SAN FRANCISCO
Several natural gas companies, including Houston-based El Paso Corp., face a class-action lawsuit accusing them of manipulating the state's market and unfairly driving up prices.
It was the latest in a series of lawsuits this week against companies involved with supplying, transporting and selling natural gas to California, accusing them of wrongdoing.
Antitrust lawyer Francis O. Scarpulla and Lieff, Cabraser, Heimann and Bernstein, which is currently litigating class action antitrust suits against Microsoft and the music industry, sued Thursday in San Francisco Superior Court.
The lead plaintiff is Sweetie's, a bar in San Francisco's popular North Beach neighborhood. The suit is on behalf of Sweetie's and all California businesses and individuals that bought or will buy natural gas between March 1, 2000 and May 1, 2001.
"Obviously we all know there have been enormous increases in the price of natural gas," said attorney Barry Himmelstein. "One might fairly suspect that competitive forces are not working as efficiently as they should."
Excluded from the suit are the utilities, generators and anyone else who bought natural gas to fuel a power plant or to resell it.
The suit claims that defendants, including Houston-based El Paso Corp., which owns the main pipeline transporting out-of-state gas to Southern California, "rigged the bidding for natural gas pipeline capacity to gain market power in the California natural gas spot market and then abused its market power to manipulate the prices."
"El Paso artificially inflated demand on the Arizona side of the border, which resulted in reduced supply on the California side of the border and then took advantage of the shortage," Himmelstein said.
