152 (Em.App. 1983).

Therefore, Washington's two-year

statute of limitations should be applied to

plaintiff Fletcher. Fletcher's claim was

brought in 1977 for overcharges beginning

in 1974. In a case such as this, where any

51

A46

overcharges incurred resulted from an

initial improper base price, the statute of

limitations begins to run from the date of

the first overcharge. Western Mountain

Oil, Inc. v. Gulf Oil Corp., 726 F.2d 765

(Em.App. 1983); Fleetwing Corp. v. Mobil

Oil Corp., 726 F.2d 768 (Em.App. 1983);

Lerner v. Atlantic Richfield Co., F.2d

No. 9-78 (Em.App. March 13, 1984),

rehearing en banc denied, April 10, 1984.

Fletcher's claim for overcharges is barred

by Wash. Rev. Code § 12.16.130.

Passing On Defense

Gulf claims that those overcharges

which were passed through to the plain-

tiff's service station customers should not

be refunded because the plaintiffs suffered

no economic injury from overcharges which

A47

were passed down the stream of commerce.”

Although such use of a passing on defense

has been denied because of difficulty of

proof in the past,” Gulf argues that in

determining the sum on which to award

prejudgment interest, the trial court

sufficiently found the amounts which the

plaintiffs had passed through to their

customers, and therefore, no difficulty of

proof problem exists which would prevent

the use of passing on as an affirmative

54

defense.

In Eastern Air Lines, Inc. v. Atlantic

Richfield Co., 609 F.2d 497 (Em.App. 1979)

92culf's Brief at 21.

5313:inois Brick Co. v. Illinois, 431

U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707

(1977); Eastern Air Lines v. Atlantic

Richfield Co., 609 F.2d 497 (Em.App. 1979)

("ARCO I").

5

4culf's Brief at 21-23.

A48

("ARCO I"), this Court refused to allow a

passing on defense in an overcharge action.

In ARCO I, we held that, in order to be

excepted from the general rule disallowing

the affirmative pass on defense, >> the

defendant must establish that a preexisting

functional equivalent of a cost-plus

contract>° existed in which plaintiffs

would necessarily pass through any

overcharge received, and that the effect of

the overcharge to plaintiffs must be

capable of determination in advance. Id.

at 498.

Therefore, Gulf's assertion that the

overcharges passed on by plaintiffs were

determined by the magistrate at trial, thus

obviating any difficulty of proof problem,

>See, Hanover Shoe, Inc. v. United

Shoe Machinery Corp., 392 U.S. 481, 88

S.Ct. 2224, 20 L.Ed. 1231 (1968).

ot In re Beef Industry Antitrust

Litigation, 600 F.2d 1148 (5th Cir. 1979).

A493

misses the point. In order for Gulf to

successfully assert the passing on defense,

the impact of any overcharges made by it to

plaintiffs must be determinable before the

overcharges occurred. Such was not the

case here. There was no certainty about

how plaintiffs would price their gasoline

at the service station in response to the

amount charged by Gulf. Because the

exception to the general rule disallowing

passing on as a defense is narrow, we hold

that Gulf may not use the passing on

defense in this case where no preexisting

functional equivalent of a cost-plus

contract existed.

Class of Purchaser Determination

Gulf asks us to overturn the district

judge's order denying Gulf's motion to

reopen the trial on the class of purchaser

A50

issue.”? Gulf sought to introduce

additional evidence to show that the San

Francisco Bay oan. where Armour is

located, is a distinct market from the

Seattle-Tacoma-Portland area, where

plaintiffs are located, and thus it would

be inappropriate to use the same

classification and base price for Armour

and the plaintiffs.

Judge Panner denied the motion to

reopen the trial during a telephone

conference on May 12, 1982, °° sixteen

months before a final judgment was entered

on September 12, 1983. It is apparent from

the transcript of that conference that the

judge had not fully considered the

memorandum and affidavit accompanying

"’oulf's Brief at 24.

>BRecord at Vol. 19, Tab 323.

A51

59

Gulf's motion. Although the grant or

denial of a motion to reopen the trial is

within the district judge's discretion, °°

we hold that the refusal to reopen the

trial in this case was an abuse of

discretion and clear error.

The district judge's ruling on the

motion to reopen the trial without

considering the supporting documents filed

by Gulf was an abuse of discretion. See,

Sertic v. Cayahoga Counties Carpenters

Dist. Council, 459 F.2d 579 (6th Cir.

1972). The Pretrial Order in this case was

extremely vague as to the issues framed for

60s anders v. Int'l. Ass'a. of Bridge

Workers, 546 F.2d 879 (10th Cir. 1976).

A52

trial, °! and we hold that Gulf did not have

a full and fair opportunity to present

evidence on its most similar existing class

of purchaser after the ruling denying the

use of Platt's Oilgram as a base price

determinant. Therefore, we reverse and

remand the district judge's ruling on the

motion to reopen trial and direct him to

consider Gulf's evidence and make a new

determination of the proper class of

purchaser and base price for the

plaintiffs.

CONCLUSION

Gulf's Motion to Dismiss is

DENIED.

61

Although the Pretrial Order

contained references to the Armour class of

purchaser, the record reflects that the

idea of using the Armour base price for

plaintiffs was first seriously considered

at trial.

A53

- ¥ The district court's Order

determining the proper class of purchaser

for Plaintiffs is REVERSED and REMANDED

with directions to reopen the trial to

consider Gulf's evidence on the class of

purchaser issue. Any award of overcharges

must be recalculated to reflect any change

in base price.

°F The Orders of the district court

granting attorney's fees and prejudgment

interest are REVERSED.

4. That portion of the judgment of

the district court awarding overcharges to

Plaintiff Fletcher is REVERSED.

The judgment of the district court is

REVERSED and REMANDED for further

proceedings consistent with this opinion.

A54

CHRISTENSEN, Judge, concurring:

The prevailing opinion has my full

concurrence but I wish to add a few words

to clarify an unaddressed misconception

relating to the wording of the controlling

Statute which might otherwise appear on its

face to carry weight.

The contention has been made that if,

as held in Eastern Airlines, a court's

discretion to award attorney's fees under

section 210(b) of the ESA is limited to

cases of willful overcharges, mention of

"costs" would not have been included in the

phrase "reasonable attorney's fees and

costs,"

Since under the general rule

taxable costs are recoverable by prevailing

parties in any event. The contention fails

to recognize the distinction between

taxable costs awardable as of course to a

prevailing party apart from adjudged

liability and "reasonable attorney's fees

A55

ana costs" as a liability authorized in

departure from tme American Rule as to

attorney's fees because of certain

recognized equitable considerations or, as

here, by express statutory provision under

specified conditions. If the term "costs"

in line with the argument had been

eliminated from the phrase, a more

plausible contention could have been made

that even taxable costs could not be

recovered at all in case of willful

overcharges whereas they would have been if

the overcharges were not willful. Senerinn

did not need to invite the latter

unreasonable construction by omitting the

mention of costs in connection with its

reference to attorney's fees. It plainly

indicated its intention to the contrary and

it would be quite unreasonable to hold that

in so doing it granted carte blanche

discretion to award "attorney's fees and

costs" in disregard of the limitations it

A56

specified merely because taxable costs

otherwise may have been awardable to a

prevailing party without reference to those

limitations.

A57

ZIRPOLI, Judge, concurring in part and

dissenting in part:

While I am in accord with the opinion

of the majority on the issues of

jurisdiction, remand for further trial on

the class of purchasers determination, and

the statute of limitations applicable to

Fletcher, I cannot agree with the

majority's conclusions on the issues of

prejudgment interest, attorney's fees, and

Fletcher's standing. Accordingly, I must

respectfully dissent.

A. Prejudgment Interest

The majority concludes that it was

improper for the district court to award

prejudgment interest in this case because

the amount of overcharges by Gulf were not

certain until after trial. The majority

relies on Zahir v. Shell Oil Co., 718 F.2d

1567, 1573 (TECA 1983), and Eastern Air

Lines, Inc. v. Atlantic Richfield Co., 712

A58

F.2d 1402, 1410 (TECA), cert. denied,

U.S. _, 104 §.Ct. 278 (1983). Neither

of these cases bars an award of prejudgment

interest in the present case. Because I

find no abuse of discretion in the trial

court's award of prejudgment interest in

this case, I would affirm that portion of

the decision.

"In the absence of an unequivocal

prohibition of interest, and where the

statute imposes a money obligation, the

power of the court to award interest is

dependent on an appraisal of the

congressional purpose of imposing the

obligation and on the relative equities of

the parties." Hodgson v. American Can Co.,

440 F.2d 916, 922 (8th Cir. 1971). The

statute authorizing suits to collect

overcharges is remedial in nature and

designed to compensate those who have been

overcharged for the losses that they

sustained as a result of the overcharges.

A59

See Minnesota v. Standard Oil Co., 516

F.Supp. 682, 687 (D. Minn. 1981); Ashland

Oil Co. of California v. Union Oil Co., 567

F.2d 984, 990 n. 12 (TECA 1977). An award

of prejudgment interest to compensate

plaintiffs for the loss of the use of money

is consistent with the congressional

purpose of this statute.

The relative equities of the parties

in this case do not tip so strongly towards

Gulf as to render the award of prejudgment

interest to plaintiffs an abuse of

discretion. While it may be true that Gulf

had financial difficulties in the Pacific

Northwest where plaintiffs operate, this is

not a proper factor to consider in deciding

whether or not to award prejudgment

interest, nor does it appear that the

majority considers this to be a relevant

consideration, since it is not mentioned in

the opinion. What is a relevant factor, is

that Gulf conceded its use of spot purchase

A60

prices reported in Platt's Oilgram for

establishing plaintiffs’ base price was

unjustified. In deciding to award

prejudgment interest, the trial court

expressed its “concern that there wasn't a

more serious effort [by Gulf] .. . to

correct the overcharge” (Tr. 1159).

Although the trial court did find that

Gulf's overcharges were not intentional,

and so did not award treble damages, I

think that it was well within its

discretion to award prejudgment interest to

plaintiffs on overcharges which they did

not pass through to their customers.

The majority bases its reversal of the

award of prejudgment interest on the fact

that the principal amount of the overcharge

was the "subject of a great amount of

uncertainty" because the parties were in

disagreement as to what was the most

appropriate class of purchasers for

plaintiffs. Until the trial court had

A61

ruled on the appropriate class of

purchasers question, the principal amount

of overcharges could not be computed.

Because this uncertainty as to a legal

issue is not the type which is

traditionally held to preclude an award of

prejudgment interest, I would defer to the

trial court's determination that the

relative equities of the parties, as well

as the remedial purpose of the statute,

warranted the award. Neither Zahir or

Eastern Airlines dictates otherwise.

In both Zahir and Eastern, this court

affirmed the trial court's denial of

prejudgment interest. In Zahir it was held

that "the trial court did not abwse its

discretion” in declining to award

prejudgment interest where the plaintiff's

claim was "not for a liquidated or readily

liquidatable sum." 718 F.2d at 1573. In

that case, the plaintiff's claim upon which

he sought prejudgment interest was for lost

A62

profits due to the defendant's failure to

supply him with gasoline. A claim for lost

profits is a highly speculative type of

injury which must be estimated, rather than

one which is capable of determination with

mathematical precision. It has long been

the rule that awards of prejudgment

interest are not given on claims of injury

which are not of the type capable of

reasonably precise determination. Thus,

the refusal of the trial court to award

prejudgment interest in Zahir was clearly

correct.

In the present case, on the other

hand, the injury suffered by plaintiffs was

one capable of mathematical computation.

The “uncertainty” involved was due to the

parties’ dispute as to which was the proper

class of purchasers for determining plain-

tiffs' base price. Once the trial court

had made its ruling on the class of

purchasers question, the principal amount

of the overcharge was one capable of

mathematical computation. 2

Courts’ have traditionally had

discretion to award prejudgment interest in

cases where the damages are liquidated or

capable of mathematical computation. Thus,

it has been said that "interest is allowed

on all claims that are liquidated or

readily ascertainable by mathematical

computations . . . in other words where it

is not necessary to rely upon opinion or

discretion." Nelse Mortensen & Co. v.

14 great deal of time was spent in

determining what portion of the overcharges

plaintiffs had passed through to their

customers. The trial court had ruled that

it would be inequitable to award plaintiffs

prejudgment interest on overcharges that

they had passed through, since to the

extent of such pass-throughs, plaintiffs

had not been deprived of the use of the

money. Gulf should not be heard to

complain about any "uncertainty" involved

in determining the amount passed through,

since this equitable determination to limit

the award of prejudgment interest on

overcharges was to Gulf's benefit.

A64

United States, 305 F.Supp. 470, 471 (E.D.

Wash. 1969) (quoting from Caterpillar

Tractor v. Collins Machinery Co., 286 F.2d

446 (9th Cir. 1960)). A disputed claim is

not rendered unliquidated or incapable of

precise valuation merely because the

parties disagree as to the proper method

for calculating the principal amount due.

Thus, in American Enka Co. v. Wicaco Mach.

Corp., 686 F.2d 1050, 1057 (3rd Cir. 1962),

where the parties were in disagreement over

the correct date to be used for an award of

the market value of goods lost by a bailee,

the court held that the dispute concerned a

liquidated amount "capable of ascertainment

with mathematical precision" (once it was

determined which was the proper date for

purposes of vaiuing the property) and the

trial court had discretion to award

prejudgment interest. See also, Mortensen,

305 F.Supp. at 471 ("Mere difference of

opinion as to amount is, however, no more a

A65

reason to excuse him from interest than

difference of opinion whether he legally

ought to pay at all, which has never been

held an excuse." [Emphasis deleted;

quoting from Prier v. Refrigeration

Engineering Co., 442 P.2d 621, 627 (Wash.

1968). )

Nor does Eastern Airlines dictate any

deviation from the traditional principle

that the trial court has discretion to

award prejudgment interest on sums which

are liquidated or "capable of ascertainment

with mathematical precision." American

Enka, 686 F.2d at 1057. In Eastern, as

noted above, the trial court did not award

prejudgment interest, and this decision was

affirmed. In the present case, on the

other hand, the trial court, in its

discretion, did award prejudgment interest.

The majority, with no discussion of the

relative equities of the parties or the

remedial purpose of the statute, holds that

A66

the trial court abused its discretion in

awarding prejudgment interest in this case.

The majority apparently relies on the

broad language in Eastern that "prejudgment

interest is not available where the amount

of damages claimed to be due is uncertain."

712 F.2d at 1410. However, as noted above,

it is not every type of "uncertainty" which

will preclude an award of prejudgment

interest. An examination of the case cited

in Eastern in support of the quoted

language shows the relevant type of

uncertainty to be that due to inherent

difficulty in measuring the extent of

injury, such as that involved in Zahir.

The case cited in Eastern, Belcher v.

Birmingham National Bank, 488 F.2d 474, 478

(Sth Cir. 1973), was an action to recover

the value of services rendered. In

determining the reasonable value of

services rendered, the court must rely upon

"opinion or discretion" to estimate the

A67

principal amount to be awarded. Mortensen,

305 F.Supp. at 471. Such an estimate

necessarily means that the amount is not

"readily ascertainable by mathematical

computations." Id. Thus, the authority

cited in Eastern does not support any broad

rule that a dispute as to the legal issue

of the most appropriate class of purchasers

for plaintiffs will preclude an award of

prejudgment interest. Furthermore, any

such broad rule would be contrary to the

remedial purposes of the statute. Thus, I

do not read Eastern as holding that the

trial court would have abused its

discretion if it had awarded prejudgment

interest in that case. Rather, as was made

clear in Zahir, the trial court had

discretion to deny prejudgment interest in

Eastern, depending upon the equities, and

there was no indication that it had abused

its discretion in that case.

A68

In the present case, the trial court

considered the equities and the remedial

purposes of the statute and concluded that

an award of prejudgment interest was

appropriate. I find no reason to overturn

this decision.

B. Attorney's Fees

I must dissent from the majority's

determination that it was "plain error" to

award attorney's fees in this case. While

I find the majority opinion somewhat

ambiguous as to the basis for its holding

on this question, I assume that the opinion

is intended to hold that an award of

attorney's fees is never authorized under

section 210(b) of the Economic

Stabilization Act if the defendant proves

that the overcharge was "not intentional

and resulted from a bona fide error

notwithstanding the maintenance of

procedures reasonably adapted to the

avoidance of such error." 12 U.S.C. § 1904

A69

note. I do not think that a close

examination of the statute supports this

interpretation.

As a preliminary matter, it should be

noted that although the trial court did

expressly find that the overcharges in this

case were not intentional, there was no

express finding that they were the result

of a "bona fide error notwithstanding the

maintenance of [adequate procedures

designed to prevent such errors]." The

majority's statement that the "finding that

Gulf maintained ‘procedures reasonably

adapted to the avoidance’ of an overcharge"

was not in the "precise language" of the

statute (see opinion at 15) is somewhat

misleading, since not only was such a

finding not in the "precise language" of

the statute, it was not made at all.

Nevertheless, since I think it is clear

that such a finding was impliedly made, I

do not take issue with the majority's

A70

conclusion that Gulf had proven that the

overcharges were the result of a bona fide

error. I make this observation only to

make absolutely clear that this court was

not under the erroneous impression that the

trial court had made some express finding,

even though not in the "precise language”

of the statute. The basis for my

conclusion that the trial court had made an

implied finding that Gulf had made the

overcharges in good faith notwithstanding

the maintenance of adequate procedures is

that the trial court went to the trouble of

deciding a difficult statutory

interpretation question as to whether

attorney's fees were awardable even in

cases where treble damages are not. Treble

damages are clearly not awardable under

section 210(b) where the defendant proves

that the overcharge was unintentional and

the result of a bona fide error

notwithstanding the maintenance of adequate

A71

procedures. If the trial court had not

made an implied finding that Gulf's

overcharc s were the result of a good faith

error, it would not have been necessary for

it to decide the statutory interpretation

question.

Unlike the majority, I agree with the

district court's conclusion that

section 210(b) authorizes an award of

attorney's fees in this case even though

Gulf had satisfied the court that its error

was unintentional and the result of a good

faith error. Section 210(b) provides, in

pertinent part, as follows:

{[T})he 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

establishes that the overcharge

was not intentional and resulted

A72

from a bona fide error

notwithstanding the maintenance

of procedures reasonably adapted

to the avoidance of such error

the liability of the defendant

shall be limited to the amount of

the overcharge.

12 U.S.C. § 1904 note.

Upon close examination of the statute,

the district court concluded that "the

language of exception beginning with the

word 'except' modifies only the language

that follows the word 'plus.'" Thus, the

court concluded that it had discretion to

award attorney's fees in this case. I

agree. Under the interpretation of this

statute adopted by the majority, the award

of costs, as well as attorney's fees, would

not be authorized in cases where the

defendant proves that the overcharge was

unintentional. Such an interpretation

clearly would run counter to the remedial

purpose of the statute and to Congress'

intent that private actions should play a

"critical" role in the enforcement of the

A73

price regulations. See Ashland Oil, 567

F.2d at 290 n.1l. While the opinion in

Eastern does include dicta which supports

the majority's interpretation, the holding

in that case was merely that the trial

court had not erred in denying an award of

attorney's fees and treble damages, and

there is no indication that the court in

that case was called upon to closely

examine the statute.

Thus, I conclude that section 210(b)

authorizes the court, in its discretion, to

award “attorney's fees and costs" to a

successful plaintiff in an action to

recover overcharges even in cases where the

defendant makes a showing that would pre-

clude an award of treble damages. Since

there is no indication that it would be an

A74

abuse of discretion to award any amount of

attorney's fees, I respectfully dissent.”

C. Fletcher's Standing

Although I concur in the majority's

holding that the two-year Washington

statute of limitations bars Fletcher's

claims, and so do not believe it is

necessary for the court to rule on the

issue of Fletcher's standing, because the

majority has expressed its views on this

2since I concur in the holding that

this case should be remanded to permit Gulf

to introduce new evidence on the class of

purchasers issue, I express no opinion as

to whether the amount of attorney's fees

awarded in this case was reasonable. I

would note, however, that plaintiffs are

entitled to recover a "reasonable fee"

based upon the "prevailing market rates" in

the community, and are not restricted to

recovery of the fees actually billed. Blum

v. Stenson, U.S. , 52 U.S.L.W.

4377, 4379 (March 21, 1984). It appears

that a substantial portion of the "bonus"

referred to by the majority (see opinion

note 38) may be attributable to the fact

that the fees actually billed plaintiffs

were lower than the market rate.

A75

issue, I feel constrained to state my

views.

Fletcher was a retail seller of

gasoline under the Gulf brand in Washington

and Oregon until Gulf withdrew its brand

from the region in 1974. Gulf continued to

supply gasoline to Fletcher and the other

plaintiffs after 1974, on an unbranded

basis, as required by the mandatory

allocation regulations. The gasoline sold

by Fletcher under the Gulf brand was

purchased under a cost-plus contract

between Fletcher and Tesoro Petroleum

Corporation. Tesoro, in turn, had a

gasoline supply contract with Gulf. Thus,

on a superficial basis, it might appear

that Fletcher was not a direct purchaser

from Gulf; however, an examination of all

the facts supports the district court's

finding that "the sale [by Gulf] in

substance was to Fletcher." Fletcher had

substantial direct dealings with Gulf.

A76

Fletcher took delivery of the gasoline

directly from Gulf. Gulf established a

procedure by which Fletcher transmitted its

credit card slips directly to Gulf, which

in turn would credit Tesoro's account.

Gulf included Fletcher in meetings held

with all of Gulf's branded jobbers, and

notices of price changes came directly from

Gulf to Fletcher, not through Tesoro.

Prior to the execution of both the

Gulf-Tesoro and the Tesoro-Fletcher

contracts, Gulf was informed that Fletcher

would be the party receiving and retailing

the gasoline, and Gulf representatives

investigated Fletcher's station locations,

and explained the ramifications of

Fletcher's anticipated use of the Gulf

brand. The contract between Tesoro and

Fletcher provided that Fletcher would pay

Gulf's price plus a fixed markup of $.00375

per gallon. When Gulf applied to the DOE

to withdraw as a supplier from certain West

A77

Coast locations, Gulf referred to its

supply obligation to "Tesoro Fletcher."

Section 210(b) of the ESA authorizes

suits for overcharges ".

against any

person . . . who is found to have

overcharged the plaintiff." This statute

has been interpreted as limiting standing

in overcharge suits to "direct purchasers."

Thus, in Arnson v. General Motors Corp.,

377 F.Supp. 209, 211-12 (N.D. Ohio, 1974),

the court held that a purchaser of an

automobile from a dealer did not have

standing to sue the manufacturer for

alleged overcharges by the manufacturer to

the dealer. In reaching this conclusion,

however, the court noted "there is no

allegation that [the defendant} dealt

directly with the plaintiff in any manner.

Thus absent any privity between plaintiff

and defendant, it is apparent that

defendant is not a seller within the scope

of the Act as it relates to this

A78

ii Rae ai

transaction." 377 F.Supp. at 212.

Furthermore, the court in Arnson

specifically found that there was no agency

relationship between the manufacturer and

the dealer by which price increases of the

manufacturer were automatically passed on

to the ultimate consumer. In fact, such

price increases were not passed on by the

dealer in five percent of the cases. Id.

at 214. In the present case, on the other

hand, there were substantially direct

dealings between Gulf and Fletcher, and the

price paid by Fletcher was directly tied to

the price charged by Gulf through a

cost-plus contract. Thus, Arnson, relied

on by the majority, by no means establishes

that Fletcher lacks standing to sue Gulf

for overcharges.

Nor does Palazzo v. Gulf Oil Corp.,

the other case cited by the majority, stand

for the proposition that an "indirect"

purchaser such as Fletcher had no standing

A79

to sue. In Palazzo, the plaintiff was an

officer and stockholder of the entity which

made the purchases from the defendant.

Thus, the overcharges by Gulf had no direct

and mathematically certain impact on

Falazzo. Overcharges by Gulf in the

present case, on the other hand, had a

direct and ascertainable impact on

Fletcher, due to the cost-plus contract

between Tesoro and Fletcher.

It is the general rule under the

antitrust laws that an indirect purchaser

has no standing to sue, yet there is an

exception to this rule which permits such

suits where the plaintiff makes purchases

under a cost-plus contract. See Illinois

Brick Co. v. Illinois, 431 U.S. 720, 736

(1976); In re Beef Industry Antitrust

Litigation, 600 F.2d 1148, 1163-64 (5th

Cir. 1979). I see no reason why such an

exception should not also exist for suits

to recover overcharges under

A80

section 210(b). This is especially true in

view of Congress' intent that private suits

to recover overcharges would serve both

remedial and policing functions. To hold

that Tesoro, not Fletcher, is the only

party which would have standing to sue for

these overcharges would not serve any

remedial purpose, since Tesoro was not

harmed by Gulf's overcharges. Tesoro

received its $.00375 per gallon no matter

what Gulf charged. Nor would such a

holding advance the enforcement purposes of

the statute, since Gulf would be permitted

to raise the defense that Tesoro passed on

all of Gulf's overcharges to Fletcher. See

Hanover Shoe, Inc. v. United Shoe Machinery

Corp., 392 U.S. 481, 494 (1968); Eastern

Airlines, Inc. v. Atlantic Richfield Co.,

609 F.2d 497 (TECA 1979); and majority

opinion at 19. Tesoro obviously would have

no motivation to bring suit for overcharges

A81

by Gulf for which it could not recover due

to the passing-on defense.

D. Remand

In joining the majority ruling that

the case be remanded to reopen the trial

to censider Gulf's evidence on the class of

purchasers issue, I am satisfied that the

court expresses no view on what the proper

class of purchasers will ultimately be

found to be. I do not understand the

majority's statement that the district

court's findings were "erroneous as to the

class of purchaser base price" (opinion

at 12) to be a determination as to the

proper class of purchaser.

A82

TEMPORARY EMERGENCY COURT OF APPEALS

OF THE UNITED STATES

Nos. 9-80 and 9-81

GULF OIL CORPORATION,

Defendant-Appellant/Cross-Appellee,

Vv.

RICHARD W. DYKE, dba Western Stations Co.,

COLVIN OIL COMPANY, and

F. O. FLETCHER, INC., dba Fletcher

Oil Company,

Plaintiffs-Appellees/Cross-Appellants,

and

UNITED STATES OF AMERICA, Intervenor.

Before CHRISTENSEN, ESTES and ZIRPOLI,

Judges.

JUDGMENT

This cause came on to be heard on the

record on appeal from the United States

District Court for the District of Oregon

and was argued by counsel. In considera-

tion whereof, It is

ORDERED that (1) Gulf's Motion to

Dismiss is Denied; (2) the district court's

A83

Order determining the proper class of

purchase for Plaintiffs is REVERSED and

REMANDED with directions to reopen the

trial to consider Gulf's evidence on the

class of purchaser issue. Any award of

overcharges must Se recalculated to reflect

any change in base price; (3) the Orders of

the district court granting attorney's fees

and prejudgment interest are REVERSED; and

(4) that portion of the judgment of the

district court awarding overcharges to

Plaintiff Fletcher is REVERSED. And it is,

FURTHER ORDERED that the judgment of

the district court is REVERSED and REMANDED

for further proceedings consistent with

this opinion.

FOR THE COURT:

Donna M. Bold, Clerk

by: /s/ Patricia L. Krosel

Patricia L. Krosel

Chief Deputy Clerk

April 17, 1984

A84

a a a es “

TEMPORARY EMERGENCY COURT OF APPEALS

OF THE UNITED STATES

Nos. 9-80 and 9-81

GULF OIL CORPORATION,

Defendant-Appellant/Cross-Appellee,

Vv.

RICHARD W. DYKE, dba Western Stations Co.,

COLVIN OIL COMPANY, and

F. O. FLETCHER, INC., dba Fletcher

Oil Company,

Plaintiffs-Appellees/Cross-Appellants,

and

UNITED STATES OF AMERICA, Intervenor.

Before CHRISTENSEN, ESTES and ZIRPOLI,

Judges.

ORDER

Upon consideration of the Petition for

Rehearing filed by Appellant/Cross-

Appellee, Gulf Oil Corporation, it is

ORDERED that said petition is DENIED.

The mandate shall issue on June 5, 1984, as

set forth in the Order of this Court dated

May 29, 1984.

A85

FOR THE COURT:

Donna M. Bold

Clerk

by: /s/ Patricia Krosel

Patricia Krosel

Chief Deputy Clerk

June 4, 1984

A86

TEMPORARY EMERGENCY COURT OF APPEALS

OF THE UNITED STATES

Nos. 9-80 and 9-81

GULF OIL CORPORATION,

Defendant-Appellant/Cross-Appellee,

Vv.

RICHARD W. DYKE, dba Western Stations Co.,

COLVIN OIL COMPANY, and

F. O. FLETCHER, INC., dba Fletcher

Oil Company,

Plaintiffs-Appellees/Cross-Appellants,

and

UNITED STATES OF AMERICA, Intervenor.

Before CHRISTENSEN, ESTES and ZIRPOLI,

Judges.

ORDER

Upon consideration of Plaintiffs-

Appellees/Cross-Appellants' Petition for

rehearing and suggestion for rehearing en

banc, it is

ORDERED trat the petition for

rehearing is DENIED.

A87

It is FURTHER ORDERED that the

suggestion for rehearing en banc is DENIED.

The mandate shall issue on June 5, 1984.

FOR THE COURT:

Donna M. Bold

Clerk

May 29, 1984

A88

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

RICHARD W. DYKE,

dba Western

Stations Co.,

ivil No. 77-10-PA

Plaintiff,

Vv.

GULF OIL CORPORA-

TION, a

Pennsylvania

corporation

COLVIN OIL COMPANY,

an Oregon

corporation,

Civil No. 77-791-PA

Plaintiff,

Vv.

»c

)

)

)

)

)

)

)

)

)

)

)

)

Defendant. )

)

)

)

)

)

)

.

GULF OIL CORPORA- )

TION, a )

Pennsylvania )

corporation, )

)

)

Defendant.

A89

F.O. FLETCHER,

INC., dba FLETCHER

OIL COMPANY,

Civil No. 77-849-PA

Plaintiff,

Vv. FINDINGS OF FACT

AND CONCLUSIONS OF

GULF OIL CORPORA- LAW

TION, a

Pennsylvania

corporation,

Defendant.

me ee ee ee ee ee ee ee ee ee ee

John L. Schwabe, Esquire

Neva T. Campbell, Esquire

Mary E. Egan, Esquire

Schwabe, Williamson, Wyatt,

Moore & Roberts

1200 Standard Plaza

Portland, Oregon 97204

Attorneys for Plaintiffs

John R. Brooke, Esquire

Wood, Tatum, Mosser, Brooke

& Holden

1001 S.W. Fifth - Suite 1300

Portland, Oregon 97204

Jack D. Fudge, Esquire

Michael L. Hickok, Esquire

Douglas J. Del Tondo, Esquire

McCutchen, Black, Verleger & Shea

600 Wilshire Boulevard

Los Angeles, California 90017

Attorneys for Defendant

A90

PANNER, J.

These are actions under the Emergency

Petroleum Allocation Act ("EPAA"), 15

U.S.C. § 751 et seg., to recover

overcharges in the price of gasoline. The

parties agreed that the three cases would

be consolidated for trial. They further

agreed that Dyke would be tried first and

that the court's findings and conclusions

in that case would also apply to Colvin and

Fletcher.

This court has subject matter

jurisdiction pursuant to sections 210 and

21l(a) of the Economic Stabilization Act of

1970 ("ESA"), 84 Stat. 799, as amended, as

so incorporated by reference into

section 5(a)(1) of the EPPA. See 12

U.S.C.A. § 1904, Note (1979 Pocket Part).

This court has pendent subject matter

jurisdiction over Gulf's counterclaim

AQ91

against Dyke arising out of the same

nucleus of operative facts as Dyke's claim.

Herewith follow findings of fact and

conclusions of law pursuant to Fed.R.Civ.P.

52(a).

I. FINDINGS OF FACT

A. Description of Parties.

Ae Dyke, Colvin and Fletcher are

unbranded independent marketers of motor

gasoline and are reseller-retailers as

defined in the EPAA. 10 C.F.R. § 212.31.

2. Gulf is a refiner as defined in

the EPAA. 10C.F.R. § 212.31.

: Fe (a) Dyke marketed gasoline in

western Oregon and Longview, Washington

beginning in 1971. He received Gulf

product from 1971 to January 1977 via

terminals located in Portland and Eugene,

Oregon and Crescent City, California. From

1975 to January 1977 he marketed gasoline

in the Seattic-Tacoma, Washington area,

receiving Gulf product at the Tacoma,

Washington terminal.

(b) Colvin markets gasoline in

southwest Oregon. It received Gulf product

via terminals located at Crescent City,

California and Eugene, Oregon from 1967

until January 1977.

{c) Fletcher markets gasoline in

Washington and Oregon. It received Gulf

product via terminals locaced at Tacoma,

Washington and Portland, Oregon from 1970

until January 1977.

4. (a) In 1972 Dyke, Colvin and

Fletcher purchased Gulf branded gasoline on

contract and sold that gasoline under

Gulf's brand name.

(b) Product was delivered by

Gulf to Dyke's stations or Dyke received a

hauling allowance for transporting the

gasoline from the terminals to Dyke's

A93

stations. Colvin and Fletcher received

hauling allowances.

(c) Dyke as a branded jobber had

the right to honor Gulf credit cards,

obtain free painting of service station

facilities, and received reimbursement for

expenses paid by Gulf in lieu of other

delivery expenses. Each of those

above-mentioned penefits enjoyed by Dyke

while operating as a Gulf-branded jobber

and service station operator have

historically been provided by Gulf solely

in conjunction with the use of its brand.

B. Divesv.iture Area.

a (a) In October 1972 Gulf adopted

a divestiture program for the northwestern

United States. Under this program Gulf

disposed of approximately 2.5 percent of

its assets including approximately 3,500

service stations and 275 bulk plants and

terminals. Also encompassed in the

divestiture plan was the termination of

A94

Gulf's branded gasoline relationships.

Gulf intended to withdraw from its

marketing operations in northern

California, northern Nevada, Oregon and

Washington. This area has been described

as Gulf's San Francisco Retail Marketing

District.

(b) Gulf's branded operations

throughout the divestiture area had

produced consistent and substantial losses.

Prior to the divestiture decision, Gulf

incurred losses in those marketing areas of

$31.7 million in 1971 and $37 million in

1972. Gulf's management decision to divest

was made before the adoption of the EPAA.

(c) Part of Gulf's divestiture

program implemented in the Pacific

Northwest was the withdrawal of the Gulf

brand.

(d) Following the divestiture

decision, Gulf was required by mandatory

allocation regulations to continue to make

A95

gascline available to its jobbers in the

area that it supplied during 1972. 10

C.2.8. § Bia:

(e) Effective January 1, 1974

Gulf continued to supply gasoline but

withdrew its brand from purchasers in the

San Francisco Retail Marketing District.

ma Within this area Gulf had

terminals at:

Tacoma, Washington

Portland, Oregon

Eugene, Oregon

Crescent City, California

Bradshaw (Sacramento), California

Hercules (San Francisco), California

Brisbane, California

San Jose, California

Stockton, California

Fresno, California

Reno, Nevada

3. All but one of Gulf's jobbers in

this area were branded jobbers on May 15,

1973.

4. The only unbranded jobber in this

area as of May 15, 1973 was Armour Oil Co.,

which picked up product at several

terminals in northern California.

A96

CG. May 15, 1973 Branded Jobbers.

An Gulf sold branded gasoline to

Dyke on May 15, 1973 from the following

terminals at the following prices:

Good Gulf No Nox

Terminal Destination (Regular) (Premium)

Portland Portland 1495 . 1820

Eugene Cottage Grove .1495 . 1820

Crescent City/

Eugene Roseburg . 1595 . 1920

Crescent City/

Eugene Eisewhere . 1695 . 2020

a Gulf sold branded gasoline to

Tesoro/Fletcher in Tacoma, Washington on

May 15, 1973 at the following prices:

Good Gulf No Nox

(Regular) (Premium)

Tacoma .1445 ee et

a Gulf suid branded gasoline to

these northern California jobbers on

May 15, 1973 at the following prices:

line relationship between Gulf, Tesoro

Petroleum Corporation ("Tesoro") and

Fletcher is discussed infra.

A97

Good Gulf No Nox

Jobber (Regular) (Premium)

Caldo Oil Co. .1495 . 1820

Curtesy Oil, Inc. .1495 . 1820

Major Oil Co. .1495 . 1820

Miles Oil Co. 1495 . 1820

Olympian Oil .1495 . 1820

Ramco Oil Co. .1495 . 1820

Red Triangle Oil Co. .1495 . 1820

Rinehart .1595 . 1920

Sierra Petroleum . 1695 . 2020

Sturdy Oil Co. .1495 . 1820

Tom's Sierra Oil Co. .1495 . 1820

4. The prices extended to branded

jobbers on May 15, 1973 included certain

price-related amenities such as the use of

Gulf's credit cards, brand name and

advertising. The branded jobbers also

received hauling allowances. When these

branded jobbers were converted to unbranded

status, the hauling allowances and

amenities were eliminated.

wa Dyke purchased gasoline from Gulf

under a ten-year written contract obliging

him to make minimum purchases and providing

for credit terms net within 10 to 25 days.

A98

6. Armour purchased gasoline on a

spot basis with no written contract and

with credit terms net within 30 to 60 days.

ra Location. In pricing its

products on May 15, 1973 Gulf did not treat

its Northwest purchasers significantly

different from its northern California

purchasers, as indicated in Dyke's

Exhibit 69, summarized below:

A99

OcEL*

(unowuy )

O2EL*

(unowuy )

OLEL*

(unowuy )

OlEL*

(unowsy )

OlEL*

(unowuy )

OecetL’

(s,33e1d)

Oflt’

adItdd

€1/S61/S5

pepuesqun

#N

hlél

‘ue

adh,

V/N

G6nL*

G6nt*

G6hl*

G6nl*

G6nl*

G6nlL*

TH *x37

@IUd

€1/S1/S

sejn6bay

pepueug

uMou XUN

@Ildd

ON

uAMOoU XUN

adIdd

ION

@91dd

ON

@Idd

JON

@dIud

ION

puog

8

swuay

UOTITITIW

L-2

UO'ITIIW

L Ao}ag

UO!IIIW

L Aoleg

UOITIIW

tL Ao| eg

UO!TIIIW

L “0; 98g

UO!TIIW

ent

UO!ITIIW

G*2e-l

("Uuowy

“1OA

pepuesquy

peapueug

gsouemMo|iy BbulineH

29143S!iQ Bulyeyuvew | !e70yY OOS!OUReUY UES

n QW4S

g OW4S

a GWw4is

g QWwis

g QW4S

a GW4S

#9 #OW4IS

A

A

“3sig ‘3s!ad

adAj “I4W OVd

uo! 3es07

nouou

o>

* *

"

(=)

=

te

”

+

YNOWNV

AQUNLS

ASALYND

SJ1IW

OOWVY

NVI dWA10

JXAG

Kuedwo9

A100

8. Type of Purchaser. The type of

purchaser, branded versus unbranded, is

exactly the same for all the branded

jobbers who were placed in the unbranded

categories.

9. Volume. The volume, while larger

in the case of Armour, is not significantly

different. There is no showing of price

differential made by Gulf based on volume

differences between branded jobbers.

Olympian and the other northern California

Gulf branded jobbers who became unbranded

were placed in the same classes of

purchaser as Armour even though they had

substantially less volume than Armour.

10. Terms and Conditions. The terms

and conditions extended to the northern

California purchasers were just the same as

extended to Dyke, with the possible

exception of two that were unknown. Gulf

did not offer any indication that they were

different.

A101

D. January 1, 1974.

Ae The May 15, 1973 prices Gulf

utilized to compute unbranded prices to

California jobbers in the divestiture area

after December 31, 1973 were unbrarnded

prices at which Gulf had sold unbranded

gasoline to Armour on May 15, 1973.

a Gulf applied the following

May 15, 1973 Armour prices at the Hercules,

San Jose, and Bradshaw (Sacramento)

terminals for the formulation of unbranded

prices to the California jobbers picking up

at those terminals after December 31, 1973:

Terminal Regular Premium

Hercules .1320 . 1495

San Jose .1355 . 1530

Bradshaw .1370 . 1545

Be Gulf utilized the following

May 15, 1973 prices for the formulation of

unbranded gasoline prices to Dyke after

December 31, 1973:

A102

Terminal Regular Premium

Tacoma -1720 . 1895

Portland . 1730 .1915

Eugene . 1730 .1915

Crescent City .1730 .1915

4. (a) Gulf used Platt's Oilgram to

determine the May 15, 1973 unbranded prices

for the former Gulf branded jobbers at the

Tacoma, Washington; Portland, Oregon;

Eugene, Oregon; and Crescent City,

California terminals.

(b) The edition of Platt's

Oilgram utilized by Gulf to determine

unbranded jobber May 15, 1973 gasoline

selling prices was dated May 15, 1973,

vol. 51, No. 94, page 5-A. The following

were reported as the West Coast Terminal

prices:

Los Angeles/ Seattle/

San Francisco Tacoma Portland

100 Oct Prem. 15.6-18.95 18.95 19.15

95 Oct Prem. 14.5-17.85 17.30 17.50

91 Oct Prem. 13.4-16.75 16.75 16.95

(c) The gasoline prices in

Platt's for Seattle/Tacoma and Portland

A103

were based on spot purchases by a small

refiner, Powerine.

(ad) In order to determine a

price for its 93 octane (regular) gasoline

from Platt's 91 octane price, Gulf used the

difference between Gulf's prices to Armour

for 91 and for 93 octane and added that

differential to the Platt's 91 octane

price.

(e) Mr. Gilchrist of Gulf talked

to general counsel and spoke with others

within Gulf about the use of trade journals

to establish prices.

De (a) Gulf originally relied on

the new item - new market rule, 10 C.F.R.

§ 212.111, as the basis for its use of

Platt's Oilgram to determine May 15, 1973

unbranded prices to Dyke. Gulf later

conceded that the rule was inapplicable.

(b) On and after January 1, 1974

Duke continued to receive product from Gulf

A104

at the same terminals and to market it at

the same locations as before.

(c) There was no difference

between the quality of gasoline which was

sold by Gulf to Dyke prior to January l,

1974 and that sold after.

E. Submission of Claims.

As Dyke was first aware of Gulf's

overcharges when he was contacted by a DOE

auditor investigating Gulf's prices.

ye Dyke claims that Gulf overcharged

him in a series of gasoline sales from

January 1, 1974 through January 31, 1977 in

violation of the EPAA and its price

regulations.

. Dyke submitted a 90-day demand

letter to Gulf. Gulf did not respond to

the letter.

4. Dyke's complaint was filed

January 4, 1977.

Colvin's complaint was

filed October 11, 1977. Fletcher's

complaint was filed October 20, 1977.

A105

De Gulf counterclaims against Dyke

for his failure to pay Gulf $735,444.78 for

gasoline purchases from December 16, 1976

through January 28, 1977.

y. Fletcher's Standing.

A In late September or early

October 1970, Tesoro entered into a

gasoline supply contract with Gulf. Tesoro

and Fletcher thereupon entered into an

-This case was originally assigned to

Chief Judge Skopil who was appointed to the

Ninth Circuit in 1979. There was also an

interlocutory appeal by the DOE. Dyke v.

Gulf Oil Corp., 601 F.2d 557 (TECA 1979).

On remand, Chief Judge Burns granted a

six-month stay of proceedings and assigned

the case to me. I lifted the stay in July

1980. The trial was conducted in stages

from November 1981 to April 1982. MI

assigned Magistrate Juba to determine the

amount of prejudgment interest to be

awarded and adopted his findings and

recommendations on October 26, 1982.

— ss

7

’

.

/

:

1

agreement whereby Fletcher received the

gasoline Tesoro purchased from Gulf.

y Fletcher and Tesoro agreed prior

to execution of any of these agreements

that Fletcher's gasoline requirements would

A106

be supplied by Gulf through a separate

contract between Tesoro and Gulf.

Accordingly, Gulf agreed to contract with

Tesoro for the sale of branded gasoline on

a wholesale basis in the states of

Washington, Oregon and Idaho. It was

understood that the prices for those sales

would be at a level low enough to permit

Tesoro a small margin on resales at prices

competitive for its customers. When

Fletcher entered into its agreement with

Tesoro, it was aware of and relied on

Gulf's agreement to supply.

Si Prior to execution of the

contract between Tesoro and Gulf, Tesoro

explained that the product to be supplied

by Gulf under the contract was to go to

Fletcher, and Gulf agreed to that

arrangement.

4. Gulf's representatives

investigated Fletcher's station locations

before executing the contract with Tesoro.

A107

Gulf's representatives explained to

Fletcher's representatives and sales

employees the ramifications of Fletcher's

change to the Gulf brand, including price

supports, hauling allowance, use of Gulf

credit cards, Gulf signs and Gulf station

painting.

Ss Fletcher did not approach Gulf

directly as a supplier. One of Fletcher's

goals was to obtain a long-term, fixed rent

lessor for all of Fletcher's service

station properties. Following Gulf's

acknowledgement of the agreement to supply

branded product to be delivered to Fletcher

service stations, Tesoro offered to lease

all the stations, pay a guaranteed rental

sum and extend the lease through eight

years. Fletcher was permitted to lease

back the properties on a year-to-year

basis, providing Fletcher with maximum

flexibility and security. Since Tesoro had

A108

the long-term lease, it was left to Tesoro

to locate a suitable supplier.

6. While there was a contract

between Gulf and Tesoro and a contract

between Tesoro and Fletcher, the sale in

substance was to Fletcher. Gulf knew that

before entering into the contracts. A term

of the sublease was a gasoline sales

agreement between Tesoro and Fletcher.

Under this sales agreement, Tesoro was

obligated to supply Fletcher's requirements

for gasoline through the subleased

premises.

: For all grades of gasoline

supplied under Fletcher's sales agreement

with Tesoro, Fletcher paid Gulf's price

plus a fixed markup of $.00375/gal.

8. Tesoro was invoiced by Gulf and

made payment to Gulf.

9. As part of the transaction, Gulf

established a special procedure for

Fletcher to transmit its Gulf credit card

A109

sales invoices directly to Gulf, for which

Gulf allowed Tesoro credit on Tesoro's open

account. Fletcher was informed that this

special procedure was set up "[d]Jue to the

unique relationship between Fletcher 0il

Company, Tesoro and Gulf."

10. A notice dated June 9, 1971 from

E.R. Eisemann, Jr., Vice President of Gulf,

addressed and sent directly to Fletcher to

notify it of product substitution, refers

to "the contract(s) currently in effect

between us concerning the sale of Gulf

gasolines."

11. At all times material to this

case Gulf authorized Fletcher to take

delivery of product directly from terminals

in Oregon and Washington designated by

Gulf.

12. Gulf granted Fletcher "jobber

assistance" upon proper request from

Fletcher.

A110

13. Gulf included Fletcher in

meetings held for Gulf Western Region

Jobbers, which Mr. Hirschburg, president of

Fletcher, attended.

14. Notices of price changes came

directly from Gulf to Fletcher, not from

Tesoro.

15. In 1975, when Gulf applied to the

DOE? 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

3References to the Department of

Energy ("DOE") include references, in

appropriate time periods, to the

predecessor agencies: Federal Energy

Administration, Federal Energy Office, and

the Cost of Living Council.

DOE to terminate its supply obligation to

"Tesoro Fletcher."

16. The unique relationship between

Fletcher, Tesoro and Gulf continued

throughout all relevant times in this case.

Alll

G. Statute of Limitations.

During the course of the trial, I

decided which statutes of limitations

would apply to the various transactions.

My opinion is attached as Appendix A.

II. CONCLUSIONS OF LAW

A. Maximum Allowable Selling Prices.

* Gulf was not allowed to charge

prices for its covered products in excess

of a maximum allowable price. Maximum

allowable price means the weighted average

price at which the covered product was

priced for sale on May 15, 1973 plus any

allowable increased product costs and

increased non-product costs incurred after

that date. 10 C.F .8. 8

a. To arrive at a maximum allowable

price, Gulf was required to establish

appropriate classes of purchasers. Class

of purchaser under the regulations means

All2

purchasers to whom a person has charged a

comparable price for comparable product or

service pursuant to customary price

differentials between those purchasers and

other purchasers. 1OC.F.R. § 212.31.

oe Customary price differentials

include price distinctions based on

discount allowances, add-on, premium, and

an extra based on a difference in volume,

grade, quality or location or type of

purchaser or a term or condition of sale or

delivery. Id.

4. In ruling 1975-2, 3 Energy Mgt.

(CCH) 47 16,042, the DOE explained the

application of the class of purchaser

concept. In doing so it defined the term

"customary price differential" and pointed

to illustrative factors which may account

for price distinctions. These important

factors, aside from grade and quality, are

(a) location, (b) type of purchaser,

All13

(c) volume and (d) term or condition of

sale or delivery.

B. Class of Purchaser.

Rx The change from a branded to

unbranded relationship between the

supplier and the purchaser calls for a

change in the purchaser's classification.

Administrative decisions support this

conclusion. Greenbelt Consumer Services,

Inc., 1 FEA @@ 20,211 (Dec. 17, 1974); State

of New Hampshire, 2 FEA 4 80,574 (Apr. 16,

1975).

2. The parties do not dispute Gulf's

legal right to change Dyke from a branded

to unbranded status. Gulf's withdrawal of

various services including hauling

allowances, service station painting

allowances, and credit card programs in

conjunction with withdrawal of its brand

did not violate former 10 C.F.R. § 210.62.

a. Gulf was obligated to place Dyke

in Gulf's most similar existing class of

A114

purchaser. * Saber Petroleum Corp., 5 FEA

§ 80,544 (Feb. 4, 1977). See also Atlantic

Richfieid Co., 4 FEA § 80,550 (Oct.8,

1976); Mid Continent, Inc., 3 FEA 9% 80,507

(Nov. 14, 1975); Western Jobbers Alliance,

4 FEA 9 87,010 (Sept. 10, 1976).

4. Guif did not have the right to

rely on the new item - new market rule.

Although Gulf initially raised this

possibility, Gulf conceded that it did not

have the right to rely on this rule. By

4this is consistent with a primary

purpose of the regulations, and the law

establishing the regulations, which is to

maintain the price differentials that

existed on May 15, 1973 between groups of

purchasers. This goal cannot be reached if

suppliers such as Gulf are allowed to

create new classes of purchasers anc set

new prices when business relationships

change.

selecting a price based on reported sales

in Platt's Oilgram, Gulf improperly created

a new class of purchaser for Dyke.

A115

C. Selection of Existing Class of

Purchaser.

1. (a) Dyke should have been placed

in the Armour classes of purchaser.

(b) Armour consisted of several

classes of purchaser, one for each terminal

where it picked up product.

(c) Dyke is assigned to three

pricing zones emanating out from the

Seattle-Tacoma refinery complex, reflecting

the three stipulated Armour prices

emanating out from the San Francisco

complex. The terminals farthest from the

Seattle/Taxoma refinery complexes receive

the Armour prices at the terminal farthest

from the San Francisco area refinery and

the terminals closest to the Seattle

refinery receive the Armour prices at the

San Francisc. sefinery. The assignment of

May 15, 1973 Armour prices to the

A116

terminals where Dyke lifted product is

summarized in the following table:

Regular Zone Price

Tacoma 1 . 1320

Portland 2 .1355

Eugene 3 .1370

Crescent City 3 .1370

Premium

Tacoma 1 .1495

Portland 2 .1530

Eugene 3 .1545

Crescent City 3 .1545

# Gulf's other existing classes of

purchaser in the divestiture area on

May 15, 1973 were its branded classes.

Under the circumstances of this case, the

branded classes were inappropriate for Dyke

without a price adjustment for loss of

branded benefits. Under the regulations,

however, it is not proper to apply such

price adjustments to an existing class of

purchaser. For this additional reason,

Dyke should have been placed in the

existing Armour unbranded classes of

purchaser.

All?7

D. Overcharge Calculation Methodologies.

Be The proper method in this case

for calculating the overcharges is to

subtract the court-ordered May 15, 1973

prices to Dyke from the May 15, 1973 prices

imputed to Dyke based on Platt's Oilgram.

If Gulf did not actually pass through its

full cost increment to Dyke in a month, the

cost increment difference is to be

subtracted from the overcharge calculated

on May 15 prices. The difference shall be

multiplied by the volume of each grade of

gasoline sold to Dyke in each month. This

method is appropriate under the regulations

and is the most fair to th» parties.”

y 2 Gulf advocates use of the refiner

price formula to calculate overcharges in |

this case.° The parties’ various refiner ;

price rule calculations, described as

"Refiner's Price formula - Ex. #95B";

"Deemed Recovery After 9/1/74"; “Leener's

Equal Application - Ex. #137" (“equal

This calculation follows the same

format used by the DOE in its proposed

remedial order to Gulf dated December 21,

1981. But, in addition, it gives Gulf

credit for the difference between the cost

pass-through increment Gulf charged to

other customers and the increment it

charged to Dyke. These cost pass through

increments were also used by Gulf to add to

May 15, 1973 prices to calculate maximum

allowable prices in Gulf's original answers

to plaintiffs’ interrogatories.

Scult contends that Longview Refining

Co. v. Shore, 554 F.2d 1006 (TECA), cert.

denied, 434 U.S. 836 (1977), requires use

of the refiner price formula to calculate

overcharges resulting from May 15, 1973

base price error. The refiner price

formulas presented by the parties to

compute overcharges in this case are not

required by Longview.

application/deemed recovery approach"); and

as “Leener's Unit Proportional Bank -

Ex. #136" ("proportional bank approach") in

Dyke's Exhibit 113 are inappropriate.

3. Under Dyke's equal application/

deemed recovery approach, Gulf's bank of

unrecouped costs would be destroyed. It

would be totally inequitable to destroy

Gulf's bank by utilizing that formula.

A119

4. Gulf's proportional bank approach

is not fair or equitable. That formula

would permit Gulf to apply additional costs

to Dyke that were not charged to any other

purchaser. Gulf argues, in effect, that if

it makes an error, it should be allowed to

assess additional costs that it did not

elect to assess to anyone else. It would

permit Gulf to benefit by its own error

without any charge against its bank other

than the charge for this particular

purchaser. Under the circumstances of this

case, this approach is inappropriate.

Si The parties stipulated to the

gallons, prices and other factors in the

court's methodology to arrive at the

overcharge figures: $2,000,000 for Dyke,

$745,000 for Colvin and $790,000 for

Fletcher.

A120

- Affirmative Defenses.

‘i Gulf's affirmative defense that

any Gulf overcharges should be reduced to

the extent Dyke was able to pass on the

overcharges in his own prices is denied.

This ruling is based on difficulty of proof

and the lack of a pre-existing cost-plus

contract or its functional equivalent.

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

7120, 97 $. Ct. 2061, S2 UL. Ed. 2@ /07

(1977); Eastern Airlines v. Arco, 609 F.2d

497 (TECA 1979); Go-Tane Service Stations,

Inc. v. Ashland Oil, Inc., 508 F. Supp. 200

(N.D. Tid. 1962).

as Gulf's affirmative defense of

laches is denied. The parties brought

their claims against Gulf within a

reasonable time.

3. Gulf's affirmative defenses of

estoppel and alleged failure to report the

overcharges to the DOE are denied. Dyke

purchased from Gulf because it was Dyke's

Al21

base period supplier under the regulations.

Dyke first became aware of the overcharges

when contacted by a DOE auditor

investigating Gulf's prices.

F. Treble Damages.

Be The 90-day notices sent by the

plaintiffs were sufficient, within the

meaning of the statute.

Be When a 90-day notice has been

sent and overcharges have been determined,

the burden is on the defendant to prove the

overcharges were not intentional and that

reasonable priactices were established to

prevent overcharges. If that burden is

met, defendant avoids imposition of treble

damages.

as Treble damages will not be

awarded in this case. In light of the

circumstances and lack of guidelines at the

time Gulf's decision was made, I find that

the overcharges were not intentional.

A122

SS SETS te

G. Statute of Limitations.

The court's opinion of March 8, 1982

contains the conclusions on this issue.

See Appendix A.

H. Prejudgment Interest.

a. Dyke is entitled to prejudgment

interest to the extent he is able to prove

that he lost the use of money attributable

to Gulf's overcharge.

a. The rate of interest as

established by the DOE is the appropriate

rate. This is a federal case involving

federal regulations and statutes. In

addition, the DOE rate would more nearly

recompense Dyke for his loss than the

Oregon statutory rate of interest over this

period.

: ee Calculation of prejudgment

interest was assigned to Magistrate Juba.

His "FINDINGS AND RECOMMENDATION" was

adopted by the court and contains its

findings and conclusions on this issue.

See Appendices B and C.

4. (a) Based on the court's

prejudgment interest rulings, the parties

stipulated to the following interest as of

December 1982 for each plaintiff:

Richard W. Dyke $499,199.34

Fletcher Oil Company 350,900.68

Colvin Oil Company ,73,216.248

(b) The parties also stipulated

to the amounts on which interest is to be

determined beginning January 1, 1983:

Richard W. Dyke $705,788.29

Fletcher Oil Company 695,900.68

Colvin Oil Company 305,730.58

i Fletcher Standing.

Based on the relationship between Gulf

and Fletcher as reflected in the Findings

of Fact, the court concludes that Fletcher

has standing to sue under section 210(b) of

the Economic Stabilization Act as

incorporated into the EPAA. The court

rejects Gulf's argument that Fletcher was

an indirect purchaser and thus has no

A124

et Ee Sea

Py

standing to sue. Illinois Brick, 431 U.S.

720 (1977), does not compel a contrary

result.

CONCLUSION

Separate judgments will be entered for

each plaintiff.

Dyke will be awarded $1,364,555.22 for

overcharges (the setoff of $2,000,000.00

minus $735,444.78) / plus appropriate

prejudgment interest and attorneys’ fees.

Dyke does not contest Gulf's

counterclaim for breach of the Gulf-Dyke

gasoline sales contract. Gulf is therefore

entitled to recover from Dyke the sum of

$735,444.78 which amount is to be offset

against overcharges which Dyke would

otherwise recover from Gulf.

Colvin will be awarded $745,000.00 for

overcharges plus prejudgment interest and

attorneys' fees.

A125

Fletcher will be awarded $790,000.00

for overcharges plus prejudgment interest

and attorneys’ fees.

IT IS SO ORDERED.

DATED this 20th day of June 1983.

/s/ Owen M. Panner

OWEN M. PANNER

United States District Judge

A126

Richard W. DYKE, dba Western

Stations Co., Plaintiff,

Vv.

GULF OIL CORPORATION, a Pennsylvania

corporation, Defendant.

COLVIN OIL COMPANY, an Oregon

corporation, Plaintiff,

Vv.

GULF OIL CORPORATION, a Pennsylvania

corporation, Defendant.

F.O. FLETCHER, INC., dba Fletcher Oil

Company, Plaintiff,

ee

GULF OIL CORPORATION, a Pennsylvania

corporation, Defendant.

Civ. Nos. 77-10-PA, 77=-791-PA

and 77-849-PA.

United States District Court,

D. Oregon.

Aug. 23, 1983.

John L. Schwabe

Neva T. Campbell

Mary E. Egan

Schwabe, Williamson, Wyatt,

Moore & Roberts

Portland, Oregon for plaintiff.

A127

John R. Brooke

Wood, Tatum, Mosser,

Brooke & Holden

Portland, Oregon

Jack D. Fudge

Michael L. Hickok

Douglas J. Del Tondo

McCutchen, Black, Verleger & Shea

Los Angeles, California for defendant.

PANNER, District Judge.

[1] The remaining issue in these

consolidated cases is the award of

attorneys’ fees. I previously ruled that

such an award was appropriate pursuant to

section 210(b) of the Economic

Stabilization Act, 12 U.S.C. § 1904, note.

Defendant argues that a recent decision of

the Temporary Emergency Court of Appeals

' fees

precludes me from awarding attorneys

in the circumstances of this case.

Although TECA's decision in Eastern Air

Lines, Inc. v. Atlantic Richfield, 712 F.2d

1402, (Em. App. 1983), contains strong

dicta on the subject, I find the decision

is not controlling.

A128

7 haar ee

; ‘

ee Ml Ree ge ee

In Eastern Air Lines, TECA upheld the

decision of a district court not to award

attorneys' fees. The appeals court based

its decision partly on what it regarded as

the trial court's “sound application of

discretion." Id. at 1413. TECA was not

required in that opinion to carefully

analyze the language of the statute

authorizing attorneys' fees. Such an

analysis reveals that Congress did not

specify that attorneys' fees could only be

awarded in cases of intentional

overcharges.

The relevant statute provides:

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 $1000;

except that in any case where the

defendant establishes that the

A129

overcharge was not intentional

and resulted from a bona fide

error notwithstanding the

maintenance of procedures

reasonably adapted to the

avoidance of such error the

liability of the defendant shall

be limited to the amount of the

overcharge.

12 U.S.C. § 1904 note (1980).

It seems quite clear that the language

of exception beginning with the word

"except" modifies only the language that

follows the word "plus." That is, a court

may discretionarily award attorney's fees.

In addition, the court may award treble

damages or damages in an amount between

$100 and $1,000, unless the defendant

establishes the overcharge was

unintentional and resulted from a bona fide

error.

I hold that a reasonable award of

attorneys’ fees in these cases is

$75C,000.00.

A130

BACKGROUND

These actions were brought in 1977

against Gulf Oil Corporation ("Gulf")

pursuant to the Emergency Petroleum

Allocation Act, 15 U.S.C. § 751, et seq.

and various U.S. Department of Energy

regulations. Plaintiffs sought to recover

overcharges for gasoline sold by Gulf.

There were years of extensive discovery and

pretrial proceedings before the case was

set for trial. Because of the complexity

of the issues involved, the trial was split

into several phases. In phase I, I held

that Gulf's method of setting plaintiffs’

May 15, 1973 base price was improper. In

phase II, I ruled that a reasonable

existing May 15, 1973 classification for

plaintiffs was the three-tier geographic

prices paid by a nonbranded distributor in

California. In phase III, I selected the

theory and means of calculating plaintiffs

Al31

ieee

damages. As a result of that ruling the

parties stipulated to an amount of damages

of $2,000,000.00 for Dyke, $745,000.00 for

Colvin, and $790,000.00 for Fletcher. In

phase IV, I held that Fletcher was a

real-party-in-interest. Finally, in

phase V, I ruled that an award of

attorneys’ fees in these cases was

appropriate. The trial proceedings were

spread over a period of seven months.

DISCUSSION

A. Standards.

{2,3} The amount of reasonable

attorneys’ fees is within the court's

discretion. Sapper v. Lenco Blade, Inc.,

704 F.2d 1069, 1073 (9th Cir.1983). While

the statute is silent on what is

"reasonable, "

many courts have enumerated

factors for consideration. The Ninth

Circuit has adopted the twelve factors

A132

recited in Johnson v. Georgia Highway

Express, Inc., #88 F.2d 714 (5th Cir.1974).

Kerr v. Screen Extras Guild, Inc., 526 F.2d

67, 70 (9th Cir.1975), cert. denied sub

nom., Perkins v. Screen Extras Guild, Inc.,

425 U.S. 951, 96 S.Ct. 1726, 58 L.Ed.2d 195

(1976). Although it is not necessary for

the court to specifically discuss each

factor, Sapper, 704 F.2d at 1073, the court

may abuse its discretion in setting fees if

it does not at least consider the various

factors and discuss the relevant ones.

Harmon v. San Diego County, 664 F.2d 770,

772 (9th Cir. 1981); O'Neil v. City of Lake

8

Oswego, 642 F.2d 367, 370 (9th Cir.19

-

A court may rely upon a single factor if it

appears to be controlling and so long as

the remaining factors are considered.

Vanelli v. Reynolds School District # 7,

667 F.2d 773, 781 (9th Cir. 1982).

{4} The twelve Johnson factors are:

(1) the time and labor required; (2) the

A133

novelty and difficulty of the questions

involved; (3) the skill necessary to

perform the legal services properly;

(4) the preclusion of other employment by

the attorney due to the acceptance of the

case; (5) the customary fee; (6) whether

the fee is fixed or contingent; (7) time

limitations imposed by the client or

circumstances; (8) the amount involved and

the results obtained; (9) the experience,

reputation and ability of the attorneys;

(10) the undesirability of the case;

(11) the nature and length of the

professional relations with the client; and

(12) awards in similar cases. Johnson, 488

F.2d at 717-19. To these factors I add

another: the attorneys' efforts to bring

the matter to a prompt and reasonable

ccenclusion.

Before turning to the relevant factors

in these cases I note that this circuit has

warned against inflexible application of

A134

the Johnson factors. In Moore v. Jas.

‘

Matthews & Co., 682 F.2d 830 (9th

Cir.1982), the court reviewed the

"lodestar" method of setting fees utilized

in several other circuits. E.g., Copeland

v. Marshall, 641 F.2d 880 (D.C.Cir.1980);

Furtado v. Bishop, 635 F.2d 915 (lst

Cir.1980); Detroit v. Grinnell Corp., 560

F.2d 1093 (2d Cir.1977); Lindy Bros.

Builders, Inc. of Philadelphia v. American

Radiator & Standard Sanitary Corp., 487

F.2d 161 (3d Cir.1973). Lodestar analysis

involves the calculation of a "lodestar"

figure by multiplying the number of

attorney hours times the prevailing billing

rate for comparable legal services. That

lodestar figure is then adjusted based on

the quality of work and the risk taken by

the attorney. Moore, 682 F.2d at 840.

The Moore panel noted with approval

the increased use by district courts of a

combined Johnson and lodestar approach.

A135

Id. While the technique varies from case

to case, this "blended" approach involves

"a

use of the lodestar analysis as

procedure for ordering the examination of

[the] factors listed in [Kerr]." Moore,

682 F.2d at 840, citing In re Capital

Underwriters, Inc. Securities Litigation,

519 F.Supp. 92, 100 (N.D.Cal.1981), aff'd

in part, remanded in part, 705 F.2d 466

(9th Cir.1983), and Knutson v. Daily

Review, Inc., 479 F.Supp. 1263, 1270 n. 10

(N.D.Cal.1979). Typically, a court

utilizing the blended approach would

examine the first element of the lodestar

formula, “hours spent," just as it would

examine the Johnson element of "time and

labor required." The remaining Johnson

elements would then be used to determine

the second lodestar factor, "hourly rate,"

and to augment or decrease the overall

award based on quality or contingency

consideration. Moore, 682 F.2d at 840-41.

A136

[5] While there is obvious merit to

this blended method, I prefer not to give

undue emphasis to mechanical, mathematical

calculations. In most cases, the work

product of an attorney is not easily

quantified. Use of the Johnson factors to

establish the lodestar elements creates the

unjustified appearance of reliability and

"scientific" methodology. The setting of

fees by the district court necessarily

requires the use of subjective analysis.

Such analysis is imprecise and is therefore

entrusted to the discretion of the district

court because of that court's intimate

knowledge of the proceedings. Hensley v.

Eckerhart, je eawe @.6¢. 1933,

1941, 76 L.Ed.2d 40 (1983).

[6] The number of hours expended by

the attorneys and the prevailing hourly

rate must, of course, be examined and

considered by the court. I am not

required, however, to make precise

A137

calculations on the record. Hensley, 103

S.Ct. at 1940. The requirements

established by Kerr can be met by a review

of the relevant factors and disclosure of

the court's reasoning. Harmon v. San Diego

County, 664 F.2d at 772.

B. Application.

Time and Labor Required.

These were difficult, complex cases

involving an area of the law that has

received very little exploration. The

"Quiding" regulations were often tortuously

constructed and contradictory. Combining

these circumstances with defendant's

aggressive and persistent defense,

plaintiffs' attorneys necessarily expended

considerable time and effort.

Specifically, plaintiffs' attorneys have

submitted affidavits showing that they

spent 228 hours in trial and approximately

7437 hours in research and nontrial work.

A138

Additionally, they claim 1543 hours of

paralegal work.

[7] I find that the submitted

attorney hours were reasonably expended in

the prosecution of these cases. While I am

not bound by the hours claimed by an

attorney, e.g., Seymour v. Hull & Moreland

Engineering, 605 F.2d 1105, 1117 (9th

Cir.1979), I find that the hours claimed

here were reasonably within the range of

time needed to achieve the successful

results. No hours were spent on unrelated

claims upon which plaintiffs did not

prevail. See Sethy v. Alameda County Water

District, 602 F.2@ 894, 898 (9th Cir.1979),

cert. denied, 444 U.S. 1046, 100 S.Ct. 734,

62 L.Ed.2d 731 (1980).

[8]) I reject, however. inclusion of

secretarial time within the paralegal

classification. The approximately 1000

hours of such secretarial time constitute

an overhead expense which is recoverable

A139

only as a part of the attorneys’ time.

E.g., Kania v. United States, 650 F.2d 264,

269, 227 Ct.Cl. 458, cert. denied, 454 U.S.

895, 102 S.Ct. 393, 70 L.Ed.2@ 230 (ivea).

ie Novelty and Difficulty of

Questions Raised.

[9] These were complex cases that

raised significant questions of both law

and fact. Novel issues of law were

presented. The ever changing regulatory

scheme presented an interpretive challenge

to both counsel and court. The compiexity

of these cases support a substantial award

of attorneys’ fees to the plaintiffs.

- Skill Necessary to Perform Legal

Services Properly.

It is clear that the novelty and

difficulty of the questions raised by these

cases required commensurate skill and

talent.

A140

4. Preclusion of Other Work.

I do not find preclusion of other work

to be a significant factor in these cases.

Accordingly, I give it no weight.

7 Customary Fee.

Plaintiffs suggest an hourly trial fee

ranging from $66 to $165 for the various

attorneys. The range for nontrial time is

$60 to $150 per hour. Clerk time and other

paralegal time is billed at $35 per hour.

The suggested ranges reflect the relative

value cf experienced attorney time in

contrast to inexperienced associate time.

The suggested rate structure is higher

than fees customarily awarded in this

district. The subject matter of these

cases justifies higher than usual hourly

fees. A survey of awards in this court

illustrate the court's general reluctance

to award fees in excess of $100 per hour.

A substantial portion of these awards were

A141

based on hourly fees ranging from $50 to

$80.

Accordingly, I hold that a range of

$80 to $100 for all attorney time is

appropriate in these cases. Plaintiffs'

suggested rate of $35 per hour for

paralegal work is within the range of

acceptable levels. Considerable expertise

was required of the paralegals in these

cases.

6. Contingent or Fixed Fee

Arrangement.

[10] Plaintiffs' fees were not ona

contingent fee basis. Hourly rates were

fixed and predetermined. Defendant argues

that an award in excess of that actually

billed to the plaintiffs is excessive and

punitive in nature. I reject that

argument. At the time the fee arrangement

was made, neither the client nor the

attorneys had the opportunity to determine

a reasonable fee in light of the various

A142

factors that I can now evaluate. No one

could speculate as to the amount of the

recovery. It is the court's responsibility

to set a reasonable fee award. The statute

provides for the award of a reasonable fee,

not the fee agreed upon by the parties and

their attorneys. See Johnson, 488 F.2d

at 718 (fee arrangement not decisive in

court's determination of reasonable

attorney fee award).

Ue Time Limitations Imposed by the

Client.

I know of no limitations placed upon

the attorneys by the clients.

8. Amount of Damages.

Plaintiffs were highly successful.

The damages, coupled with the award of

prejudgment interest, constitute a

substantial figure. The amount recovered,

though not bearing directly on the

determination of a reasonable attorney fee

award, is an important factor in measuring

A143

the effectiveness and competency of the

attorneys. The recovery in these cases

supports a substantial fee award.

9. Experience, Reputation and

Ability of the Attorneys.

Each of plaintiffs’ four principal

attorneys has demonstrated ability in these

cases and in other cases before the court.

Lead counsel, Ms. Campbell, has engaged in

extensive business and business-related

litigation and has particular expertise in

Emergency Petroleum Allocation Act

litigation.

10. Desirability of the Case.

These cases were not undesirable and

therefore this factor is not significant.

11. Nature of Professional

Relationship with Client.

Plaintiffs have been represented by

these attorneys for a substantial period

of time. Dyke has been a client since

1971.

A144

12. Award in Similar Cases.

An award of fees under the Economic

Stabilization Act is of first impression

in this district. In Evanson v. Union Oil

of California, 4 C.C.H. Energy Management

q 26,417 (D. Minn. 1980), the court

approved a settlement of $2,750,000.00 plus

$800,000.00 in attorneys’ fees. While

there was no discussion of the

reasonableness of the fee award, the

figures are illustrative of proportional

relationship in an overcharge case.

13. Efforts to Bring the Matter to a

Prompt and Reasonable Conclusion.

A lawyer has a continuing duty to

analyze positions taken and to determine

whether they are legally sound. A lawyer

must evaluate whether positions are

unfairly taken and will unreasonably

prolong litigation. The effort a lawyer

expends to expeditiously accomplish a

A145

result for the client is an important

consideration.

Although resolution of these cases did

not come swiftly, plaintiffs’ attorneys

worked efficiently and expeditiously and in

a timely and cooperative manner. Such

attributes should be awarded when combined

with successful results.

CONCLUSION

I hold that reasonable awards of fees

in these cases, allocated pro rata accord-

ing to plaintiffs' counsels’ affidavits of

requested fees, are as follows:

Dyke -- $385,500

Colvin -- $173,500

Fletcher -- $191,000

The clérk is directed to enter

judgment for these amounts. Plaintiffs

shall submit their cost bills to the Clerk.

IT IS SO ORDERED.

A146

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

RICHARD W. DYKE, dba WESTERN

STATIONS COMPANY,

Plaintiff,

Civil No.

77-10PA

Vv.

GULF OIL CORPORATION, a

Pennsylvania corporation,

Defendant.

COLVIN OIL COMPANY, an Oregon

corporation,

Plaintiff,

77-791PA

GULF OIL CORPORATION, a

Pennsylvania corporation,

Defendant.

F. O. FLETCHER, INC., dba

FLETCHER OIL COMPANY,

Plaintiff,

Civil No.

77-849PA

Vv.

GULF OIL CORPORATION, a

Pennsylvania corporation,

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Vv ) Civil No.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

) OPINION

)

)

Defendant.

John L. Schwabe

Neva T. Campbell

Mary E. Egan

Schwabe, Williamson, Wyatt,

Moore & Roberts

1200 Standard Plaza

Portland, OR 97204

Attorneys for Plaintiffs.

Jonn R. Brooke

Wood, Tatum, Mosser,

Brooke & Holden

1001 S.W. 5th-Suite 1300

Portland, OR 97204

Jack D. Fudge

Michael L. Hickok

McCutchen, Black, Verleger & Shea

3435 Wilshire Blvd., 30th Floor

Los Anceles, CA 90010

Attorneys for Defendant.

PANNER, Judge:

Plaintiffs brought these actions under

the Emergency Petroleum Allocation Act

(EPAA), 15 U.S.C. §§ 751, et seg., which

incorporates the private remedy section 210

of the Economic Stabilization Act (ESA)

(1970). Plaintiffs seek to recover

overcharges in the price of gasoline sold

by Gulf in violation of various

A148

regulations. This cpinion is limited to

the question of which statute of

limitations should be applied. I hold that

the Oregon six-year statute, Or. Rev. Stat.

§ 12.080(2), applies.

FACTS AND BACKGROUND

The relevant facts are limited for the

issue presented. Dyke, an Oregon

resident, purchased most of its gasoline in

Oregon and sold it in Oregon. Colvin, an

Oregon resident, purchased its gasoline

from Gulf in Califronia, transported it to

Oregon and sold it in Oregon. Fletcher, a

Washington resident, purchased gasoline in

Washington (60%) and Oregon (40%), and sold

it in Washington. Gulf is a Pennsylvania

corporation.

Gulf argues that the applicable

statute of limitation for compensatory

damages in each respective state are Cal.

A149

Civ. Pr. § 338(1) (three years); Wash. Rev.

Code § 12.16.130 (two years); and Or. Rev.

Stat. § 12.080(2) (six years). Plaintiffs

contend that only Or. Rev. Stat.

§ 12.080(2) should apply.

DISCUSSION

Neither the EPAA nor section 210

contains a limitation provision. 28

U.S.C. § 2462, the five-year federal

limitation statute, for the "enforcement of

any civil fine, penalty, or forfeiture,"

does not apply to actions under EPAA or

ESA. Colorado Pet. Products Co. v. Husky

Oil Co., 646 F.2d 555, 556 (TECA 1981). In

the absence of a stati cory limitation

period provided by Congress, federal courts

are to apply the most analogous state law

of limitation. Ashland Oil Co. of

California v. Union Oil of California, 567

F.2d 984 (TECA 1977), cert. denied, 435

A150

U.S. 994 (1978). See also Colorado Pet.

Products, supra and Shell Oil Co. v. Nelson

Ola Go... Ge’ &£.24 228, 236 (TECA); cert.

denied, 449 U.S. 1022 (1980).

A federal court may not mechanically

apply a state statute of limitation simply

because a limitation period is absent from

the federal statute. State legislatures do

not set limitation periods with national

interests in mind. Occidental Life

Insurance Co. of California v. E.E.O.C.,

Goa U.e. fee, 2e7 (1977). Accordingly, I

must be assured that the application of

state law will not frustrate or interfere

with the implementation of national policy.

A state limitation period will not be

borrowed if its application would be

inconsistent with the underlying policies

of the federal legislation. Occidental,

supra at 367, citing Johnson v. Railway

Express Agency, 421 U.S. 454 (1975); Auto

A151

Workers v. Hoosier Cardinal Corp., 383 U.S.

696 (1966).

The nature of the claims presented

must first be determined by federal law.

E.g., Ashland Oil, supra; Kocolene Oil

Corp. v. Ashland Oil Corp., 517 F. Supp.

1029 (S.D. Ohio 1981). Section 210 grants

a federal cause of action to any private

individual injured as a result of another's

violation of the ESA. I hold that the

nature of the interests sought to be

protected and the general policies of the

legislation "dictate that this action be

characterized a tort for the purpose of

choosing the appropriate statute of

limitation." Hyland v. Dennison Mfg. Co.,

496 F. Supp. 939, 941 (D. Mass. 1980).

Oregon is committed to the general

rule that a forum court utilize its own

state's statute of limitation. Forsyth v.

Cessna Aircraft Co., 520 F.2d 608, 613 (9th

Cir. 1975), citing Conner v. Spencer, 304

A152

F.2d 485 (9th Cir. 1962); Van Santvoord v.

Rosethier, 35 Or. 250, 3S/ FP. 628 (1899).

Oregon's "borrowing" statute is Or. Rev.

Stat. 12.260. E.g., Cope v. Anderson, 331

U.S. 461, 466 (1947). See also Tomlin v.

Boeing, 650 F.2d 1065, 1068-69 (9th Cir.

1981). It provides that where a cause of

action arises between two non-residents in

a foreign state, an Oregon court will

"borrow" the statute of limitation of the

state where the cause of action arose. It

is the general view, however, that the

foreign statute of limitation is borrowed

only to the extent that it shortens the

period of limitation of the forum. Connor

v. Spencer, supra at 487.

I note also the modern trend that

choice of statutes of limitation should not

be handled differently than other

choice-of-law problems. E.g., Tomlin,

supra at 1069. Assuming that approach is

applicable, I must examine Oregon courts'

A153

choice-of-law decisions in tort actions.

Oregon recently abandoned the doctrine lex

loci delicti commissi in favor of the "most

significant relationship test." Casey v.

Manson Construction Co., 247 Or. 274, 428

P.2d 898 (1967). The latter standard was

further refined in Erwin v. Thomas, 264 Or.

454, 506 P.2d 494 (1973), and in Tower v.

Schwabe, 284 Or. 105, 585 P.2d 662 (1978).

An Oregon court will now examine the

interests and policies of various

jurisdictions to determine if all have a

substantial interest in the controversy. A

state without an interest in the

controversy is eliminated from the

choice-of-law decision. If more than one

state has a true interest in the contro-

versy, an Oregon court will apply the law

of the forum which has the "most

significant relationship." Fisher v. Huck,

50 Or. App. 635, 624 P.2d 177 (i9Gi).

A154

Returning now to the facts of this

case, I apply the various choice-of-law

standards to each plaintiff.

DYKE

Oregon's six-year statute of

limitation applies to Dyke's action for

compensatory damages. Pyke is an Oregon

resident. Most of Dyke's purchases from

Gulf were made in Oregon. Oregon's

borrowing statute cannot apply since Dyke

is a resident. Under Oregon's

choice-of-laws analysis, Oregon is the only

state with an interest in the controversy.

Oregon's six-year limitation is consistent

with the federal statutory scheme and

mational policies. See, U.S. Oil Co. v.

Koch Refining Co., 497 F. Supp. 1125, 1131

(E.D. Wis. 1980) (holding that Wisconsin's

six-year limitation statute is reasonably

A155

applied to a claim for compensatory

damages.

Judge Skopil previously determined

that Oregon's three-year limitation period

applied to Dyke's claim for treble damages.

Use of these two separate periods is not

inconsistent with state law or with federal

policy. The recovery of exemplary or

treble damages is a penalty provision that

requires more "stringent proof of

additional elements than that warranting

the award of merely compensatory relief."

Ashland Oil, supra, at 990. See also U.S.

Oil Co., supra at 1130.

COLVIN

I hold that Oregon's six-year statute

of limitation must also be applied to

Colvin's claim for compensatory damages.

Colvin is an Oregon resident. Oregon's

borrowing statute therefore cannot be

A156

applied. Applying Oregon's choice-of-law

standards, California has no real interest

in the controversy. California's courts

are not burdened with this litigation. No

parties reside in California. Under these

circumstances, it is unnecessary to reach

the second step of applying a "most

significant relationship" test. As

previously stated, Oregon's six-year

limitation period does not conflict with

federal statutory schemes or national

policy.

FLETCHER

Fletcher's peculiar circumstances make

a choice-of-laws decision difficult.

In applying Oregon's statute of limitation,

Oregon's borrowing statute may apply.

Neither Fletcher nor Gulf is a resident of

Oregon. There is support for Gulf's

position that each transaction involving an

A157

overcharge is a separate statutory tort

that gives rise to its own cause of action.

E.g., U.S. Oil Co., supra at 1130, citing

Jennings Oil v. Mobil Oil, No. 77 Civ. 1398

(HFW) (S.D. N.Y. August 23, 1979) 1979-2

Trade Cases § 62,836. Under that theory,

at least the sales made to Fletcher in

Washington may be subject to Washington's

two-year limitation. Additionally,

Washington's two-year limitation statute

may be borrowed since it shortens the

period of limitation of the forum.

Turning to Oregon's choice-of-law

standards, I hold that Washington has no

true interest in this controversy. A state

legislature sets limitations on damages as

part of a total scheme to achieve a desired

balance between its policies of

compensation and deterrence without placing

undue burdens on defendants. Tomlin, supra

at 1069-70. Statutes of limitation protect

both courts and defendants. Barring stale

A158

claims conserves judicial resources and

provides repose to defendants. Id. Here,

Washington courts are not involved. The

defendant is not a Washington resident.

Under the circumstances, I hold that

Washington has no true interest and,

therefore, I need not apply the "most

significant relationship" test.

I decline to apply Washington's

two-year limitation period in this case. I

hold that a two-year limitation places a

bar on recovery inconsistent with federal

policy. The federal cause of action

created by section 210 was intended to

favor private enforcement and surveillance

of the price control regulations. The

purpose of the Emergency Petroleum

Allocation Act is to prevent economic

dislocation caused by oil shortages. This

is clearly national in scope.

Citronelle-Mobil Gathering, Inc. v.

O'Leary, 499 F. Supp. 871 (S.D. Ala. 1980).

A159

To assure compliance with the pricing

regulations, Congress provided a

traditional private right of action to

discover violators and to deter would-be

violators. Kocolene Oil Corp., supra, 517

F. Supp. at 1031. In Ashland Oil, supra

567 F.2d at 991, the Temporary Emergency

Court of Appeals held that it would be

inconsistent with the underlying policies

of section 210 to apply a one-year statute

of limitation to an action for compensatory

damages. Similarly, in Naph-Sol Refining

Co. v. Cities Service Oil Co., 506 F.Supp.

77 (W.D. Mich. 1980), the court held that

it would be inconsistent with public policy

to apply a two-year statute of limitations

to the recovery of compensatory damages.

See U.S. Oil Co., supra (rejecting a

two-year statute of limitation for

compensatory damages and selected a

six-year period). Cf. Colorado Pet.

Products Co. v. Husky Oil Co., 646 F.2d 555

A160

(TECA 1981) (applying a two-year limitation

on claims for treble damages and noting

that appellant conceded in the court below

and did not argue on appeal whether the

claim for actual damages was similarly

barred).

I conclude that Washington's two-year

limitation statute cannot be applied to

Fletcher since it is inconsistent with

federal policy. Occidental Life Insurance

Co. v. E.E.0.C., 432 U.S. 335 (1977);

Ashland Oil, supra at 989. Furthermore, I

decline to apply Oregon's borrowing statute

when the foreign state has no interest in

the controversy. For reasons specified in

Dyke above, I hold that Oregon's six-year

limitation statute is consistent with

public policy and should be applied to

Fletcher.

Al61

CONCLUSION

Oregon's statute of limitation, Or.

Rev. Stat. § 12.080(2), which provides for

a six-year period will be applied in

calculating the respective compensatory

damages sustained by Dyke, Colvin and

Fletcher.

DATED the 8 day of March, 1982.

/s/ Owen M. Panner

Owen M. Panner

United States District Judge

A162