Ninth Circuit Affirms Dismissal of Oil Price-Fixing Lawsuit

Court Holds That State Law Claims Are Preempted by Federal Law

Background

In 2013, several states filed a lawsuit against major oil companies, alleging that they had engaged in a conspiracy to fix the price of oil. The states alleged that the oil companies had violated the Sherman Antitrust Act, as well as various state antitrust laws.

The oil companies moved to dismiss the lawsuit, arguing that the state law claims were preempted by the federal Petroleum Marketing Practices Act (PMPA). The PMPA is a federal law that regulates the sale of gasoline and other motor fuels. It includes a provision that states that "no state or political subdivision of a state may enact or enforce any law or regulation with respect to the sale or marketing of gasoline or motor fuels which is in conflict with" the PMPA.

The district court agreed with the oil companies and dismissed the lawsuit. The states appealed to the Ninth Circuit Court of Appeals.

Ninth Circuit's Decision

The Ninth Circuit affirmed the district court's dismissal of the lawsuit. The Ninth Circuit held that the state law claims were preempted by the PMPA because they "directly regulated" the sale or marketing of gasoline or motor fuels.

The Ninth Circuit also held that the states' claims were not saved by the PMPA's "savings clause." The savings clause states that the PMPA does not preempt state laws that "regulate unfair or deceptive acts or practices in connection with the sale or marketing of gasoline or motor fuels."

The Ninth Circuit held that the states' claims did not regulate unfair or deceptive acts or practices. Instead, the Ninth Circuit held that the states' claims were "essentially price-fixing claims" that were preempted by the PMPA.

Implications of the Ninth Circuit's Decision

The Ninth Circuit's decision is a significant victory for the oil companies. It means that the states will not be able to pursue their price-fixing claims against the oil companies under state law.

The Ninth Circuit's decision also has implications for other antitrust lawsuits that are based on state law. It is possible that the Ninth Circuit's decision could be used to dismiss other antitrust lawsuits that are based on state law, even if the lawsuits do not involve the sale or marketing of gasoline or motor fuels.