Posted by Social Science Research Network
White Paper: Antitrust Analysis of NOPEC Legislation
By Harry First (New York University) & Darren Bush (University of Houston Law Center)
This White Paper analyzes the proposed “No Oil Producing and Exporting Cartels Act of 2019” (NOPEC). This legislation, which has been introduced in the United States Senate and House of Representatives, addresses the antitrust issues involved in allowing the Department of Justice to sue the Organization of the Petroleum Exporting Countries (OPEC), their member states, their state owned oil companies (SOEs), nonmember states and their SOEs, and private companies for their participation in an international cartel that has long been involved in regulating the production and distribution of oil and other petroleum products.
The White Paper begins with a background discussion of the participants in the oil cartel. The paper then describes in detail the proposed legislation. The paper discusses how prior suits against OPEC have failed as courts have applied several substantive law doctrines — comity, Act of State, and the Foreign Sovereign Immunities Act — as well as rules on service of process under the Federal Rules of Civil procedure, to turn away the four private cases that have been filed. The paper then addresses how NOPEC is directed at removing the substantive defenses that have blocked the private party litigation and that might block litigation filed by the Justice Department. The bill removes the substantive law blocks, although an issue might remain if the Department brings a criminal prosecution, but NOPEC does not address the procedural issue of service of process. The White Paper concludes that NOPEC is an important part of a worldwide effort to stop international cartels that harm consumers and reduce economic welfare.
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