Long Beach, State Will File New Oil Suit

The state of California and the City of Long Beach said Friday that they will file a new price-fixing lawsuit against six major oil firms in state court in place of one that they had dismissed earlier in the week in federal court.

The new suit will focus on alleged conduct after Dec. 31, 1977, a period later than in a case called “Long Beach I.” That was the state and city’s longstanding suit that U.S. District Judge William P. Gray decided June 19 in favor of the oil companies.

“Long Beach II” was voluntarily dismissed Wednesday by the state and city, which filed it last March 4 in Los Angeles County Superior Court against Chevron, Texaco, Exxon, Unocal, Mobil and Shell. Lawyers for the defendant companies successfully had the case moved to Gray’s court, and, on July 3, he refused a plaintiffs’ motion to send it back to the state court.

Will Redraft Suit

Michael Spiegel, a California deputy attorney general, and Gary W. Hoecker, an attorney for Long Beach, said Friday that they will redraft the suit to conform to Gray’s comments July 3.

While refusing to send the case back to state court because of overlap with Long Beach I, the judge said he would “have no trouble” doing so if he could conclude that it was “designed to involve conduct and/or damages occurring only after Dec. 31, 1977, the end of the Long Beach I damage period.”

“We’ve taken him up on that and dismissed it without prejudice,” Spiegel said. “We will rewrite the complaint to make clear we are talking about the period since 1977 and will refile it in state court.”

Long Beach II alleged that the oil firms conspired to hold down the prices of crude oil that they paid to the state and Long Beach. In his oral ruling on Long Beach I, Gray held that the plaintiffs had failed to uncover any evidence of a conspiracy. The state and city said they would await his written opinion, expected early this fall, before filing an appeal.