District of New Mexico Allows Antitrust Claims by Indirect Fuel Purchasers Against Major Shale Producers to Proceed, Rejects Act-of-State Defense
District of New Mexico denied motions to dismiss in MDL alleging Hess, Pioneer, Occidental, EOG and four other major shale producers conspired starting in 2021 to restrain domestic oil production to inflate crude prices, finding antitrust standing for indirect purchasers of refined products in a proposed nationwide class seeking injunctive relief and 35-state damages class of end purchasers. The court rejected defendants' OPEC act-of-state defense and allowed claims to proceed on behalf of fuel purchasers downstream of the alleged production restraint conspiracy.
Background
On August 31, 2026, the U.S. District Court for the District of New Mexico denied motions to dismiss in In re Shale Oil Antitrust Litigation, a multidistrict litigation alleging that eight major shale producers—including Hess, Pioneer Natural Resources, Occidental Petroleum, and EOG Resources—engaged in a conspiracy beginning in 2021 to artificially restrain domestic oil production and inflate crude prices. The plaintiffs seek to certify two classes: a nationwide class of all fuel purchasers seeking injunctive relief, and a 35-state damages class comprising end purchasers of refined petroleum products.
The Antitrust Standing Issue
The central threshold question addressed in the motion to dismiss was whether indirect purchasers of refined products—consumers who buy gasoline and other fuels at retail, rather than crude oil itself—possess antitrust standing to challenge an alleged upstream production conspiracy. Defendants argued that the attenuated chain of causation between the alleged production restraints and retail fuel prices, combined with the multiple levels of distribution and refining, defeated standing. The court rejected this argument, finding that the proposed class members adequately alleged injury flowing from the alleged conspiracy to restrain production.
Act-of-State Defense Rejected
Defendants also invoked the act-of-state doctrine, arguing that the alleged conspiracy was undertaken in coordination with or at the behest of OPEC member states and therefore implicated foreign sovereign acts immune from judicial scrutiny. The District of New Mexico rejected this defense at the motion to dismiss stage. The rejection of the OPEC act-of-state defense allows discovery to proceed into the nature and extent of any coordination between domestic shale producers and foreign oil-producing nations.
Implications for E&P Companies
The survival of this MDL past the motion to dismiss stage creates exposure for the named defendants and raises questions about permissible coordination among competitors in the upstream oil and gas sector. The court's recognition of antitrust standing for end purchasers of refined products expands the potential class size and damages exposure beyond what would exist if standing were limited to direct purchasers of crude oil.