Baltimore Takes Shale Producers to Court Over Alleged Price-Fixing Scheme
(Reuters) — The city of Baltimore has hit major U.S. shale oil producers including Hess and Permian Resources with a lawsuit alleging they conspired to curb production, leading to higher prices for gasoline, diesel fuel and heating oil.
The proposed class action was filed on Saturday in New Mexico federal court, where a panel of U.S. judges this month consolidated more than a dozen lawsuits accusing seven shale producers of participating in a price-fixing conspiracy.
The lawsuit was the first by any state or municipality in the consolidated litigation.
Baltimore’s lawsuit, filed by the national plaintiffs firm Berger Montague and other firms, also named Chesapeake Energy, Occidental Petroleum, Diamondback Energy and Pioneer Natural Resources, which is now a subsidiary of Exxon Mobil.
The complaint accused the companies of a scheme that artificially inflated the price of crude oil and light petroleum products, in violation of antitrust law. The lawsuit said the alleged conspiracy began in 2017.
Hess, Permian Resources, Chesapeake Energy and other defendants did not immediately respond to requests for comment.
The defendants have said the plaintiffs' complaints fail to state any claim under antitrust law and should be dismissed.
Baltimore and its lawyers also did not immediately respond to requests for comment.
Baltimore, a seaport and the largest city in Maryland, purchased petroleum products from a wholesale supplier. The city said it paid higher prices than it should have for gasoline and other products during the alleged conspiracy.
“The defendants acted against their economic self-interest by declining to ramp up production in the face of high crude oil prices,” the lawsuit said.
Baltimore will seek class action status for Maryland and other states that allow monetary damages for claims involving the “indirect” purchase of a product from a defendant. Those states include California, Illinois, Florida, Michigan, New York and North Carolina.
The lawsuit estimated a class size of thousands of members. Baltimore is seeking damages of more than $5 million and a court order barring any further price coordination.
U.S. District Judge Matthew Garcia in Albuquerque, who was confirmed to the court last year, was selected on Aug. 1 to oversee the multidistrict litigation. Garcia is a former chief of staff to Democratic New Mexico Governor Michelle Grisham.
The case is Mayor and City Council of Baltimore v. Permian Resources Corp et al, U.S. District Court, District of New Mexico, No. 24-cv-842.
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