1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 NORTHERN DISTRICT OF CALIFORNIA 11 12 ROSEMARY D'AUGUSTA, et al., Case No. 22-cv-01979-JSW
13 Plaintiffs, ORDER GRANTING MOTIONS TO 14 v. DISMISS AND DENYING MOTIONS FOR LEAVE TO SUPPLEMENT THE 15 AMERICAN PETROLEUM INSTITUTE, COMPLAINT AND FOR et al., RECONSIDERATION 16 Defendants. Re: Dkt. Nos. 85, 86, 108, 109 17 18 Now before the Court are the motion to dismiss filed by defendants American Petroleum 19 Institute, Chevron Texaco Capital Corporation, Continental Resources Inc., Devon Energy 20 Corporation, Energy Transfer LP, Exxon Mobil Corporation, Occidental Petroleum Corporation, 21 Phillips 66 Company (collectively, “Defendants”) and the motion to dismiss filed separately by 22 defendant Energy Transfer LP (“Energy Transfer”). Also before the Court are the motions filed 23 by Plaintiffs for leave to supplement their complaint and for reconsideration of this Court’s order 24 dated August 22, 2022, denying Plaintiffs’ request for leave to depose third-party witness, Jared 25 Kushner. 26 The omnibus motion to dismiss filed by Defendants is GRANTED without leave to amend 27 and the motion to dismiss filed by Energy Transfer is GRANTED. Plaintiffs’ motion for leave to 1 BACKGROUND 2 Plaintiffs, consumers of gasoline in the four years prior to filing suit, allege an antitrust 3 conspiracy between the United States, Saudi Arabia, Russia, and Defendants. Plaintiffs allege that 4 Defendants “agreed among themselves, and with Saudi Arabia and Russia, to cut the production of 5 oil, to remove and store excess oil supply, to limit future exploration and production of oil, and to 6 stop the price war that had erupted between Saudi Arabia and Russia, all for the purpose and with 7 the intended effect to raise the price of oil and gasoline and other fuels in the United States and 8 elsewhere.” (Complaint at ¶ 43.) Plaintiffs assert that the sovereign nations and Defendants 9 formed their conspiracy as an integral part of a global settlement of a price war between Saudi 10 Arabia and Russia. (Id. at ¶¶ 1, 7-9.) 11 Omitting any reference to the onset of the Covid-19 global pandemic, Plaintiffs assert that 12 the price war started in March 2020 after Russia repudiated a prior agreement with OPEC to limit 13 oil production, Saudi Arabia retaliated by announcing plans to increase production, and Russia 14 responded by also increasing production. (Id. at ¶¶ 7-9.) Plaintiffs allege that as prices for oil and 15 gasoline continued to fall, Defendants agreed to cut their production and reduce new investment in 16 exploration and production in an attempt to stem the price reductions. (Id. at ¶¶ 16, 18.) Plaintiffs 17 allege that then-President Trump heralded the free market and praised the reduction in oil prices 18 and then, after contact with some of the Defendant oil companies, agreed to meet with them to 19 discuss the price war. (Id. at ¶¶ 20-22.) Plaintiffs allege that discussion with some Defendants, 20 Trump sought agreement with Saudi Arabia and Russia to stop the price war and then met with the 21 Defendants’ CEOs on Friday, April 3, 2020. (Id. at ¶¶ 22-25.) Although the meeting itself was 22 held in secret, allegedly, as “a condition of calling off the price war,” Saudi Arabia and Russia 23 required that the United States, Canada, and Mexico “agree to cut production.” (Id. at ¶ 29.) As a 24 result of political maneuvering, Plaintiffs allege that “the American oil companies agreed to cut 25 production by 2 million barrels per day (or 3 million barrels per day) by the end of the year as a 26 quid pro quo for the cessation of the price war, just as Russia and Saudi Arabia had demanded.” 27 (Id. at ¶ 37.) As a result of capitulating to foreign demand, [c]ompetition in the oil industry was 1 Plaintiffs further allege that by “reason of these agreements, the price of oil and gasoline 2 was substantially increased … [and] the price of oil and the price of gasoline would be 3 substantially less than what they have become as a result of these agreements, and inflation would 4 have been far less, if non-existent.” (Id. at ¶ 44.) Plaintiffs assert that, as consumers of gasoline, 5 they “have been harmed and continue to be threatened with harm and damage in that they have 6 been deprived of price competition that they otherwise would have enjoyed but for the 7 Defendants’ anticompetitive agreement to reduce the production of oil in order to raise the price of 8 oil and gasoline.” (Id. at ¶ 67.) 9 Based on these allegations, Plaintiffs assert claims under Sections 1 and 2 of the Sherman 10 Act and Section 7 of the Clayton Act. The Defendants moved to dismiss in an omnibus motion as 11 well as defendant Energy Transfer moving to dismiss separately. In addition, Plaintiffs move for 12 leave to supplement their complaint and for reconsideration of the Court’s order denying leave to 13 depose Kushner. 14 The Court shall address other relevant facts in the remainder of its order. 15 ANALYSIS 16 A. Motion to Dismiss filed by All Defendants. 17 1. Legal Standard Pursuant to Federal Rule of Civil Procedure 12(b)(6). 18 Defendants move to dismiss for failure to state a claim under Federal Rule of Civil 19 Procedure 12(b)(6). Under Rule 12(b)(6), a court generally “is limited to the allegations in the 20 complaint, which are accepted as true and construed in the light most favorable to the plaintiff.” 21 Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). Even under the liberal 22 pleadings standard of Federal Rule of Civil Procedure 8(a)(2), “a plaintiff’s obligation to provide 23 the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a 24 formulaic recitation of the elements of a claim for relief will not do.” Bell Atlantic Corp. v. 25 Twombly, 550 U.S. 544, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). 26 Pursuant to Twombly, a plaintiff must not allege conduct that is conceivable but must allege 27 “enough facts to state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 1 inference that the Defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 2 678 (2009) (citing Twombly, 550 U.S. at 556). 3 If a plaintiff fails to state a claim, a court should grant leave to amend, unless amendment 4 would be futile. See, e.g., Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990); Cook, 5 Perkiss & Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 246-47 (9th Cir. 1990). 6 However, if a plaintiff has previously amended a complaint, a court has “broad” discretion to deny 7 leave to amend. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) (quoting Ascon 8 Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989)). 9 2. Legal Standard Pursuant to Federal Rule of Civil Procedure 12(b)(1). 10 Defendants also move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). 11 The Court evaluates challenges to Article III standing under Federal Rule of Civil Procedure 12 12(b)(1).
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1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 NORTHERN DISTRICT OF CALIFORNIA 11 12 ROSEMARY D'AUGUSTA, et al., Case No. 22-cv-01979-JSW
13 Plaintiffs, ORDER GRANTING MOTIONS TO 14 v. DISMISS AND DENYING MOTIONS FOR LEAVE TO SUPPLEMENT THE 15 AMERICAN PETROLEUM INSTITUTE, COMPLAINT AND FOR et al., RECONSIDERATION 16 Defendants. Re: Dkt. Nos. 85, 86, 108, 109 17 18 Now before the Court are the motion to dismiss filed by defendants American Petroleum 19 Institute, Chevron Texaco Capital Corporation, Continental Resources Inc., Devon Energy 20 Corporation, Energy Transfer LP, Exxon Mobil Corporation, Occidental Petroleum Corporation, 21 Phillips 66 Company (collectively, “Defendants”) and the motion to dismiss filed separately by 22 defendant Energy Transfer LP (“Energy Transfer”). Also before the Court are the motions filed 23 by Plaintiffs for leave to supplement their complaint and for reconsideration of this Court’s order 24 dated August 22, 2022, denying Plaintiffs’ request for leave to depose third-party witness, Jared 25 Kushner. 26 The omnibus motion to dismiss filed by Defendants is GRANTED without leave to amend 27 and the motion to dismiss filed by Energy Transfer is GRANTED. Plaintiffs’ motion for leave to 1 BACKGROUND 2 Plaintiffs, consumers of gasoline in the four years prior to filing suit, allege an antitrust 3 conspiracy between the United States, Saudi Arabia, Russia, and Defendants. Plaintiffs allege that 4 Defendants “agreed among themselves, and with Saudi Arabia and Russia, to cut the production of 5 oil, to remove and store excess oil supply, to limit future exploration and production of oil, and to 6 stop the price war that had erupted between Saudi Arabia and Russia, all for the purpose and with 7 the intended effect to raise the price of oil and gasoline and other fuels in the United States and 8 elsewhere.” (Complaint at ¶ 43.) Plaintiffs assert that the sovereign nations and Defendants 9 formed their conspiracy as an integral part of a global settlement of a price war between Saudi 10 Arabia and Russia. (Id. at ¶¶ 1, 7-9.) 11 Omitting any reference to the onset of the Covid-19 global pandemic, Plaintiffs assert that 12 the price war started in March 2020 after Russia repudiated a prior agreement with OPEC to limit 13 oil production, Saudi Arabia retaliated by announcing plans to increase production, and Russia 14 responded by also increasing production. (Id. at ¶¶ 7-9.) Plaintiffs allege that as prices for oil and 15 gasoline continued to fall, Defendants agreed to cut their production and reduce new investment in 16 exploration and production in an attempt to stem the price reductions. (Id. at ¶¶ 16, 18.) Plaintiffs 17 allege that then-President Trump heralded the free market and praised the reduction in oil prices 18 and then, after contact with some of the Defendant oil companies, agreed to meet with them to 19 discuss the price war. (Id. at ¶¶ 20-22.) Plaintiffs allege that discussion with some Defendants, 20 Trump sought agreement with Saudi Arabia and Russia to stop the price war and then met with the 21 Defendants’ CEOs on Friday, April 3, 2020. (Id. at ¶¶ 22-25.) Although the meeting itself was 22 held in secret, allegedly, as “a condition of calling off the price war,” Saudi Arabia and Russia 23 required that the United States, Canada, and Mexico “agree to cut production.” (Id. at ¶ 29.) As a 24 result of political maneuvering, Plaintiffs allege that “the American oil companies agreed to cut 25 production by 2 million barrels per day (or 3 million barrels per day) by the end of the year as a 26 quid pro quo for the cessation of the price war, just as Russia and Saudi Arabia had demanded.” 27 (Id. at ¶ 37.) As a result of capitulating to foreign demand, [c]ompetition in the oil industry was 1 Plaintiffs further allege that by “reason of these agreements, the price of oil and gasoline 2 was substantially increased … [and] the price of oil and the price of gasoline would be 3 substantially less than what they have become as a result of these agreements, and inflation would 4 have been far less, if non-existent.” (Id. at ¶ 44.) Plaintiffs assert that, as consumers of gasoline, 5 they “have been harmed and continue to be threatened with harm and damage in that they have 6 been deprived of price competition that they otherwise would have enjoyed but for the 7 Defendants’ anticompetitive agreement to reduce the production of oil in order to raise the price of 8 oil and gasoline.” (Id. at ¶ 67.) 9 Based on these allegations, Plaintiffs assert claims under Sections 1 and 2 of the Sherman 10 Act and Section 7 of the Clayton Act. The Defendants moved to dismiss in an omnibus motion as 11 well as defendant Energy Transfer moving to dismiss separately. In addition, Plaintiffs move for 12 leave to supplement their complaint and for reconsideration of the Court’s order denying leave to 13 depose Kushner. 14 The Court shall address other relevant facts in the remainder of its order. 15 ANALYSIS 16 A. Motion to Dismiss filed by All Defendants. 17 1. Legal Standard Pursuant to Federal Rule of Civil Procedure 12(b)(6). 18 Defendants move to dismiss for failure to state a claim under Federal Rule of Civil 19 Procedure 12(b)(6). Under Rule 12(b)(6), a court generally “is limited to the allegations in the 20 complaint, which are accepted as true and construed in the light most favorable to the plaintiff.” 21 Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). Even under the liberal 22 pleadings standard of Federal Rule of Civil Procedure 8(a)(2), “a plaintiff’s obligation to provide 23 the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a 24 formulaic recitation of the elements of a claim for relief will not do.” Bell Atlantic Corp. v. 25 Twombly, 550 U.S. 544, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). 26 Pursuant to Twombly, a plaintiff must not allege conduct that is conceivable but must allege 27 “enough facts to state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 1 inference that the Defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 2 678 (2009) (citing Twombly, 550 U.S. at 556). 3 If a plaintiff fails to state a claim, a court should grant leave to amend, unless amendment 4 would be futile. See, e.g., Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990); Cook, 5 Perkiss & Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 246-47 (9th Cir. 1990). 6 However, if a plaintiff has previously amended a complaint, a court has “broad” discretion to deny 7 leave to amend. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) (quoting Ascon 8 Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989)). 9 2. Legal Standard Pursuant to Federal Rule of Civil Procedure 12(b)(1). 10 Defendants also move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). 11 The Court evaluates challenges to Article III standing under Federal Rule of Civil Procedure 12 12(b)(1). Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011) (motion to dismiss for lack 13 of standing governed by Rule 12(b)(1)). Where, as here, a defendant makes a facial attack on 14 jurisdiction, the factual allegations of the complaint are taken as true. Fed’n of African Am. 15 Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir. 1996). Plaintiffs are then entitled to 16 have those facts construed in the light most favorable to them. Id. 17 The “irreducible constitutional minimum” of standing consists of three elements: an injury- 18 in-fact, causation, and redressability. Spokeo v. Robins, 136 S. Ct. 1540, 1547 (2016) (citing 19 Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992)). Plaintiffs must prove each element with 20 the same manner and degree of evidence required at each stage of the litigation. Lujan, 504 U.S. 21 at 561. “At the pleading stage, general factual allegations of injury resulting from the defendant’s 22 conduct may suffice, for on a motion to dismiss we ‘presum[e] that general allegations embrace 23 those specific facts that are necessary to support the claim.’” Id. at 561 (quoting Lujan v. Nat’l 24 Wildlife Fed’n, 497 U.S. 871, 889 (1990)). Because Plaintiffs are the parties invoking federal 25 jurisdiction, they “bear[] the burden of establishing these elements.” Id. 26 Defendants argue that, under several doctrines, Plaintiffs lack standing to file suit. Thus, 27 they move to dismiss pursuant to Rule 12(b)(1). In addition, Defendants contend that even if the 1 claim upon which relief can be granted pursuant to Rule 12(b)(6). 2 3. Political Question Doctrine. 3 The political question doctrine bars courts from making any determination of issues that 4 the Constitution commits to the political branches of government. Adjudication of those claims is 5 jurisdictionally barred. Under the political question doctrine, a court “lacks authority to decide the 6 dispute before it” when a case involves a “textually demonstrable constitutional commitment of 7 the issue to a coordinate political department; or lack of judicially discoverable and manageable 8 standards for resolving it.” Zivotofsky ex rel. Zivotofsky v. Clinton, 566 U.S. 189, 195 (2012) 9 (quoting Nixon v. United States, 506 U.S. 224, 228 (1993)). Courts lack jurisdiction to adjudicate 10 “those controversies which revolve around policy choices and value determinations 11 constitutionally committed for resolution to the halls of Congress or the confines of the Executive 12 Branch.” Japan Whaling Ass’n v. Am. Cetacean Soc’y, 478 U.S. 221, 203 (1986). 13 Here, Plaintiffs contend that the former President of the United States and his 14 administration were instrumental in negotiating an end to an international price war over the cost 15 of petroleum products. It is well-established that allegations of a conspiracy among American 16 corporations and foreign sovereigns raise non-justiciable political questions. See, e.g., Spectrum 17 Stores, Inc. v. Citgo Petroleum Corp., 632 F3d. 938, 950 (5th Cir. 2011) (holding that matters 18 relating to the conduct of foreign relations is committed exclusively to the political branches of 19 government and largely immune from judicial inquiry or interference) (citing Haig v. Agee, 453 20 U.S. 280, 292 (1981)). Plaintiffs here are barred by the political question doctrine from 21 questioning foreign policy decisions of the coordinate branches of government. The complaint 22 alleges that President Trump, in negotiating a fix to the international price war, sought an 23 agreement among the American oil companies together with Saudi Arabia and Russia to agree to 24 limit production and exploration of oil. (See Complaint at ¶ 1 (“Plaintiffs allege that the 25 Defendants combined and conspired between and among themselves and with Saudi Arabia and 26 Russia to raise the price of oil and gasoline.”); ¶ 34 (“The American oil companies had agreed to 27 the demands of Saudi Arabia and Russia. The cartel now included the Americans.”); ¶ 37 (“Thus, 1 price war, just as Russia and Saudi Arabia had demanded.”)). Plaintiffs allege that 2 [f]rom the beginning of the conspiracy and as an integral part of its success, the plan of the Defendant oil companies and API was to 3 cajole and persuade former President Trump into abandoning any notion of the free enterprise principles, and, instead, to convince his 4 “friends” Vladimir Putin of Russia and the Crown Price of Saudi Arabia to end their price war, and to commit to a substantial reduction 5 of their production so that the prices for oil and gasoline could increase to the substantial benefit of all producers, and to the 6 substantial and catastrophic detriment of all consumers, and others who rely on oil and gasoline in their businesses, including, 7 commuters, vacationers, and citizens just driving to the store. 8 (Id. at ¶ 40.) 9 The facts proffered by Plaintiffs clearly include Russia and Saudi Arabia as indispensable 10 members of the alleged conspiracy and include questioning the foreign policy decisions of 11 President Trump and his administration. Although in opposition, Plaintiffs argue that they have 12 alleged an independent and completely domestic conspiracy, the actual allegations in the 13 complaint confirm a purported global, not just private or domestic agreement, between Saudi 14 Arabia, Russia, and the United States to cut production of oil. The allegations include specific 15 foreign policy decisions allegedly made by the Trump administration in furtherance of the alleged 16 conspiracy. 17 The court lacks jurisdiction over a complaint that “requires and inquiry into” whether 18 foreign nations entered an agreement with Defendants at the behest of the President of the United 19 States. See Spectrum Stores, 632 F.3d at 951 (holding that adjudicating the legality of the actions 20 of foreign states would trench on “delicate foreign policy questions” and would also require the 21 Court to “reexamin[e] critical foreign policy decisions, including the Executive Branch’s 22 longstanding approach of managing foreign relations with foreign oil-producing states through 23 diplomacy rather than private litigation.”). Accordingly, the Court finds that the claims not 24 justiciable and barred by the political question doctrine. 25 4. Act of State Doctrine. 26 The act of state doctrine declares that a United States court will not adjudicate a politically 27 sensitive dispute which would require the court to judge the legality of the sovereign act of a 1 Petroleum Exporting Countries (OPEC), 648 F.2d 1354, 1358 (9th Cir. 1981). The doctrine 2 “recognizes the institutional limitations of the courts and the peculiar requirements of successful 3 foreign relations.” Id. The political branches of government are uniquely suited “to consider the 4 competing economic and political considerations and respond to the public will in order to carry 5 on foreign relationships in accordance with the best interests of the country as a whole. The 6 courts, in contrast, focus on single disputes and make decisions on the basis of legal principles.” 7 Id. Like the political question doctrine and similarly derived from the respect of the separation of 8 powers, the act of state doctrine “requires that the courts defer to the legislative and executive 9 branches when those branches are better equipped to resolve a politically sensitive question.” Id. 10 Here, the act of state doctrine bars this suit as Plaintiffs explicitly involve the sovereign 11 countries – Russia and Saudi Arabia – and their management of their own respective petroleum 12 resources. As pled, these countries are indispensable co-conspirators in the alleged scheme to cut 13 production and they demanded Defendants’ cooperation in the conspiracy as a “quid pro quo” for 14 ending the price war. (See Complaint at ¶¶ 37-39.) The Court finds that Plaintiffs’ direct 15 challenge to the official acts of foreign nations to limit their oil production and demand that 16 Defendants do the same, are acts of state beyond the jurisprudential scope of this Court’s 17 authority. Accordingly, the Court finds that the claims are independently barred by the act of state 18 doctrine. 19 5. Noerr-Pennington Doctrine. 20 The First Amendment guarantees the “right of the people … to petition the Government 21 for a redress of grievances.” U.S. Const. amend. I. The Noerr-Pennington doctrine derives from 22 this constitutional guarantee. Generally, it holds that an individual who petitions the government 23 for redress will be immune from any statutory liability for their petitioning conduct. See Sosa v. 24 DIRECTV, Inc., 437 F.3d 923, 929, 934 (9th Cir. 2006) (citing Empress LLC v. City & County of 25 S.F., 419 F.3d 1052, 1056 (9th Cir. 2005)). The doctrine “immunizes petitions directed at any 26 branch of government, including the executive, legislative, judicial and administrative agencies.” 27 Manistee Town Center v. City of Glendale, 227 F.3d 1090, 1092 (9th Cir. 2000). Under the 1 government officials are protected from antitrust liability.” Allied Tube & Conduit Corp. v. Indian 2 Head, Inc., 486 U.S. 492, 499 (1988). 3 The allegations in the complaint, taken as true at this procedural posture, amount to 4 Defendants advocating to the former President and his administration for a diplomatic solution to 5 the global price war over petroleum products. Petitioning the President to use diplomacy to end a 6 price war among sovereign states is constitutionally protected activity and “federal antitrust laws 7 … do not regulate the conduct of private individuals in seeking anticompetitive action from the 8 government.” City of Columbia v. Omni Outdoor Advert., Inc., 499 U.S. 365, 379-80 (1991). The 9 complaint describes a conspiracy relating to the United States government’s action in response to 10 Defendants’ alleged petitioning. Plaintiffs allege that Defendants publicly advocated for a 11 solution to the price war and suggested methods for stabilizing the global oil market to the 12 President and his administration. (Complaint at ¶¶ 14, 15, 22-23, 25-26, 34.) This lobbying effort 13 is “protected petitioning activity [under] … Noerr-Pennington.” See B&G Foods N. Am., Inc. v. 14 Embry, 29 F.4th 527, 540 (9th Cir. 2022). Taken as true, the complaint alleges that Defendants 15 sought to have the President engage in diplomatic negotiations to end the price war. This conduct 16 is protected by the Noerr-Pennington doctrine from antitrust liability. 17 Accordingly, the Court finds that the motion to dismiss filed by all defendants can be 18 granted on the basis that the claims are barred by the political question doctrine, the act of state 19 doctrine, and the Noerr-Pennington doctrine. These jurisprudential bars to this litigation are each 20 sufficient to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1). 21 However, the Court also finds that Plaintiffs have failed plausibly to state a claim by which relief 22 can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiffs have failed to 23 allege sufficient facts to demonstrate the basis for any claim for antitrust violation, that is, they 24 have failed to allege facts to support a plausible inference of an unlawful agreement among 25 Defendants, including the “who, did what, to whom (or with whom), where, and when.” In re 26 Musical Instruments & Equip. Antitrust Litig., 798 F.3d 1186, 1194 n.6 (9th Cir. 2015). The bare 27 assertion that Defendants “agreed to take any surplus oil off the market, cut their production, and 1 support the claim of an unlawful agreement. (Complaint at ¶ 16.) The complaint simply does not 2 allege sufficient plausible facts detailing any such agreement. In addition, during the same time 3 period when oil and gasoline prices increased, the world faced the Covid-19 pandemic, which 4 gave rise to stay-at-home orders, economic collapse, and plunging demand for gasoline and other 5 fuels. This provides another explanation, omitted entirely from the complaint, for a significant 6 drop in demand and consequent production cuts by oil companies. Although if given leave, the 7 Plaintiffs might ostensibly plead additional facts giving rise to an inference of an unlawful 8 agreement, because the Court finds the antitrust claims are barred by several applicable 9 jurisprudential doctrines, the Court GRANTS Defendants’ omnibus motion to dismiss without 10 leave to amend. 11 B. Motion to Dismiss Filed by Defendant Energy Transfer. 12 Defendant Energy Transfer joins in the omnibus motion to dismiss filed on behalf of all 13 Defendants and also files a motion separately to dismiss on the basis that the Court lacks personal 14 jurisdiction over the company. First, Energy Transfer argues that Plaintiffs fail to allege that the 15 defendant produces or sells oil or gasoline or that it specifically took any action that affected oil 16 and gasoline prices. In fact, the Complaint states that the defendant transports only natural gas and 17 propane. (Complaint at ¶ 79.) Second, Energy Transfer contends that there are no specific 18 allegations that Plaintiffs purchased anything from the company. Third, Plaintiffs do not identify 19 any merger or acquisition by Energy Transfer in the relevant time frame or any transaction that 20 may have affected gasoline purchased by Plaintiffs. Lastly, although Energy Transfer concedes 21 that it may be served in California, there are no allegations supporting the contention that this 22 Court has personal jurisdiction over the company as it is not incorporated or have its principal 23 place of business in the State and there are no allegations of the company doing business in the 24 State or specific targeting activity in the jurisdiction. See 15 U.S.C. ¶ 22. Accordingly, the Court 25 lacks personal jurisdiction over defendant Energy Transfer.1 Although the Court would grant 26 leave to amend to allege specific facts which may give rise to the exercise of personal jurisdiction, 27 1 the Court has already found that the claims are barred. 2 C. Motion for Leave to Supplement the Complaint. 3 1. Legal Standard. 4 Plaintiffs seek leave to file a supplemental pleading under Federal Rule of Civil Procedure 5 15(d) to add Hess Corporation as a defendants and to add detailed representations made by 6 Kusher. Under Rule 15(d), “[o]n motion and reasonable notice, the court may, on just terms, 7 permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event 8 that happened after the date of the pleading to be supplemented.” Fed. R. Civ. P. 15(d); see also 9 Eid v. Alaska Airlines, Inc., 621 F.3d 858, 874 (9th Cir. 2010) (“Rule 15(d) provides a mechanism 10 for parties to file additional causes of action based on facts that didn’t exist when the original 11 complaint was filed.”). Supplementation is generally favored as “a tool of judicial economy and 12 convenience.” Keith v. Volpe, 858 F.2d 467, 473 (9th Cir. 1988). “To determine if efficiency 13 might be achieved, courts assess ‘whether the entire controversy between the parties could be 14 settled in one action.’” Id. (citation and ellipses omitted). “The clear weight of authority ... in 15 both the cases and the commentary, permits the bringing of new claims in a supplemental 16 complaint to promote the economical and speedy disposition of the controversy.” Id. 17 “The legal standard for granting or denying a motion to supplement under Rule 15(d) is the 18 same as for amending one under 15(a).” Paralyzed Veterans of America v. McPherson, No. C 06- 19 4670 SBA, 2008 WL 4183981, at *26 (N.D. Cal. Sept. 9, 2008). The five factors commonly used 20 to evaluate the propriety of a motion for leave to amend (and thus, a motion to supplement) are: 21 (1) undue delay, (2) bad faith or dilatory motive on the part of the movant, (3) repeated failure of 22 previous amendments, (4) undue prejudice to the opposing party, and (5) futility of the 23 amendment. See Foman v. Davis, 371 U.S. 178, 182 (1962). “[T]he consideration of prejudice to 24 the opposing party … carries the greatest weight.” Eminence Capital, LLC v. Aspeon, Inc., 316 25 F.3d 1048, 1052 (9th Cir.2003). Absent prejudice or a “strong showing” of any other Foman 26 factor, there is a presumption in favor of granting leave to supplement. Id. 27 2. Leave Denied. 1 to supplement factual statements made by Kushner in a presentation by his new company, Affinity 2 Partners. Plaintiffs allege that Kushner identified one of his most significant accomplishments 3 while in his father-in-law’s administration to be “leading negotiations on the historic OPEC+ oil 4 agreement in April 2020 among the United States, Saudi Arabia and Russia, which led to the 5 largest oil production reductions in history.” (Dkt. No. 109-1, Motion at 3.) Plaintiffs also allege 6 that Kushner specifically referred to Hess Corporation’s participation in the “deal to raise oil 7 prices” in his nearly released memoir. (Id. at 4.) 8 Because the Court has already determined that Plaintiffs’ claims are barred by the political 9 question, act of state, and Noerr-Pennington doctrines, the Court finds the proposed addition of 10 the Hess Corporation and Kushner’s purported participation in the Trump administration still 11 present non-justiciable political questions regarding the United States’ foreign policy with respect 12 to other oil-producing countries and public acts of foreign states and Defendants’ possible efforts 13 to petition the government for redress. The adjudication of these threshold questions requires 14 dismissal of this action. Further supplementation of the complaint would be futile. Accordingly, 15 Plaintiffs’ motion for leave to supplement the complaint is DENIED. 16 D. Motion for Leave to File Motion for Reconsideration. 17 1. Legal Standard. 18 A motion for reconsideration may be made on one of three grounds: (1) a material 19 difference in fact or law exists from that which was presented to the Court, which, in the exercise 20 of reasonable diligence, the party applying for reconsideration did not know at the time of the 21 order; (2) the emergence of new material facts or a change of law; or (3) a manifest failure by the 22 Court to consider material facts or dispositive legal arguments presented before entry of judgment. 23 N.D. Civ. L.R. 7-9(b)(1)-(3). The moving party may not reargue any written or oral argument 24 previously asserted to the Court. Id., 7-9(c). 25 2. Leave Denied. 26 Plaintiffs seek leave to file a motion for this Court to reconsider its ruling disallowing the 27 deposition of Jared Kushner based on alleged disclosures in his recently-published memoir. For 1 Court finds the addition of Kushner as a witness futile and DENIES Plaintiffs lead to file a motion 2 || for reconsideration of its earlier order. 3 CONCLUSION 4 For the foregoing reasons, the omnibus motion to dismiss filed by all defendants is 5 GRANTED without leave to amend and the motion to dismiss filed by Energy Transfer is 6 GRANTED. Plaintiffs’ motion for leave to supplement the complaint and for leave to file a 7 motion for reconsideration are DENIED. 8 IT IS SO ORDERED. 9 Dated: January 9, 2023 \ | he / nt 10 foe i i / JEREVEY S. WKATE 1] i /Unit 1 States Pustrict Judge 12
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