Opinion ID: 2639270
Heading Depth: 1
Heading Rank: 6

Heading: Product scope

Text: The CID requests documents relating to petroleum products, defined as any of the following fuels: motor fuel gasoline, No. 2 diesel, low sulfur fuel oil, high sulfur fuel oil, heating oil, jet fuel, `JP4' jet fuel, aviation gas, bunker/fuel oil and marine diesel. Tesoro argues that the investigation only focuses on one product, gasoline, [55] and therefore the CID should pertain only to documents relating to that product. Tesoro contends that the statute's judicial review provisions and the judiciary's role is weakened if the attorney general can control the parameters of the request through its own definition of the investigation. As Tesoro correctly notes, AS 45.50.592 interposes the power of the courts into the administrative process to protect the public from unreasonable demands by the attorney general. The superior court justified its holding that the State's request for documents regarding all petroleum products was reasonable with the statement that such documents would help the attorney general to better understand how the movement of certain products within the market affects pricing of gasoline products. Tesoro raises two objections to the court's explanation. On one hand, Tesoro argues that [t]he Superior Court's reasoning is simply wrong. The pricing of such unrelated products as heating fuel or jet fuel, for example, has no relevance to the pricing of gasoline. On the other hand, even if that information was relevant, in Tesoro's view, the court erred by not considering the burden to Tesoro in producing these documents in relation to the attorney general's burden if the documents were not produced. According to Tesoro, [t]he marginal relevance that documents relating to fundamentally different petroleum products may have with respect to the issue of gasoline pricing is vastly outweighed by the burden and expense Tesoro will incur in producing such documents to date. At oral argument to the superior court the State addressed Tesoro's contention that the State's investigation only involved the issue of gasoline. The State argued that the reason we have asked for information beyond just gasoline is that a barrel, of course, is cut many different ways, depending on the hydrocarbons that are in the oil. Some parts of the oil are refined differently. We feel that in order to explain a particular margin on ... one cut of the barrel, we have to understand what the companies did with the other part. Given the State's explanation of how documents regarding all types of petroleum products relate to the investigation, and the deference due such explanations, [56] the superior court's holding is not clearly erroneous. The superior court demonstrated a rational foundation for its holding: The definition for `petroleum products' shall remain intact as it is not an unreasonable request in order for the Attorney General to better understand how the movement of certain products within the market affects pricing of gasoline products. In support of its request to limit the CID to gasoline-related documents, Tesoro cites Covey Oil Co. v. Continental Oil Co., a case in which one petroleum company alleged antitrust violations by another, relating to the price of gasoline. [57] After the defendant company served a subpoena duces tecum on a non-party witness, the district court modified the subpoena to cover only gasoline products. [58] Tesoro argues that here a similar modification should have been ordered in accordance with its requests for relief. We agree with the State that the holding in Covey Oil is inapt. Covey Oil dealt with a private antitrust action; in contrast to an agency investigation, the private petitioner's request did not warrant deference. Moreover, the opinion does not clearly indicate the scope of the products at issue in the case. The trial court's modifications to the subpoena did not necessarily have anything to do with the range of petroleum products included in the subpoena. [59] That Tesoro was able to find a case discussing a subpoena which covered only gasoline does not persuade us that a similar subpoena is appropriate here, particularly where the burden of proof rests with Tesoro. [60] We therefore affirm the superior court's holding that Tesoro must produce documents relating to petroleum products as originally defined in the CID.
Because Hosie, as outside counsel to the State, should be considered an authorized employee of the state for purposes of AS 45.50.592(e), because the superior court reviewed the CID under the correct standard, and because the superior court was within its discretion in holding that the CID was not unreasonable, improper, or oppressive, we AFFIRM the superior court's decision in all respects.