Charges Antitrust Violations in Seeking $350 Million : Long Beach Sues Six Big Oil Firms

The City of Long Beach filed a $350-million civil suit Monday against six major oil companies and two subsidiaries, accusing them of conspiring to depress the price of crude oil pumped from city tidelands in violation of state antitrust laws.

The companies, according to the suit filed in Los Angeles Superior Court, have been working together to fix prices for California and Alaska crude oils in order to monopolize and control the production, distribution, purchase and sale of crude on the West Coast.

Posting prices at unreasonably low and non-competitive levels below fair market value, they engage in “reciprocal exchanges, swaps and buy/sells . . . designed to ensure equal value among (themselves) and . . . eliminate purchase and sale price transactions from the price competition of the marketplace,” the suit alleges.

These activities have caused the city, as trustee for the state, to lose at least $350 million, according to the suit. The suit seeks treble that amount from the oil companies as well as an unspecified amount in exemplary and punitive damages.

Robert W. Parkin, Long Beach city attorney, said any money awarded by the court would go to the state. The Legislature appointed the city as trustee for the state to oversee substantial portions of the Wilmington oil field, located in the Long Beach tidelands area.

California Atty. Gen. John Van de Kamp and state Controller Kenneth Cory said Monday that the state, as beneficiary of the trust administered by Long Beach, has joined the city in the suit under the antitrust count.

Parkin said the lawsuit was necessary because the defendant oil companies have continued to depress crude prices “in spite of” a lawsuit still pending in federal court concerning crude oil pricing before 1978.

“In that case, we had real evidence of meetings and conspiratorial conduct,” Parkin said, “but in this (the newly filed) case we focused on the fact that the posted price does not meet the true value of the oil.”

Last December, Atlantic Richfield Co. agreed to pay $22.5 million to settle its part in the federal antitrust suit, which alleged that it conspired with other oil companies in price fixing.

It was not named as a defendant in the civil suit filed Monday.

Named as defendants are Chevron Corp., Texaco Inc., Exxon Corp., Exxon USA, Unocal (Union) Corp., Mobil Oil Corp., Shell Oil Co. and Shell California Production Inc.

Anthony P. Brown, an attorney for Chevron, said the suit is “just a rehash” of the earlier federal suit.

“They’ve restated and updated the same allegations and brought it in state court,” he said. “There’s even less substance, if that’s possible, in this new suit.”

A spokesman for Unocal said that the company had just received a copy of the suit and would not comment until its lawyers have had a chance to study it.

Spokesmen for Texaco, Shell, Exxon and Mobil could not be reached for comment.