III. CONCLUSION

Based on the discussion above, limited rehearing of D.11-05-026 is granted on the issue regarding the correct methodology for determining the refund. The Decision is also modified to add findings of fact and conclusions of law regarding the public utility status of SPBPC; to correct an error on page 18 to reflect that the proxy rate refers to the rate the Pipeline charged STUSCO for shipping SJVH Blend; to add a finding of fact that all oil on the Pipeline is shipped heated. The Decision is also modified to provide a clear explanation and two conclusions of law regarding the equitable tolling of the statute of limitations. As to all other issues, the rehearing applications of SPBPC and STUSCO of D.11-05-026, as modified, should be denied, as no legal error has been demonstrated.

THEREFORE, IT IS ORDERED that:

1. Limited rehearing of D.11-05-026 is granted on the sole issue of how to calculate the appropriate refunds using the actual monthly variations in the transportation charges for deliveries of SJVH Blend to the Shell Martinez Refinery during the refund period.

2. The discussion beginning in the second paragraph on page 13 and ending on page 14 in section entitled "3. Extent of the Past Period" should be deleted and replaced by the following:

We further note the statute of limitations in section 736 was tolled by the filing and pendency of Chevron's
C.05-12-004. That complaint, like all the others filed and consolidated into this docket, sought refunds from
April 1, 2005, putting the Pipeline on notice of the claim. Chevron filed C.05-12-004 in December 2005, seven months into the limitations period. Tesoro intervened in that proceeding on December 12, 2005, and adopted Chevron's Complaint as its own. The statute of limitations remained tolled until August 20, 2008, when the court challenges to D.07-07-040 and D.07-12-021 filed by SPBPC's predecessors, Equilon and STUSCO, in the California Court of Appeal and the California Supreme Court were finally denied. (See Equilon Enterprises LLC Et al. v. Public Utilities Commission of the State of California, California Court of Appeal, Second Appellate District, Division Five, Case No. B203949 - Order denying petition for writ of review (June 26, 2008); Equilon Enterprises LLC Et al. v. Public Utilities Commission of the State of California, California Supreme Court, Case No. S164909 - Order denying petition for review (August 20, 2008) [2008 Cal. Lexis 10214].) Because of the tolling of the statute of limitations mandated in section 736, Chevron and Tesoro had another two years and five months from August 20, 2008 to file their subsequent complaints based on the same facts and claims set forth in their 2005 complaints. Thus, C.08-03-021 by Chevron and C.09-02-007 by Tesoro were timely filed on March 27, 2008 and February 13, 2009, respectively.

Equitable tolling "is a judge-made doctrine which operates independently of the literal wording of the Code of Civil Procedure to suspend or extend a statute of limitations as necessary to ensure fundamental practicality and fairness." (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 370, quoting Addison v. State of California (1978) 21 Cal.3d 313, 318-319) [holding statute of limitations tolled where plaintiff first filed in federal court and, after federal case was dismissed and statute had run, filed state claim in state court]; see also Bollinger v. National Fire Ins. Co. (1944) 25 Cal. 2d 399, 405 & 411 ["When claims are honestly made, care should be taken to prevent technical forfeitures . . . ."].) The doctrine works "to prevent the unjust technical forfeiture of causes of action, where the defendant would suffer no prejudice." (Lantzy, 31 Cal.4th at p. 370.)

We believe that equitable tolling should also apply to Valero's complaint, C.09-03-027, which was filed
March 23, 2009, as amended by Valero on June 16, 2009, asserting a claim under § 494. The tolling of the statute of limitation for Valero's complaint would "prevent the unjust technical forfeiture of causes of action, where the defendant would suffer no prejudice." (Lantzy, supra.) We should keep in mind that the record shows that long before 2005, the Pipeline, while engaging in public utility activities, consistently violated the Public Utilities Code, thereby unlawfully profiteering to the detriment of all three complainants. To cut short Valero's right to legitimate refunds even further by not tolling the three year statute of limitation would be unjust, because under the circumstances of this case, the rationale and purpose of that statute would not be served.

Moreover, when the assigned Administrative Law Judge (ALJ) consolidated the complaints filed by Chevron, Tesoro and Valero with the San Pablo Bay Pipeline Company rate case, all parties including Applicant treated April 1, 2005 as the earliest date for which refunds could be sought. Accordingly, all refund claims will be measured from that date forward.

3. On page 34, D.11-05-026 is modified to add Finding of Fact No. 19, with the following language: "April 1, 2005 is a reasonable start date for measuring the amount of refunds."

4. On page 35, D.11-05-026 is to add Conclusion of Law No. 10, which shall contain the following language: "D.07-07-040 and D.07-12-025 established that SPBPC, as a successor of Equilon, became a public utility before 2005."

5. On page 35, D.11-05-026 is modified to add Conclusion of Law No. 11, with the following language:

"The Commission determined in D.07-07-040, as affirmed by D.07-12-021, that Equilon (SPBPC's predecessor) and STUSCO had manifested an unequivocal intention to dedicate the 20" Pipeline to public use by engaging in the business of transporting oil for a fee, and that the Pipeline had been dedicated to public use in that its capacity has been provided to third parties since 1996."

6. On page 35, D.11-05-026 is modified to add Conclusion of Law No. 12, which shall state the following: "The statute of limitations in Public Utilities Code Section 736 was tolled by the filing and pendency of Chevron's C.05-12-004, and the Court resolution of the challenges to D.07-07-040."

7. On page 35, D.11-05-026 is modified to add Conclusion of Law No 13, with the following language:

"Complaints filed under § 494 must be brought within the three-year limitation period set forth in Public Utilities Code § 736."

8. On page 35 D.11-05-026 is modified to add Conclusion of Law No 14, with the following language:

"Under the doctrine of equitable tolling, the complaints of all three Independent Shippers were timely filed." 

9. On page 35, D.11-05-026 is modified to add Conclusion of Law No 15, with the following language:

SPBPC nevertheless waived its right to object to all three complaints on the ground that they violated the statute of limitations, by agreeing to April 1, 2005 as the start date for measuring each complainant's refund claims, as stated in their respective complaints.

10. D.11-05-026 is modified to add Finding of Fact No. 20, with the following language:

11. The first full sentence on page 18 in D.11-05-026 is modified to read as follows: "We look instead to the rate the Pipeline charged its affiliate STUSCO to ship SJVH Blend to the Shell Martinez refinery during the same period."

12. The partial stay granted in D.11-10-019 shall remain in effect pending the outcome of the limited rehearing.

13. Except for the granting of rehearing on the sole issue of how to calculate the appropriate refunds set forth in Ordering Paragraph No. 1, rehearing of D.11-05-026, as modified, is denied in all other respects.

This order is effective today.

Dated February 16, 2012, at San Francisco, California.

  Commissioners

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