Market Manipulation Class Action


On July 19, 2006, the California Supreme Court's denial of plaintiffs' petition for review ended a six-year lawsuit challenging BP's export of Alaska North Slope crude oil as an exercise of market power that raised the price of crude oil and gasoline sold on the West Coast. These market-manipulation allegations initially arose in connection with the FTC's review of BP's acquisition in 2000 of Atlantic Richfield Company. Based upon the FTC's investigation and decision in the merger case, plaintiffs' class action attorneys filed a lawsuit in state court in Los Angeles, claiming that BP's conduct had artificially raised all California gasoline prices. The court certified a class of all California gasoline purchasers. Our team then persuaded the trial judge, who had certified the class and initially upheld the complaint, to dismiss plaintiffs' claim under the California Unfair Competition Law ("UCL") on the ground that the class of gasoline purchasers were not entitled to a monetary recovery under the UCL based upon alleged unfair competition in the crude oil market. After a year of further proceedings, the team then persuaded the same judge also to dismiss the remaining common-law claim for unjust enrichment. Plaintiffs appealed. At an oral argument in December 2005, the appellate court initially suggested the case would be remanded for trial. However, after argument by partner Ronald Redcay, the appellate court on March 27, 2006, affirmed the trial court's decision dismissing the complaint.


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