US station owners charge Shell, Chevron, Saudis with price fixing
 
Washington (Platts)--23Aug2007
Nearly two dozen gasoline stations owners have filed suit against Shell,
Chevron and Saudi Refining, alleging that the companies conspired to fix
gasoline prices for 23,000 Shell- and Texaco-branded dealers nationwide
between 1998 and 2001.

     The case, filed Tuesday in US District Court in San Francisco, charged
the majors implemented a marketing scheme for their Equilon and Motiva
joint ventures that pushed gasoline prices up at the service stations that
bought their fuel, even as crude prices were falling. Equilon marketed gas to
the western US, while Motiva marketed fuel to the eastern US.

     "During the time that crude oil prices were dropping to their lowest
levels since the Great Depression, Shell, Texaco and Saudi, by and through
Equilon and Motiva, agreed to and did in fact fix and raise the price of
gasoline sold to the independent Shell and Texaco branded retail dealers," the
complaint alleges.

     The case is similar to one filed in 2004 by California gas station
owners. That case, Dagher vs. Saudi Refining, made it to the US Supreme Court,
where the justices unanimously ruled against the station owners.

     Attorney Joseph Alioto, who represented the station owners in Dagher
and in this new case, told Platts Thursday the two lawsuits are identical
factually, but the newer suit uses a new theory of law to make its case. 

     The Supreme Court rejected the Dagher because the case was argued as "a
per se violation," he said, which does not require plaintiffs to show the
impact that price fixing has on the market or evidence of anti-competitive
behavior.

    "The [Supreme] Court said it is not a 'per se case' but a 'rule of reason
case'," Alioto said. "So we went back, following instruction of the Supreme
Court, and refiled under the theory the court said we should go under -- rule
of reason."  Rule of reason cases require evidence of "injury to market and
anti-competitive purpose and affect," he said, adding that he was confident
plaintiffs could present adequate evidence to win the case.

     Like the previous case, the new case, Madani v. Shell, alleges that
Shell, Texaco and Saudi Refining, who were competitors prior to the joint
venture, set up a "Strategic Marketing Initiative," under which Equilon and
Motiva "set the same dealer tankwagon price for both the Shell and Texaco
brands in each of the thousands of distinct pricing areas" throughout the US.

		--Cathy Landry, cathy_landry@platts.com

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