Exxon Corp, the only major oil company not to settle a 17-year-old antitrust case, was cleared of price-fixing charges by a civil jury in U.S. District Court in Los Angeles on Friday.
The suit, brought by the state of California and the city of Long Beach, had charged Exxon and six other big oil companies--Unocal, Chevron, Texaco, Mobil, Arco and Shell--with conspiracy to depress crude oil prices in the state from 1961 through 1977.
This hurt independent producers, the suit alleged, including the state and city, which produce oil from their public lands.
Without admitting wrongdoing, all the other companies by last summer had agreed to settlements totaling $320 million in fines and other assets.
Exxon, which the plaintiffs' attorneys said never offered a "significant" amount in settlement, continued to fight.
Although the bills are not yet in, legal costs to the city and state over the years are estimated at a minimum of $75 million, according to one attorney for the plaintiffs. An attorney on Exxon's team said he could not estimate how much the company's defense cost, but said that "it cost Exxon a lot of money."
"Once (Exxon's) management made the decision that they had not violated the law, they were committed to defending the case," said the lead attorney for Exxon, Howard J. Privett of Baker & Hostetler McCutchen Black in Los Angeles.
It could be a week or more before the city and state decide whether to appeal the decision.
Lt. Gov. Leo T. McCarthy and state Controller Gray Davis--a member of the State Lands Commission, which is the trustee for the state oil field involved--both strongly criticized Exxon last summer when it refused to settle the case.
But the Exxon case was "definitely . . . not as strong as the case against the others," Hoecker acknowledged.
Exxon was charged with joining a pricing scheme that had allegedly been set up by the other oil companies in a series of meetings in 1961 and 1962.
The suit against the oil companies asked for damages of $250 million, which could have been trebled under antitrust law. It alleged that the oil companies used a scheme to exchange crude oil among themselves at a higher price than they offered such independent oil producers as Long Beach and the state.
Most of the 280 million barrels sold to these firms from 1971 to 1977 by the city and state were produced in tidelands and submerged lands near Long Beach. The city operated the wells for both its own land and that of the state.
A similar antitrust case against Exxon is pending in Los Angeles Superior Court and will likely go to trial in 1993, according to Royce H. Schulz of Broad, Schulz, Larson & Wineberg.
Schulz, who also represented the city of Long Beach in the case concluded Friday, said that "Long Beach II" involves crude oil pricing in California from 1980 to 1985.
With the exception of Exxon, the major oil companies sued in that case have also settled.