In re: WESTERN STATES WHOLESALE NATURAL GAS ANTITRUST LITIGATION, SINCLAIR OIL… v. Oneok Energy Services Company, L.p.

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: WESTERN STATES WHOLESALE
NATURAL GAS ANTITRUST
LITIGATION,
______________________________
SINCLAIR OIL CORPORATION,
Plaintiff-Appellant,
v.
ONEOK ENERGY SERVICES
COMPANY, L.P.,
Defendant-Appellee.
No. 17-16925
D.C. Nos.
2:03-cv-01431-RCJ-PAL
2:06-cv-00282-PMP-PAL
MEMORANDUM*
In re: WESTERN STATES WHOLESALE
NATURAL GAS ANTITRUST
LITIGATION,
______________________________
SINCLAIR OIL CORPORATION,
Plaintiff-Appellant,
v.
EPRIME, INC. and XCEL ENERGY, INC.,
No. 17-16926
D.C. Nos.
2:03-cv-01431-RCJ-PAL
2:06-cv-00267-RCJ-PAL
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
FILED
AUG 1 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

-- 1 of 4 --

2
Defendants-Appellees.
Appeals from the United States District Court
for the District of Nevada
Robert Clive Jones, District Judge, Presiding
Argued and Submitted July 12, 2018
San Francisco, California
Before: GRABER and HURWITZ, Circuit Judges, and LEMELLE,** District
Judge.
Sinclair Oil Corporation claims in these consolidated actions that defendant
natural gas traders ePrime, Inc., Xcel Energy, Inc., and OneOK Energy Services
violated state antitrust laws by manipulating retail prices of natural gas. Concluding
that the class action settlement in In re Natural Gas Commodity Litigation, No. 03-
CV-06186-VM (S.D.N.Y. May 24, 2006) (“the NYMEX settlement”) barred
Sinclair’s claims, the district court granted summary judgment in favor of
Defendants. We have jurisdiction over Sinclair’s appeal under 28 U.S.C. § 1291 and
reverse.
1. “The interpretation of a settlement agreement, like that of a contract, is a
question of law subject to de novo review . . . .” Pekarsky v. Ariyoshi, 695 F.2d 352,
354 (9th Cir. 1982). The NYMEX litigation, in which Sinclair was a class member,
** The Honorable Ivan L.R. Lemelle, United States District Judge for the
Eastern District of Louisiana, sitting by designation.

-- 2 of 4 --

3
involved alleged price manipulation in natural gas futures and options contracts
traded on the New York Mercantile Exchange. The settlement agreement released
all claims by class members, including state-law antitrust claims,
arising from or relating in any way to trading in NYMEX Natural Gas
Contracts (including purchasing, selling, or holding any NYMEX Natural Gas
Contract, or taking or making delivery of physical natural gas pursuant to any
NYMEX Natural Gas Contract, or any combination thereof, whether as a
hedger or speculator), whether or not asserted in the Action, . . . .
The NYMEX settlement agreement does not release Sinclair’s claims in these
actions. The agreement covers only claims “arising from” or “relating” to “trading
in NYMEX Natural Gas Contracts,” which are defined in the settlement as “any
commodity futures (including any option thereon), basis, or swap contract related to
natural gas that was traded on NYMEX, or any combination thereof, that was
transacted or settled during the Class Period.” The transactions at issue in these cases
did not involve such trading; rather, they were direct retail purchases by Sinclair of
gas from Defendants. The NYMEX settlement only extends to claims involving
delivery of physical natural gas “pursuant to any NYMEX Natural Gas Contract;”
and the gas at issue in these cases was not delivered pursuant to such contracts. The
fact that the same collusive conduct that gave rise to the claims in the NYMEX case
may have also affected the prices of retail purchases (whose prices were pegged to
the NYMEX index) does not bring those retail purchases within the ambit of the
settlement.

-- 3 of 4 --

4
2. Nor does the doctrine of claim preclusion bar Sinclair’s claims. “A
settlement can limit the scope of the preclusive effect of a dismissal with prejudice
by its terms.” United States ex rel. Barajas v. Northrop Corp., 147 F.3d 905, 911
(9th Cir. 1998). We therefore look to the terms of the settlement agreement, rather
than general principles of res judicata, to determine the preclusive effect of the
judgment in the NYMEX action. Because the settlement agreement covers only
claims arising from or relating to purchases of physical natural gas pursuant to
NYMEX Natural Gas Contracts, it does not preclude Sinclair’s claims in these cases.
See also Reorganized FLI, Inc. v. OneOK, Inc. (In re W. States Wholesale Nat. Gas
Antitr. Litig.), 725 F. App’x 560 (9th Cir. 2018) (rejecting argument that NYMEX
settlement precluded suit by retail buyers of natural gas).
REVERSED and REMANDED.1
1 Sinclair’s motions for judicial notice, Dkt. 36 (No. 17-16925) and Dkt. 35
(No. 17-16926), are GRANTED. Sinclair’s motions for summary reversal, Dkt. 33
(No. 17-16925) and Dkt. 32 (No. 17-16926), are DENIED.

-- 4 of 4 --