72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1812
House Bill 2998
Sponsored by COMMITTEE ON TRANSPORTATION (at the request of
Oregon Petroleum Marketers Association)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Prohibits certain below-cost sales of motor fuel. Creates
exceptions. Grants civil remedies to injured competitor and
prosecuting attorney. Authorizes prosecuting attorney to serve
investigative demand and to accept assurance of voluntary
compliance.
A BILL FOR AN ACT
Relating to motor fuel marketing.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 10 of this 2003 Act:
(1) 'Affiliate' means a person:
(a) The stock of which is more than 50 percent owned by a
refiner;
(b) That is controlled by a refiner; or
(c) That is controlled by a person that controls a refiner.
(2) 'Competition' means the vying for sales of motor fuel
between two sellers in a relevant geographic market.
(3) 'Control' means the possession, direct or indirect, of the
power to direct or cause the direction of the management and
policies of a person.
(4) 'Dealer' means a person, other than a refiner or
wholesaler, that sells motor fuel at a retail outlet.
(5) 'Direct labor cost' means the personnel costs incurred to
sell motor fuel at a retail outlet:
(a) Including, but not limited to, the costs of persons that
purchase, store and inventory motor fuel, maintain equipment and
comply with environmental obligations.
(b) Excluding the costs of persons that clean up or remediate
motor fuel.
(6) 'Motor fuel' means a petroleum product used to propel a
motor vehicle.
(7) 'Motor vehicle' has the meaning given that term in ORS
801.360.
(8) 'Nonrefiner' means a person, other than a refiner, that
sells motor fuel.
(9) 'Posted terminal price' means the price for a grade of
motor fuel that a refiner posts at a terminal facility for
wholesalers.
(10) 'Prosecuting attorney' means the Attorney General or the
district attorney of any county in which a violation of section 2
of this 2003 Act is alleged to have occurred.
(11) 'Reasonable rental value' means the price that a person
would pay in an arm's length transaction for the use of the land
and improvements used for the sale of motor fuel at the retail
outlet.
(12) 'Refiner' means a person or an affiliate of the person
that:
(a) Stores or exchanges motor fuel at a terminal facility in
this state; and
(b) Sells motor fuel through the loading rack at the terminal
facility.
(13) 'Retail outlet' means premises where a person offers motor
fuel for sale to the motoring public.
(14) 'Sale' or 'sell' has the meaning given that term in ORS
571.505, but does not include exchanges at the wholesale level of
distribution.
(15) 'Terminal facility' means any fuel storage facility that
has marine or pipeline access.
(16) 'Wholesaler' means a person, other than a refiner, that
purchases motor fuel from a refiner at or below the refiner's
posted terminal price. + }
SECTION 2. { + (1) A refiner may not sell motor fuel at retail
below the refiner's cost for the fuel when the effect of the sale
is to injure competition.
(2) A nonrefiner may not sell motor fuel at retail below the
nonrefiner's cost for the fuel when the effect of the sale is to
injure competition.
(3) For purposes of this section, the price at which a refiner
or nonrefiner sells motor fuel at retail is the price posted on
the pump at the retail outlet less the amount of any rebate,
coupon or other concession that reduces the price to the
consumer.
(4) Subsections (1) and (2) of this section do not apply to a
sale made:
(a) In good faith to meet a retail price in the relevant
geographic area that the refiner or nonrefiner reasonably
believed was a lawful price;
(b) To discontinue trade in the motor fuel;
(c) Under an order or at the direction of a court;
(d) Under a contract with a unit of government; or
(e) During the first 48 hours of a retail outlet's grand
opening. + }
SECTION 3. { + (1) Unless a refiner establishes by clear and
convincing evidence that the refiner's cost for motor fuel is
less than the cost as calculated under subsection (2) of this
section, the refiner's cost for motor fuel shall be calculated
under subsection (2) of this section.
(2) For purposes of sections 1 to 10 of this 2003 Act, a
refiner's cost for motor fuel is the sum of:
(a) For the grade of motor fuel delivered to the retail outlet,
the lowest posted terminal price reported by the Oil Price
Information Service at the terminal facility from which the
refiner delivered the motor fuel;
(b) State, federal and local taxes on the motor fuel;
(c) State, federal and local inspection and environmental fees
attributable to the motor fuel;
(d) Freight charges to the retail outlet;
(e)(A) For a sale to a wholesaler, eight percent of the total
of paragraphs (a), (b), (c) and (d) of this subsection; or
(B) For a sale to a dealer, six percent of the total of
paragraphs (a), (b) and (c) of this subsection; and
(f) If the refiner sold the motor fuel in combination with
another product, the cost of the product.
(3) When a refiner establishes the refiner's cost for motor
fuel under subsection (1) of this section, the refiner shall
include the reasonable rental value of the retail outlet and
direct labor cost attributable to the sale of the motor fuel. + }
SECTION 4. { + (1) Unless a nonrefiner establishes by clear
and convincing evidence that the nonrefiner's cost for motor fuel
is less than the cost as calculated under subsection (2) of this
section, the nonrefiner's cost for motor fuel shall be calculated
under subsection (2) of this section.
(2) For purposes of sections 1 to 10 of this 2003 Act, a
nonrefiner's cost for motor fuel is the sum of:
(a) The price of the motor fuel on the invoice to the
nonrefiner less credit card allowances, trade discounts, rebates
or any other concessions that the nonrefiner received;
(b) State, federal and local taxes on the motor fuel;
(c) State, federal and local inspection and environmental fees
attributable to the motor fuel;
(d) Freight charges to the retail outlet;
(e)(A) For a sale to a wholesaler, eight percent of the total
of paragraphs (a), (b), (c) and (d) of this subsection; or
(B) For a sale to a dealer, six percent of the total of
paragraphs (a), (b) and (c) of this subsection; and
(f) If the refiner sold the motor fuel in combination with
another product, the cost of the product.
(3) When a nonrefiner establishes the nonrefiner's cost for
motor fuel under subsection (1) of this section, the nonrefiner
shall include the reasonable rental value of the retail outlet
and the direct labor cost attributable to the sale of the motor
fuel. + }
SECTION 5. { + (1) A person injured by a violation of section
2 of this 2003 Act may bring a civil action in circuit court for
actual damages, a declaratory judgment, exemplary damages or
injunctive relief.
(2) A trade organization is a person injured by a violation of
section 2 of this 2003 Act if a member of the trade organization
is a person injured by a violation of section 2 of this 2003 Act.
(3) The court may award reasonable attorney fees to a person
that prevails on a claim under this section.
(4)(a) When a person commences an action under this section,
the person shall mail a copy of the complaint to the Attorney
General in Salem.
(b) When the court enters judgment in an action under this
section, the person that commenced the action shall mail a copy
of the judgment to the Attorney General in Salem.
(c) A person's failure to mail a copy of the complaint to the
Attorney General does not deprive the court of jurisdiction over
the action. The court may not enter judgment for the person that
commences the action unless the person provides proof of mailing
of the copy of the complaint. + }
SECTION 6. { + (1)(a) A person establishes a prima facie case
of a violation of section 2 of this 2003 Act if the person
produces evidence to show that, in the relevant geographic
market:
(A) A refiner made a sale at retail below the refiner's cost
for the fuel; or
(B) A nonrefiner made a sale at retail below the nonrefiner's
cost of the fuel.
(b) If a person establishes a prima facie case, the burden of
rebutting the prima facie case by showing justification for the
sale is upon the person charged with the violation.
(2) In an action under section 5 or 9 of this 2003 Act, the
relevant geographic market is presumed to consist of an area not
greater than a radius of two miles from the location of the sale.
A person may rebut the presumption by establishing that the area
of effective competition is greater than a radius of two miles
from the location of the sale. + }
SECTION 7. { + (1) Notwithstanding ORCP 79, the court shall
grant a temporary restraining order or preliminary injunction if
the applicant for the order or injunction produces evidence to
show:
(a)(A) A violation of section 2 of this 2003 Act injures the
applicant; or
(B) The applicant is a prosecuting attorney and a violation of
section 2 of this 2003 Act injures a person;
(b) There exists a sufficiently serious question going to the
merits of the claim to make the question fair ground for
litigation; and
(c) On balance, the hardships imposed on the refiner or
nonrefiner by the issuance of the order or injunction will be
less than the hardships the applicant would suffer if the court
did not issue the order or injunction.
(2)(a) Notwithstanding ORCP 82, the court may issue the order
or injunction without requiring the applicant to give security.
(b) If the court requires an applicant to give security, the
amount of the security may not exceed $50,000.
(3)(a) An action under section 5 of this 2003 Act shall be
commenced within two years from the date when the violation is
first discovered or in the exercise of reasonable care should
have been discovered.
(b) An action under section 9 of this 2003 Act shall be
commenced within one year from the date when the violation is
first discovered or in the exercise of reasonable care should
have been discovered.
(4) The remedies provided by this section and sections 5 and 9
of this 2003 Act are in addition to and not exclusive of any
other remedy provided by law. + }
SECTION 8. { + (1) When it appears to a prosecuting attorney
that a person has engaged in, is engaging in, or is about to
engage in a violation of section 2 of this 2003 Act, the
prosecuting attorney may execute and serve an investigative
demand on a person the prosecuting attorney believes to have
information, documents or physical evidence of the violation.
(2) The demand may require the person:
(a) To give an oath or affirmation;
(b) To appear and testify;
(c) To answer written interrogatories; and
(d) To produce documents or physical evidence.
(3)(a) Before the return date in a demand, or within 20 days
after service of the demand, whichever is sooner, the person
served with the demand may file a petition to extend the return
date or to modify or set aside the demand.
(b) The person may file the petition in the circuit court in
the county in which the person resides or the Marion County
Circuit Court.
(c) The petition must set forth:
(A) Good cause for the extension, modification or setting
aside; and
(B) The information, documents or evidence to which the person
claims a privilege from disclosure. + }
SECTION 9. { + (1) A prosecuting attorney who has probable
cause to believe that a person is engaging in, has engaged in, or
is about to engage in a violation of section 2 of this 2003 Act
may bring an action in the name of the State of Oregon to
restrain the person from engaging in the alleged violation. The
prosecuting attorney may bring the action in the circuit court in
the county in which the person resides or the Marion County
Circuit Court.
(2) Before bringing an action under this section, the
prosecuting attorney shall provide written notice to the person
of the action and the relief to be sought. The prosecuting
attorney shall serve the notice in the manner set forth in ORS
646.622 for the service of investigative demands.
(3) A person has 10 days from the person's receipt of notice
within which to execute and deliver to the prosecuting attorney
an assurance of voluntary compliance. The assurance shall set
forth what actions, if any, the person intends to take with
respect to the alleged violation. The assurance shall not be
considered an admission of a violation for any purpose. If the
prosecuting attorney is satisfied with the assurance, the
prosecuting attorney may submit the assurance to the circuit
court in the county in which the person resides or the Marion
County Circuit Court for approval. If the court approves the
assurance, the clerk shall enter the assurance in the register
and docket the assurance in the judgment docket. An assurance
that the clerk registers and dockets constitutes a judgment in
favor of the State of Oregon. Violation of a term of an
assurance that the clerk has registered and docketed constitutes
a contempt of court.
(4) Subsection (2) of this section does not apply if:
(a) Within the previous two years, a prosecuting attorney
accepted an assurance from the person; or
(b) The prosecuting attorney alleges that the prosecuting
attorney has reason to believe that the delay caused by complying
with subsection (2) of this section would cause immediate harm to
the public health, safety or welfare.
(5)(a) The court may award reasonable attorney fees to the
prevailing party in an action under this section.
(b) The court shall award reasonable attorney fees to a
prevailing defendant if:
(A) The defendant had in good faith submitted a satisfactory
assurance to the prosecuting attorney prior to the commencement
of the action; or
(B) The prosecuting attorney proceeded under subsection (4) of
this section without reasonable grounds to proceed. + }
SECTION 10. { + Sections 1 to 10 of this 2003 Act may be cited
as the Motor Fuel Fair Marketing Act. + }
SECTION 11. { + Sections 1 to 10 of this 2003 Act apply to
conduct occurring on or after the effective date of this 2003
Act. + }
----------