DallasNews.com: ChevronTexaco, Shell face price fixing case

03:10 PM CDT on Tuesday, June 1, 2004

Bloomberg News

Posted 2 June 04

Royal Dutch/Shell Group and ChevronTexaco Corp. must face an antitrust lawsuit brought by Los Angeles-area gasoline dealers who claim the companies conspired to fix gas prices, an appeals court ruled.

The 9th U.S. Circuit Court of Appeals in San Francisco revived the suit brought on behalf of 23,000 Los Angeles-area service station owners. The station owners claim the oil companies created joint ventures Equilon Enterprises and Motiva Enterprises as a guise to overcharge dealers. Texaco Inc. sold its stake in the ventures to gain approval of its 2001 acquisition by Chevron Corp.

The U.S. General Accounting Office said today a study showed the joint ventures resulted in higher gasoline prices in cities where the companies supplied gasoline before ChevronTexaco and Shell combined refining and marketing efforts. The appeals court reversed a judge who had dismissed the case.

The oil companies "have failed to produce sufficient evidence demonstrating that their price fixing scheme was ancillary rather than naked," Judge Stephen Reinhardt wrote on behalf of a three-judge panel.

The 9th Circuit affirmed U.S. District Judge George H. King's decision to dismiss the suit against Saudi Refining Co, which partnered with the companies to form Motiva.

The case is Dagher v. Saudi Refining, et al No. 02-56509 in the 9th U.S. Circuit Court of Appeals in San Francisco

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