California Station Owners Sue Big Oil Companies

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California Station Owners Sue Big Oil Companies

SAN FRANCISCO -- Nearly two dozen gas-station owners in California are suing oil companies Shell Oil, Chevron and Saudi Refining, claiming they conspired to fix gas prices for 23,000 franchise owners nationwide, The Associated Press reported.

The station owners allege that chairmen of the three oil companies met privately nearly every month starting in 1996 to collude on prices. The suit, filed in the U.S. District Court in San Francisco, contends the oil executives jacked up the wholesale price by 20 to 40 cents a gallon in nearly every state from 1999 to 2001, according to the AP.

The plaintiffs' lawyer, San Francisco-based Joseph M. Alioto, said in the report that gas prices soared for franchise owners at a time when inflation-adjusted crude oil prices had hit their lowest levels since the Great Depression. The suit says dealers were forced to either cut profits or pass on the cost to their customers.

The case seeks class-action status for the plaintiffs. It is similar to another lawsuit filed in 2004 by other California gas station owners, which was thrown out by the U.S. Supreme Court last year. The new group hopes the court will consider a slightly different argument. In a new twist, the plaintiffs now say the venture violates a "rule of reason" governing antitrust matters, the AP reported.

The lawsuit doesn't seek a specific financial award, however Alioto, who represented plaintiffs in both the old and new cases, reasons since an average gas station in the United States pumps about 100,000 gallons per month, the energy companies owe each of the 23,000 station owners at least $240,000.

A Chevron spokeswoman, Stephanie Price, said the company has not seen the lawsuit and she couldn't discuss specifics. She told the AP that Chevron, which acquired Texaco in 2001, was vindicated last year when Chief Justice John Roberts blasted the previous case for its "very artificial hook."

A spokesman for the state-owned oil company of Saudi Arabia, of which Saudi Refining is a subsidiary, said they had received no official notification of a lawsuit. Representatives did not return phone calls and e-mails to Shell, a subsidiary of the Royal Dutch/Shell Group, the AP report said.