Eastern Airlines, Inc. v. Mobil Oil Corp.

735 F.2d 1379, 1984 U.S. App. LEXIS 22341
CourtTemporary Emergency Court of Appeals
DecidedMay 21, 1984
DocketNo. 11-6
StatusPublished
Cited by8 cases

This text of 735 F.2d 1379 (Eastern Airlines, Inc. v. Mobil Oil Corp.) 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
Eastern Airlines, Inc. v. Mobil Oil Corp., 735 F.2d 1379, 1984 U.S. App. LEXIS 22341 (tecoa 1984).

Opinion

POINTER, Judge.

On the earlier appeal of this case, 677 F.2d 879 (T.E.C.A.1982), this court affirmed the summary dismissal of Eastern’s claim that it had been “overcharged” by Mobil contrary to Section 210(b) of the Economic Stabilization Act of 1970, 12 U.S.C. § 1904 note, and the Emergency Petroleum Allocation Act of 1973, 15 U.S.C. §§ 751 et seq. The case was remanded for consideration of its claim of price discrimination under [1380]*1380§ 210(a) of the ESA.1 Eastern now appeals from the order of the district court, 564 F.Supp. 1131, granting Mobil’s motion for summary judgment with respect to that claim. We affirm.

The critical facts are not in dispute. From November 1, 1973, to October 31, 1974, Eastern was permitted by the federal energy regulations to purchase jet fuel at the Boston and Los Angeles airports only from Mobil. During this period it paid Mobil’s “posted airport prices,” which (except at Boston from January 1 through March 31, 1974) were higher than the prices Mobil charged TWA for similar fuel. Eastern asserts that for a portion of this period — after March 31 at Boston and after August 31 at Los Angeles — these price differentials constituted “discrimination” proscribed by 10 C.F.R. § 210.62(b). At the prices charged TWA after those dates, Eastern would have paid Mobil $1,175,495 less than it actually paid; this amount, with interest, Eastern seeks as “damages” for a “legal wrong” under ESA § 210(a). Mobil contends — and the district court agreed— that the charges it charged TWA were permissible because of a preexisting contract and that, in any event, it could charge Eastern higher prices than TWA without violating 10 C.F.R. § 210.62(b) provided those prices were below the ceilings established under 10 C.F.R. § 212.82(a). ^

Eastern acknowledges that the anti-discrimination regulations would not be violated if TWA’s lower prices were set by a preexisting contract. See Trans World Airlines, Inc. v. FEO, 380 F.Supp. 560 (D.D.C.1974), aff'd sub nom. Air Transport Ass’n v. FEO, 520 F.2d 1339 (T.E.C.A.1975); see also FEA Ruling 1974-12. It concedes that the lower prices paid by TWA at Boston before January 1, 1974, and at Los Angeles before September 1, 1974, were pursuant to such a contract and accordingly makes no claim with respect to these price differentials.

The parties disagree, however, as to whether any such contract — or at least one effective for purposes of the energy regulations — governed the lower prices charged TWA at Boston after March 31 and at Los Angeles after August 31. Their dispute is over the law, not the critical facts.

In 1966 Mobil and TWA entered a long-term supply contract for jet fuel at four airports, including Boston and Los Ange-les. The contract contained different pricing and termination provisions for each of the airports. For Los Angeles, the contract extended through 1976, with pricing provisions for the entire period. For Boston, it specified a price only through 1973; and its duration was stated as being “through December 31,1975, contingent on mutual agreement on price for the last two years of this period,” with an additional provision that, “if a mutual agreement regarding this price cannot be reached by October 1, 1973, this [agreement] may be cancelled by either party effective December 31, 1973.”

No agreement was reached by Mobil and TWA prior to the end of 1973 as to future prices at Boston; and, for the first three months of 1974, TWA, like Eastern, paid Mobil’s posted airport prices at that airport. Pursuant to negotiations looking toward a new contract to supersede the 1966 agreement, Mobil began charging TWA somewhat less than the posted airport prices at Boston in April 1974. In August 1974 they verbally agreed on the terms of a new long-term supply contract which, inter alia, provided further reduction in the prices charged at Boston after March 1974 and an increase in the prices to be charged at Los Angeles after August 1974. A refund was made by Mobil to TWA in August to reflect the retroactive reduction at Boston, and on September 4, 1974, they signed the new agreement.

Much of the dispute in this case between Eastern and Mobil regarding the status of Mobil’s agreements with TWA centers on [1381]*1381the provisions of 10 C.F.R. § 212.83(d).2 That section provided an exception from the “deemed recovery rule,” to be discussed later, with respect to “the price charged to the purchaser because of a price term of a written contract covering the sale of such product which was entered into on or before September 1, 1974.” Mobil argues, in essence, that the prices charged TWA at Boston until the new contract was agreed upon should be treated as governed by the 1966 contract and that the new contract, including its retroactive pricing at Boston, is also within the exception of § 212.83(d) because it was formalized by a written contract and was entered into (albeit verbally) prior to September 1. We disagree. The exception applies only to the extent that a written contract entered into before September 1, 1974, specified the prices to be charged. The 1966 contract ceased after December 31, 1973, to set prices at Boston; and the new written agreement was not entered until after September 1, 1974. Verbal understandings regarding prices do not come within the exception stated in the regulation.3

The fact, however, that the prices charged TWA at Boston after December 31, 1973, and perhaps at Los Angeles after August 31, 1974,4 were outside the exemption from the “deemed recovery rule” does not entitle Eastern to damages for the higher prices it paid after those dates. Rather, the consequence is that, in calculating its unrecouped increased costs incurred after May 15, 1973, Mobil would have to treat or “deem” as received from TWA the higher prices being charged to Eastern. This calculation, in turn, might affect the maximum prices that Mobil could charge its purchasers of “other covered products,” the category including jet fuel.5 Depending upon how Mobil decided to allocate its unrecouped increased costs among the various “other covered products”, this calculation could affect the maximum price— sometimes referred to as the “base” or “ceiling” price — Mobil was permitted to charge purchasers of jet fuel.

It has already been held, however, on the prior appeal that the prices charged Eastern did not exceed the maximum prices that Mobil could have charged under the pricing regulations.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Nautica International, Inc. v. Intermarine USA, L.P.
5 F. Supp. 2d 1333 (S.D. Florida, 1998)
American Recycling Co., Inc. v. County of Manatee
963 F. Supp. 1572 (M.D. Florida, 1997)
Gencare Health Systems, Inc. v. Florida Specialty Network, Ltd.
662 So. 2d 434 (District Court of Appeal of Florida, 1995)
Lifecare International, Inc. v. CD Medical, Inc.
68 F.3d 429 (Eleventh Circuit, 1995)
Go-Tane Service Stations, Inc. v. Clark Oil & Refining Corp.
798 F.2d 481 (Temporary Emergency Court of Appeals, 1986)
Martin Oil Service, Inc. v. Koch Refining Co.
636 F. Supp. 1186 (N.D. Illinois, 1986)
Kickapoo Oil Co. v. Murphy Oil Corp.
779 F.2d 61 (Temporary Emergency Court of Appeals, 1985)

Cite This Page — Counsel Stack

Bluebook (online)
735 F.2d 1379, 1984 U.S. App. LEXIS 22341, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eastern-airlines-inc-v-mobil-oil-corp-tecoa-1984.