## Facts

- A certified class of roughly 23,000 Shell and Texaco service-station owners purchased branded gasoline for resale.
- Shell and Texaco, formerly independent competitors, formed a nationwide downstream alliance through two joint ventures:
  - Equilon Enterprises LLC, combining their western U.S. downstream refining and marketing operations.
  - Motiva Enterprises LLC, combining their eastern and southern U.S. downstream operations with Saudi Refining, Inc. (SRI).
- As part of the alliance, Shell and Texaco transferred downstream assets to the ventures and entered noncompete agreements preventing them from competing with the ventures in the relevant territories.
- Within each venture’s territory, Equilon and Motiva set a single wholesale price for both Shell-branded and Texaco-branded gasoline, despite continued separate branding at the station level.
- The station owners alleged the alliance and unified pricing were used to fix wholesale prices for Shell and Texaco gasoline in violation of § 1 of the Sherman Act.
- The district court granted summary judgment to SRI for lack of antitrust standing and to Shell and Texaco on the ground that per se price-fixing did not apply to the ventures’ pricing.

## Issues

1. Whether the station owners had antitrust standing to sue SRI when they did not purchase gasoline directly from SRI.
2. Whether the unified pricing of Shell- and Texaco-branded gasoline by the ventures could be treated as per se unlawful horizontal price-fixing under Sherman Act § 1, rather than analyzed under the rule of reason as an internal joint-venture decision.

## Decision

- The Ninth Circuit affirmed summary judgment for SRI, holding plaintiffs lacked antitrust standing to sue SRI.
- The Ninth Circuit reversed summary judgment for Shell and Texaco, holding plaintiffs presented sufficient evidence to create a triable issue that the unified pricing could constitute per se unlawful horizontal price-fixing.
- The case was affirmed in part, reversed in part, and remanded for further proceedings.

## Legal Principles

- Antitrust standing requires a sufficiently direct injury; plaintiffs outside the “target area” of a defendant’s conduct, or whose injury is remote in the distribution chain, may lack standing.
- An agreement among competitors to fix prices is per se unlawful under Sherman Act § 1, including when implemented indirectly through a jointly controlled entity.
- Formation of a legitimate joint venture does not automatically immunize conduct from per se scrutiny; courts examine whether a challenged restraint is ancillary and reasonably necessary to procompetitive joint activity or instead amounts to “naked” price-fixing.
- On summary judgment, if evidence permits a reasonable factfinder to characterize the conduct as horizontal price-fixing, the per se framework may remain available and judgment as a matter of law is improper.

## Conclusion

The Ninth Circuit held the station owners could not sue SRI due to lack of antitrust standing, but it allowed the § 1 claims against Shell and Texaco to proceed because the record could support a finding that unified Shell/Texaco wholesale pricing through their joint ventures was per se unlawful horizontal price-fixing.


Dagher v. Saudi Refining, Inc., 369 F.3d 1108 (9th Cir. 2004)