Six Oil Refiners to Face Trial on Price Fixing : Energy: The Supreme Court rules that an old case brought by Long Beach and the state must go to federal court. If found guilty, the firms could face $800 million in damages.

WASHINGTON —  The Supreme Court on Tuesday ordered six major oil refiners operating in Southern California to stand trial on charges that they conspired to cheat the City of Long Beach by holding down prices for crude oil pumped from the Wilmington oil field.

The huge antitrust suit filed in 1975 by the City of Long Beach and the State of California has been tied up for years in discovery and pretrial motions.

But now the case will to go before a jury. If the oil companies are found guilty of price fixing, they could face as much as $800 million in damages.

The six companies facing the charges are Chevron Corp. (formerly Standard Oil of California), Exxon Corp., Mobil Oil Corp., Shell Oil Co., Texaco Inc. and Union Oil Co. of California.

“We’re obviously delighted,” said James McCabe, deputy city attorney for Long Beach. “The city and the state have been after this case for 15 years, and we feel vindicated.”

State Controller Gray Davis, who is also chairman of the State Lands Commission, which is a plaintiff in the suit, said in a statement: “My office has overwhelming evidence the oil industry conspired to fix prices during certain period of the 1970s and ‘80s. Legal maneuvering by the industry forced California consumers to wait 15 long years for relief. Finally, however, the consumer will have his day in court.”

McCabe estimated that the case has cost the plaintiffs well over $30 million to litigate so far but added, “We’re confident the expenses will be many times repaid when we get a jury verdict.”

Spokesmen for several oil companies denied any price fixing and said they were confident they would prevail before a jury.

In the early 1960s, Long Beach officials sold interests in the 1.5-billion barrel field to the major oil companies to pump and refine the crude oil. In its antitrust complaint, the city alleges that oil company representatives met secretly and conspired to pay prices below what a competitive market would have brought.

The State of California, which owns oil fields offshore, then joined the suit. The original complaint said the city and state had lost $280 million because of the conspiracy. In successful antitrust cases, the damages are tripled.

Despite years of investigation and discovery, city attorneys were unable to furnish clear evidence of such a conspiracy. In 1985, U.S. District Judge William P. Gray concluded that the case was weak and dismissed the complaint.

But last year, a three-judge panel of the U.S. 9th Circuit Court of Appeals concluded that there was circumstantial evidence of price fixing. While the city has produced “no direct evidence” that a conspiracy existed, the big companies appeared to act “in conscious parallel” to hold down the prices to be paid for crude oil, said appeals court Judge Jerome Farris. This sort of circumstantial evidence is enough to warrant a trial before a jury, Farris wrote.

Officials of the major oil companies signed on a series of prominent attorneys--among them former U.S. Solicitor Gen. Rex Lee and former appeals court judge and Supreme Court nominee Robert H. Bork--hoping to get the Supreme Court to overturn that conclusion and block the trial.

In its corner, the city had former 9th Circuit Court Judge and U.S. Secretary of Education Shirley Hufstedler, now a Los Angeles lawyer.

In the end, the court simply dismissed all the appeals and returned the case for a trial. (Standard Oil vs. Long Beach, 89-987; Chevron vs. Long Beach, 89-988, Exxon vs. Long Beach, 89-990)

“It’s disappointing that the case didn’t stay dead,” said Anthony P. Brown, a lawyer representing Chevron Corp. But, he added: “The fact that the Supreme Court declined to hear the case isn’t terribly surprising and shouldn’t be considered to be any comment on the validity of the plaintiffs’ case or the correctness of the action by the Court of Appeals.”

John Lord, a spokesman for Mobil in New York, said: “We absolutely deny price fixing and are sure a jury will find no evidence whatsoever of price fixing.”

And a spokesman for Exxon’s domestic oil and gas division said, “Exxon is disappointed that the Supreme Court did not elect to hear the case. However, it is important to emphasize that the court’s denial (of a hearing) is not a decision on the merits. It appears that the court did not deem that the issues had enough national significance for it to hear the case.”

At Texaco Inc., spokesman Peter Maneri said that Texaco had made no decision on whether to pursue its defense or settle out of court.

In 1984, Atlantic Richfield Co. agreed to pay a $22.5-million settlement to the city and the state and was dropped as a defendant from the suit.

California Atty. Gen. John K. Van de Kamp issued a statement saying: “With hundreds of millions of dollars at stake for taxpayers, I am delighted that the U.S. Supreme Court will allow California and the City of Long Beach an opportunity to put evidence of price fixing before a jury.”

McCabe, the Long Beach attorney, said the city and state would press for an early trial date. It is unlikely the case will go before a jury for at least a year.

Times staff writer Patrick Lee contributed to this story.