WASHINGTON -- A federal price-fixing lawsuit was filed Monday against CITGO Petroleum Inc. on behalf of a class of plaintiffs who purchase gasoline, asphalt, lubricants, various petrochemicals, motor oil and other refined oil products directly from CITGO throughout the country.
The complaint arises out of what the plaintiff's call CITGO's willing and conspiratorial participation in the anticompetitive conduct of the Organization of Petroleum Exporting Countries (OPEC), the world's most notorious and successful price-fixing cartel.
Plaintiffs allege, as cited in the complaint, that "Venezuela and the OPEC conspiracy, using CITGO as a tool of its unlawful scheme, have thus entered United States territory for the purpose and with the effect of bringing to fruition their unlawful scheme to sell oil-based products to American consumers at anticompetitive prices."
The complaint, brought under Section 1 of the Sherman Act and Sections 4 and 16 of the Clayton Act, alleges that CITGO actively has participated in OPEC's illegal price-fixing conspiracy, has provided unlawful assistance to OPEC, and has implemented Venezuela's and OPEC's price-fixing scheme in the United States. The complaint alleges that CITGO has agreed with OPEC to provide the cartel, directly and through member nation Venezuela, with technical services and with information that greatly assist OPEC in its effort to fix the price of oil at anticompetitive levels.
The complaint also alleges that, to further Venezuela's participation in and capability to implement OPEC's price-fixing conspiracy in the United States, CITGO has spent hundreds of millions of dollars building refinery capacity that can handle generally low-quality Venezuelan crude.
According to attorney for plaintiffs Robert Eisler of New York's Lieff Cabraser Heimann & Bernstein, LLP, CITGO's supply contracts are clearly anticompetitive and designed to assist the cartel. He said, "CITGO has agreed to buy Venezuela's crude oil whenever Venezuela wants to sell it to CITGO, but Venezuela has no obligations to provide the crude if it decides to reduce its output for any reason, including an anticompetitive reason." In addition, said Eisler, "CITGO has failed to take action against Venezuela when Venezuela has breached its supply contracts."
Attorney for the plaintiffs Geoffrey L. Harrison of Houston's Susman Godfrey LLP had this to say about the lawsuit: "CITGO and its co-conspirators have flouted our country's antitrust laws and helped themselves to billions of dollars worth of illegally inflated profits like hogs at the trough. This lawsuit demonstrates that CITGO's anticompetitive conduct is illegal and has caused titanic damage to American consumers. Enough is enough."
The action was filed in the U.S. District Court for the Southern District of Texas. Plaintiffs seek to recover actual damages incurred as a result of the illegal OPEC price-fixing cartel and to enjoin future illegal conduct by CITGO. Under federal antitrust laws, these damages will be trebled in the event of a judgment in plaintiffs' favor. Plaintiffs also are requesting an award of punitive damages.
CITGO spokesperson David McCollum declined to comment to CSP Daily News except to say that the company is studying the allegations.
A copy of the complaint filed in this action is available at www.citgopricefixinglawsuit.com. The class is limited to direct purchasers of CITGO's refined oil products. Individuals who have purchased gasoline from CITGO stations are not members of the class.
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