Originally published February 15 2006
Supreme Court hears case against oil companies accused of price fixing
by Mike Adams, the Health Ranger, NaturalNews Editor
Chief Justice John Roberts registered his skepticism during the opening arguments of a case brought against ChevronTexaco Corp. and Shell Oil Co. for violating antitrust laws and fixed prices.
The Supreme Court debated Tuesday whether two oil companies could be sued for setting up now-defunct joint ventures that allegedly inflated gas prices in the late 1990s.
In spirited questioning, the justices - led by Chief Justice John Roberts - seemed skeptical of arguments by a lawyer for 23,000 gas distributors that ChevronTexaco Corp. and Shell Oil Co. violated antitrust laws and fixed prices.
In 1998, when ChevronTexaco was still Texaco, the company joined with Shell to form Equilon Enterprises and Motiva Enterprises to handle refining and marketing of their gasoline.
Equilon focused on the western United States, while Motiva handled the eastern United States and Saudi Arabia.
The two ventures charged the same wholesale price for Texaco and Shell gasoline, which were sold as separate products under the companies' brand names.
In 1999, several gas distributors filed a class-action lawsuit in California, alleging that Texaco and Shell had used Equilon to fix gas prices in violation of antitrust provisions of the Sherman Act.
Justice Antonin Scalia said he didn't believe the Federal Trade Commission would have approved the joint ventures - as it had done - if the two oil companies had dominated the market.
The court's decision could resonate across the business world, affecting how future joint ventures and mergers are structured, not just with oil companies.
Alioto told the justices the joint ventures were launched when crude oil prices were at their lowest since the Great Depression.
In court papers, the gas distributors said they paid $1 billion or more in excessive charges.
A trial court judge dismissed the lawsuit against the oil companies.
But the San Francisco-based 9th Circuit U.S. Court of Appeals reversed, ruling the case should go forward because there was evidence that the ventures had improperly restrained trade.
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