Court Opinion

ID: 9308694
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:21:28.49798+00
Date Added: 2024-06-11T17:14:03.070111
License: Public Domain

ZIRPOLI, Judge,
concurring in part and dissenting in part:
While I am in accord with the opinion of the majority on the issues of jurisdiction, remand for further trial on the class of purchasers determination, and the statute of limitations applicable to Fletcher, I cannot agree with the majority’s conclusions on the issues of prejudgment interest, attorney’s fees, and Fletcher’s standing. Accordingly, I must respectfully dissent.
A. Prejudgment Interest
The majority concludes that it was improper for the district court to award prejudgment interest in this case because the amount of overcharges by Gulf were not certain until after trial. The majority relies on Zahir v. Shell Oil Co., 718 F.2d 1567, 1573 (Em.App.1983), and Eastern Air Lines, Inc. v. Atlantic Richfield Co., 712 F.2d 1402, 1410 (Em.App.), cert. denied, — U.S. -, 104 S.Ct. 278, 78 L.Ed.2d 258 (1983). Neither of these cases bars an award of prejudgment interest in the present case. Because I find no abuse of discretion in the trial court’s award of prejudgment interest in this case, I would affirm that portion of the decision.
“In the absence of an unequivocal prohibition of interest, and where the statute imposes a money obligation, the power of the court to award interest is dependent on an appraisal of the congressional purpose of imposing the obligation and on the relative equities of the parties.” Hodgson v. American Can Co., 440 F.2d 916, 922 (8th Cir.1971). The statute authorizing suits to collect overcharges is remedial in nature and designed to compensate those who have been overcharged for the losses that they sustained as a result of the overcharges. See Minnesota v. Standard Oil Co., 516 F.Supp. 682, 687 (D.Minn.1981); Ashland Oil Co. of California v. Union Oil Co., 567 F.2d 984, 990 n. 12 (Em.App.1977). An award of prejudgment interest to compensate plaintiffs for the loss of the use of money is consistent with the congressional purpose of this statute.
The relative equities of the parties in this case do not tip so strongly towards Gulf as to render the award of prejudgment interest to plaintiffs an abuse of discretion. While it may be true that Gulf had financial difficulties in the Pacific Northwest where plaintiffs operate, this is not a proper factor to consider in deciding whether or not to award prejudgment interest, nor does it appear that the majority considers this to be a relevant consideration, since it is not mentioned in the opinion. What is a relevant factor, is that Gulf conceded its use of spot purchase prices reported in Platt’s Oilgram for establishing plaintiffs’ base price was unjustified. In deciding to award prejudgment interest, the trial court expressed its “concern that there wasn’t a more serious effort [by Gulf] ... to correct the overcharge.” (Tr. 1159). Although the trial court did find that Gulf’s overcharges were not intentional, and so did not award treble damages, I think that it was well within its discretion to award prejudgment interest to plaintiffs on overcharges which they did not pass through to their customers.
The majority bases its reversal of the award of prejudgment interest on the fact that the principal amount of the overcharge was the “subject of a great amount of uncertainty” because the parties were in disagreement as to what was the most appropriate class of purchasers for plaintiffs. Until the trial court had ruled on the appropriate class of purchasers question, the principal amount of overcharges could not be computed. Because this uncertainty as to a legal issue is not the type which is traditionally held to preclude an award of prejudgment interest, I would defer to the trial court’s determination that the relative *812equities of the parties, as well as the remedial purpose of the statute, warranted the award. Neither Zahir or Eastern Airlines dictates otherwise.
In both Zahir and Eastern, this court affirmed the trial court’s denial of prejudgment interest. In Zahir it was held that “the trial court did not abuse its discretion” in declining to award prejudgment interest where the plaintiff’s claim was “not for a liquidated or readily liquidatable sum.” 718 F.2d at 1573. In that case, the plaintiff’s claim upon which he sought prejudgment interest was for lost profits due to the defendant’s failure to supply him with gasoline. A claim for lost profits is a highly speculative type of injury which must be estimated, rather than one which is capable of determination with mathematical precision. It has long been the rule that awards of prejudgment interest are not given on claims of injury which are not of the type capable of reasonably precise determination. Thus, the refusal of the trial court to award prejudgment interest in Zahir was clearly correct.
In the present case, on the other hand, the injury suffered by plaintiffs was one capable of mathematical computation. The “uncertainty” involved was due to the parties’ dispute as to which was the proper class of purchasers for determining plaintiffs’ base price. Once the trial court had made its ruling on the class of purchasers question, the principal amount of the overcharge was one capable of mathematical computation.1
Courts have traditionally had discretion to award prejudgment interest in cases where the damages are liquidated or capable of mathematical computation. Thus, it has been said that “interest is allowed on all claims that are liquidated or readily ascertainable by mathematical computations ... in other words where it is not necessary to rely upon opinion or discretion.” Nelse Mortensen & Co. v. United States, 305 F.Supp. 470, 471 (E.D.Wash.1969) (quoting from Caterpillar Tractor v. Collins Machinery Co., 286 F.2d 446 (9th Cir.1960)). A disputed claim is not rendered unliquidated or incapable of precise valuation merely because the parties disagree as to the proper method for calculating the principal amount due. Thus, in American Enka Co. v. Wicaco Mach. Corp., 686 F.2d 1050, 1057 (3rd Cir.1982), where the parties were in disagreement over the correct date to be used for an award of the market value of goods lost by a bailee, the court held that the dispute concerned a liquidated amount “capable of ascertainment with mathematical precision” (once it was determined which was the proper date for purposes of valuing the property) and the trial court had discretion to award prejudgment interest. See also, Mortensen, 305 F.Supp. at 471 (“Mere difference of opinion as to amount is, however, no more a reason to excuse him from interest than difference of opinion whether he legally ought to pay at all, which has never been held an excuse.” (emphasis deleted; quoting from Prier v. Refrigeration Engineering Co., 74 Wash.2d 25, 442 P.2d 621, 627 (1968).)
Nor does Eastern Airlines dictate any deviation from the traditional principle that the trial court has discretion to award prejudgment interest on sums which are liquidated or “capable of ascertainment with mathematical precision.” American Enka, 686 F.2d at 1057. In Eastern, as noted above, the trial court did not award prejudgment interest, and this decision was affirmed. In the present case, on the other hand, the trial court, in its discretion, did award prejudgment interest. The majority, with no discussion of the relative equities of the parties or the remedial purpose of *813the statute, holds that the trial court abused its discretion in awarding prejudgment interest in this case.
The majority apparently relies on the broad language in Eastern that “prejudgment interest is not available where the amount of damages claimed to be due is uncertain.” 712 F.2d at 1410. However, as noted above, it is not every type of “uncertainty” which will preclude an award of prejudgment interest. An examination of the case cited in Eastern in support of the quoted language shows the relevant type of uncertainty to be that due to inherent difficulty in measuring the extent of injury, such as that involved in Zahir. The case cited in Eastern, Belcher v. Birmingham National Bank, 488 F.2d 474, 478 (5th Cir.1973), was an action to recover the value of services rendered. In determining the reasonable value of services rendered, the court must rely upon “opinion or discretion” to estimate the principal amount to be awarded. Mortensen, 305 F.Supp. at 471. Such an estimate necessarily means that the amount is not “readily ascertainable by mathematical computations.” Id. Thus, the authority cited in Eastern does not support any broad rule that a dispute as to the legal issue of the most appropriate class of purchasers for plaintiffs will preclude an award of prejudgment interest. Furthermore, any such broad rule would be contrary to the remedial purposes of the statute. Thus, I do not read Eastern as holding that the trial court would have abused its discretion if it had awarded prejudgment interest in that case. Rather, as was made clear in Zahir, the trial court had discretion to deny prejudgment interest in Eastern, depending upon the equities, and there was no indication that it had abused its discretion in that case.
In the present case, the trial court considered the equities and the remedial purposes of the statute and concluded that an award of prejudgment interest was appropriate. I find no reason to overturn this decision.
B. Attorney’s Fees
I must dissent from the majority’s determination that it was “plain error” to award attorney’s fees in this case. While I find the majority opinion somewhat ambiguous as to the basis for its holding on this question, I assume that the opinion is intended to hold that an award of attorney’s fees is never authorized under section 210(b) of the Economic Stabilization Act if the defendant proves that the overcharge was “not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to the avoidance of such error.” 12 U.S.C. § 1904 note. I do not think that a close examination of the statute supports this interpretation.
As a preliminary matter, it should be noted that although the trial court did expressly find that the overcharges in this case were not intentional, there was no express finding that they were the result of a “bona fide error notwithstanding the maintenance of [adequate procedures designed to prevent such errors].” The majority’s statement that the “finding that Gulf maintained ‘procedures reasonably adapted to the avoidance’ of an overcharge” was not in the “precise language” of the statute (see opinion at 807) is somewhat misleading, since not only was such a finding not in the “precise language” of the statute, it was not made at all. Nevertheless, since I think it is clear that such a finding was impliedly made, I do not take issue with the majority’s conclusion that Gulf had proven that the overcharges were the result of a bona fide error. I make this observation only to make absolutely clear that this court was not under the erroneous impression that the trial court had made some express finding, even though not in the “precise language” of the statute. The basis for my conclusion that the trial court had made an implied finding that Gulf had made the overcharges in good faith notwithstanding the maintenance of adequate procedures is that the trial court went to the trouble of deciding a difficult statutory interpretation question as to whether attorney’s fees were awardable even in cases where treble damages are not. Treble damages are clearly not awardable under *814section 210(b) where the defendant proves that the overcharge was unintentional and the result of a bona fide error notwithstanding the maintenance of adequate procedures. If the trial court had not made an implied finding that Gulfs overcharges were the result of a good faith error, it would not have been necessary for it to decide the statutory interpretation question.
Unlike the majority, I agree with the district court’s conclusion that section 210(b) authorizes an award of attorney’s fees in this case even though Gulf had satisfied the court that its error was unintentional and the result of a good faith error. Section 210(b) provides, in pertinent part, as follows:
[T]he court may, in its discretion, award the plaintiff reasonable attorney’s fees and costs, plus whichever of the following sums is greater:
(1) an amount not more than three times the amount of the overcharge upon which the action is based, or
(2) not less than $100 or more than $1,000; except that in any case where the defendant establishes that the overcharge was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to the avoidance of such error the liability of the defendant shall be limited to the amount of the overcharge ....
12 U.S.C. § 1904 note.
Upon close examination of the statute, the district court concluded that “the language of exception beginning with the word ‘except’ modifies only the language that follows the word ‘plus.’ ” Thus, the court concluded that it had discretion to award attorney’s fees in this case. I agree. Under the interpretation of this statute adopted by the majority, the award of costs, as well as attorney’s fees, would not be authorized in cases where the defendant proves that the overcharge was unintentional. Such an interpretation clearly would run counter to the remedial purpose of the statute and to Congress’ intent that private actions should play a “critical” role in the enforcement of the price regulations. See Ashland Oil, 567 F.2d at 990 n. 11. While the opinion in Eastern does include dicta which supports the majority’s interpretation, the holding in that case was merely that the trial court had not erred in denying an award of attorney’s fees and treble damages, and there is no indication that the court in that case was called upon to closely examine the statute.
Thus, I conclude that section 210(b) authorizes the court, in its discretion, to award “attorney’s fees and costs” to a successful plaintiff in an action to recover overcharges even in cases where the defendant makes a showing that would preclude an award of treble damages. Since there is no indication that it would be an abuse of discretion to award any amount of attorney’s fees, I respectfully dissent.2
C. Fletcher’s Standing
Although I concur in the majority’s holding that the two-year Washington statute of limitations bars Fletcher’s claims, and so do not believe it is necessary for the court to rule on the issue of Fletcher’s standing, because the majority has expressed its views on this issue, I feel constrained to state my views.
Fletcher was a retail seller of gasoline under the Gulf brand in Washington and Oregon until Gulf withdrew its brand from the region in 1974. Gulf continued to supply gasoline to Fletcher and the other plaintiffs after 1974, on an unbranded basis, as *815required by the mandatory allocation regulations. The gasoline sold by Fletcher under the Gulf brand was purchased under a cost-plus contract between Fletcher and Tesoro Petroleum Corporation. Tesoro, in turn, had a gasoline supply contract with Gulf. Thus, on a superficial basis, it might appear that Fletcher was not a direct purchaser from Gulf; however, an examination of all the facts supports the district court’s finding that “the sale [by Gulf] in substance was to Fletcher.” Fletcher had substantial direct dealings with Gulf. Fletcher took delivery of the gasoline directly from Gulf. Gulf established a procedure by which Fletcher transmitted its credit card slips directly to Gulf, which in turn would credit Tesoro’s account. Gulf included Fletcher in meetings held with all of Gulf’s branded jobbers, and notices of price changes came directly from Gulf to Fletcher, not through Tesoro. Prior to the execution of both the Gulf-Tesoro and the Tesoro-Fletcher contracts, Gulf was informed that Fletcher would be the party receiving and retailing the gasoline, and Gulf representatives investigated Fletcher’s station locations, and explained the ramifications of Fletcher’s anticipated use of the Gulf brand. The contract between Tesoro and Fletcher provided that Fletcher would pay Gulf’s price plus a fixed markup of $.00375 per gallon. When Gulf applied to the DOE to withdraw as a supplier from certain West Coast locations, Gulf referred to its supply obligation to “Tesoro Fletcher.”
Section 210(b) of the ESA authorizes suits for overcharges “... against any person ... who is found to have overcharged the plaintiff.” This statute has been interpreted as limiting standing in overcharge suits to “direct purchasers.” Thus, in Arnson v. General Motors Corp., 377 F.Supp. 209, 211-12 (N.D.Ohio 1974), the court held that a purchaser of an automobile from a dealer did not have standing to sue the manufacturer for alleged overcharges by the manufacturer to the dealer. In reaching this conclusion, however, the court noted “there is no allegation that [the defendant] dealt directly with the plaintiff in any manner. Thus absent any privity between plaintiff and defendant, it is apparent that defendant is not a seller within the scope of the Act as it relates to this transaction.” 377 F.Supp. at 212. Furthermore, the court in Amson specifically found that there was no agency relationship between the manufacturer and the dealer by which price increases of the manufacturer were automatically passed on to the ultimate consumer. In fact, such price increases were not passed on by the dealer in five percent of the cases. Id. at 214. In the present case, on the other hand, there were substantial direct dealings between Gulf and Fletcher, and the price paid by Fletcher was directly tied to the price charged by Gulf through a cost-plus contract. Thus, Amson, relied on by the majority, by no means establishes that Fletcher lacks standing to sue Gulf for overcharges.
Nor does Palazzo v. Gulf Oil Corp., the other case cited by the majority, stand for the proposition that an “indirect” purchaser such as Fletcher has no standing to sue. In Palazzo, the plaintiff was an officer and stockholder of the entity which made the purchases from the defendant. Thus, the overcharges by Gulf had no direct and mathematically certain impact on Palazzo. Overcharges by Gulf in the present case, on the other hand, had a direct and ascertainable impact on Fletcher, due to the cost-plus contract between Tesoro and Fletcher.
It is the general rule under the antitrust laws that an indirect purchaser has no standing to sue, yet there is an exception to this rule which permits such suits where the plaintiff makes purchases under a cost-plus contract. See Illinois Brick Co. v. Illinois, 431 U.S. 720, 736, 97 S.Ct. 2061, 2070, 52 L.Ed.2d 707 (1977); In re Beef Industry Antitrust Litigation, 600 F.2d 1148, 1163-64 (5th Cir.1979). I see no reason why such an exception should not also exist for suits to recover overcharges under section 210(b). This is especially true *816in view of Congress’ intent that private suits to recover overcharges would serve both remedial and policing functions. To hold that Tesoro, not Fletcher, is the only party which would have standing to sue for these overcharges would not serve any remedial purpose, since Tesoro was not harmed by Gulf’s overcharges. Tesoro received its $.00375 per gallon no matter what Gulf charged. Nor would such a holding advance the enforcement purposes of the statute, since Gulf would be permitted to raise the defense that Tesoro passed on all of Gulf’s overcharges to Fletcher. See Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 494, 88 S.Ct. 2224, 2232, 20 L.Ed.2d 1231 (1968); Eastern Airlines, Inc. v. Atlantic Richfield Co., 609 F.2d 497 (Em.App.1979); and majority opinion at 809. Tesoro obviously would have no motivation to bring suit for overcharges by Gulf for which it could not recover due to the passing-on defense.
D. Remand
In joining the majority ruling that the case be remanded to reopen the trial to consider Gulf’s evidence on the class of purchasers issue, I am satisfied that the court expresses no view on what the proper class of purchasers will ultimately be found to be. I do not understand the majority’s statement that the district court’s findings were “erroneous as to the class of purchaser base price” (opinion at 805) to be a determination as to the proper class of purchaser.

. A great deal of time was spent in determining what portion of the overcharges plaintiffs had passed through to their customers. The trial court had ruled that it would be inequitable to award plaintiffs prejudgment interest on overcharges that they had passed through, since to the extent of such pass-throughs, plaintiffs had not been deprived of the use of the money. Gulf should not be heard to complain about any “uncertainty” involved in determining the amount passed through, since this equitable determination to limit the award of prejudgment interest on overcharges was to Gulf’s benefit.

. Since I concur in the holding that this case should be remanded to permit Gulf to introduce new evidence on the class of purchasers issue, I express no opinion as to whether the amount of attorney’s fees awarded in this case was reasonable. I would note, however, that plaintiffs are entitled to recover a “reasonable fee” based upon the “prevailing market rates” in the community, and are not restricted to recovery of the fees actually billed. Blum v. Stenson, — U.S. -, -, 104 S.Ct. 1541, 1547, 79 L.Ed.2d 891 (1984). It appears that a substantial portion of the “bonus" referred to by the majority (see opinion note 38) may be attributable to the fact that the fees actually billed plaintiffs were lower than the market rate.