Dempsey v. Rhodes Oil Co.

620 F.2d 274, 1980 U.S. App. LEXIS 19481
CourtTemporary Emergency Court of Appeals
DecidedMarch 20, 1980
DocketNo. 8-5
StatusPublished
Cited by5 cases

This text of 620 F.2d 274 (Dempsey v. Rhodes Oil Co.) is published on Counsel Stack Legal Research, covering Temporary Emergency Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dempsey v. Rhodes Oil Co., 620 F.2d 274, 1980 U.S. App. LEXIS 19481 (tecoa 1980).

Opinion

PECK, Judge.

Appellant, an owner-operator of a gasoline service station, commenced this action against appellee, a reseller-retailer of petroleum products, pursuant to the Economic Stabilization Act of 1970, as amended (ESA), 12 U.S.C. § 1904 note (1976 Supp.), and the Emergency Petroleum Allocation Act of 1973, as amended (EPAA), 15 U.S.C. § 751 et seq. (1976 Supp.), to recover alleged overcharges on gasoline purchased by appellant from the appellee between January 1, 1974 and January 23, 1976. The dispute in this case arose out of appellee’s termination of a $.02 per gallon discount on December 31, 1973, that appellant had received from appellee prior to that date.

After a bench trial, the district court filed Findings of Fact and Conclusions of Law favorable to the appellee, and entered judgment thereon. The court held that the $.02 discount was a competitive discount, which could be validly terminated under both the ESA and its successor, the EPAA. Additionally, the district court found that the appellant had failed to present a claim for refund to the appellee, a condition precedent to recovery under ESA § 210(b). This appeal followed.

For the reasons set forth below, we hold that the district court did not err in determining that the appellant did not make a claim for refund, and we affirm on that ground.

The stipulations and evidence offered by the parties and admitted at trial showed that appellant, Bob Dempsey, initially purchased his gasoline from Boring Oil Company (Boring). On or about November 1, 1971, he terminated his contract with Boring and began purchasing gasoline from Gulf Oil Company (Gulf). Gulf granted Dempsey a $.02 per gallon discount, as well as other consideration, to lure him away from Boring.

Sometime prior to August 15, 1973, Gulf made a decision to “pull out” of eastern Missouri, where Dempsey’s station is located. On that date, defendant-appellee, Rhodes Oil Company (Rhodes), which owned a bulk plant near Dempsey’s station, assumed Gulf’s obligations under the contract and supplied Dempsey with gasoline thereafter until January 23, 1976.

On December 31, 1973, four months after appellee commenced supplying gasoline to appellant, Rhodes notified Dempsey that it was discontinuing the $.02 discount. Between January 1, 1974 and January 23, 1976, appellant purchased 459,932 gallons of gas from Rhodes at the non-discounted rate.

[276]*276In July 1975, prior to severing business relations with defendant, Dempsey sent a letter to the Federal Energy Administration (FEA). He asserted that the $.02 per gallon “rent” he had been receiving had been terminated by Rhodes, and asked the FEA to help in determining his rights. The FEA contacted a corporate officer of appel-lee by phone, related the substance of Dempsey’s allegations, and asked Rhodes to respond. In a letter to the FEA, Rhodes’ manager stated that the “rent” referred to in Dempsey’s letter was a “competitive discount” that was discontinued due to a change in market conditions rendering it no longer necessary. The FEA concluded from its investigation that no violation of its regulations had occurred, and the parties were so informed.

In February 1976, shortly after Dempsey ceased purchasing gasoline from Rhodes, Dempsey sent a letter to Rhodes proposing settlement of a claim that Rhodes apparently was asserting against him. In. this letter, appellant made reference to “back rent” that he asserted appellee owed him. This was' followed by a letter from appellant’s attorney to appellee’s attorney. This letter invited Rhodes’ attorney to discuss the possibility of settlement of Rhodes’ claim and included an assertion that “a substantial amount” was owed by appellee under FEA regulations. The record discloses no further communications between the parties prior to the commencement of this suit.

Plaintiff instituted this action for treble damages in federal district court on November 12, 1976. Fifteen months later, Dempsey’s attorney sent a letter to appellee in which he set forth the grounds for objecting to the termination of the discount, the period during which the alleged violation occurred, the quantity of gasoline purchased during that period, and the total amount of the alleged overcharge. The letter concluded with a demand for refund of the overcharge within ninety days.

Section 210(b) of the ESA, which the trial court found appellant had failed to comply with, provides, in part:

[W]here the overcharge is not willful within the meaning of section 208(a) of this title, no action for an overcharge may be brought by or on behalf of any person unless such person has first presented to the seller or renter a bona fide claim for refund of the overcharge and has not received repayment of such overcharge within ninety days from the date of the presentation of such claim.

Appellant has never asserted that appel-lee “willfully” violated the Act, and he concedes that ESA § 210(b), therefore, is the applicable law on this issue. See Manning v. University of Notre Dame Du Lac, 484 F.2d 501 (Em.App.1973). He contends, however, that “substantial" compliance with § 210 is all that is required. Appellant argues that appellee had sufficient notice of his claim without formal presentment and that the district court therefore erred when it held strict compliance to be the rule. In support of this argument, appellant asserts that the language of § 210(b) is nonspecific, case law provides no guidance with respect to the formalities that must be followed in making a claim, and non-judicial settlement of claims is encouraged, consonant with the congressional intent underlying § 210(b), where a seller receives notice sufficient to apprise him of the general “nature” of a purchaser’s claim. Appellant’s assertions are not persuasive.

When ESA § 210, which provides for civil actions to recover overcharges and permits the courts to award treble damages, was undergoing congressional scrutiny prior to passage, legislators became concerned that the enactment of this section, as originally proposed, would result in the courts being deluged with frivolous suits. Following debate on the floor of both houses, the proviso of section 210(b) at issue here was added as a procedural hurdle to recovery in an attempt to counteract what Congress perceived to be a “substantial inducement to litigate.” 117 Cong.Rec. 43712 (1971) (remarks of Sen. Inouye). In keeping with Congress’ intent to avoid “misunderstanding[s]” and consequent litigation, Id., section 210(b) sets forth several explicit requirements as conditions precedent to a [277]*277purchaser’s right to recover overcharges in an action in federal court: there must be a claim; the claim must be for a refund; it must be presented by the purchaser; and it must be presented to the seller.

With regard to appellant’s claimed compliance, he never once sent a letter or even made a phone call demanding that appellee pay the alleged overcharge until almost fifteen months after filing this suit. The legislative history clearly indicates that a demand for repayment is a condition precedent to bringing suit. As this Court recognized in Longview Refining Co. v. Shore,

Related

Elf Aquitaine, Inc. v. Placid Oil Co.
624 F. Supp. 994 (D. Delaware, 1985)
Wellven, Inc. v. Gulf Oil Corp.
731 F.2d 892 (Temporary Emergency Court of Appeals, 1984)
STATE OF MINN. BY HUMPHREY v. Standard Oil Co.
568 F. Supp. 556 (D. Minnesota, 1983)
US Oil Co., Inc. v. Koch Refining Co.
497 F. Supp. 1125 (E.D. Wisconsin, 1980)

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Bluebook (online)
620 F.2d 274, 1980 U.S. App. LEXIS 19481, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dempsey-v-rhodes-oil-co-tecoa-1980.