Opinion ID: 1829624
Heading Depth: 2
Heading Rank: 4

Heading: Is Vicksburg Still a Public Storage Warehouse?

Text: In April, 1982, Vicksburg contracted most of its then-existing storage capacity to Placid on a primary service basis. Vicksburg's contract with Placid is to primarily service Placid's products. Placid, in turn, contracts some of the storage capacity it receives from Vicksburg to Amoco and others. All other facts concerning its operations remain the same. Vicksburg still takes custody of the product and exercises control over the product and its own facilities; Vicksburg still stores the products of more than one customer; Vicksburg still comingles products in its storage tanks; Vicksburg still charges its per barrel or per-gallon throughput charges. In short, Vicksburg continues to perform all services previously performed, even for Amoco, because it has charge, care, custody, and control of the product and its own facilities. Vicksburg claims its primary service contract with Placid in 1982 eliminated its public character, if any. Vicksburg contends its change in operations changed its public nature. This Court disagrees. Vicksburg remains a public storage warehouse because it still stores the products of more than one company and, unlike Limestone, does not have an exclusive storage contract with Placid. Moreover, Vicksburg, unlike Limestone, did not construct its facility for the primary purpose of storing exclusively for only one customer, nor has it stored for only one customer since it began operations. Vicksburg's contract with Placid is a storage agreement not unlike all of Vicksburg's previous contracts save for three exceptions: (1) It recites that Vicksburg will primarily service Placid, (2) it allows Placid exclusive use of six (6) of the then existing seven (7) storage tanks, and (3) it gives Placid a right of first refusal on additional storage space. This contract does not lock Vicksburg into storing for Placid exclusively. To the contrary, the agreement by the parties that Vicksburg will primarily service, as opposed to exclusively service, reflects that Vicksburg can and will store for others. It appears that Vicksburg is now a public storage warehouse using Placid as an agent for contracting. This is pretextual. Vicksburg should not be allowed to use its contract with one oil company as a shield from sales taxation when it, in fact, stores for more than one oil company. Having no exclusive storage provision, Vicksburg's contract with Placid does not, in view of Limestone, rise to the level of a lease. Vicksburg can at any time find itself storing, not only the products of Placid and Amoco, but the products of anyone else. This Court concurs with the MSTC that, under its new contract with Placid, Vicksburg has three avenues of public character: (1) It can contract on its own, (2) it can tell other customers to contract with Placid, or (3) Placid can contract with others. Placid, in fact, has contracted with Amoco. The contract, in material respects, is not unlike all the rest. Placid does not perform the services contained in the contract; Vicksburg does. Once again, the bottom line is that Vicksburg's contract with Placid is not an exclusive storage contract. Vicksburg still stores the products of whomever wants to pay the contract price. Vicksburg does not rent or lease its facilities exclusively to one customer in exchange for a fixed rental fee. Vicksburg continues to exercise charge, care, custody, and control over the products it stores and over its facilities. In short, Vicksburg is still a public storage warehouse.