People of the State of Michigan v. BP p.l.c.

The federal district court for the Western District of Michigan ruled that Michigan lacked standing for federal antitrust claims against four fossil fuel companies and American Petroleum Institute (API). The court described Michigan’s case as claiming that the fossil fuel companies in the 1970s “agreed, through API, to suppress renewable energies to maintain supracompetitive prices in the transportation and primary energy markets,” allegedly resulting in many harms to Michigan and its residents, including “overpriced energy, a lack of options in the energy market, increased insurance premiums for households and depressing home values, and increased costs to implement measures mitigating the negative externalities of fossil fuel use.” The court concluded that Michigan plausibly alleged only one “antitrust injury” under the Clayton Act: overcharges for energy in the transportation and primary energy markets. The court found that Michigan could not allege that renewable energy output reduction was an antitrust injury because this output reduction was not in the transportation and primary energy markets Michigan defined in its complaint. The court also found that reduction in product variety and innovation would not independently qualify as an antitrust injury. In addition, the court said Michigan conceded that other alleged harms would not independently qualify as antitrust injuries though Michigan contended that consequential damages could be recovered for those other harms. The court rejected the defendants’ contention that Michigan made only conclusory allegations regarding overcharges. Although the court concluded that the alleged energy overcharges would qualify as an antitrust injury, the court found that Michigan failed to plausibly allege the proximate causation element of antitrust standing. First, the court concluded that Supreme Court precedent barred recovery for damages as an indirect purchaser from the fossil fuel companies since the alleged conspiracy involved trade in the wholesale markets, not in the retail markets in which Michigan and its residents made purchases. Second, the court found that Michigan could not recover damages for any direct purchases from the companies or from retailers owned by the fossil fuel company defendants because proximate cause factors such as “the indirectness of the injury, the uncertain causal chain, and the existence of other potential plaintiffs” outweighed factors in favor of proximate cause. The court also found that “the tenuous causal connection … similarly cuts against proximate cause for an injunction.” The court dismissed the federal antitrust claim with prejudice and declined to exercise supplemental jurisdiction over Michigan state law claim under the Michigan Antitrust Reform Act.

Antitrust action brought by Michigan Attorney General against energy industry defendants alleging that they engaged in a “conspiracy to delay the transition from fossil fuels to renewable energy.”

Antitrust action brought by Michigan Attorney General against energy industry defendants alleging that they engaged in a “conspiracy to delay the transition from fossil fuels to renewable energy.”

Antitrust action brought by Michigan Attorney General against energy industry defendants alleging that they engaged in a “conspiracy to delay the transition from fossil fuels to renewable energy.”