Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

9th Circuit Resurrects Antitrust|Action Against Oil Companies

(CN) - The 9th Circuit voted 2-1 to revive an antitrust class action accusing major oil companies of striking 44 exchange agreements that had the effect of restraining trade and inflating gas prices in California.

The lawsuit stems from a class action alleging that big oil producers such as Chevron, Shell and Exxon, conspired to limit the supply and raise prices of cleaner-burning fuel, or CARB gas.

The lower court initially dismissed the claim as a repeat version of Aguilar v. Atlantic Richfield Co., in which retail buyers filed an antitrust class action against the same companies. Because the class actions shared attorneys and similar allegations, the district court stayed the action in the second lawsuit, filed by wholesale buyers, pending the outcome of Aguilar.

The superior court dismissed the first suit for lack of evidence, and the California Supreme Court affirmed. The oil companies then moved to dismiss the second class action based on the outcome of Aguilar.

In May 2002, the district court granted their motion but allowed the plaintiffs to amend their complaint. Several versions later, the plaintiffs settled on the theory that 44 bilateral agreements among oil producers had the effect of unreasonably restraining trade.

The district court dismissed this claim, too, saying the plaintiffs failed to show how any one agreement - which accounts for a small percentage of the market - is able to inflate the price of CARB gas.

But the federal appeals court in San Francisco disagreed and allowed the plaintiffs to sue over the aggregate effect of the agreements.

"We agree with the California Supreme Court that the Aguilar trial court only adjudicated a per se claim of horizontal price fixing," Judge Trott wrote. "Therefore, Plaintiffs' rule of reason claim alleging that the bilateral exchange agreements have anticompetitive effects is not precluded."

Judge Callahan dissented, saying the amended lawsuit "is too broad and amorphous and fails to limit (the plaintiffs') claims to those that are not precluded by Aguilar."

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Loading...