Oil Companies Win Again as Appeals Court Upholds Dismissal of Suit Alleging Price-Fixing Conspiracy

Plaintiffs argued that Trump, Russia, and Saudi Arabia had conspired with the firms to cut production. The appeals panel said it was a political matter.

A federal appeals court has affirmed a lower court’s dismissal of an antitrust lawsuit brought by gasoline consumers against major oil companies that accused them of conspiring with the Trump administration, Russia, and Saudi Arabia to cut oil production and inflate gasoline prices.

A three-judge panel of the Ninth U.S. Circuit Court of Appeals ruled unanimously on Sept. 16 that a lower court correctly dismissed the lawsuit in January 2023 because courts lack the power to second-guess White House foreign policy and have no authority over how Russia and Saudi Arabia manage their oil resources. The appeals court also upheld the lower court’s finding that the plaintiffs failed to adequately state an antitrust conspiracy claim.

The lawsuit, originally filed in the Northern District of California, centered on allegations that the defendants collaborated with then-President Donald Trump to broker an agreement with Russia and Saudi Arabia to end a 2020 oil price war, limit future oil exploration, and artificially increase gas prices at the pump.

The plaintiffs claimed that oil companies’ complaints about sinking prices led the Trump administration to persuade oil-producing countries to cut production, boosting industry profits. The lawsuit accused the oil companies of stifling competition, fixing prices, and violating U.S. antitrust laws, including the Sherman Act’s provisions on price-fixing and monopolistic practices.

However, the district court ruled—and the Ninth Circuit agreed—that the case involved questions of politics, not legality.

“We lack subject-matter jurisdiction to adjudicate plaintiffs’ allegations of a global oil conspiracy involving the United States, Russia, and Saudi Arabia. Both the political question and act of state doctrines present insurmountable bars to plaintiffs’ claims,” reads the Ninth Circuit’s Sept. 16 opinion.

The appeals court emphasized that matters of foreign diplomacy—especially those involving negotiations between the United States, Russia, and Saudi Arabia on oil production—are committed to the political branches of government, not the courts.

“At bottom, plaintiffs ask the judicial branch to second-guess the foreign policy decisions of the executive branch,” the appeals court opinion reads. “That would violate well-established limits on our judicial review.”

The plaintiffs’ remaining allegations, which focused on private conduct among oil companies, also failed to meet the standard for an antitrust conspiracy claim. The Ninth Circuit found that the plaintiffs failed to provide sufficient evidence of any illegal agreement among the defendants. The appeals court pointed to the global COVID-19 pandemic, which drastically reduced oil demand in 2020, as a more plausible explanation for the reduction in production and subsequent price increases.

Neither lawyers for the plaintiffs nor those representing the defendants responded to requests for comment on the ruling.

Reuters contributed to this report.

Original News Source Link – Epoch Times

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