# Implementation of Special Refund Procedures > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A94-5990 ## Record - **Collection:** Federal Register - **Document type:** Uncategorized Document - **Published:** March 15, 1994 ## Text DEPARTMENT OF ENERGY Office of Hearings and Appeals Implementation of Special Refund Procedures AGENCY: Office of Hearings and Appeals Department of Energy. ACTION: Notice of implementation of special refund procedures. ----------------------------------------------------------------------- SUMMARY: The Office of Hearings and Appeals of the Department of Energy announces the procedures for disbursement of $14,912.58 (plus accrued interest) obtained by the DOE under the terms of Remedial Orders issued to Pete Aljian Chevron and Shaw & 99 Chevron. The money is being held in escrow following the settlement of enforcement proceedings brought by the DOE's Economic Regulatory Administration. DATE AND ADDRESS: Applications for Refund from the remedial order funds must be filed in duplicate and must be postmarked no later than June 13, 1994. All Applications should refer to either Case Number LEF-0089 or LEF-0090 and should be addressed to the Office of Hearings and Appeals, Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585. FOR FURTHER INFORMATION CONTACT: Richard W. Dugan, Associate Director, Office of Hearings and Appeals, 1000 Independence Avenue, SW., Washington, DC 20585, (202) 586-2860. SUPPLEMENTARY INFORMATION: In accordance with Sec. 205.282(c) of the procedural regulations of the Department of Energy, 10 CFR 205.282(c), notice is hereby given of the issuance of the Decision and Order set forth below. The Decision relates to Remedial Orders issued to Pete Aljian Chevron (Aljian) and Shaw & 99 Chevron (Shaw), two motor gasoline retail outlets located in Castro Valley and Fresno, California, respectively. The Remedial Orders found that the firms had committed pricing violations in their sales of motor gasoline during the periods of December 15, 1979 through May 28, 1980, and December 15, 1979 through July 7, 1980, respectively. The Decision sets forth the procedures and standards that the Office of Hearings and Appeals (OHA) of the DOE has formulated to distribute funds remitted by Aljian and Shaw and being held in escrow. The OHA has decided to accept Applications for Refund from individuals that purchased motor gasoline from Aljian or Shaw during the respective audit periods. Each claimant will be required to submit a listing of its monthly purchases from Aljian and Shaw. The specific information required in an Application for Refund is set forth in the following Decision and Order. Applications for Refund will now be accepted provided they are filed in duplicate and postmarked no later than 90 days after publication of this Decision and Order in the Federal Register. Dated: March 8, 1994. George B. Breznay, Director, Office of Hearings and Appeals. Decision and Order of the Department of Energy Implementation of Special Refund Procedures March 8, 1994. Names of Firms: Pete Aljian Chevron Shaw & 99 Chevron Date of Filing: July 20, 1993 Case Numbers: LEF-0089, LEF-0090. In accordance with the procedural regulations of the Department of Energy (DOE), 10 CFR part 205, subpart V, the Economic Regulatory Administration (ERA) of the Department of Energy (DOE) filed a Petition for the Implementation of Special Refund Procedures with the Office of Hearings and Appeals (OHA), to distribute the funds which Pete Aljian Chevron (Aljian) and Shaw & 99 Chevron (Shaw) remitted to the DOE pursuant to a May 3, 1982 Remedial Order Decision. I. Background During the periods relevant to this proceeding, Aljian and Shaw operated Chevron-branded retail service stations located in Castro Valley, and Fresno, California, respectively. In 1980, the ERA audited the pricing practices of the two retailers and, as a result of those audits, issued Proposed Remedial Orders (PROs) to the two firms. The PROs alleged that Aljian, during the period December 15, 1979 through May 28, 1980, and Shaw, during the period December 15, 1979 through July 7, 1980, sold motor gasoline at prices in excess of their maximum lawful selling prices, in violation of the Federal petroleum price regulations at 10 CFR 212.93(a)(2). After considering the firms' objections to the PROs, the DOE amended the remedial provisions of the PROs and issued a final consolidated Remedial Order Decision on May 3, 1982, to five retailers, including Aljian and Shaw. Allen Union, 9 DOE  83,028 (1982). On November 22, 1982, the Federal Energy Regulatory Commission issued a consolidated Order affirming the Aljian and Shaw Remedial Orders. Gary Pfister's Mobil Service, 21 FERC  61,109 (1982). Aljian and Shaw have remitted to the DOE $8,190.51 and $6,722.07, respectively, in compliance with the Remedial Orders. The firms' payments are currently being held in separate interest-bearing escrow accounts pending distribution by the DOE.1 --------------------------------------------------------------------------- \1\The funds were held in a non-interest bearing DOE suspense account until September 3, 1993, when they were transferred to separate escrow accounts. --------------------------------------------------------------------------- On December 15, 1993, we issued a Proposed Decision and Order (PD&O) setting forth a tentative plan for the distribution of the consent order funds. 58 FR 67403 (December 15, 1993). We stated in the PD&O that the basic purpose of a special refund proceeding is to make refunds in order to remedy the effects of regulatory violations. In order to effect restitution in this proceeding, we proposed to establish a claims procedure whereby applications for refund would be accepted from customers who can demonstrate that they were injured as a result of any alleged overcharges made by one of the consent order firms during the relevant consent order period. II. Jurisdiction and Authority The subpart V regulations set forth general guidelines by which the Office of Hearings and Appeals may formulate and implement a plan of distribution of funds received as a result of an enforcement proceeding. The DOE policy is to use the subpart V process to distribute such funds. For a more detailed discussion of subpart V and the authority of the Office of Hearings and Appeals to fashion procedures to distribute refunds, see Petroleum Overcharge Distribution and Restitution Act of 1986, 15 U.S.C. 4501 et seq.; Office of Enforcement, 9 DOE 82,508 (1981); Office of Enforcement, 8 DOE 82,597 (1981). We have considered the ERA's petition that we implement subpart V proceedings with respect to the Aljian and Shaw Remedial Order funds and have determined that such proceedings are appropriate. This Decision and Order sets forth the OHA's plan to distribute these funds. III. Refund Procedures The PD&O provided a 30-day period for the submission of comments regarding our proposed refund procedures. Since more than 30 days have elapsed and we have not received any comments regarding our proposed refund procedures, we have determined that those procedures should be adopted. The distribution of refunds will take place in two stages. In the first stage, refund monies will be refunded to those customers who purchased motor gasoline from one of the firms during the relevant audit period and who demonstrate that they were injured by the overcharges of the applicable firm. Such purchasers must file claims and document their purchases in order to be eligible for a refund. A. Calculation of Refunds As in many prior special refund cases, we will adopt certain presumptions. First, we will adopt a presumption that the adjudicated overcharges were dispersed equally in all sales of motor gasoline made by each firm during its audit period. The OHA has referred to this presumption in the past as a volumetric refund amount. Presumptions in refund cases are specifically authorized by applicable DOE procedural regulations. Section 205.282(e) of those regulations states that: In establishing standards and procedures for implementing refund distributions, the Office of Hearings and Appeals shall take into account the desirability of distributing the refunds in an efficient, effective and equitable manner and resolving to the maximum extent practicable all outstanding claims. In order to do so, the standards for evaluation of individual claims may be based upon appropriate presumptions. 10 CFR 205.282(e). The presumptions we will adopt in this case are used to permit claimants to participate in the refund process without incurring disproportionate expenses, and to enable the OHA to consider the refund applications in the most efficient way possible in view of the limited resources available. The volumetric refund presumption assumes that the overcharges were spread equally over all gallons of product marketed by a particular firm. In the absence of better information, this assumption is sound because the DOE price regulations generally required a regulated firm to account for increased costs on a firm- wide basis in determining its prices. However, we also recognize that the impact of a firm's pricing practices on an individual purchaser could have been greater, and any purchaser is allowed to file a refund application based on a claim that it suffered a disproportionate share of the overcharges. See, e.g., Amtel, Inc., 12 DOE 85,073 at 88,233-34 (1984); Sid Richardson Carbon and Gasoline Co./Siouxland Propane Co., 12 DOE 85,054 at 88,164 (1984). In each of the cases being considered here, the information available in the ERA audit files is insufficient to base refunds on the amount each individual customer was overcharged.\2\ We therefore shall use the volumetric method to allocate the Remedial Order fund in each case. An applicant's allocable share will be equal to the number of gallons purchased from Aljian or Shaw during the relevant audit period multiplied by the per gallon volumetric refund amount. In the present case, the per gallon refund amount for Aljian customers is $0.0340. We derived this figure by dividing the amount of the Remedial Order funds remitted by Aljian, $8,190.51, by the 240,777 gallons which the firm sold during the period December 15, 1979 through May 28, 1980. The per gallon refund amount for Shaw customers is $0.0202, which we derived by dividing the amount it remitted $6,722.07, by the 333,505 gallons that it sold during the period December 15, 1979 through July 7, 1980. Any firm that establishes its eligibility for a refund will receive all or a portion of its allocable share plus a pro-rata share of the accrued interest. --------------------------------------------------------------------------- \2\The ERA audit files do not identify any customers of Aljian or Shaw. --------------------------------------------------------------------------- The relevant information for the two proceedings is summarized below. ------------------------------------------------------------------------ Volumetric Firm Amount Audit period refund amount ------------------------------------------------------------------------ Pete Aljian Chevron, $8,190.51 December 15, 1979-May $0.0340 Castro Valley, CA. 28, 1980. Shaw & 99 Chevron, 6,722.07 December 15, 1979-July 0.0202 Fresno, CA. 7, 1980. ------------------------------------------------------------------------ B. Presumption of Injury Since both firms were small retailers, we presume that all, or virtually all, of their sales were to end-users. In accordance with prior Subpart V proceedings, we shall adopt the presumption that an end-user (ultimate consumer) of gasoline purchased from Aljian and Shaw whose business is unrelated to the petroleum industry was injured by the overcharges set forth in the Remedial Order Decision. See, e.g., Texas Oil and Gas Corp., 12 DOE 85,069 at 88,209 (1984). Unlike regulated firms in the petroleum industry, members of this group generally were not subject to price controls during the periods covered by the Remedial Orders, and were not required to keep records which justified selling price increases by reference to cost increases. Consequently, analysis of the impact of the overcharges on the final prices of goods and services produced by members of this group would be beyond the scope of the refund proceeding. Id. Therefore, end-users of gasoline purchased from Aljian and Shaw need only document their purchase volumes from Aljian and Shaw during the applicable period covered by the Remedial Orders to make a sufficient showing that they were injured by the overcharges.3 --------------------------------------------------------------------------- \3\If a reseller or retailer should file a refund application in this proceeding, we will utilize the standards and appropriate presumptions established in previous refined product refund proceedings. See, e.g., Shell Oil Co., 18 DOE 85,492 at 88,799 (1989). --------------------------------------------------------------------------- C. Minimum Refund Amount We will establish a minimum amount of $15 for refund claims. We have found through our experience in prior refund cases that the cost of processing claims in which refunds are sought for amounts less than $15 outweighs the benefits of restitution in those situations.4 See, e.g., Uban Oil Co., 9 DOE 82,541 at 85,225 (1982); see also 10 CFR Sec. 205.286(b). --------------------------------------------------------------------------- \4\In order to be eligible for the minimum refund, applicants in the Aljian and Shaw proceedings will have to have purchased during the relevant audit period 442 and 743 gallons, respectively. --------------------------------------------------------------------------- D. Refund Application Requirements All Applications for Refund must be filed in duplicate and must be postmarked no later than 90 days after publication of this Decision and Order in the Federal Register. A copy of each Application will be available for public inspection in the Public Reference Room of the Office of Hearings and Appeals, Forrestal Building, Room 1E-234, 1000 Independence Avenue, S.W., Washington, D.C. Any applicant that believes that its Application contains confidential information must so indicate on the first page of its Application and submit two additional copies of its Application from which the material alleged to be confidential has been deleted, together with a statement specifying why the information is alleged to be privileged or confidential. The following information should be included in all Applications for Refund: 1. Identifying information including the claimant's name, current business address, business address during the refund period, taxpayer identification number,5 a statement indicating whether the claimant is an individual, corporation, partnership, sole proprietorship, or other business entity, the name, title, and telephone number of a person to contact for any additional information, and the name and address of the person who should receive any refund check; --------------------------------------------------------------------------- \5\Under the Privacy Act of 1974, the submission of a social security number by an individual applicant is voluntary. An applicant that does not wish to submit a social security number must submit an employer identification number if one exists. This information will be used in processing refund applications, and is requested pursuant to our authority under the Petroleum Overcharge Distribution and Restitution Act of 1986 and the regulations codified at 10 C.F.R. Part 205, Subpart V. The information may be shared with other Federal agencies for statistical, auditing or archiving purposes, and with law enforcement agencies when they are investigating a potential violation of civil or criminal law. Unless an applicant claims confidentiality, this information will be available to the public in the Public Reference Room of the Office of Hearings and Appeals. --------------------------------------------------------------------------- 2. The applicant's use of gasoline purchased from Pete Aljian Chevron or Shaw & 99 Chevron: e.g., consumer (end-user), retailer, or reseller; 3. A monthly purchase schedule covering the period December 15, 1979 through May 28, 1980, for Aljian and December 15, 1979 through July 7, 1980 for Shaw. The applicant should specify the source of this gallonage information; 4. A statement as to whether the applicant or a related firm has filed, or has authorized any individual to file on its behalf, any other application in the Aljian or Shaw refund proceedings. If so, an explanation of the circumstances of the other filing or authorization should be submitted; 5. If the applicant is or was in any way affiliated with Aljian or Shaw, it should explain this affiliation, including the time period in which it was affiliated; 6. A statement as to whether the ownership of the applicant's firm changed during or since the refund period. If an ownership change occurred, the applicant should list the names, addresses, and telephone numbers of any prior or subsequent owners. The applicant should also provide copies of any relevant Purchase and Sale Agreements, if available. If such written documents are not available, the applicant should submit a description of the ownership change, including the year of the sale and the type of sale (e.g., sale of corporate stock, or sale of company assets); 7. A statement as to whether the applicant has ever been a party in a DOE enforcement action or a private Section 210 action. If so, an explanation of the case and copies of relevant documents should also be provided. 8. The statement set forth below signed by the individual applicant or a responsible official of the firm filing the refund application: I swear (or affirm) that the information submitted is true and accurate to the best of my knowledge and belief. I understand that anyone who is convicted of providing false information to the federal government may be subject to a fine, a jail sentence, or both, pursuant to 18 U.S.C. 1001. I understand that the information contained in this application is subject to public disclosure. I have enclosed a duplicate of this entire application which will be placed in the OHA Public Reference Room. All Applications should be either typed or printed and clearly labelled ``Aljian Special Refund Proceeding, Case No. LEF-0089'' or ``Shaw Special Refund Proceeding, Case No. LEF-0090.'' Applications should be sent to: Office of Hearings and Appeals, Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585. E. Distribution of Funds Remaining After First Stage Any funds that remain after all first stage claims have been decided shall be distributed in accordance with the provisions of the Petroleum Overcharge Distribution and Restitution Act of 1986 (PODRA), 15 U.S.C. 4501-07. PODRA requires that the Secretary of Energy determine annually the amount of oil overcharge funds that will not be required to refund monies to injured parties in Subpart V proceedings and make those funds available to state governments for use in four energy conservation programs. The Secretary has delegated these responsibilities to the OHA, and any portion of the Aljian and Shaw Remedial Order funds that the OHA determines will not be needed to effect direct restitution to injured customers will be distributed in accordance with the provisions of PODRA. It Is Therefore Ordered That: (1) Applications for Refund from the funds remitted to the Department of Energy by Pete Aljian Chevron and Shaw & 99 Chevron will be distributed in accordance with the foregoing Decision. (2) All Applications must be postmarked no later than 90 days after publication of this Decision and Order in the Federal Register. Dated: March 8, 1994. George B. Breznay, Director, Office of Hearings and Appeals. [FR Doc. 94-5990 Filed 3-14-94; 8:45 am] BILLING CODE 6450-01-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-5990. Public record. Not legal advice.