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Tesoro Petroleum Corporation v. State2/15/2002
e nation? Are there agreements in place between the companies not to compete thus altering competition and other natural market forces? Have the companies "volumetrically divided" the Alaska gasoline market amongst themselves? Are there illegal barriers to entry in the market? Or, are there economic factors that can be identified and explained that are driving Alaska's gasoline prices through the roof?
Because it gave appropriate deference to the State's definition of the investigation, the superior court did not abuse its discretion in holding that the CID, while broad, was not unreasonable or oppressive in light of the breadth of the investigation.
That the court modified the CID in substantial ways also speaks to the court's proper use of its discretion. The court modified Instruction No. 1, which originally covered all Tesoro personnel, to apply only to "personnel with decision making authority, significant control over operations, marketing, acquisition or disposition of materials, pricing and sale of gasoline in Alaska, or strategy, or any other personnel that might assist, through research and drafting of memoranda or reports." Additionally, the court struck two vague and confusing requests in accordance with the requirement that demands be adequately specific, and excluded Tesoro's operations in the Far East from the scope of the CID. We disagree with Tesoro's contentions that the court's amendments were superficial. The superior court's modifications show that it balanced the wide scope of the investigation with the burden of compliance to Tesoro.
Furthermore, Tesoro's citation of Williams v. City of Dallas is unpersuasive. In Williams, the court did not defer to the issuer of a subpoena duces tecum on the question of relevance, but in that case the issuer was a private civil rights litigant. As described above, questions of reasonableness and relevance of administrative subpoenas duces tecum must be analyzed showing appropriate deference to the administrative entity issuing the document demand.
That this case involves possible antitrust violations also militates toward holding that the superior court's findings regarding the CID are not clearly erroneous. In general, there is a "policy of allowing liberal discovery in antitrust cases." "Particularly where allegations of conspiracy or monopolization are involved," as in this case, "broad discovery may be needed to uncover evidence of invidious design, pattern or intent."
2. Temporal scope
Tesoro argues that the State's investigation, although nominally broad, actually covers only one to two years because the phenomenon the attorney general has decided to investigate has only recently occurred. As evidence of the supposedly limited scope of the inquiry, Tesoro relies on the State's explanation for its need for the investigation as a response to the "Alaska Paradox," that even though Alaska has the largest oil field in North America, Alaskan consumers and businesses pay the highest retail tax-excluded gasoline prices in the country. To explain the "Alaska Paradox," the State supplies two graphic comparisons of gasoline and gasoline tax prices. One graph represents figures from 1997 and one represents figures from 1998. Therefore, reasons Tesoro, the investigation is aimed solely at explaining gasoline prices from the past several years.
Tesoro argues, citing Kellam Energy, Inc. v. Duncan, that " courts have recognized that the temporal limits of a subpoena in the antitrust context can be ascertained by reference to the time period of the claims at issue." Based on the limited scope of the investigation, Tesoro suggests that the time period of discoverable document
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