THE WALL STREET JOURNAL: US High Court Seeks Govt View Of Shell, Texaco Venture: “The U.S. Supreme Court Tuesday sought the federal government's view on whether it should review an antitrust lawsuit over a 1998 joint refining agreement between Shell Oil Co. and Texaco Inc. The case stems from a challenge by gasoline station owners who contend the two companies illegally set the same wholesale gas prices for products made by the joint venture.” (ShellNews.net) Posted 23 Feb 05
By MARK H. ANDERSON
Of DOW JONES NEWSWIRES
WASHINGTON -- The U.S. Supreme Court Tuesday sought the federal government's view on whether it should review an antitrust lawsuit over a 1998 joint refining agreement between Shell Oil Co. and Texaco Inc.
The case stems from a challenge by gasoline station owners who contend the two companies illegally set the same wholesale gas prices for products made by the joint venture. The outcome of the case could have a national impact on joint ventures done by companies that combine forces to reduce the costs of expensive product production.
Texaco and Shell had combined their refining and marketing operations after clearing the plans with the Federal Trade Commission and other U.S. regulators, believing the move could save as much as $800 million annually. Later, a group of gas station operators sued the companies for price fixing when the joint venture charged identical prices for Shell and Texaco branded gasoline.
Shell purchased Texaco's stake in the joint venture in 2002 as part of regulatory agreements that allowed Chevron and Texaco to merge. Equilon is now known as Shell Oil Products US. Texaco is a unit of ChevronTexaco Corp. (CVX), San Ramon, Calif. Shell is a unit of Netherlands-based Royal Dutch Petroleum (RD.AS).
The companies appealed a lower court ruling that said the joint venture illegally set gasoline prices despite the fact the venture itself was legitimate. The ruling by the 9th U.S. Circuit Court of Appeals, San Francisco, let the antitrust lawsuit against the two companies proceed.
"The circuit conflict spawned by the Ninth Circuit's decision leaves the law in an intolerable state of uncertainty for any business venture that will operate on a national level," attorneys for Shell said in the company's appeal.
Several uninvolved corporations, including Microsoft Corp. (MSFT) and The Coca-Cola Co. (KO), and the U.S. Chamber of Commerce have filed briefs urging the Supreme Court to review the issue.
Attorneys for the gas station operators accused the two companies of twisting the legal issues involved in the case in an attempt to get a Supreme Court appeal. "To attract this court's attention, Shell and Texaco have created a question that does not exist," they said.
The cases are Texaco Inc. v. Dagher, 04-805, and Shell Oil Co. v. Dagher, 04-814. The government will file a brief regarding the cases later this year. The high court will then decide whether to grant an appeal.
-By Mark H. Anderson, Dow Jones Newswires, 202 862-9254;