| Introduction |
| On November 13, 2006, five companies ("plaintiffs")
that purchased gasoline and other oil-based products
directly from CITGO for resale to consumers filed an antitrust
class action lawsuit against Citgo Petroleum Corporation
("Citgo") alleging Citgo has conspired with
the Organization of Petroleum Exporting Countries ("OPEC"),
to fix the price
of gasoline and other oil-based products in the United States. The complaint was filed in the federal
court in Houston, Texas. |
| Plaintiffs' Allegations |
| The lawsuit has been brought under Section 1 of the Sherman Act and Sections 4 and 16 of the Clayton Act. In summary, plaintiffs allege: |
1) OPEC
is an international cartel whose eleven member nations control
most of the world's proven oil reserves conspire to
set limits on the production of oil to raise, fix, and stabilize
world oil prices above competitive levels, thus increasing
the prices of gasoline and other oil-based products, such as lubricants, motor oil, and asphalt, throughout the United States. |
2) Defendant
Citgo is wholly owned and controlled by the Bolivarian Republic
of Venezuela ("Venezuela"), through Petróleos de Venezuela,
S.A. ("PDVSA"), Venezuela's national oil company, and
its affiliates. |
3) Citgo purchases huge quantities of Venezuelan oil – over half a million barrels a day. In turn, Citgo refines the Venezuelan oil into gasoline and other oil-based products, and sells these products directly to plaintiffs and the class throughout the continental United States. |
4) Citgo
has violated federal antitrust laws in at least three ways:
First, Citgo has entered into an agreement with OPEC and its members to assist the cartel's price-fixing scheme including by providing analyses of American oil markets and other information important to the cartel's success, preparing OPEC's long-term strategy, organizing OPEC summits, and providing speakers at OPEC conferences.
Second, Citgo has entered into an anticompetitive agreement and conspiracy with Venezuela and PDVSA to assist and facilitate their sale of oil-based products to American customers at anticompetitive prices.
For example, Citgo (a) has spent hundreds of millions of dollars on retrofitting its refineries to enable it to refine and process huge quantities of Venezuela's heavy and relatively impure crude oil; (b) has entered into one-sided contracts that benefit Venezuela by allowing shipments of crude to be curtailed whenever Venezuela and other OPEC members reduce output to increase prices; and (c) has allowed Venezuela and PDVSA to breach their contractual obligations to Citgo with impunity.
Finally,
third, Venezuela and OPEC have used Citgo as their instrument
have entered United States territory for the purpose and
with the effect of selling oil-based products to American
consumers at anticompetitive prices. |
| Proposed Class |
| Plaintiffs -- all companies that purchased
directly from Citgo -- filed the lawsuit on behalf of themselves
and seek to represent a class of all persons and entities in
the United States that have purchased gasoline and other oil-based
products directly from Citgo during the last four years. |
| No determination has been made by the court whether the case may proceed as a class action. |
| Relief Sought |
| Plaintiffs seek to recover for themselves
and the class the amount, trebled, of the overcharges collected
by Citgo and its co-conspirators as a result of OPEC's artificial
price restraint. Plaintiffs also request the Court enjoin Citgo
from continuing to conspire with OPEC in the setting of the
price of gasoline and other oil-based products sold in the
United States. To read a copy of the complaint, click
here [Adobe Acrobat format]. |
| Additional Lawsuits and Consolidation
by the Multidistrict Litigation Panel |
| Not long after the complaint was filed,
four similar lawsuits were filed in Illinois, Ohio, and the
District of Columbia. Although each complaint names CITGO as
a defendant, the similar cases also name additional defendants,
including PDVSA; Saudi Aramco, the Saudi Arabian government’s
oil company; and Motiva, the Russian government’s oil
company. On December 18, 2007, the United States Judicial Panel
on Multidistrict Litigation transferred these cases to the
federal court in Houston, and consolidated all five cases for
pretrial proceedings. The consolidated cases are proceeding
as In re: Refined Petroleum Products Antitrust Litigation (MDL
No. 1886). |
| The defendants have moved to dismiss
the cases. Among other things, the defendants argue that United
States courts lack jurisdiction over the foreign defendants
and the acts of the cartel. The motion is pending. |
| The five companies that filed the
initial complaint maintain that the federal court has jurisdiction
over CITGO, because the oil company’s primary place of
business is located in the United States, because it owns
and runs refineries in the United States, and because it sells
the refined petroleum in the United States. |
| Contact Plaintiffs' Counsel |
| Companies that have purchased oil directly from Citgo are welcome to contact plaintiffs' counsel to learn more about the litigation and provide information on their experiences with Citgo. Please note: Consumers that purchase gas from Citgo stations are not part of the proposed class and should not contact counsel. Since CITGO stations are independently owned, purchasing gasoline from a station does not constitute a direct purchase. |
| All information submitted will be held in confidence as provided under the law. There is no charge or obligation for plaintiffs’ review of your complaint. |
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