Revived Price-Fixing Suit Will Be Hard to Prove against Arco, Chevron and Others

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Revived Price-Fixing Suit Will Be Hard to Prove against Arco, Chevron and Others

04/07/2009
LOS ANGELES – An appeals court here ruled Friday that a class-action lawsuit accusing Arco, Chevron and other refiners of conspiring in the 1990s to keep prices high should proceed, even though they also said the case will be hard to prove.

According to a report by the LA Times, the U.S. 9th Circuit Court of Appeals ruled on a suit filed by William O. Gilley on behalf of other wholesale buyers of a cleaner-burning fuel that has been required in California since 1996. Attorneys for Gilley contend that the refiners had violated the Sherman Antitrust Act by limiting the supply of gasoline to raise prices and keep them high, according to the report.

In 2002, a federal judge dismissed the case, ruling that Gilley could not re-litigate claims from a 1996 case that had determined no conspiracy existed. But Friday, two members of a three-judge appeals panels ruled the case explored a new area not included in the original suit: whether the total effect of production-sharing agreements entered into individually by refiners could squeeze supply.

The panel also ruled that the lower court had erred in not allowing the plaintiffs to argue that there could have been an anti-competitive effect on pricing even without evidence of collusion, said the LA Times.

The appeals court sent the case back to the lower court, but the majority justices noted that the lower court judge might be correct in thinking "the prospects of Gilley actually proving the allegations . . . to be highly improbable."

Nevertheless, the plaintiffs’ attorney called the appeals ruling a "major breakthrough" while the defendants’ attorney said it was too early to comment on the future of the case.

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