Long Beach and State Sue 6 Oil Firms--Again : Price-Fixing Complaint Continues Old Dispute

The state of California and the City of Long Beach fired another salvo Wednesday in their long-running oil-pricing dispute with most of the nation’s major oil companies.

In a 48-page lawsuit dismissed by one defendant as a “rehash” of claims already dismissed by another court, six oil companies are again accused--this time in Los Angeles Superior Court--of conspiring to fix the price of oil pumped from Long Beach tidelands. The defendants are Chevron, Unocal, Mobil, Shell, Texaco and Exxon.

These six and a seventh oil company, Arco, were first sued by the same plaintiffs more than a decade ago for allegedly conspiring for more than a decade to keep the price of heavy California crude oil below what it was worth on the free market.

Their actions purportedly deprived state and city coffers of several million dollars in revenue for crude oil produced in Long Beach Harbor.

Arco Settlement

Arco isn’t named as a defendant this time because in December, 1984, it paid $22.5 million to settle the case out of court. That was just six months before a federal judge in Los Angeles dismissed the key allegations in the case.

That suit was a federal court matter, and the decision has been appealed to the U.S. 9th Circuit Court of Appeals.

A separate, even broader price-fixing suit brought against the companies by the state attorney general was subsequently dropped. Wednesday’s filing replaces it.

Only the dates of the alleged conspiracy and an allegation that the companies unlawfully operated a crude oil pipeline distinguish this suit from the earlier ones.

The new charges center on activities between 1980 and 1985. The federal suit alleges an oil price-fixing conspiracy during the early 1970s.

“This is a new conspiracy,” asserted Andrea Ordin, the state’s chief assistant attorney general. “Long Beach and California were not getting a fair price for Long Beach crude oil between 1980 and 1985.”

No Surprise

The suit had been long expected by the six defendants. But as of late Wednesday, most had not yet seen the court document.

One who had, Anthony P. Brown, chief trial counsel for Chevron, called the new suit “an artful pleading” but nevertheless “just a rehash” of the decade-old conspiracy charges.

The pipeline allegation, which the plaintiffs say is a new charge, is nothing more than “a 20-year-old argument that was found wanting by the Legislature and others,” Brown maintained.

The state and city seek damages of $550 million for revenue they say was lost because of the defendants’ alleged fraud, deceit, antitrust and seven other alleged illegalities.