Lawmakers are aiming to solve the problem of rising oil prices – by suing the oil producers for their so-called 'conspiracy'. Daphne Eviatar reports

When it costs almost $100 (£55) to fill the gas tank of the average American's SUV, something's got to change. Conscientious consumers are downsizing their cars to improve gas mileage and conserve energy. But some lawmakers are advocating a more American way: sue the oil producers.

In May, the House of Representatives passed a Bill that would amend federal law to allow the US Government to sue the Organisation of the Petroleum-Exporting Countries, or OPEC, for price-fixing. President Bush has vowed to veto the Bill, known as NOPEC, if it passes the Senate.

But not everyone is waiting on the Government. Lawyers for petroleum product distributors and retailers are already trying to get around the jurisdictional problems of suing a foreign sovereign. Instead of directly suing OPEC member nations, they are suing their national oil companies: Saudi Arabia Oil, CITGO Petroleum and Lukoil, among others. The hope is that, even though courts have previously dismissed similar actions filed against OPEC members, a federal court will be willing to exercise jurisdiction over what are arguably purely commercial enterprises doing business in the US.

"Plaintiffs and their co-conspirators participated in a conspiracy to fix, raise, maintain and stabilise" petroleum prices, charges one of five complaints which have been consolidated before Judge Sim Lake in Houston. A motion to dismiss is pending.

Of course, fix and maintain is precisely what OPEC was created to do. "The OPEC [member countries] coordinate their oil production policies in order to help stabilise the oil market and to help oil producers achieve a reasonable rate of return on their investments," reads OPEC's website.

The national oil companies claim that the cases should be dismissed, relying largely on a previous federal antitrust action filed against OPEC during the last oil crisis. In 1980, the US Court of Appeals for the Ninth Circuit held that courts "will not adjudicate a politically-sensitive dispute which would require the court to judge the legality of the sovereign act of a foreign state". The NOPEC Bill was drafted in part to get around that obstacle.

But Geoffrey Harrison, a partner at Susman Godfrey who filed a complaint against CITGO, a Texas-based oil refining and marketing company wholly owned by Venezuela, thinks he can prevail without even naming OPEC or its members. The Ninth Circuit case only protected the nation-state members, cautions Harrison: "There isn't a legal doctrine that says state-owned oil companies are immune from the law."

Still, the dozens of lawyers and large law firms that have weighed in on the other side – representing not only the defendants, but each of the OPEC countries as amici and even the US Chamber of Commerce, which, curiously, is arguing on their side – insist these cases raise the same problems as suing OPEC itself.

"These cases are a direct assault on the sovereign power of foreign nations to control and exploit their own natural resources," asserts a joint brief filed on behalf of the national oil companies by lawyers from eight different firms, including Akin Gump Strauss Hauer & Feld, Bracewell & Giuliani, Fulbright & Jaworski, and White & Case (the OPEC states are represented by a whole other set of firms, including Patton Boggs, Cleary Gottlieb Steen & Hamilton, Thompson & Knight, and Sidley Austin).

Anti-OPEC sentiment recently inspired another, more outlandish case in federal court in Florida. The man behind the suit is conservative gadfly Larry Klayman. In June, under the auspices of the group Freedom Watch, he filed suit directly against OPEC, accusing it of "economic terrorism" against the US, and claiming that its policies are designed to further OPEC's "anti-Western and anti-Judeo-Christian agendas" and spread communism throughout Latin America and radical Islam everywhere else.

Now that's a conspiracy theory.

This article initially appeared in the Bar Talk section of The American Lawyer, Legal Week's US sister title.