Price-fixing claims disputed
Bloomberg News Service
Shell Oil Co., Saudi Refining Inc. and ChevronTexaco Corp. asked a federal judge to dismiss a lawsuit filed by Los Angeles-area gasoline dealers who claim the companies conspired to fix gas prices since 1998.
The three companies were accused in a June 1999 lawsuit of creating two joint ventures as a guise to overcharge dealers. U.S. District Judge George H. King in Los Angeles listened to arguments yesterday and said he would issue a written ruling by early next year.
A decision on a state antitrust suit against oil companies also is pending in Hawai'i. U.S. District Judge Samuel King is considering a request by oil companies including Chevron Corp. to throw out the state's $2 billion antitrust case against them that alleges oil companies conspired to keep prices artificially high.
The California suit seeks a court order that would dissolve Motiva Enterprises LLC, a joint venture formed by all three companies, and ChevronTexaco and Shell's Equilon Enterprises LLC. It also seeks to recover the companies' alleged overcharges, which would be tripled under federal antitrust law.
"There is no evidence whatsoever to this allegation" this is a "sham joint venture," said Stuart Senator, a lawyer with Munger, Tolles & Olson, who represents Shell.
Joseph Alioto, who represents the gas-station owners, said he has depositions from the oil companies' CEOs that prove Shell, Saudi Refining and Texaco Inc., before it was acquired by Chevron Corp., fixed the price of gasoline.
"They're fixing the price for the sole purpose of eliminating competition," Alioto argued.
The U.S. Federal Trade Commission conducted a yearlong anti-trust investigation prior to Motiva and Equilon's formation. The three companies agreed to divest a small number of gas stations, among other things, to obtain regulatory approval for the joint ventures.
Chevron acquired Texaco in October for $45.8 billion and the company now operates under the ChevronTexaco name. The San Francisco company is the second largest U.S. oil company.
Shell, based in Houston, is the U.S. arm of the Royal Dutch/Shell Group, the world's No. 2 publicly traded oil company. Saudi Refining is an affiliate of Saudi Arabia's Saudi Aramco, the largest oil firm.
