Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

HURLEY v. AMOCO OIL CO.

August 16, 1979

PATRICIA HURLEY, Plaintiff, against AMOCO OIL COMPANY, Defendant.


The opinion of the court was delivered by: NEAHER

MEMORANDUM AND ORDER

This private treble damage action is brought pursuant to Section 210 of the Economic Stabilization Act of 1970, as amended, 12 U.S.C. § 1904 Note ("ESA"), and Section 5(a) of the Emergency Petroleum Allocation Act of 1973, as amended, 15 U.S.C. § 754(a) ("EPPAA"). According to the allegations of the two-count complaint, in August 1973 the defendant ("Amoco"), in violation of the regulations promulgated under both the ESA and the EPPAA, reduced or discontinued certain gasoline price allowances which had been in effect on May 15 of that year, thereby causing plaintiff, a gasoline retailer, to pay an excessive price for the gasoline she purchased from Amoco over a three-year period. The action is now before the court on Amoco's motion for an order staying further proceedings pending the outcome of a related matter before the United States Department of Energy ("DOE"). For the reasons which follow, the motion is granted.

 Until his death in April 1973, Francis J. Hurley owned and operated a gasoline service station in Commack, New York, known as "Gasoline Heaven." On April 14, 1969, Hurley entered into two agreements with Amoco. The first, a so-called "dealer's agreement," obliged Amoco to supply Gasoline Heaven's monthly gasoline requirements, apparently at prevailing "tank wagon" prices less a $ .02 per gallon end-of-month allowance ("EOM"), until a total of 10 million gallons had been supplied. The second agreement, an "amortization letter," provided for a $ 30,950.00 contribution by Amoco to Gasoline Heaven for real estate improvement and equipment installation, to be "amortized" at the rate of $ .0031 per gallon sold by Gasoline Heaven until the 10 million gallon mark had been reached. When Hurley died, his wife, Patricia Hurley, the plaintiff in this action, became the owner and operator of Gasoline Heaven.

 On April 25, 1973, plaintiff, at Amoco's behest, entered into a new dealer's agreement for the period April 19, 1973 to August 31, 1973 (her husband had passed away on April 18), which provided for an EOM of $ .01 rather than $ .02 per gallon, despite the fact that the volumetric limit of the 1969 agreements had not been reached. Thereafter, she entered into a three-year dealer agreement with Amoco, apparently embodying similar terms (i. e., a $ .01 EOM), to commence September 1, 1973. See Hurley Aff. (6/13/78), Exhibit A.

 Notwithstanding the terms of the April 25 agreement, Amoco continued to pay Mrs. Hurley a $ .02 per gallon EOM through the beginning of August 1973, which was, coincidentally, the month during which Gasoline Heaven purchased its ten-millionth gallon under the 1969 agreements. August also marked the promulgation of the Cost of Living Council's "Phase IV" petroleum products pricing rules, which, subject to certain adjustments, prohibited refiners from charging for a "covered product" such as gasoline sold "to any class of purchaser a price in excess of the base price," 6 C.F.R. § 150.355(b) (1974), defined as "the average weighted price at which the item was lawfully priced in transactions with the class of purchaser concerned on May 15, 1973, plus (A) increased product costs incurred between the month of measurement and the month of May 1973 and measured pursuant to the provisions of § 150.356, and (B) the refiner incentive factor calculated and permitted pursuant to the provisions of § 150.357," Id. at § 150.355(g).

 In 1974, the Federal Energy Administration ("FEA") promulgated its own "General Allocation and Price Rules" and "Mandatory Petroleum Price Regulations," codified in 10 C.F.R. Parts 210 and 212, respectively, and assumed responsibility for enforcing the Cost of Living Council's Phase IV petroleum pricing rules. Accordingly, it was to the FEA that plaintiff wrote on November 18, 1974, complaining that Amoco's $ .01 per gallon reduction in the EOM she received for gasoline purchased for resale by Gasoline Heaven was inconsistent with federal pricing regulations. See Hurley Aff. (filed 6/13/78), Exhibit A.

 Nearly a year after receiving plaintiff's letter, and following some form of investigation, the FEA took the first step in commencing formal enforcement or compliance proceedings by issuing a Standard Oil Company (Indiana) ("Standard"), Amoco's parent company, a Notice of Probable Violation ("NOPV"), see 10 C.F.R. §§ 205.190-205.195, in which it alleged that Amoco had violated 6 C.F.R. §§ 150.20, 150.355 and 10 C.F.R. §§ 210.62, 212.82 by modifying or failing "to renew certain lease-leasebacks and end of month allowances with Amoco-branded independent motor gasoline retail dealers who either own their locations or have leasehold interests therein derived from parties other than Amoco." NOPV (11/11/75), at 2-3. Standard has filed with FEA and its successor agency, the DOE, several "replies" challenging the allegations of the NOPV, the most recent on February 10, 1978. See Lethem Aff. (filed 5/25/78), Exhibit D.

 THE NOPV was still outstanding on March 1, 1978, when plaintiff filed her two-count complaint. Indeed, it remains so today.

 The Complaint

 Plaintiff's first claim is that the $ .02 EOM, which was in effect on May 15, 1973, constituted a rebate or other price allowance which could not be discontinued by Amoco under the provisions of 10 C.F.R. Part 212, Subpart E. Accordingly, she seeks an award of three times her actual damages of $ 85,484.08, representing $ .01 for every gallon of gasoline Gasoline Heaven purchased from Amoco after it reached the volumetric limit of the 1969 agreements *fn1" and until August 31, 1976. Her second claim is that Amoco was required by 10 C.F.R. § 210.62 and Part 212, Subpart E, to continue through August 31, 1976, the amortization agreement which was in effect on May 15, 1973 and which by its terms expired when Gasoline Heaven sold its ten-millionth gallon in August of that year. To redress the loss she sustained as a result of this violation, she seeks an award of treble damages totalling $ 79,500.18.

 Amoco does not suggest that plaintiff was required to exhaust administrative remedies before seeking judicial relief. It does, however, argue that the court should temporarily stay its hand so that it may have the benefit of the DOE's resolution of those issues which are common to this action and the DOE proceeding and which fall within the purview of the agency's particular expertise.

 The rationale underlying the concept the defendant invokes, the doctrine of primary jurisdiction, was most succinctly stated in Far East Conference v. United States, 342 U.S. 570, 574-75, 72 S. Ct. 492, 494, 96 L. Ed. 576:

 
"In cases raising issues of fact not within the conventional experience of judges or cases requiring the exercise of administrative discretion, agencies created by Congress for regulating the subject matter should not be passed over. This is so even though the facts after they have been appraised by specialized competence serve as a premise for legal consequences to be judicially defined. Uniformity and consistency in the regulation of business entrusted to a particular agency are secured, and the limited functions of review by the judiciary are more rationally exercised, by preliminary resort for ascertaining and interpreting the circumstances underlying the legal issues to agencies that are better equipped than courts by specialization, by insight gained through experience, and by more flexible procedure."

 See MCI Communications Corp. v. American Telephone & Telegraph Co., 496 F.2d 214, 220 (3d Cir. 1974). From this, Judge Tenney has recently formulated a tetrapartite test for determining whether a district court should in the first instance defer to agency expertise: (1) Does resolution of the issue require the exercise of ordinary judicial expertise? (2) Does the controversy involve matters within the agency's peculiar discretion? (3) Is there a danger of inconsistent judicial and administrative rulings? and (4) Has the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.