Case No. RR272-00124

January 28, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Motion for Reconsideration

Name of Applicant: Wells Cargo, Inc.

Date of Filing: December 20, 1993

Case Number: RR272-124

On March 5, 1991, the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) issued a Decision and Order granting refunds to two applicants in the crude oil overcharge refund proceeding, conducted pursuant to 10 C.F.R. Part 205, Subpart V (Subpart V). Broderick and Gibbons, Inc., Case No. RF272-61526. One of the applicants covered by that determination, Wells Cargo, Inc. (Case No. RF272-63966) was granted a refund of $23,867, based on purchases of 29,833,389 gallons of refined petroleum products made between August 19, 1973 and January 27, 1981.

Subsequently, the OHA became aware that it had erred in granting that refund. We realized that Wells Cargo's refund application noted that it had already received a refund from the Surface Transporters escrow fund in the Stripper Well refund proceeding (Case No. RF270-1538). In order to participate in the Stripper Well refund proceeding, Wells Cargo executed the "Surface Transporters Escrow Settlement Claim Form and Waiver" (waiver). By executing the waiver, Wells Cargo gave up its right to participate in the Subpart V crude oil overcharge refund proceeding. Since Wells Cargo was not entitled to participate in the Subpart V crude oil refund proceeding, the OHA rescinded the Subpart V crude oil overcharge refund, and ordered both the firm and its representative to remit the $23,867 refund to the DOE. (1) Wells Cargo , Inc., Case No. RC272-207 (August 16, 1993).

On December 20, 1993, Wells Cargo filed the instant Motion For Reconsideration, in which it requests that we reconsider our

decision to rescind the Subpart V refund. As discussed below, we find no merit to the contentions raised in the Motion, and accordingly, we will not modify our Decision and Order rescinding the refund.

In its Motion, Wells Cargo first argues that the OHA has no basis to reopen a final order where no request for reconsideration has been received from any party, and where there has been no new or corrected information brought to our attention by a party to the proceeding. In this regard, the firm cites Ordering Paragraph Number (5) of Broderick and Gibbons, Inc. That paragraph stated that the decision was based on the "presumed validity" of the statements and documents submitted by the applicants, and that the determination may be revoked or modified at any time, upon a finding that the basis underlying a refund application is incorrect. Wells Cargo contends that since there was no inaccuracy or omission in its application, there were no grounds for revocation of the refund.

This argument is frivolous. The referenced ordering paragraph certainly does not preclude the OHA from revoking a refund at any time it finds that the underlying basis is incorrect. Ordering Paragraph (5) merely suggests one instance in which we will consider revoking a prior determination: when we discover the assertions of an applicant are incorrect. However, we are not thereby limited to those occasions in which an applicant has made incorrect assertions upon which we relied.

We are also not limited by the fact that the error in this case was not brought to our attention by a party, but was instead discovered by OHA itself. We see no support anywhere for such a restriction. OHA on its own performs regular reviews of its Decisions and Orders to assess whether any mistakes have been made, and upon discovering an error takes appropriate action. Corrections of errors are often made on OHA's own motion. See, e.g., Koppers Company, Inc., 24 DOE ¶ 85,084 (1994).

In the present case we found an error and redressed it. We see no foundation for the position that OHA is powerless to correct errors on its own motion. Such a principle would be unconscionable.

Wells Cargo next points out that the claim it made in the Subpart V crude oil overcharge refund proceeding was for petroleum products for which it was not entitled to receive a refund in the Stripper Well refund proceeding. Wells Cargo asserts that we should reexamine the practice of denying refunds to waiving firms for products not within the purview of Stripper Well escrow in which they participated. Wells Cargo believes that the waivers should not be construed to cover products for which the firm did not receive a refund in the Stripper Well refund proceeding.

Wells Cargo offers two theories to support this contention. The firm first maintains that by denying it a Subpart V crude oil overcharge refund, the DOE has failed to fulfill its statutory obligation to make restitution to injured persons to the "maximum extent possible" as provided in the Petroleum Overcharge Distribution and Restitution Act of 1986 (PODRA), contained in Title III of the Omnibus Budget Reconciliation Act of 1986, Pub. L. 99-509. Sec. 3003(b)(1)(C).

Secondly, Wells Cargo contends that the DOE failed in its fiduciary obligation to end-users of petroleum products. As stated above, by signing a Stripper Well waiver, a surface transporter lost the right to claim a Subpart V crude oil overcharge refund, even for petroleum products that could not have been included in its surface transporter refund claim. Wells Cargo argues that when the DOE entered into the Stripper Well Settlement Agreement, which limited the refunds of end-users who signed Stripper Well waivers, it breached its duty to protect those waiver signatories, by eliminating their opportunity to collect refunds for all the petroleum products that they purchased.

Both of these theories ultimately challenge the scope and validity of the application of the waiver provisions. They involve arguments as to why the limitations on Subpart V crude oil refunds set forth in the Stripper Well waivers should not be applied.

Wells Cargo's attempt to persuade us that we should not give effect to clear provisions of the waiver are to no avail. The type of challenge it raises was previously soundly dismissed. In Mid- America Dairymen v. Herrington, the Temporary Emergency Court of Appeals (TECA) clearly rejected the very result advocated by Wells Cargo, that the waivers should not be considered to include petroleum product purchases for which the firm has not otherwise received a refund. In that case TECA stated:

Any view which would limit the effect of the waiver and release form executed by parties making claim to the Stripper Well escrow fund to affect only the gallonage claimed by the one making the waiver fails to take into account the very clear and unambiguous provisions throughout the Settlement Agreement and the Release and Waiver forms, that the one who executes the waiver releases all claims of affiliates to further recovery of overcharges in Subpart V proceedings.

Mid-America Dairymen v. Herrington, 3 Fed. Energy Guidelines ¶ 26,617 (Temp. Emer. Ct. App. 1989) (emphasis in original).

We certainly give no credence to Wells Cargo's allegations that in giving effect to the waivers, the DOE has been remiss in its statutory and fiduciary obligations. However, even if there were any validity to the arguments, TECA's clear statement on the scope and meaning of the waivers remains the law in these cases. As TECA stated, the waiver means that "if you make claim to Stripper Well escrow funds, you may not make a claim to other overcharge recoveries...." Id. at 27,002. The OHA cannot disregard TECA's conclusive ruling in this matter.

Further, as TECA stated, the Stripper Well Settlement Agreement was a "hard fought, negotiated agreement between numerous parties all with adverse interests...." Id. The DOE was only one among many of those parties. The OHA has no authority to modify, sua sponte, the terms of that agreement and allow claimants to receive refunds that are in conflict with the clear terms of the waivers, the settlement agreement and TECA's opinion. Wells Cargo's challenges to the meaning given to the waiver, if appropriate at all, are more properly addressed to the court.

Wells Cargo also asks that it be permitted to withdraw its Stripper Well application and reinstate its Subpart V crude oil overcharge refund application. It is by now well-settled that the waiver executed by a Surface Transporter was effective upon its submission to OHA. Boise Cascade Corp., 16 DOE ¶ 85,214 (1987), aff'd sub nom. In Re: Department of Energy Stripper Well Exemption Lit., 707 F. Supp. 1267 (D. Kan. 1987). Once it submitted a waiver, a Surface Transporter applicant could not withdraw it. Boise Cascade, 16 DOE at 88,411. Although a Surface Transporter applicant could withdraw its surface transporter refund claim at will, the waiver of the right to receive a Subpart V crude oil overcharge refund remained effective. Upon filing a surface transporter waiver, a claimant had made an irrevocable election of remedies. Id. There are several rather narrow exceptions to this principle. See Tajon, Inc., 26 DOE ¶ 85,018 (1996). However, Wells Cargo has not advanced an argument as to why any of these limited exceptions is applicable to its situation, and we see none.

Based on the above considerations, the Motion for Reconsideration filed by Wells Cargo will be denied.

It Is Therefore Ordered That:

(1) The Motion for Reconsideration filed by Wells Cargo, Inc., Case No. RR272-124, be and hereby is denied.

(2) This is a final Order of the Department of Energy.

George B. Breznay

Director

Office of Hearings and Appeals

Date: January 28, 1997

(1)Wells Cargo states that it remitted that amount to the DOE by check, dated September 13, 1993.