Opinion ID: 1814771
Heading Depth: 1
Heading Rank: 2

Heading: The Same Product Issue

Text: Section 9(h) of Act 1403 provides, . . . The inspection fee herein provided for shall be paid but once with respect to the same product, .... [Emphasis supplied.] The rerefined lubricating oil which Gurley Refining sold in Alabama was processed exclusively from waste oil acquired from a supplier located in Alabama. The supplier certified to Gurley Oil that he had collected the waste oil only from service stations located within Alabama. The Gurleys' expert witness testified that rerefined oil produced from waste oil is the same product as the virgin oil because it has the same molecular structure before it is used and after it is reprocessed. Other experts testified that rerefined oil is not the same product as the virgin oil because rerefined oil does not have the same physical characteristics and does not contain the same chemical additives as the virgin oil. The trial court apparently accepted the testimony of the Gurleys' expert and also assumed that the inspection fee had been previously paid on all of the waste oil from which the rerefined oil was produced. The court held that, since the rerefined oil was the same product on which the inspection fee had originally been paid, to require payment of the inspection fee on the rerefined oil would be to require payment more than once with respect to the same product. We hold that rerefined lubricating oil is not the same product as the virgin lubricating oil which, after being used, has been reprocessed to produce the rerefined lubricating oil. It is irrelevant whether both have the same basic molecular structure or the same chemical composition. Whether the virgin oil and the rerefined oil are basically the same oil or not, they are not the same product, as the term is used in § 9(h) of Act 1403. Just because the materials used to make a product are recycled over and over again does not make the result of each remanufacturing process the same product. We hold that the result of each such reprocessing is a new product. The interpretation given to same product by the trial court and plaintiffs Gurley is inconsistent with the purpose of the act and the nature of the fee imposed. The act establishes an inspection program and imposes an inspection fee. An inspection is necessary every time the product of such a refining or rerefining process enters the market to determine whether that particular product meets the standards established by the state. Section 2 of Act 1403 provides that persons selling, offering for sale, storing, or using petroleum products in this state must obtain a permit. In § 2, it is also provided: . . This section shall not apply to any person selling or offering for sale or storing or using petroleum products obtained from a person that has compiled [sic] with the provisions of this act with respect to the same petroleum products. If same petroleum products means here what the trial court and plaintiffs say that same product means in § 9(h), then a person selling, storing, or using rerefined lubricating oil which had been reprocessed from waste oil collected in Alabama would not need to get a permit. That conclusion is not consistent with the purpose of the act. We think that the intent of the legislature is that the person first selling, storing, or using any petroleum products in the state must comply with the provisions of the act, including payment of the inspection fee, and that those persons obtaining petroleum products from such a person need not also comply with the act. Thus, in § 9(h), the act provides, . . .It shall be the duty of the person first selling or storing or using any petroleum product in the state to pay said inspection fee. . . . The inspection fee herein provided for shall be paid but once with respect to the same product,. . . . The provision in question has nothing to do with encouraging recycling of petroleum products; it merely attempts to prevent the imposition of double liability for the inspection fee. It is therefore that we reverse and remand this cause to the trial court for the entry of a judgment in conformity herewith. REVERSED AND REMANDED. JONES, ALMON, EMBRY and BEATY, JJ., concur.