(CN) — A federal judge on Monday dismissed an antitrust lawsuit against a myriad of oil companies, including Exxon and Chevron, over an alleged price-fixing scheme, supposedly conceived by representatives of the U.S. government, Russia and Saudi Arabia.
The complaint, filed in March by 24 named individuals living all over the country, accused the petroleum companies of agreeing “among themselves, and with Saudi Arabia and Russia, to cut the production of oil, to remove and store excess oil supply, to limit future exploration and production of oil, and to stop the price war that had erupted between Saudi Arabia and Russia, all for the purpose and with the intended effect to raise the price of oil and gasoline and other fuels in the United States and elsewhere.”
As to evidence of this international conspiracy, the plaintiffs pointed to the notorious Twitter feed of then-President Donald J. Trump.
Oil prices plummeted in March 2020, as much of the world shut down in reaction to the Covid-19 pandemic. The civil complaint, filed in a California federal court, omitted this obvious fact, and instead blamed the drop in oil prices to Russia pulling out of an agreement with the Organization of the Petroleum Exporting Countries, or OPEC.
The suit then cites a tweet by the former president on April 2, 2020: "Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!" Trump then added: "…..Could be as high as 15 Million Barrels. Good (GREAT) news for everyone!"
It was a curious tweet, since presidents typically want gas prices to be lower — in fact, months earlier, Trump himself had lauded how cheap gasoline had gotten. The suit also states that Trump later held a secret meeting with representatives of Exxon, Chevron, the American Petroleum Institute, Occidental Petroleum, and other energy companies, after which "the American oil companies agreed to cut production by 2 million barrels per day (or 3 million barrels per day) by the end of the year as a quid pro quo for the cessation of the price war, just as Russia and Saudi Arabia had demanded.”
The suit adds: "Because of these artificial and conspiratorial increases, and because fuel prices make up as much as 50% of the rate of inflation from March of 2020 to the present, the economy of the United States has been encumbered by a substantial increase in the price of other commodities and services dependent directly or indirectly upon the cost of fuel, including food, clothing, transportation, manufacturing, distribution and retail services."
Oil prices climbed steadily starting in the fall of 2020, peaking at more than $100 per barrel in the summer of 2022. Since then, prices have been falling, and are now less than 75% of what they were at their peak — though prices at the pump remain high in California.
U.S. District Judge Jeffrey White, a George W. Bush appointee, dismissed the suit on Monday for a number of reasons in a curt, 12-page ruling. For one thing, he wrote, the allegations in the lawsuit were beyond the scope of the courts, thanks to the "political question doctrine."
"The allegations include specific foreign policy decisions allegedly made by the Trump administration in furtherance of the alleged conspiracy," White wrote. "The court lacks jurisdiction over a complaint that 'requires and inquiry into' whether foreign nations entered an agreement with defendants at the behest of the President of the United States."
Perhaps more to the point, Judge White also wrote that the lawsuit lacked enough evidence to proceed.
"The bare assertion that defendants 'agreed to take any surplus oil off the market, cut their production, and
substantially reduce their investment in exploration and production' is insufficient alone to support the claim of an unlawful agreement," White wrote. "The complaint simply does not allege sufficient plausible facts detailing any such agreement."
White not only dismissed the complaint, he barred the plaintiffs from re-filing an amended version of the lawsuit.
The attorney for the plaintiffs did not respond to a phone call and email requesting a comment on the ruling. An attorney for the American Petroleum Institute also did not respond by press time Monday.
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