Gasoline Price-Fixing Unproved, Justices Say

The California Supreme Court unanimously dismissed a class-action lawsuit Thursday accusing nine major oil refiners of conspiring to fix prices of gasoline during the mid-1990s.

The state high court said the suit presented no compelling evidence of wrongdoing, only that petroleum companies had the motive, opportunity and ability to enter into a conspiracy.

“But that is not enough,” Justice Stanley Mosk wrote for the court. “Such evidence merely allows speculation. Speculation, however, is not evidence.”

Craig J. de Recat, a lawyer for one of the oil companies named in the antitrust suit, said the ruling gives judges more leeway to dismiss all kinds of lawsuits.

The Los Angeles lawyer said the decision also could affect a future lawsuit by state Atty. Gen. Bill Lockyer against energy suppliers. Lockyer is considering bringing an antitrust suit charging a conspiracy to manipulate prices on the wholesale electricity market.

If circumstantial evidence in such a case is just as consistent with legal behavior as it is with an unlawful conspiracy, then the case can be dismissed without a trial, the court said.

“This prevents lawyers from weaving a tale of illegal conspiracy from what is otherwise innocent and appropriate conduct,” De Recat said.

But Charles M. Kagay, who represented consumers in the case, said the decision “does not make it impossible, or even unreasonably difficult, to bring antitrust cases” in the future.

A state Court of Appeal had already ruled that the lawsuit against the petroleum companies should be dismissed, but the state high court decided to take up the matter to clarify the legal grounds for throwing out suits without a trial. This is done through a motion for summary judgment.

The lawsuit, filed by two San Diego lawyers on behalf of California’s 24 million drivers who purchase reformulated, cleaner-burning gasoline, charged that the oil refiners worked together to raise the price by restricting supply.

In asking a San Diego Superior Court judge to dismiss the suit, the companies presented evidence, including declarations by officers and managers, of how each company independently made its production and pricing decisions.

The consumers’ attorneys countered with evidence that the companies used the same consultants and cooperated in other ways.

The trial judge thew out the lawsuit, Aguilar vs. Atlantic Richfield, S086738, then reinstated it on the grounds his first ruling had been flawed because he applied the wrong legal precedent. Aguilar appealed after losing in the Court of Appeal.

Named as defendants in the suit were Arco, Chevron, ExxonMobil, Unocal, Shell, Texaco, Tosco and Ultramar.