Appellate judges weigh whether to allow suit against OPEC to proceed

Source: Jeremy P. Jacobs, E&E reporter • Posted: Wednesday, March 12, 2014

The advocacy group Freedom Watch took its fight against the Organization of the Petroleum Exporting Countries to federal appellate court today, asking judges to let an antitrust lawsuit against the association move forward.
Freedom Watch claims that OPEC, an association representing Iran, Saudi Arabia, Venezuela and several other oil-rich countries, is violating U.S. law by manipulating oil and petroleum prices.The lawsuit has garnered the attention of the oil industry, as Freedom Watch has alleged the countries use oil revenues to fund terrorist groups. However, the litigation was blocked in lower court because OPEC claimed it was not properly served notice of the litigation at its headquarters in Vienna.OPEC says it has special protections as an international organization under Austrian law and its “headquarters agreement.”

But Larry Klayman, Freedom Watch’s founder, argued today at the U.S. Court of Appeals for the District of Columbia Circuit that Austria is unjustly shielding OPEC from prosecution.

“In practice and in letter of the law,” Klayman said, “Austria provides OPEC with absolute immunity from American antitrust law.”

The case involves the complicated interaction of Austrian law, precedents set by other international headquarters — such at the World Bank — and whether Freedom Watch actually gave notice to anyone affiliated with OPEC.

Freedom Watch argues that it handed notice of the lawsuit to an “intake officer” at OPEC’s Vienna headquarters in May 2012, but OPEC later said that individual was a security officer who was not part of the organization.

Much of the arguments today focused on whether a lower court dismissing the case unfairly prevented Freedom Watch from serving the notice to American lawyers who represent OPEC.

Judge David Tatel, a Democratic appointee, told Klayman that “none of your efforts to serve” OPEC in Austria were in accordance with Austrian law.

Further, Judge Robert Wilkins, another Democratic appointee, noted that Freedom Watch never made a motion in federal district court to serve OPEC’s American lawyers.

Attorney Carolyn Lamm of White & Case LLP, representing OPEC, said many headquarters agreements around the world contain provisions protecting organizations from service notifications. Under Austrian law, she said, OPEC could only be served through a government ministry.

But the panel also pressed her on whether the lower court judge fully weighed whether Freedom Watch could bring a motion to serve OPEC’s American attorneys.

Lamm said Klayman’s group was free to file another lawsuit and do so.

Klayman disagreed, contending that the lower court opinion “shut the door.”