Plant Oil Powered Diesel Fuel Systems, Inc. v. Exxonmobil Corp.

801 F. Supp. 2d 1163, 2011 U.S. Dist. LEXIS 88306, 2011 WL 3510755
District Court, D. New Mexico·Decided July 21, 2011·No. CIV 11-0103 JB/WPL·Published·Cited by 13 cases

Opinion

MEMORANDUM OPINION AND ORDER

BROWNING, District Judge.

THIS MATTER comes before the Court on: (i) Defendant Conocophillips’ Motion to Dismiss, filed April 1, 2011 (Doc. 64); (ii) Defendant ExxonMobil Corporation’s Motion to Dismiss Plaintiffs Second Amended Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), filed April 1, 2011 (Doc. 66); and (iii) Defendant ASTM International’s Motion to Dismiss Plaintiffs Second Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), or in the Alternative, to Strike Certain Allegations Pursuant to Fed.R.Civ.P. 12®, filed April 1, 2011 (Doc. 67). The primary issues are: (i) whether the claims asserted by Plaintiff Plant Oil Powered Diesel Fuel Systems, Inc. (“POP Diesel”) are ripe; (ii) whether POP Diesel adequately pled allegations plausibly showing that the Defendants engaged in an conspiracy in violation of § 1 of the Sherman Act, 15 U.S.C. § 1; and (iii) whether POP Diesel has adequately pled a claim for tortious interference with business contracts under New Mexico law. The Court dismisses without prejudice POP Diesel’s claims that are based on the Fit-for-Purpose Guidelines as unripe. The Court dismisses POP Diesel’s antitrust claims over which it has subject-matter jurisdiction, because POP Diesel fails to allege a plausible conspiracy. Because POP Diesel’s state law claims are predicated on its antitrust claims and because POP Diesel does not allege contractual relations with which the Draft Standard Specification for Triglyceride Burner Fuel for use of triglyceride diesel fuel in larger-sized commercial and industrial burners, numbered WK 21463 (the “Draft ASTM Triglyceride Standard”) would interfere, the Court also dismisses POP Diesel’s claim for interference with prospective business advantage.

FACTUAL BACKGROUND

POP Diesel develops, manufactures, and sells triglyceride diesel fuel — fuel consisting of vegetable oil and animal fat — and related equipment that permits and manages the use of triglyceride diesel fuel in residential, commercial, and industrial burners and in diesel engines. See Second Amended Complaint Jury Demand ¶ 1, at 2, filed April 1, 2011 (Doc. 1)(“SAC”). POP Diesel also owns and operates a state-licensed triglyceride diesel fuel processing and filling station in state of New Mexico, which it opened in 2006 as the first such station in the United States of America. See SAC ¶ 4, at 3. The cities of Albuquerque, Las Cruces, and Santa Fe and the town of Taos in New Mexico have all pledged to assist POP Diesel in establishing the first state-wide network of triglyceride fuel filling stations in the country. *1167 See SAC ¶ 5, at 3. POP Diesel’s feedstock for making triglyceride diesel fuel at this time consists primarily of waste vegetable oils and greases obtained from restaurants and from industrial and agricultural operations, of which there is a virtually unlimited supply. See SAC ¶ 6, at 3.

Defendants ExxonMobil Corporation and ConocoPhillips Company (together “the Defendant Oil Companies”), are two of the world’s largest producers and sellers of petroleum-based diesel fuel, which competes with triglyceride diesel fuel, but which POP Diesel alleges is inferior to triglyceride diesel fuel for use in burners and diesel engines, for reasons of cost, performance, product safety, and environmental impact. SAC ¶¶ 7-9, at 3-4. Each of the Defendant Oil Companies is a member of Defendant ASTM International, one of the largest standard-setting organizations in the world. See SAC ¶¶ 8, 11-15, at 4-5. ASTM promulgates quality standards for many products, including fuel oils, which have been adopted by reference in federal and state statutes throughout the United States, including New Mexico. See SAC ¶ 13, at 4. ASTM’s “membership is composed of three categories: producers, consumers, and general interest (academic, etc.) ... [and] [i]ts specifications are written by technically qualified committees composed of members from the three categories.” Application of Am. Soc’y for Testing & Materials, 231 F.Supp. 686, 688 (E.D.Pa.1964).

This case involves ASTM’s pending promulgation, with the Defendant Oil Companies’ alleged involvement, of a proposed new standard and guidelines for biofuels that would limit the use of triglyceride diesel fuel and related products, including those of POP Diesel. POP Diesel alleges that the Defendants conspired with numerous other entities. See SAC ¶¶ 17-19, at 5-6. POP Diesel asserts that the co-conspirators of which it knows include certain members of ASTM’s Triglyceride Burner Fuel Working Group and Subcommittee P of ASTM Committee D02, including: (i) the National Biodiesel Board and Ralph F. Turner, Chair of the Triglyceride Burner Fuel Working Group, acting on behalf of biodiesel interests; (ii) Barbara Parry and Steve Spence of Newalta, acting on behalf of interests connected with recycled engine oil for burners; (iii) Marie F. Calhoon of Transmontaigne Inc., acting on behalf of interests connected with the petroleum industry; and (iv) other members of the Triglyceride Burner Fuel Working Group and Subcommittee P of ASTM Committee D02. See SAC ¶ 18, at 6. POP Diesel contends that the co-conspirators and the Defendant Oil Companies all have an economic interest in the exclusion of triglyceride diesel fuel from the relevant markets, because

triglyceride diesel fuel may tend to displace competing products manufactured, marketed, or promoted by the co-conspirators, including petroleum-based diesel fuel, recycled engine oil, and so-called biodiesel, a blend of 95 percent petroleum-based diesel fuel and 5 percent of a substance that starts out as triglycerides, but the molecules of which end up being physically and chemically transformed into a different substance .... Specifically, the co-conspirators are primarily affiliated with and representatives of petroleum companies, including, but not limited to, the Defendant Oil Companies; corporate agricultural interests that have invested heavily in biodiesel production facilities; companies that collect and render waste triglycerides, which have also invested heavily in biodiesel production facilities; sellers of petroleum fuel oil and recycled engine oil for use in burners; manufacturers and sellers of biodiesel; and related in *1168 terests that service petroleum and biodiesel producers.

SAC ¶ 17, at 5-6.

1. The Relevant Markets.

The relevant product and geographic markets for purposes of this action are: (i) the diesel fuel market for residential, commercial, and industrial burners in the United States, and (ii) the diesel fuel market for diesel engines in the United States (“the Relevant Markets”). SAC ¶ 21, at 7. POP Diesel competes in the Relevant Markets against the Defendant Oil Companies, as well as against other producers and sellers of diesel fuel. See

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Plant Oil Powered Diesel Fuel Systems, Inc. v. Exxonmobil Corp., 801 F. Supp. 2d 1163, 2011 U.S. Dist. LEXIS 88306, 2011 WL 3510755 (D.N.M. 2011).

801 F. Supp. 2d 1163 (Plant Oil Powered Diesel Fuel Systems, Inc. v. Exxonmobil Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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