Full opinion text
ESTES, Judge. Plaintiffs-appellees, W. R. (Bill) Shore and 12 other separate parties, are purchasers of gasoline and diesel fuel from one or more refineries, which products each of them resells to and through service stations for retail distribution to consumers. Defendant-appellant Longview Refining Company (Longview) operates a small refinery which has been a supplier of gasoline and/or diesel fuel for the respective plaintiffs at various periods of time. Defendant-appellant Crystal Oil Company acquired all of Longview’s capital stock as of November 1, 1973. The plaintiffs sought declaratory and injunctive relief and monetary damages for certain actions allegedly committed by defendants: (1) violations of the Economic Stabilization Act of 1970, as amended (Stabilization Act), 12 U.S.C. § 1904 note (1976 Supp.), and the Emergency Petroleum Allocation Act of 1973, as amended (Allocation Act), 15 U.S.C. § 751 et seq. (1976 Supp.), and regulations thereunder; (2) violations of the Sherman and Clayton Acts; and (3) violations of the parties’ supply contract and the termination provisions of Article 2.309(c) of the Texas Business and Commerce Code, V.T.C.A. Bus. & C. § 2.309(c) (1968). The plaintiffs’ original complaint was filed December 27, 1973. On May 7, 1974, the district court ordered the plaintiffs’ first cause of action to be severed and advanced on the trial docket. The trial on the severed cause of action was held December 9-11, 1974. Findings of Fact and Conclusions of Law were filed by the district court on January 22, 1976, and judgment was rendered February 23,1976, for the plaintiffs against the defendants for $518,053.71, with interest from the date of judgment, attorney’s fees to be determined following any appeal from the judgment, and all costs of court. On March 17, 1976, the district court granted the defendants’ motion for a stay of execution of the judgment pending appeal to the Temporary Emergency Court of Appeals (TECA). Defendants filed a notice of appeal with this court on March 23, 1976. Finding the judgment entered February 23, 1976, by the district court on plaintiffsappellees’ severed cause of action to be nonappealable without proper certification by the district court in accordance with Federal Rule of Civil Procedure (FRCP) 54(b), this court entered an order on June 24, 1976, dismissing the defendants-appellants’ appeal. Acting upon plaintiffs’ motion, the district court entered an order on August 10, 1976, dismissing the antitrust claims contained in the second and third causes of action (Sections IV and V of the Plaintiffs’ Complaint) without prejudice to refiling. Based on that order’s making the February 23, 1976 judgment final pursuant to the requirements of 28 U.S.C. § 1291, defendants filed a notice of appeal in this court on September 7, 1976. Since the plaintiffs’ motion requested dismissal of the contract claims, the antitrust claims, and the claims against Atlantic Richfield Company and since the third cause of action contained in Section V of the Plaintiffs’ Fifth Amended Complaint expressly deals with supply contract violations, the contract claims and those against Atlantic Richfield Company were dismissed. There being no further claims or causes of action in the district court, this court has jurisdiction over this appeal. There are two basic periods of time during which the plaintiffs paid the defendants prices which allegedly constituted overcharges under the Stabilization Act and the Allocation Act. These two periods are: (1) the entire freeze period from June 13, 1973, through August 19, 1973; and (2) that portion of the pricing formula period from November 1, 1973, through February 28, 1974. The defendant Longview Refining Company allegedly overcharged the plaintiffs during the first freeze period, and Longview Refining Company and Crystal Oil Company allegedly overcharged the plaintiffs during the pricing formula period, November 1, 1973, through February 28, 1974. In essence, plaintiffs’ cause of action was based upon assertions: (1) that the defendant Longview Refining Company’s charges to plaintiffs for gasoline and diesel fuels during the freeze period, from June 13 to August 19,1973, were higher than the maximum allowable price under Executive Order No. 11723, June 13, 1973, 38 F.R. 15763 (June 15, 1973), as extended through August 19, 1973, at 38 F.R. 21933 (August 14, 1973), resulting in an overcharge to plaintiffs; and (2) that the defendants subsequently failed to comply with the Phase IV pricing formula established by the Cost of Living Council (CLC) at 6 CFR §§ 150.355-356 and continued by the Federal Energy Office (FEO), sometimes referred to in this opinion as Federal Energy Administration (FEA), in 10 CFR §§ 212.82-83, resulting in additional overcharges to the plaintiffs. Asserting that the overcharges were willful and intentional on the part of the defendants, the plaintiffs sought treble damages under Section 210 of the Stabilization Act. The district court found that defendant Longview intentionally and willfully overcharged during the freeze period the amount of $73,027.59. Apparently, the district court accepted the calculations of plaintiffs’ CPA witness, Mr. Sanders, that the total overcharge was $.0125 x 5,842,207, i. e., the overcharge per gallon multiplied by the total gallonage of regular gasoline, premium gasoline, and diesel fuel purchased by plaintiffs June 13 through August 19, 1973. According to Mr. Sanders, the $73,-027.59 figure represents the total overcharges for all of the plaintiffs except one who did not provide his purchases for that period. In addition, the district court found that the plaintiffs had proved the defendants willfully violated the Phase IV pricing formula, 6 CFR § 150.356, and the Allocation Act’s pricing formula, 10 CFR § 212.-83(c)(2). The court accepted Mr. Sanders’ calculation in Plaintiffs’ Exhibit 6(b) that the overcharge through February, 1974, amounted to $99,656.98. Concluding that the overcharge must be presumed to be deliberate and not the result of bona fide error, rejecting the alternative of awarding damages not less than $100 nor more than $1,000, and exercising its power to treble the amount of the overcharge, the district court ordered that the plaintiffs recover $518,053.71 [($73,027.59 + $99,656.98) X 3] with interest. [Conclusions of Law (C.L.) 15, 16]. The method for determining the existence and amount of any overcharge during the freeze and formula periods involved is different. During the freeze period, the price of covered petroleum products was required to be maintained at the level at which the seller had made at least ten per cent of the total sales to the same class of purchaser during the freeze base period, June 1 to June 8,1973. Under the phase IV pricing formula which became effective at the end of the freeze period and continued under FEO regulations, the maximum allowable price was determined by reference to a complicated, changing formula which allocated refiners’ increased costs to their covered products. Clearly, plaintiffs have the burden in this case to provide the specific data needed to prove the existence of an overcharge. Determining lawful prices during both the freeze period and the pricing formula period requires an interpretation of certain essential concepts and terms used in the regulations. The pricing formula, 10 CFR § 212.83, is extremely complex and its application calls for expertise. Thus, precise findings of fact by the district court are of paramount importance in this case. In Kelley v. Everglades Drainage Dist., 319 U.S. 415, at 419, 63 S.Ct. 1141, at 1143, 87 L.Ed. 1485, at 1487 (1943), the Supreme Court stated that “[t]he nature and degree of exactness of the findings required depends on the circumstances of the particular case.” After noting facts which it would have been appropriate for the district court to consider, the Supreme Court held: It may be that adequate evidence as to these matters is in the present record. On that we do not pass, for it is not the function of this court to search the record and analyze the evidence in order to supply findings which the trial court failed to make. Nor do we intimate that findings must be made on all of the enumerated matters or need be made on no others; . . . We hold only that there must be findings, stated either in the court’s opinion or separately, which are sufficient to indicate the factual basis for the ultimate conclusion, (emphasis added) 319 U.S. at 421-422, 63 S.Ct. at 1145, 87 L.Ed. at 1489. In the case before this court, the district court’s findings as to the facts relevant to the proof of any overcharges alleged in the plaintiffs’ complaint are not sufficiently specific to substantiate concluding there was an overcharge by the defendants in any sum certain as to any individual plaintiff. Willful Overcharge In considering the overcharges the district court found that plaintiffs paid during the freeze and formula periods, the crucial question which must be examined initially is whether the alleged overcharge was willful (in either or both periods) within the meaning of section 208(a) of the Stabilization Act. Section 210(b)(2) precludes bringing an action for an overcharge which “is not willful within the meaning of section 208(a)” unless “a bona fide claim for refund” has been presented. It is undisputed that the plaintiffs did not present defendants with a claim before instituting this action; plaintiffs assert that the overcharge was willful. Requiring presentation of a bona fide claim for refund of an overcharge is part of the congressional provision of an opportunity and an incentive for non-judicial settlement. If the person refuses to refund the overcharge within 90 days of the presentation of a claim, the injured party may bring suit pursuant to § 210 of the Stabilization Act. Under § 210(b) of that act, a defendant can be subjected to serious penalties in addition to repayment of the overcharge unless 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 . ” Stabilization Act § 210(b)(2), 12 U.S.C. § 1904 note (1976 Supp.). The district court found as to each time period involved that it was unnecessary for plaintiffs to present a claim for refund, since defendants’ overcharge was willful. The finding of willfulness was based upon an erroneous conclusion that as a matter of law the “civil meaning of willfulness” controls this case. (C.L. 14). In the absence of prior presentation of a claim for refund, the overcharge must be found to be willful in the criminal sense, even though the action is itself civil. As this court stated in Manning v. University of Notre Dame du Lac, 484 F.2d 501, 503 (Em.App.1974): The Act clearly reveals in this context that the term “willful overcharge" must be construed in the criminal sense. Pure statutory construction clearly supports the Manning holding. Also, the district court concluded that section 210 of the Stabilization Act “is essentially civil in nature.” (C.L. 14) This conclusion ignores the express language of section 210 requiring the overcharge to be “willful within the meaning of section 208(a).” From the face of section 208, there can be no doubt that section 208(a) is essentially criminal in nature. Since the section 208(a) criminal meaning of willful governs in section 210 of the Stabilization Act, two district court decisions in criminal actions brought under the Act are pertinent. Facing the issue of whether the predecessor of section 208(a) was civil or penal in nature, the district court in United States v. Futura, 339 F.Supp. 162, 165 (N.D.Fla.1972), held the section was penal and that Violation of the [Stabilization] Act is predicated upon a showing or finding of scienter, i. e. willful disobedience of the Act or regulations by the offender. The Futura court looked to the legislative history of section 208 and concluded that it revealed “that Congress did in fact intend that a crime be created and did intend to provide for criminal punishment for violation thereof.” United States v. Futura, at 165-166. Agreeing with the Futura court that “§ 208(a) criminal penalties were written with an eye to scienter,” the district court in United States v. Gulf Oil Corp., 408 F.Supp. 450, 463 (W.D.Pa.1975), decided that The Congress in enacting § 208(a) of the Economic Stabilization Act, intended that those refiners who, with bad motive or criminal intent, refused to comply with the regulations passed pursuant to the Act, would thereby be subjected to criminal fines. Further examination of legislative history substantiates this court’s conclusion that the criminal rather than the civil meaning of willful was intended to apply in this case. While discussing the provisions of section 210 and the requirement of presentation of a bona fide claim for refund prior to commencing an action for overcharge, the Conference Committee stated in the Joint Explanatory Statement: “The House Bill also provided that the term ‘willful’ shall have the same meaning as in the case of criminal willfulness. , . . The Conference accepted the House provisions.” Conference Report No. 92-753, 2 U.S.Code Cong. & Adm.News, 92d Congress, 1st Sess., pp. 2307, 2310 (1971). Cases interpreting the word “willfully” for purposes of the tax law require proof under the criminal meaning. Deciding that “willfully” had the same meaning in the context of a misdemeanor tax statute that it had in the context of a felony tax statute, the Supreme Court stated in United States v. Bishop, 412 U.S. 346, 360-361, 93 S.Ct. 2008, 2017, 36 L.Ed.2d 941 (1973): The Court, in fact, has recognized that the word “willfully” in these statutes generally connotes a voluntary, intentional violation of a known legal duty. It has formulated the requirement of willfulness as “bad faith or evil intent,” [United States v.] Murdock, 290 U.S. [389], at 398, 54 S.Ct. [223], at 226 [78 L.Ed. 381,] or “evil motive and want of justification in view of all the financial circumstances of the taxpayer,” Spies [v. United States], 317 U.S. [492], at 498, 63 S.Ct. [364], at 368 [87 L.Ed. 418], or knowledge that the taxpayer “should have reported more income than he did.” Sansone [v. United States], 380 U.S. [343], at 353, 85 S.Ct. [1004], at 1011 [13 L.Ed.2d 882], . In our complex tax system, uncertainty often arises even among taxpayers who earnestly wish to follow the law. . . . The Court’s consistent interpretation of the word “willfully” to require an element of mens rea implements the pervasive intent of Congress to construct penalties that separate the purposeful tax violator from the well-meaning, but easily confused, mass of taxpayers. (emphasis added). Upholding a jury instruction concerning willful filing of false income tax returns, the Supreme Court recently held that willfulness means “a voluntary, intentional vio lation of a known legal duty.” (emphasis added) United States v. Pomponio, 429 U.S. 10, 97 S.Ct. 22, 24, 50 L.Ed.2d 12, 16 (1976). Pomponio approved cases instructing the jury to the effect that intentional violation of a known legal duty must be embodied in the definition of willfulness and that negligence neither defines nor constitutes willfulness. See United States v. Pohlman, 522 F.2d 974, 976 (8 Cir. 1975) (en banc), cert. denied, 423 U.S. 1049, 96 S.Ct. 776, 46 L.Ed.2d 638 (1976); United States v. McCorkle, 511 F.2d 482, 484 (7 Cir. 1975) (en banc), cert. denied, 423 U.S. 826, 96 S.Ct. 43, 46 L.Ed.2d 43 (1975); United States v. Greenlee, 517 F.2d 899, 904 (3 Cir. 1975), cert. denied, 423 U.S. 985, 96 S.Ct. 391, 46 L.Ed.2d 301 (1975); United States v. Hawk, 497 F.2d 365, 366-367 (9 Cir. 1974), cert. denied, 419 U.S. 838, 95 S.Ct. 67, 42 L.Ed.2d 65 (1974). In the instant case, the district court's conclusion regarding a willful overcharge that . in the framework of this case, an overcharge is wilful where it is deliberate, or where it is the natural and probable consequence of actions of the defendants which are voluntary and intentional or which are in reckless disregard of the applicable regulations, as opposed to being the result of a bona fide error notwithstanding the maintenance of procedures reasonably adapted to the avoidance of such error (C.L. 14) is clearly erroneous. This conclusion fails to recognize that to establish a willful overcharge there must be an intentional violation of a known legal duty, that is to say, to be willful an overcharge must have been made with the specific intention of charging a price which the defendant knew was in excess of the ceiling price allowable under the applicable pricing law and regulations. Additionally, the district court erroneously concluded that negligence can be sufficient to establish a violation. Thus, the district court decided this case on a less stringent standard of proof (civil instead of criminal willful conduct) than required by law. The findings, conclusions, and judgment were no doubt influenced by application of the wrong standard. This and other reasons discussed herein require remand to the district court for a determination of both the existence and the willfulness of any overcharge by defendants during the periods in controversy pursuant to the criminal standard of willfulness. In view of the obvious complexity of the regulations with respect to which the agency found it necessary to provide extensive and necessary clarification by means of several amendments and rulings and in view of the gravity of the sanctions and penalties provided by the statutes, there must be clear and convincing proof that an overcharge was willful when a claim for the amount of the overcharge was not presented to the defendant prior to bringing an action for an overcharge. Freeze Period Under the price freeze initiated by Executive Order No. 11723, “Effective 9:00 p. m., e.s.t., June 13, 1973,” 38 F.R. 15763 (June 15, 1973), the prices allowable during the freeze period were the highest prices at which at least ten per cent of a seller’s products were sold to the same class of purchaser during the freeze base period from June 1 to June 8, 1973. The determination of defendant’s allowable freeze price for sales to the plaintiffs is complicated by whether American Petrofina should be included in the plaintiffs’ class of purchasers, what prices are attributable to American Petrofina’s purchases, and when the purchase transactions occurred. Longview Refining Company historically maintained different price levels for its customers, depending primarily on the customers’ purchasing characteristics; however, on May 25, 1973, a price increase was adopted which resulted in all customers paying the same price. This price continued for the plaintiffs until June 7, 1973, when Long-view raised its prices by $.0125. American Petrofina (Petrofina) was billed the lower prices through June 16, 1973, when Long-view issued Petrofina a debit memorandum, the effect of which was to increase prices Petrofina paid to defendants for gasoline and diesel fuel as of June 4, 1973. Testimony by defendants’ witnesses indicates that the failure to invoice Petrofina the higher price was due to clerical error and that all of defendants’ customers were to be charged the higher prices at least as of June 7, 1973. Mr. Peterson, who was president of Longview Refining Company at this time, testified that Petrofina’s price increase was to have been effective June 4, 1973, and that he had so agreed with Petrofina. The district court found that defendants had only one class of purchaser during the freeze base period and that, even assuming clerical error had occurred with respect to Petrofina’s price increase, the effective date of that increase would be June 6, 1973, after Mr. Peterson issued instructions to raise the prices for gasoline and diesel fuel to all of Longview’s customers. [Findings of Fact (F.F.) 7, 8,12]. If, as the trial court found, the price increase to Petrofina were considered effective June 6, 1973, less than ten per cent of defendants’ sales during the freeze base period would be at the higher prices, (F.F. II). Thus, the district court held that to the extent defendants’ charges were in excess of their lower freeze base period prices of 16$, 18$, and 15$ for regular, premium, and diesel fuel, respectively, defendants had violated the Executive Order and plaintiffs were entitled to recover the overcharges they had paid. The district court found that the overcharge of $73,-027.59 was a willful evasion of the regulations (F.F. 13), but the court made this determination on the basis of an erroneous conclusion that the civil rather than the criminal standard of willfulness was applicable. No finding of the amount of plaintiffs’ individual purchases or individual overcharges in any sum certain was made as required by the Supreme Court’s decision in Kelley v. Everglades Drainage Dist., 319 U.S. 415, 63 S.Ct. 1141, 87 L.Ed. 1485 (1943), and this court’s decision in Evans v. Suntreat Growers and Shippers, Inc., 531 F.2d 568, 571 (Em.App.1976), that Most importantly, there was no evidence of probative value in the record of any bona fide claim for refund, in any sum certain to apprise the appellee of any overcharge made by it. (emphasis added). In fact, the district court did not include the purchases of one plaintiff, J. C. Bell, in the calculation of the freeze period overcharge. Formula Period Following the expiration of the comprehensive price freeze period, new regulations which provided for continued control of the sales prices of covered products purchased or refined by a refiner became- effective August 19, 1973. 38 F.R. 22536 (August 22, 1973). Proper evaluation of the existence of any overcharge during the period in controversy, November 1, 1973 through February 28, 1974, requires cognizance of numerous changes in the regulations. The ceiling price rule applicable to the retail sales of No. 2-D diesel fuel, No. 2 heating oil, and gasoline by a refiner-retailer, reseller-retailer, or retailer was promulgated as 6 CFR § 150.355. As originally issued, section 150.356 was limited to allocating a refiner’s increased cost of imports to the base prices for its covered products and the ceiling prices for retail sales of gasoline, No. 2-D diesel fuel, and No. 2 heating oil. Subsequently, increased costs of domestic crude petroleum were included in the regulatory allocation, 38 F.R. 25686 (September 14, 1973), for purposes of arriving at a base price for covered products pursuant to 6 CFR § 150.355(g). The pricing rule for refiners, 6 CFR § 150.355, provided that a refiner could not charge any class of purchaser a price in excess of the base period price of a covered product except to the extent permitted by paragraphs (c) through (k) of § 150.355. Base price was defined in § 150.355(g)(1) as “the weighted average price at which the item was lawfully priced in transactions with the class of purchaser concerned on May 15, 1973, . . . plus increased costs of imports and domestic crude petroleum incurred between the month of measurement and the month of May 1973 . . ” 38 F.R. 30267 (November 2, 1973). However, for the months of January and February, 1974, base price was defined by the CLC as the weighted average price at which the item was lawfully priced in transactions with the class of purchaser concerned on May 15, 1973, plus (A) increased product costs incurred between the month of measurement and the month of May, 1973 and measured pursuant to the provisions of § 150.356 [§ 212.83] and (B) the refiner incentive factor calculated and permitted pursuant to the provisions of § 150.357 [§ 212.84]. 6 CFR § 150.355(g)(1)(i), 39 F.R. 979 (January 4, 1974). The FEO’s definition of base price at 10 CFR § 212.82(f)(l)(i) originated at 39 F.R. 1924 (January 15, 1974); and the section number changed to correspond with the FEO regulations, but the definition remained the same. The provisions of 6 CFR § 150.356 and 10 CFR § 212.83 allowed a refiner to increase the May 15, 1973 weighted average price of a covered product by the increased product costs allocable to that product under the regulation formula. Basically, when setting the selling price of a covered product, a refiner could add to the May 15, 1973 base selling price of that product the increased crude oil purchase costs allocable to a particular product, plus the increased costs of any purchases of the product by the refiner during the previous month, plus or minus the cumulative over- or under-recovery of increased costs recoverable under 10 CFR § 212.82, minus any recoverable increased cost which the refiner is including in other covered product prices under 10 CFR § 212.-83(c)(1)(h). Section 212.83 contained a lengthy formula which performed the function of allocating a refiner’s increased costs. The combination of § 212.83 and the price rule of § 212.82 provided a method, as did their predecessors, by which a refiner could arrive at its maximum lawful price. Generally, the scheme of 10 CFR § 212.82 (6 CFR § 150.355) during the period in controversy was that a refiner could not charge any class of purchaser a price in excess of the base price, but the base price could include increased product costs incurred during the permitted time and measured pursuant to the provisions of 10 CFR § 212.83 (6 CFR § 150.356). Thus, the § 212.83 formula delimited product costs which could be included. Mere failure of a defendant to perform the mechanical calculations under the formula in arriving at the price charged for covered products does not in and of itself result in an overcharge, i. e., the sale of a covered product at a price which “exceeds the applicable ceiling” [§ 210(c)] price. The price actually charged (however arrived at) may be below the ceiling price, so a plaintiff would suffer no legal wrong entitling him to relief under § 210 of the Stabilization Act, which was adopted by § 5(a) of the Allocation Act. In determining the applicable ceiling price, the district court should have made a specific finding of fact as to the dollar amount of defendants’ weighted average price for all gasoline and diesel fuel sold on May 15, 1973, to the class of purchaser to which the plaintiffs belonged at that time. Plaintiffs and defendants disputed the inclusion of certain purchasers of gasoline and diesel fuel in the “jobber” class of purchaser to which the plaintiffs belonged. Claiming special purchase agreements, defendants did not include certain purchasers (e. g., Petrofina) in plaintiffs’ class when computing the May 15, 1973 price. In the circumstances of this case, the finding (F.F. 28) of the district court that [t]he proper base price as of May 15,1973, is that which averages all transactions as of May 15, 1973, and is the base price used in the plaintiffs’ calculations is defectively general and all-inclusive in merely accepting “plaintiffs’ calculations” of the base price. It omits specific findings of the dollar amount of the May 15, 1973 weighted average price for each product involved as well as the actual base price figure for sales to plaintiffs’ class of purchaser; and a more specific finding should have been made as to whether Petrofina and others claimed to be of a class of purchaser separate from plaintiffs’ were included in plaintiffs’ class. Defendants-appellants contend that the district court erred in calculating defendants’ allowable prices on an unconsolidated basis. Under the unconsolidated method a substantial overcharge was found to exist while utilization of the consolidated method “ostensibly eliminated the overcharge.” (F.F. 19). Essentially, defendants claim that in the process of determining Longview Refining Company’s allowable prices they have the right to consolidate Longview's increased product costs with the increased product costs of seven other refinery and marketing affiliates of Crystal Oil Company and allocate to Longview a portion of the combined companies’ increased product costs based on the proportion which Longview’s sales bear to the combined sales of all consolidated companies. Whether calculations may be made on a consolidated basis is inextricably bound with the question of the applicable definition of “firm” for purposes of the price regulations in 10 CFR. Subpart B, Definitions, of 10 CFR provides in section 212.31, under the definition of a firm, that: The FEO may, in regulations and forms issued in this part, treat as a firm: (1) a parent and the consolidated and unconsolidated entities (if any) which it directly or indirectly controls, (2) a parent and its consolidated entities, (3) an unconsolidated entity, or (4) any part of a firm. The price rules for refiners are at 10 CFR Subpart E, while marketers, i. e., resellers and retailers, are governed by 10 CFR Sub-part F. At the time material to this proceeding, Subpart E provided that “[ejxcept as provided in Subpart F, this subpart applies to each sale of a covered product which is purchased or refined by a refiner.” 10 CFR § 212.81. In the regulation governing refiners, Subpart E, 10 CFR § 212.83(b), the FEO specifically provided that a firm “means a parent and the consolidated and unconsolidated entities (if any) which it directly or indirectly controls.” On the other hand, the regulation governing resellers and retailers, 10 CFR § 212.91, stated that the provisions of 10 CFR Subpart F, Resellers and Retailers, apply: to each sale of a covered product (other than the first sale of crude petroleum) by resellers, reseller-retailers, and retailers, and to each sale of crude petroleum (other than the first sale) by a refiner. For purposes of this subpart, “reseller” includes any entity of a refiner which is engaged in the business of purchasing and reselling covered products, provided that the entity does not purchase more than 5 percent of such covered products from the refiner including any entities which it directly or indirectly controls and provided further that the entity has historically and consistently exercised the exclusive price authority with respect to sales by the entity, (emphasis added) 39 F.R. 1924 (January 15, 1974). The district court concluded that the definition of reseller in § 212.91 referred essentially to those performing middleman or jobber type functions. (C.L. 8). The court recognized that the regulation allows certain resellers which are subsidiaries of refiners to be consolidated with the refiner in a calculation of its allowable prices but determined that the definition of reseller does not apply to this case, because the retail distribution arms of Crystal Oil Company qualify as retailers, or as reseller-retailers, rather than strictly as resellers. (C.L. 8, 9). Rather than determining whether the marketing entities should be excluded from treatment under 10 CFR Subpart F, Resellers and Retailers, as required by § 212.91, which provides a specific exclusion for certain firms meeting the definition of a reseller as defined in that section, the court made its determination that the marketing entities of Crystal would not meet the general definition of a reseller of 10 CFR Part 212.31, a definition which would not include a firm which resells covered products to ultimate customers. That the general definition was used is evident from the following excerpt from Conclusion of Law No. 9: The record fails to reveal any basis for treating them as “resellers”, i. e., firms which purchase covered products and resell them without substantially changing their form, to purchasers other than ultimate customers. But the record, (e. g., Mr. Burns’ reference to them as “retailers” and “reseller-retailers”) and public disclosures, i. e., the annual reports, by Crystal Oil Company, show that the named subsidiaries are retailers. Accordingly, that portion of Sec. 212.91 further defining “reseller” has no application, (emphasis added). Thus, the court erroneously used the definition of reseller under Subpart B, 10 CFR § 212.31, rather than the definition of a reseller specifically set out in Subpart F, 10 CFR § 212.91, to determine the application of the exclusionary provisions of § 212.91. FEA decisions and orders interpreting the mandatory pricing regulations promulgated by the agency make it clear that the definition of reseller contained in 10 CFR § 212.91, which definition is solely for the purposes of Subpart F, Resellers and Retailers, is intended to include the marketing entities of a firm. Upholding an opinion and order requiring Puerto Rican marketing affiliates and parent refiners to be treated as a single entity under the refiner’s pricing rule, the FEA stated: As originally promulgated, the price rules also provided that a marketing affiliate of a refiner would be treated separately under the reseller pricing rule, which provides for a dollar-for-dollar pass through of increased product costs, provided that the affiliate purchased less than five per cent of the petroleum products which it marketed from its parent firm. . . . The application of the rules was not only frustrating the achievement of “. . . equitable distribution of . . . refined petroleum products at equitable prices among all regions and areas of the United States and sectors of the petroleum industry ...” (EPAA, Section 4(b)(1)(F)), but was also leading to the occurrence rather than the “. . . minimization of economic distortion ...” (EPAA, Section 4(b)(l)(I)). Esso Standard Oil S. A., Ltd., Exxon Gorp., Case No. FEA-0275 (filed 10-22-74, decided 11-14-74), 1974 CCH Energy Management Transfer Binder H 20,177, at p. 20,301. The FEA denied the exception application of the U.S. Virgin Islands marketing branch and quoted the Interpretation requiring consolidation with domestic operations of Exxon: Thus, a subsidiary of Exxon Corporation operating in the U.S. Virgin Islands which buys more than 5 percent of its covered products from a foreign seller which is controlled by that subsidiary’s U.S. Parent firm (consolidated and unconsolidated, directly or indirectly controlled), is a “refiner," and is required to price its product in accordance with the regulations governing refiners set forth in Subpart E of Part 212, Title 10, Code of Federal Regulations, (emphasis added) Esso Standard Oil S. A. Ltd., Case No. FEE-1025 (filed 7-30-74, decided 12-20-74), 1974 CCH Energy Management Transfer Binder H 20,748, at pp. 20,964-20,965. In accord with respect to Esso Eastern Guam Branch is Esso Eastern Inc., Case No. FEE-0915 (filed 6-14-74, decided 12-23-74), 1974 CCH Energy Management Transfer Binder H 20,752, at p. 20,976, in which the FEA stated in reference to the definition of “firm” in 10 CFR § 212.83(b) that “Only those entities of Exxon, or any other refiner, which meet the criteria set out in Section 212.91 are subject to the reseller pricing rules.” Esso Eastern had sought treatment as a reseller-retailer by arguing that it was an independent firm. As indicated in Esso Standard Oil S. A., Ltd., Exxon Corp., supra, policy considerations favor consolidation. In Getty Oil Company (Eastern Operations), Inc., Skelly Oil Company, Case No. FEE-1101 (filed 9-11-74, decided 2-11-75), 1975 CCH Energy Management Transfer Binder U 83,041 at p. 83,108, the FEA emphasized the equitable pricing objective of section 4(b)(1)(F) of the Allocation Act in its statement that “[b]y requiring a firm to combine all of the product cost increases which it has incurred for the purpose of determining its maximum permissible selling prices, the pricing rules applicable to refiners serve to effectuate that stated Congressional objective.” The purpose of consolidating the costs which a refiner experiences across the country was to avoid imposing “any pricing anomalies that occur in a particular geographic region or on a given date . . . directly and disproportionately . . . [on] a small segment of the firm’s customers. ...” Getty Oil Co., supra, at p. 83,108. The FEA compared the provisions of § 212.83, which requires companies controlled by a common parent to combine their product and non-product cost increases as a single firm for the purposes of Subpart E-Refiners, in determining their maximum permissible selling prices, to the provisions of 10 CFR § 211.67, commonly referred to as the Entitlements Program. Getty Oil Co., supra, at p. 83,108-109. Both provisions were designed to spread cost disparities among all purchasers in order to achieve equitable prices in all regions of the country. Since Getty Eastern and Skelly were controlled by a common parent, the FEA concluded they were a single firm under Subpart E, so they had to determine prices on a consolidated basis. The FEA did grant their request for exception from Subpart E consolidation. Thus, the companies which (1) come within the meaning of firm in Subpart E and (2) are not excepted by Subpart F § 212.91 or granted exception relief by the FEA are subject to the pricing provisions of 10 CFR Part 212, Subpart E-Refiners, and should, pursuant to those regulations, combine their increased product costs with those of other affiliated entities in the same firm in determining their allowable prices. Conclusions of Law Nos. 9,10, and 11 are erroneous in that the four companies, Berry Refining Company, Adobe Refining Company, Crystal-Princeton Refining Company, and Hi-Octane Terminal Company, which are either refiners or treated as refiners, were not consolidated to the extent permissible in calculating defendants’ ceiling prices under the regulations. On remand, facts regarding acquisition and operation of the various companies must be taken into account in calculating defendants’ ceiling prices on a consolidated basis. Should it be determined that any or all of the non-refiner companies are subject to the exclusionary provisions contained within the definition of a reseller in Subpart F, section 212.-91, defendants’ consolidation of those companies for purposes of calculating the allowable price for the products sold by Long-view Refining Company would be proper under Subpart E, section 212.83. See Kerr-McGee Corporation, Case No. FEE-0930 (filed 6-24-74, decided 9-12-74), 1974 CCH Energy Management Transfer Binder f 20,-658. The defendants-appellants contend that the district court erred by completely accepting the plaintiffs’ calculations (C.L. 11) despite the fact that plaintiffs plainly disregarded specific definitions within the regulation. For example, under the price rule in 10 CFR § 212.83(c)(2), the superscript “t” means the month of measurement, which is defined as the month preceding the current month. In contravention of this express definition, plaintiffs' calculations were based on using the current month as the month of measurement. At trial, the plaintiffs’ witness maintained that the procedure of applying the same month’s sales to that month’s purchases instead of the previous month’s would not make a difference. As the defendants pointed out, if the formula were properly employed in this case, March revenues would be used in the plaintiffs’ charts and August revenues would not be included (T.R. p. 165-166). Thus, the plaintiffs’ charts are inaccurate. Finding of Fact No. 17 completely disregards the regulations in effect as of January and February, 1974, defining base price as “the weighted average price at which the item was lawfully priced in transactions with the class of purchaser concerned on May 15, 1973, plus (a) increased product costs incurred between the month of measurement and month of May, 1973 and measured pursuant to the provisions of § 212.83 and (b) the refiner incentive factor calculated and permitted pursuant to the provisions of § 212.84.” (emphasis added) 10 CFR § 212.82(f)(l)(i), 39 F.R. 1924 (January 15, 1974). The refiner incentive factor was in effect during January and February and applied to No. 2-D diesel fuel, inter alia. When properly applied, this factor affects not only the price of the No. 2-D diesel duel sold to plaintiffs, but also the price of gasoline. 10 CFR § 212.82(f)(2)(i) and (ii). The refiner incentive factor should have been considered at least to the extent of making a finding of fact as to the amount of plaintiffs’ purchases, if any, of No. 2-D diesel fuel. Also, the regulations then effective provided in Subpart E that “transactions between affiliated entities may be used to calculate increased product costs.” 10 CFR § 212.83(e), 39 F.R. 1924 (January 15,1974). Contrary to the provisions in the regulations for including the increased costs of refined petroleum products purchased by a refiner for resale, the plaintiffs’ calculations did not include any costs of finished gasoline or diesel products defendants purchased from an affiliated entity. The record does not reflect that the affiliated company transactions were made at improper prices. As to the court’s finding that these overcharges must be presumed to have been deliberate, the plaintiffs’ CPA testified that he had previously asked the defendants’ accountant, Mr. Leeseman (who was no longer employed by the defendants at the time of trial), whether or not he had any calculations on the basis of the pricing formula under Phase IV regulations. According to plaintiffs’ accountant, Leeseman responded that he did not have any calculations although he had read the formula because he found it beyond his understanding and consequently did not attempt to apply it. (T.R. p. 16). However, mere failure to employ the formula in the process of arriving at prices would not constitute a legal wrong under § 210 of the Stabilization Act for which plaintiffs can recover. It is intentionally charging a price known to be in excess of the applicable ceiling price allowable under the pricing regulations containing the formula which would constitute a willful overcharge. It is difficult, even for experts, to understand these complex regulations, as is evidenced by the frequent correction, modification, change, and clarifying rulings and by the fact that cross-examination of plaintiffs’ own CPA witness drew admissions that he had twice made substantial errors in calculating the overcharges claimed. Fairness requires clear and convincing proof of the willfulness of the overcharge. The district court erroneously inferred “from the cross-examination” of plaintiffs’ CPA witness by defendants’ counsel that at the material times in controversy defendants had the same understanding and knowledge of these complex regulations that their counsel had after a year’s time (from commencement of this action) in which to prepare for trial. Considering the errors, inadequacies, facts, and circumstances reflected by the record, the court is of the firm conviction that a mistake has been made in the findings, conclusions, and judgment rendered and that this case should be remanded for a new trial. See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969); United States v. Gypsum Co., 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746 (1948). Joinder of Administrative Agency The record reflects that the Cost of Living Council, the Internal Revenue Service, the Federal Energy Office and its successor agency, the Federal Energy Administration, have considered, investigated, or determined various aspects of plaintiffs’ case; in particular, the Cost of Living Council has received justifications for the freeze period prices defendants charged their local jobbers (see T.R. p. 455 and Ex. p. 61); plaintiff Bill Shore was required to make refunds due to freeze period violations following an I.R.S. investigation of his freeze period charges and defendants’ freeze period prices (T.R. pp. 302, 315-316); the defendants’ Phase IV pricing formula calculations were examined by the I.R.S. (T.R. pp. 481-482); and the FEA issued a decision dealing with defendants’ credit terms, Crystal Oil Company, FEA-0142 (filed 7-9-74, decided 10-8-74), 1974 CCH Energy Management Transfer Binder H 20,161. On remand, the district court should order the FEA, which has expertise and responsibility with respect to interpreting, applying, and enforcing the statutes and the pricing regulations in controversy, including corrective action for any unlawful price increase passed down the stream of commerce by a plaintiff, to be joined as a party to this litigation. See this court’s decisions in Associated General Contractors v. Laborers Int. U. Local 612, 476 F.2d 1388, 1405-1407 (Em.App.1973); Air Products and Chemicals, Inc. v. United Gas Pipe Line Co., 503 F.2d 1060, 1062 (Em.App.1974). If the parties fail to obtain the testimony of a witness from Petrofina to determine the truth regarding the existence of an agreement on June 4, 1973, between Long-view and Petrofina to raise prices covering transactions occurring during the base period June 1 to June 8, 1973 (T.R. pp. 451,453), also the testimony of Mr. Leeseman, the defendants’ former accountant, regarding defendants’ understanding and application of the pricing formula, the court may, in the interest of truth and justice, call and examine such witnesses. Chalmette Petroleum Corp. v. Chalmette Distributing Co., 143 F.2d 826 (5 Cir. 1944). Accordingly, the judgment of the district court is reversed and the case is remanded for further proceedings consistent with this opinion. APPENDIX A 48,826 Phase IV Roles 104 4 18-74 Subpart E — Refiners § 212.81 Applicability. Except as provided in Subpart F, this subpart, applies to each sale of a covered product which is purchased or refined by a refiner. § 212.82 Price rule. (a) Rule. A refiner may not charge to any class of purchaser a price in excess of the base price of that covered product except to the extent permitted pursuant to the provisions of paragraphs (c) through (k) of this section. (b) Price increases. (1) A price in excess of the base price of an item in a product line may be charged only to recover on a dollar-for-dollar basis those net increases in allowable costs that have been incurred with respect to the product line since the period for determining base cost and which the refiner continues to incur. (2) For the purpose of determining whether net allowable costs have been incurred which permit the charging of a price in excess of the base price, base costs shall be compared with current costs. Current costs which exceed base costs may be used to justify a price in excess or the base price. "Allowable costs" under this section mean non-product costs attributable to refining operations under the customary accounting procedures generally accepted and historically and consistently applied by the firm concerned and exclude any costs attributable to marketing operations except as Zollows: 104 4-18-74 I~ø~cy Ordors a~ ~o~ices 48,827 (I) Non-product costs attributable to the marketing of special products may be included as allowable costs to the extent that those costs allow an increase in the prices of special products above the prices otherwise permitted to be charged for such products pursuant to the provisions of this section by an amount not In excess of one cent per gallon with respect to retail sales and one half cent per gallon with respect to all other sales; and (Ii) Non-product costs per gallon of gasoline attributable to the retail marketing of gasoline may also be included as allowable costs to the extent that those costs per gallon of gasoline allow an Increase in the price of gasoline above the prices otherwise permitted to be charged for gasoline pursuant to the provisions of this section, including paragraph (b) (2) (i) of this section by an amount not In excess of two cents per gallon with respect to retail sales; and (ill) Beginning with April 1974, non-product costs attributable to the non-retail marketing of gasoline may be Included as allowable costs to the extent that those costs allow an Increase In the prices of gasoline above the prices other.wise permitted to be charged for such products pursuant to the provisions of this section including paragraph (b) (2) (1) of this section by an amount not in excess of one-quarter cent per gallon with respect to all sales other than retail sa1es~ and (iv) Beginning with April 1974, non. product costs attributable to the marketing of middle distillates may be included as allowable costs to the extent that those costs allow an lncrea~se In the prices of midde distillates above the prices otherwise permitted to be cha~ged for such products pursuant to the provieioxi~ of this section Including paragraph (b) (2) (1) of this section by an amount not in excess of one cent per gallon with reopect to retail sales and not In excess of one-quarter cent per gallon with respect to all other sales; and (v) Beginning with April 1974, non-product costs attributable to the marketIng of residual fuel oil may be Included as allowable costs to the extent that those costs allow an increase In the prices or residual fuel oil above the prices otherwise permitted to be charged for such products pursuant to the provisions ~f this section by an amount not in excess of three-fourths cent per gallon with respect to retail sales and one-fourth cent per gallon with respect to all other sales; and (vi) Bcginntng with April i9M, non.. product costs attributable to the mari~etlug of propaxie may be included as allowable costs to the extent that those costs allow an increase in the prices of propane above the prices otherwise permitted to be charged for such products pursuant to the provisions of this section by an amount not in excess of one cent per gallon with respect to retail sales and one-half cent per gallon with respect to all other sales. (C) Application of price increases. (1) A firm may not increase prices above base prices pursuant to this section until it complies with the prenotification requirements of Subpart I of this part. (2) A firm which Is authorized to charge a prenotifled percentage price increase puTsuant to Subpart of this part with respect to a product line by virtue of cost justification determined in accordance with this section, shall apply that percentage price increase in the following manner: (i) A refiner may charge a price in excess of the base price of a special product which reflects that. part of the total allowable percentage price increasr with respect jo the product line allocable to sales of that special product provided that (a) the amount of the increase above the base price is calculated by use of the formula in paragraph (e) (3) (i) of thIs section: (b) the amount of Increased costs allocable to that special product is equally applied to each class of purchasei's; and (c) the Increase aboie the base ;,rices may not `~c implemented more than once in any calendar month and must be Implemented on the same date that increased product costs are added to May 15, 1973 selling prices to compute base prices pursuant to paragraph (f) of this section. (ii) A refiner may charge a price In excess of the base price of its covered products other than special products which reflects that part of the total allowable percentage price increase with respect to the product line allocable to sales of those products or sales of special products not otherwise allocated pursuant to paragraph (~) (2) (1) of this section provided that (a) the amount of Increase above the base price Is calculated by use of the formula In paragraph (c) (3) (11) of this section and (b) the amount of increased costs allocated to a covered product other than a special product Is equally applied to each class of purchaser. (3) GeneraZ /orrnuiae. (I) For special products (1-1 and 1-2): Stabilization Program GuIdeline$ ¶ 48,821 48,828 104 4-18-74 tee IV Rules <il) For covered products other than special products 0=3); ZV-S.'F Where; for (i) and (ii): d«*=The dollar amount that may be added to each base price of the special product or products of the type "4° In the period "e" (the consecutive twelve-month period). The formula for special products must bo computed 'separately for 4 = 1 (No. 2 heating oil and No. 2-D diesel fuel) and t = 2 (gasoline). Dtr — The total dollar amount a refiner may add in the period "e" (the consecutive twelve month period) to base prices of covered products of the type "*” in whatever amount It deems appropriate to each particular covered product other than a special product. The formula for covered products other than special products will only be computed for 4 = 3 (all covered products other than special products and crudo petroleum). Vt':~Estimated volume or quantity of sales of a specific covered product of the type "t" in the period "e" (the consecutive twelve-month period). S»' = Estimated total revenues from sales for the period "e" (the consecutive twelve-month period), of a specific covered product or products of the type "i" at May 16, 1973 price levels. F-.-The percentage of cost-justification entered for all covered products under column (f), item 24, Part VI of CLC Form 22. The time period for measurement is referenced by the superscript e: e — The consecutive twelve-month period for which the co6t-Justlflcatlon is proposed, commencing the first day following the accounting month most recently ended prior to the date ¿f signing the prenotlflcatlon CLC Form 22. The type of covered product is referenced by the subscript i; 4=1 represents No. 2 heating oil and No. 2-D diesel fuel. í —? represents gasoline. 4 = 3 represents all covered products other than special products and crude petroleum. (d) Price reductions. A price charged in excess of the base price may continue to be charged only as long as the net increases in allowable costs which support that price in excess of the base price continue to be incurred. Price reductions shall be made whenever and to the extent necessary to assure that, for any fiscal quarter, the weighted average of all price increases and price decreases in a product line does not exceed the percentage of cost justification for that line. (e) Productivity gains. (1> Increases in allowable costs shall be reduced to reflect productivity gains. For the purpose of determining whether a price may be charged above a base price pursuant to this section, productivity gains shall be calculated on the basis of the average percentage gain in the applicable industrial category, as set forth In the table in § 212.85. To the extent provided in the table in 5 212.85 productivity gains shall be taken into account in the calculation of all price increases during any fiscal year but only until the full productivity offset, derived from the table and calculated under paragraph (e) (2) of this section, has been used within that fiscal year. (2) For the purpose of determining the extent to which a price increase is justified, each refiner shall calculate the sum of all of its labor costs (of the type required to be included as costs in reporting and prenotification forms issued pursuant to Subpart I of this part) as a percentage of sales for the product line concerned, and shall multiply than percentage by the average annual rate of productivity gain for the applicable industrial category, as set forth in the table in § 212.85. The result is the productivity gain, stated as a percentage, by which the total cost increase must be reduced in order to be an allowable cost for the purposes of a price Increase under this section. (3) If the product line concerned extends to more than' one industrial category, the average percentage gain in productivity in each category must be weighted in proportion to the ratio which its estimated sales in each industrial category for the most recently completed fiscal quarter bears to the total sales of that product line for that quarter. (f) Base price — (1) General rule. (1) The base price for sales of an item by a refiner is the weighted average price-at which the item was lawfully priced in transactions with the class of purchaser Concerned on May 15,1973, plus increased product costs incurred between the month of measurement and the month of May 1973 and measured pursuant to the provisions of § 212.83. In computing the base price, a firm may not exclude any temporary special sale, deal or allowance in effect on May 15,1973. (ii) Notwithstanding the general rule in paragraph (f)(1) (i) of this section, with respect to an allocation sale made pursuant to § 211.186 of this chapter, the base price of a petrochemical feedstock (except benzene and toluene) is 115 percent of the price calculated pursuant to paragraph (f)(1) (i) provided that in the calculation of the iricreased product costs for petrochemical feed-stocks in § 212.83, the refiner uses the formula ror special products set forth in 5 212.83(c) (2X1). (2) Special products. Ü) Notwithstanding the general rule in paragraph (f)(1) of Uhls section. In computing the base price for special products, a refiner may not Increase its May 15,1973 selling price to each class of purchaser more than once in any calendar month to reflect the increased product costs allowable pursuant to the provisions of § 212.83, but may implement the increase on any day during that month. fl 48,821 Stabilization Program Guideline* 104 4-18-74 Agency Orders end Mices 48,829 (3) Benzene and toluene. Notwithstanding the provisions of paragraph (f) (1) of this section, the base price for sales of benzene and toluene by a refiner is the weighted average price at which such an item was lawfully priced in transactions with the class of purchaser concerned on May 15,1973, plus increased product costs incurred between the month of measurement and the month of May 1973, and measured pursuant to the provisions of § 212.83, plus a maximum of $.337 per gallon for benzene, and $.288 per gallon for toluene. (4) Imputed prices. If no transaction occurred with respect to a particular product on May 15, 1973, the most recent day preceding May 15,1973 when a transaction occurred shall be used for purposes of computing the base price. If a refiner first, offered an item for sale after May 15, 1973 and prior to the effective date of this paragraph, the first day when the item was offered for sale shall be used for purposes of computing the base price. (5) Special price rule for naphtha-base aviation fuel. For purposes of computing the base price of naphtha-base aviation fuel pursuant to § 212.82(f), naphtha-base aviation fuel and kerosene-base aviation fuel shall be treated as a single item. (g) Base cost — (1) Base costs. Base costs are the net allowable costs incurred with respect to the product line concerned and are calculated as follows: (i) Input costs. The base cost with respect to costs of labor, crude petroleum and other input costs is the rate at which those costs were being incurred on May 15, 1973. If no 'input costs were incurred on that day, the base cost is the rate at which those costs were being incurred on the next day preceding May 16, 1973 on which input costs were incurred. (il) All other costs The base cost with respect to ail costs other than input costs is the rate at which those costs were being incurred on May 15,1973 However, if the base cost with respect to any costs other than an input cost cannot reasonably be determined by the method prescribed in the preceding sentence, that base cost is the average cost incurred throughout the last fiscal quarter which ended before May 15,1973, in which costs were incurred with respect to the product line concerned as calculated in accordance with forms and instructions issued by the Federal Energy Office. (2) New items. The base cost with respect to input costs for each new item, as defined in accordance with Subpart H. is calculated as of the date on which the new item concerned was first sold or leased in arms-length trading between unrelated persons.