Trans Tech Resources, Inc. v. Mobil Oil Corp.

DUNIWAY, Judge: Trans Tech Resources, one of five retail gasoline dealers which filed this action, appeals for the third time from a judgment entered by the district court. That court held that appellee Mobil Oil Corporation’s withdrawal of its discount on gasoline purchases did not result in charges exceeding the maximum allowable price under the Emergency Petroleum Allocation Act, 15 U.S.C. §§ 751-760h and the regulations promulgated under it, 10 C.F.R. §§ 210-214. We affirm. I. BACKGROUND. Both before and after May 15, 1973, appellant received a “competitive” discount in the price of gasoline that it bought from Mobil. This discount was withdrawn on May 1, 1979. In its original complaint, appellant made only one claim of violation of the Act: it said that Mobil’s withdrawal of the discount “raised the selling price to [appellant] to a price that exceeds the maximum allowable price chargeable to [appellant] and other similarly situated retail outlets in [appellant’s] class of purchaser.” The district court granted summary judgment in favor of Mobil. In Pacific Service Stations Co. v. Mobil Oil Corp., Em.App., 1980, 636.F.2d 306 (Mobil I), we reversed and remanded because Mobil had not sufficiently demonstrated that it had used appropriate class divisions, or that it had properly considered the discount, in computing the maximum allowable price under 10 C.F.R. § 212.83. Id. at 310. Section 212.82(6) defines the term “maximum allowable price” as the weighted average price at which the covered product was lawfully priced in transactions with the class of purchaser concerned on May 15, 1973, computed in accordance with the provisions of § 212.-83(a), plus increased product costs and increased nonproduct costs incurred between the month of measurement and the month of May 1973____ On remand, both sides conducted further discovery. Mobil again moved for summary judgment. It argued, first, that the withdrawal of the discounts could not have resulted in an overcharge because Mobil correctly determined appellants’ class of purchaser and the corresponding May 15, 1973 weighted average selling price. In support of this argument, Mobil filed an [1577] affidavit by Mobil pricing manager Ashby stating that the relevant transactions to be considered in determining base price involved only “O.G. & L.” dealers and, therefore, the applicable price was the dealer tankwagon price, i.e., the price for gasoline posted at Mobil’s terminals and bulk plants. Mobil had two categories of retail dealers: “O.G. & L.” dealers, who lease their premises from Mobil and never receive competitive allowances, and “N” dealers, such as appellant, who do not lease their premises from Mobil and might receive competitive allowances. Second, Mobil argued that, even if it had incorrectly determined the base price, no overcharge would have resulted because Mobil’s bank of unrecouped costs exceeded the amount of the claimed overcharge. The district court granted summary judgment on both grounds. In a second appeal, appellants challenged these conclusions. Pacific Service Stations Co. v. Mobil Oil Corp., Em.App., 1982, 689 F.2d 1055 (Mobil II). They argued that Mobil’s pricing policies, as explained by Ashby, were contrary to the applicable regulations in four areas, Mobil II at 1063, and therefore genuine issues of fact remained in dispute with respect to the base price determination. Appellants also argued that Mobil exaggerated the size of its costs bank. Mobil II at 1065. In Mobil II, we held that the district court should have granted appellant’s motion to strike the Ashby affidavit because of Mobil’s failure to submit supporting documents. Mobil II at 1062. We found the base price issue to be genuinely in dispute, because uncontested errors in Mobil’s pricing policies could have resulted in the calculation of an inflated base price, id. at 1063-64, and because Mobil could have improperly disregarded discounts if one or more of the May 15, 1973 transactions involved dealers receiving them, id. at 1064. We reversed the district court’s summary judgment, insofar as it was based on Mobil’s costs bank defense, because we were unable to say as a matter of law that the bank was large enough to justify the price increase caused by the withdrawal of appellants’ discounts. Id. at 1066. Finally, we offered guidance as to the scope of discovery upon remand: The answer to this question will in part depend upon the extent to which Mobil is able to substantiate its claims that it did not ignore discounts in computing base prices and that none of the alleged errors in its pricing policies had any significant impact upon the base price it computed for appellants. Id. On remand, the district court ordered Mobil to produce all documents referred to in the Ashby affidavit, and Mobil complied. Appellants sought additional discovery concerning the computation of Mobil’s costs, and Mobil objected on the ground that information sought by appellants was immaterial to any remaining issues. The district court limited further discovery solely to the base price issue, and such discovery was conducted. Mobil again moved for summary judgment on the ground that it did not improperly disregard discounts in computing the base price for appellants’ class of purchaser, and, therefore, that appellants have no valid claims as a matter of law. Thereafter, four of the original five plaintiffs dismissed their claims against Mobil. Appellant Trans Tech filed opposition papers and a motion seeking further discovery. The district court granted Mobil’s summary judgment motion and denied appellant’s motion. II. BASE PRICE DETERMINATION. The party opposing a motion for summary judgment is entitled to have all facts viewed in the light most favorable to it and to all reasonable inferences which may be drawn from the facts. McWhirter Distributing Co., Inc. v. Texaco, Inc., Em.App., 1981, 668 F.2d 511, 519. The moving party must show that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Mobil II at 1060; Fed.R.Civ.P. 56(c). Mobil has met this burden. Ten C.F.R. § 212.83(a)(1) prohibits a refiner to charge to any class of purchaser a [1578] price for a covered product “in excess of the maximum allowable price____” In order to establish the maximum allowable price under the regulations, a refiner must establish a weighted average selling price (base price) for each class of purchaser for transactions which occurred on May 15, 1973. 10 C.F.R. § 212.83(a) and § 212.-93(a); D.O.E. Ruling 1979-1, 44 Fed.Reg. 24046 at 24047 (1979); Taunton Mun. Lighting Plant v. D.O.E., Em.App., 1982, 669 F.2d 710, 712-13. As defined in 10 C.F.R. § 212.31, a “transaction” is considered to occur at the time and place when a binding contract is entered into between the parties. In Mobil II this panel noted that the set of transactions used to determine the base price may therefore be much smaller than the total number of class members. Mobil II at 1059, n. 7. So long as a single transaction occurred with respect to a particular class of purchasers on May 15,1973, prior transactions within that class are not included in the base price determination. Id.; D.O.E. Ruling 1979-1, 44 Fed.Reg. at 24047. Documents produced by Mobil in response to the district court’s order on remand show that Mobil properly determined the base price for appellant’s class of purchaser. They show that four relevant transactions took place on May 15, 1973; these transactions involved only “O.G. & L.” dealers who received no discount on the tankwagon price. Mobil correctly included “O.G. & L.” dealers with “N” dealers such as appellant in determining the relevant class of retail gasoline dealers in the Los Angeles area. See Templeton’s Service, Inc. v. Mobil Oil Corp., Em.App., 1980, 624 F.2d 1084. Appellant does not challenge this evidence. Indeed, appellant expressly conceded at oral argument that Mobil’s class of purchaser and base price determinations were correct. In Mobil II we reversed the district court’s summary judgment partly because uncontested errors in Mobil’s pricing policies might have resulted in the calculation of an inflated base price. Mobil II at 1064. These issues are clearly removed from the dispute by appellant’s base price concession. In Mobil II this panel expressed “considerable doubts” regarding the magnitude of Mobil’s unrecouped costs available for passthrough to customers during that month. Mobil II at 1066. Arguing that increased product and nonproduct costs are necessarily included in the calculation of “maximum allowable price” under 10 C.F.R. § 212.82(6), appellant concludes that this is a material issue remaining in dispute. However, appellant failed to challenge the determination of Mobil’s costs in its original complaint, or in Mobil I. The issue was first raised by Mobil, at the time of its second summary judgment motion, as an alternate affirmative defense. Mobil argued that appellants could not have been charged a price in excess of the maximum allowable price because (1) the base price was correctly determined as the dealer tank-wagon price and (2) even if the base price had been determined incorrectly, Mobil’s costs bank would have exceeded the amount of the claimed overcharge. Mobil II at 1060, 1065. Mobil has successfully proved its first defense. The costs issue is therefore no longer relevant. The issue of base price determination has been the threshold question throughout this litigation. Our prior opinion [Mobil /] recognized that appellants might be able to establish that the withdrawal of their discounts resulted in overcharges if they could show an overstatement by Mobil of the amount of the base price for their class of purchaser. Pacific Service Stations Co. v. Mobil Oil Corp., [Mobil I] 636 F.2d at 310. Mobil II at 1063, emphasis added. The district court correctly concluded as a matter of law that Mobil did not overstate the relevant base price, that Mobil did not overcharge appellants in violation of the EPAA, and that the validity of Mobil’s calculation of cost pass-throughs is not in issue. The order of summary judgment was proper. Appellant challenges the district court’s order denying discovery regarding Mobil’s costs. For the reasons discussed above, this was not error. Parties are not entitled [1579] to discovery on irrelevant issues. Civ.P. 26(b)(1). Fed.R. Affirmed.