Kohl Initiative to Reduce Gas Prices Passed by House of Representatives

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KOHL INITIATIVE TO REDUCE GAS PRICES PASSED BY HOUSE OF REPRESENTATIVES

Senator's Legislation Will Permit U.S. Legal Action Against OPEC

Legislation to permit the Department of Justice to bring actions against foreign states -- such as members of the Organization of Petroleum Exporting Countries (OPEC) -- for collusive practices in setting the price or production of petroleum products was approved by the U.S. House of Representatives today by a vote of 345 to 72. U.S. Senator Herb Kohl is the author of the "No Oil Producing & Exporting Cartels Act of 2007 (NOPEC)," which was unanimously approved by the Senate Judiciary Committee on April 25th; the House version of Kohl's bill was sponsored by Rep. John Conyers (D-MI).

"This legislation is about accountability. OPEC has an unfettered ability to manipulate the price of oil, and each time they hike the price it creates a ripple in our economy. This bill gives our government the leverage it needs to persuade OPEC to compete fairly or to be held accountable," Kohl said.

In 1979, a federal district court found that OPEC's price-fixing decisions were "governmental" -- not "commercial" -- acts and accordingly they were protected by the Foreign Sovereign Immunities Act. Subsequently, in 1981, a federal court of appeals declined to consider the appeal of that antitrust case based on the so-called "act of state" doctrine, which holds that a court will not consider a case regarding the legality of the acts of a foreign nation.

Kohl's bipartisan NOPEC legislation effectively reverses these decisions by making it clear that OPEC's activities are not protected by sovereign immunity and that the federal courts should not decline to hear such a case based on the "act of state" doctrine. It clears away these judicially-created roadblocks so the Department of Justice could bring an antitrust case against OPEC for its price-fixing behavior.

The legislation would force OPEC to begin pricing in a competitive, free market manner or face the possibility of being prosecuted for civil or criminal antitrust violations.

NOPEC was passed by the Senate on June 21, 2005 as part of the Energy Bill, which subsequently died in a House-Senate conference. Kohl said that he will offer the bill as an amendment to the next appropriate legislative vehicle brought before the Senate for debate.

Kohl's legislation is cosponsored by Senators Patrick Leahy (D-VT), Arlen Specter (R-PA), Russ Feingold (D-WI), Chuck Grassley (R-IA), Charles Schumer (D-NY), Tom Coburn (R-OK), Richard Durbin (D-IL), Olympia Snowe (R-ME), Carl Levin (D-MI), Barbara Boxer (D-CA), Bernie Sanders (I-VT) and Joe Lieberman (i-CT).

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