Antitrust Lawsuit Over CARB Gas Hits Roadblock

(CN) - The 9th Circuit dismissed as too broad an antitrust class action accusing major oil producers of conspiring to limit the supply of cleaner-burning gasoline and fix prices for wholesale buyers.

Since 1996, the cleaner-burning CARB fuel is the only type of gas allowed in California.

The Pasadena-based appellate panel said the wholesalers' class action mirrors an antitrust class action filed by retail buyers and consumers in 1996.

Because the lawsuits were so similar, the district court stayed the wholesaler suit pending the outcome of the 1996 suit, Aguilar v. Atlantic Richfield Co.

When the retailers and consumers lost in both trial court and the state Supreme Court, oil producers asked the court to dismiss the latest class action as barred by the previous one.

In May 2002, a federal judge shot down the class action as a repeat of the earlier claims that oil companies conspired to limit the supply and raise prices.

Lead plaintiff William Gilley narrowed his accusations, asserting that 44 bilateral exchange agreements effectively restrained trade in violation of the Sherman Act.

But the federal judge again rejected the suit, saying Gilley failed to explain how individual exchange agreements could result in higher CARB gas prices.

A 9th Circuit panel resurrected the claim in April, but has since withdrawn and replaced that opinion.

Because Gilley's second amended complaint alleges a broader conspiracy, the court ruled, it's barred by Aguilar.

"(Gilley) has thrice been given the opportunity to amend his complaint to limit it to a claim based solely on the alleged anti-competitive effect of the individual exchange agreements absent a conspiracy, and has thrice proffered amended complaints that continue to assert, albeit ever more subtly, the existence of a conspiracy," the three-judge panel wrote.

The court affirmed dismissal of the second amended complaint.

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