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Fossil Fuel Cartel conspired together to restrain trade and limit competition in violation of Federal and State Antitrust laws, driving up energy costs and limiting energy options for Michigan consumers.
LANSING – Today, Michigan Attorney General Dana Nessel filed a federal antitrust lawsuit (PDF) against BP, Chevron, Exxon Mobil, Shell, and the American Petroleum Institute alleging violations of the Sherman Antitrust Act, the Clayton Antitrust Act, and the Michigan Antitrust Reform Act. The Attorney General alleges the defendants acted as a cartel in an unlawful conspiracy in restraint of trade to forestall meaningful competition from renewable energy in order to maintain their dominance in the transportation energy market and primary energy markets in Michigan and nationally in order to reap windfall, and illegal, profits. This has caused Michigan residents to suffer artificially high home and transportation energy costs. Michigan consumers remain locked in transportation and energy markets that rely on dated and expensive technologies, and lack renewable, cost-efficient energy sources because defendants have illegally conspired to suppress the conditions for their deployment and adoption, eliminating consumer choice and worsening the energy affordability crisis facing the people of Michigan.
Filed in the United States District Court for the Western District of Michigan, the Attorney General’s lawsuit details decades of coordinated efforts by defendants and other co-conspirators to:
- abandon renewable energy products,
- use patent manipulation and litigation to hinder market competitors,
- suppress information concerning the once-hidden costs of fossil fuels and the viability of alternatives,
- infiltrate and knowingly mislead information-producing institutions,
- surveil and intimidate watchdogs and public officials, and
- use trade associations to coordinate market-wide efforts to divert capital expenditures away from renewable energy
—all to further one of the most successful and lucrative antitrust conspiracies in the history of the United States.
Defendants have, by this conspiracy, reduced the production of renewable energy for transportation and home heating and cooling and needlessly reduced choices and inflated energy prices for Michigan consumers.
“Michigan is facing an energy affordability crisis as our home energy costs skyrocket and consumers are left without affordable options for transportation. Whether you own a home, a small business, or run a large corporation, rising energy and transportation costs harm everyone,” said Attorney General Nessel. “These out-of-control costs are not the result of natural economic inflation, but due to the greed of these corporations who prioritized their own profit and marketplace dominance over competition and consumer savings.”
As detailed in the Attorney General’s lawsuit, as early as the 1950’s, defendants learned that fossil fuel consumption would impose significantly negative externalities on consumers and the natural environment, but hid that information from the public. Defendants similarly concluded that customer demand would likely favor alternative energy sources as the negative harms of fossil fuel consumption became known and the negative externality costs associated with mitigating these harms publicly understood. Despite this, over succeeding decades, defendants engaged in a multifaceted scheme to maintain the dominance of fossil fuels by suppressing the production and availability of renewable energy substitutes, using trade organizations such as the American Petroleum Institute to coordinate industry-wide efforts to delay an energy transition. As a result of this conspiracy, and its intended and accomplished goal of suppressed competition in energy markets, Michigan consumers suffer from “supracompetitive” prices for fossil fuel energy products and reduced consumer choice in purchasing alternatives, driving an energy cost crisis in the State. Michigan also suffers high costs in the form of climate change impacts and associated costs of adaptation and mitigation, rising insurance premiums, reduced home values, and damage to Michigan’s economy.
In May of 2024, the Michigan Department of Attorney General began seeking proposals from attorneys and law firms to serve as Special Assistant Attorneys General to pursue litigation related to the climate change impacts caused by the fossil fuel industry on behalf of the People of Michigan. Later that year, the Department announced that the law firms Sher Edling LLP, DiCello Levitt LLP, and Hausfeld LLP would work together for this purpose. Each firm entered into contingency contracts for this work, meaning no expense for their efforts will ever be paid by the State and that any compensation any firm receives can only be derived as a share of financial relief awarded pursuant to filed litigation. This effort started as an investigation into the financial impacts to Michigan from the fossil fuel industry’s persistent coverup and deception about climate change, however, efforts instead uncovered one of the most successful antitrust conspiracies in United States history that is now subject of the Attorney General’s lawsuit.
The litigation team of Sher Edling LLP, DiCello Levitt LLP, and Hausfeld LLP provide a diversity of skilled attorneys experienced in successfully representing public entities in specialized litigation involving environmental issues and industry deception.
For over a century, private, state and federal enforcers have invoked antitrust laws to regulate and preserve competition in American energy markets. Chief among federal antitrust laws in United States history stands The Sherman Act of 1890. In 1911, the United States Supreme Court issued its landmark ruling in Standard Oil Co. of New Jersey v. United States, wherein the Court ordered the dissolution of Standard Oil for engaging in widespread anticompetitive actions in violation of The Sherman Antitrust Act.
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