Man pumping gas at a Costco gas station in Folsom, California, on May 4, 2019.Class Action Alleges Traders Manipulated Calif. Gas Prices by $2.4B
"Our goal is to make California consumers whole after the defendants' alleged conduct cost consumers over $2 billion," said Milberg managing partner Glenn Phillips in the antitrust lawsuit.
May 14, 2020 at 03:30 PM
3 minute read
The original version of this story was published on The Recorder
A class action alleges two traders manipulated California's gas prices to the tune of $2.4 billion.
The antitrust lawsuit, filed on Wednesday, comes after California Attorney General Xavier Becerra filed a similar case earlier this month against the same two trading companies, who he accused of violating California unfair competition law by manipulating the "spot market" for wholesale gasoline and gasoline blending products following an Exxon Mobil refinery explosion in 2015 in Torrance, California. The refinery supplied about 10% of the gasoline in California.
"Our goal is to make California consumers whole after the defendants' alleged conduct cost consumers over $2 billion," said Milberg managing partner Glenn Phillips, whose New York firm filed the lawsuit, which alleges federal antitrust violations. Milberg partners David Azar, Peggy Wedgworth and Andrei Rado in New York, along with associate Blake Yagman, filed the lawsuit.
Both trading companies, Houston-based Vitol Inc., a subsidiary of Vitol Holding B.V. in the Netherlands, and Houston-based SK Energy Americas Inc., whose South Korean parent corporation, SK Trading International Ltd., also is a defendant in the complaint, did not respond to requests for comment.
The lawsuits come after the California Energy Commission suggested a year ago that market manipulation might have contributed to California's skyrocketing fuel prices, which also are higher because of taxes and emissions standards that require gasoline blending. California Gov. Gavin Newsom asked the attorney general to look into that possibility late last year.
Both suits say the trading companies made "sham transactions" and traded among themselves to spike the price of wholesale gasoline.
"Price gouging, whether it's toilet paper or gasoline, stinks," said Becerra, in a May 4 announcement of the state's lawsuit. "It's greed that hurts grandma, the Good Samaritan and everyday Americans. Every once in a while we get to fight back."
Milberg, which has filed class actions against Major League Baseball and Purdue University over unpaid refunds amid the coronavirus outbreak, filed its case in U.S. District Court for the Southern District of California. The named plaintiff, Asante Cleveland, a San Diego resident who paid $39.79 at an Arco station on Aug. 8, 2016, brought the case on behalf of a class of millions of California residents who bought gas between Feb. 18, 2015, and the end of 2016.
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