Court Opinion

ID: 9308707
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:21:41.877153+00
Date Added: 2024-06-11T17:14:03.144681
License: Public Domain

ZIRPOLI, Judge,
dissenting:
I must respectfully dissent. As the majority opinion indicates, appellant alleged in its complaint that Mobil’s May 1, 1979 price increase to appellant which resulted from the withdrawal of certain competitive discounts “has 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 issue to be decided in this appeal is whether this allegation entitles appellant to discovery concerning Mobil’s allegedly un-recouped product and nonproduct costs which were incurred by Mobil from August of 1973 through January of 1981 and upon which Mobil had based price increases to appellant’s class of purchaser.
Appellant had sought discovery specifically directed to Mobil’s allocation of increased costs since the spring of 1981 after the first remand of this case,1 and had more generally requested information about Mobil’s maximum allowable prices for appellant’s class since June of 1979.2 Mobil, in response to these discovery requests, stated that it had never attempted to calculate the maximum allowable price for appellant’s class and it refused to produce any information relating to its increased costs and how they were allocated on the ground that it was not relevant to this action.
Over appellant’s objection that the overcharge issue could not be decided without this cost-related information, the trial court granted summary judgment in favor of Mobil for a third time, without ever determining Mobil’s maximum allowable price for appellant’s class of purchaser. I dissent because I, unlike the majority, believe that the issue raised by appellant in its complaint — whether Mobil had on May 1, 1979, “raised the selling price to [appellant] to a price that exceeds the maximum allowable price chargeable to ... [appellant’s] class of purchaser” — clearly cannot be determined as a matter of law without permitting appellant to take discovery relating to Mobil’s allegedly unrecouped costs and how they were allocated.
While the majority characterizes appellant’s complaint as stating only a “single” claim, I think that it is clear from the definition of “maximum allowable price,” the discovery which appellant sought long ago relating to costs, and the language of the complaint itself that this “single” claim is composed of multiple subsidiary issues, including whether the class of purchaser structure used by Mobil was appropriate, whether the computation of the May 15, 1973 base price for appellant’s class was correct, and whether the price increases which Mobil claimed to be justified on the basis of recoupment of its increased costs were permissible under the regulations.
The “maximum allowable price” which Mobil could charge for its product is defined by 10 C.F.R. § 212.82(6) to be “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), [the “base” price] plus increased product ... and ... nonproduct costs incurred between the month of measurement and the month of May 1973____” (Emphasis added) The language of the complaint incorporating the term “maximum allowable price,” in conjunction with the nature of the discovery which appellant sought in this case make it clear that appellant’s claim was not restricted to the contention that Mobil had improperly computed the base price for appellant’s class of purchaser. Yet, the majority votes to affirm the summary judgment entered in favor of Mobil after finding only that Mobil correctly computed the base price for appellant’s class, and without any finding as to whether Mobil had sufficient unrecouped costs to justify the prices charged to appellant after May 1, *15801979. Indeed, the majority states that the costs issue is “no longer relevant.” The majority’s conclusion is evidently based upon its erroneous impression that the costs “issue was first raised by Mobil at the time of its second summary judgment motion, as an alternate affirmative defense.” (Majority opinion at 1578) In fact, appellant had sought discovery from Mobil concerning its increased costs months prior to Mobil’s filing of its second motion for summary judgment, but Mobil had refused to produce any information relating to that subject.
As we stated in Mobil I, the class of purchaser and base price determinations constitute only the “first step in determining the applicable ceiling price under 10 C.F.R. § 212.83.” 636 F.2d at 310 (emphasis added). The majority opinion itself labels the base price determination the “threshold” question. (Majority opinion at 1578) Yet today my colleagues hold that the base price determination is the disposi-tive issue in this case. Our two prior decisions in this action reversed the trial court’s entry of summary judgment in favor of Mobil because Mobil had failed to meet its burden of showing as a matter of law that it had correctly calculated appellant’s base price, which is the “first step” in determining whether the prices were “lawful under 10 C.F.R. § 212.83.” Id. I read nothing in these decisions, and fail to see any rationale in the majority’s opinion, which supports the conclusion that now that Mobil has shown, as' appellant concedes, there was no error in Mobil’s computation of the base price for appellant’s class, Mobil may obtain summary judgment in its favor without making any showing and without permitting appellant any discovery whatsoever as to the cost increase component of “maximum allowable price.”
The fact that appellant based its two prior appeals in this case upon the class of purchaser and base price issues, and that this court’s previous opinions concentrate on those matters should not serve to preclude appellant from raising the additional deficiency in the record concerning Mobil’s cost increase in order to defeat Mobil’s motion for summary judgment once those “threshold” issues were resolved. Appellant had no obligation to engage in overkill on the first two appeals by arguing the costs issue to this court when it had clear winning arguments on the other issues. Litigants should not be forced to raise every possible basis for reversal where they are confident of prevailing on a smaller sample. As previously noted, appellant unequivocally raised in the trial court factual issues concerning the “amounts of increased costs incurred by Mobil,” the “amounts of increased costs recovered by Mobil,” and the “greatest increment of increased costs included in the actual selling price to any purchaser of gasoline during each month of the period August 1973 through January 1981” by seeking discovery on these matters well before Mobil’s second motion for summary judgment was filed. See Plaintiffs’ Statement of Genuine Issues of Material Fact.
It is significant to note that Mobil does not quarrel with appellant's contention that appellant conceivably could have been overcharged due to Mobil’s errors in computing the amount of its unrecouped costs which it later passed through to appellant in the form of price increases.3 Rather, Mobil argues only that appellant is seeking to “dredge up a new cause of action unrelated to its complaint.” Far from being a “new cause of action” raised only after Mobil had shown that it correctly computed appellant’s base price, I think that the issue of Mobil’s pass-through of increased costs has been an issue in this case from the outset. Appellant did not merely allege that Mobil improperly calculated its base price. It alleged that the price charged after May 1,1979, exceeded the “maximum *1581allowable price,” which puts in issue both the base price determination and the pass-through of increased costs. Appellant sought discovery on the cost issue in its Second Set of Interrogatories and Request for Production served in the spring of 1981. Mobil refused to permit, and the trial court refused to order any discovery related to Mobil’s costs. Had appellant been given any reason to believe that the rather clear language of its complaint was not sufficient to raise the issue of Mobil’s pass-through of costs, it could have easily amended its complaint in the spring of 1981, when it first sought discovery relating to costs, without encountering any statute of limitation problems, since the amendment would have been well within the three year statute of limitations applicable to its claim. See Ashland Oil Co. of Calif. v. Union Oil Co. of Calif. Em.App., 1977, 567 F.2d 984, 991.
In my opinion Mobil has failed to sustain its burden of establishing as a matter of law that it did not charge appellant a price that “exceeds the maximum allowable price,” subsequent to May 1, 1979, and it was clear error for the trial court to deny appellant any discovery relating to Mobil’s cost pass-throughs. Accordingly, I would reverse and remand to the trial court for appropriate discovery.

. See Plaintiffs’ Second Set of Interrogatories.

. See Plaintiff s First Set of Interrogatories.

. Appellant’s position is not unsupported. In a Notice of Probable Violation issued December 12, 1979, the Department of Energy found that systematic errors in Mobil’s base price determinations for classes across the nation probably caused Mobil to overstate its increased costs (upon which it based price increases other than those stemming from a withdrawal of competitive allowances) by $271,139,215 for the period September 1973 through December 1976 alone. See also Mobil II, 689 F.2d at 1065.