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SWANN OIL, INC. v. KEYSTONE PORTLAND CEMENT CO.

December 6, 1974

SWANN OIL, INC., Plaintiff
v.
KEYSTONE PORTLAND CEMENT COMPANY



The opinion of the court was delivered by: VANARTSDALEN

 VanARTSDALEN, J.

 Plaintiff seeks judgment for an unpaid bill for the sale and delivery in January, 1974 of a large quantity of No. 6 residual fuel oil. There is no diversity jurisdiction. Federal jurisdiction is claimed under the Emergency Petroleum Allocation Act (EPA). *fn1" There are also common-law counts based upon pendent jurisdiction for breach of contract, quantum meruit, and fraud. Defendant has moved to dismiss the complaint for lack of subject-matter jurisdiction (Fed. R. Civ. P. 12(b)(1)), and failure to state a cause of action upon which relief can be granted (Fed. R. Civ. P. 12(b)(6)). The motion to dismiss will be granted.

 In 1972 plaintiff agreed by written contract to sell defendant "approximately 415,000 gallons of #6 residual fuel oil per month" commencing February 1, 1972 and continuing through December 31, 1974. Mandatory petroleum allocation regulations promulgated pursuant to the EPA became effective on December 27, 1973. Plaintiff, claiming that the EPA and its regulations constituted a force majeure advised defendant that the contract was no longer in effect. *fn2" The complaint alleges that on January 4, 1974

 
defendant agreed that a new contract, effective January 1, 1974, would be executed which would provide, inter alia, for new pricing based on plaintiff's posted prices. *fn3"

 The complaint further alleges that at the time defendant agreed to the new pricing

 
plaintiff [sic -- defendant] had decided never to pay any new pricing formula for deliveries on and after December 27, 1973 and during January, 1974. Defendant made these intentionally false and fraudulent misrepresentations in order to induce plaintiff to supply residual fuel oil to defendant. *fn4"

 Finally, the complaint alleges that in various letters from defendant to plaintiff there was a willful concealment of material facts "concerning defendant's intention not to pay for residual fuel oil on a new pricing basis." *fn5"

 Under EPA regulations, each supplier was to make pro-rata allocations from its "allocable supplies" *fn6" on a monthly basis to all its customers during the corresponding "base period." *fn7" The "base period" was defined as the corresponding month of 1973. *fn8" Residual fuel oil users, not otherwise expressly covered in the regulations, were to receive up to 100% of the "base period" supply. *fn9"

 The complaint alleges that notwithstanding the terms of the written contract, plaintiff supplied no fuel oil to defendant during the corresponding "base period" months. Thus, according to plaintiff, defendant was not entitled, as of right, to any allocation of fuel oil as an existing "base period" customer. The regulations "required" (10 C.F.R. § 200.14(e), 39 Fed. Reg. 748), or "encouraged" (10 C.F.R. § 200.60(a)) allocations to "new customers." However, a supplier was not required to sell to a purchaser unless proper credit or payment arrangements were made. *fn10" Regulations also established ceiling prices but did not fix minimum prices.

 The heart of plaintiff's contentions as to federal district court jurisdiction is that plaintiff has suffered a legal wrong because of an act or practice arising out of the EPA and the regulations adopted pursuant thereto. Section 5(a)(1) of the EPA, 15 U.S.C.A. § 754(a)(1)(Supp. 1974), adopts by reference Sections 210 and 211 of the Economic Stabilization Act of 1970. 12 U.S.C.A. § 1904 (Supp. 1974).

 Section 210(a) of the Economic Stabilization Act of 1970 provides:

 
Any person suffering legal wrong because of any act or practice arising out of this title, or any order or regulation issued pursuant thereto, may bring an action in a district court of the United States, without regard to the amount in controversy, for appropriate relief, including an action for a declaratory ...

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