In a significant legal victory for oil companies, the U.S. 9th Circuit Court of Appeals dismissed a class action lawsuit accusing several companies, including Exxon Mobil and Chevron, of conspiring to inflate gas prices, according to Reuters.
The lawsuit, brought by consumers, alleged that these companies colluded with the Trump administration and foreign governments, particularly Saudi Arabia and Russia, to cut oil production during the early months of the COVID-19 pandemic. The resulting cuts, they claimed, led to soaring oil prices, doubling the price of gasoline.
The court ruled that the case raised "political questions" beyond its purview, particularly involving foreign policy decisions and oil production strategies by sovereign nations. Additionally, it found no evidence of illegal price-fixing, noting that the pandemic and other economic factors were plausible reasons for the production cuts and the subsequent rise in prices.
The decision upholds a prior ruling by a lower court and marks a legal win for the oil companies, shielding them from claims of violating antitrust laws. This ruling reinforces the legal challenge of pursuing such cases, where foreign policy and complex economic dynamics intersect.
This decision by the court is a positive sign for California oil and gas producers, particularly as the State Legislature continues to pass bills that will be challenged in court. Arbitrary policy ideas designed to kill the state’s oil industry will perhaps be thwarted by the court in the future.