Gasoline consumers who accused major oil companies of conspiring with the Trump administration, Russia, and Saudi Arabia to cut oil production and inflate gasoline prices have had their antitrust lawsuit dismissed by a federal appeals court. The Ninth U.S. Circuit Court of Appeals ruled unanimously on Sept. 16 that the lower court’s decision to dismiss the lawsuit was correct.
The lawsuit, originally filed in the Northern District of California, alleged that the defendants collaborated with then-President Donald Trump to broker an agreement with Russia and Saudi Arabia to end a 2020 oil price war, limit future oil exploration, and artificially increase gas prices at the pump. The plaintiffs argued that the oil companies’ complaints about sinking prices led the Trump administration to persuade oil-producing countries to cut production, resulting in increased industry profits.
However, the appeals court agreed with the lower court’s ruling that the case involved political questions rather than legal issues. The court emphasized that matters of foreign diplomacy, especially those involving negotiations between the United States, Russia, and Saudi Arabia on oil production, fall under the jurisdiction of the political branches of government, not the courts. The court stated that adjudicating the plaintiffs’ allegations would require the judiciary to second-guess the foreign policy decisions of the executive branch, which goes against established limits on judicial review.
In addition to dismissing the case on political grounds, the appeals court also found that the plaintiffs failed to provide sufficient evidence of an illegal agreement among the defendants. The court pointed to the global COVID-19 pandemic as a more plausible explanation for the reduction in oil production and subsequent price increases. The pandemic significantly reduced oil demand in 2020, leading to a decrease in production.
The dismissal of this lawsuit highlights the challenges of bringing antitrust claims against major oil companies and the limitations of the court’s authority in matters of foreign policy. It also underscores the importance of considering broader economic factors, such as the impact of a global pandemic, when analyzing changes in oil production and prices.
Neither the lawyers for the plaintiffs nor those representing the defendants have commented on the ruling. The decision by the appeals court marks a significant setback for the plaintiffs and reinforces the notion that certain matters involving foreign diplomacy and global economics are best left to the political branches of government.
