Antitrust Law Daily Wrap Up, ANTITRUST—D.N.M.: Kansas had no standing or interest to intervene in Shale Oil Antitrust Litigation, (Jun 12, 2026)

By Justin Marcus Smith, J.D.

The argument that a Kansas county was usurping the state Attorney General’s role to litigate on behalf of the state and its citizens was “inconsistent” with the Kansas Restraint of Trade Act and did not establish injury for standing.

Article III injury-in-fact standing required more than what Kansas provided in support of a motion to intervene as a sovereign defendant in an antitrust class action against eight U.S. shale oil producers, held the federal district court in Albuquerque, New Mexico. Basic separation of powers principles mandated the demonstration of a concrete injury, but Kansas expressed only speculative, contingent, or hypothetical concerns about things like tax collection. The court also concluded the quarrel between the Kansas Attorney General and the political subdivision plaintiffs suing the oil producers was “not one for this Court to resolve.” The interests Kansas claimed were either shared with the plaintiff political subdivisions through state statute or were unsubstantiated. In any event, the asserted interests all depended on uncertain future litigation. Accordingly, Kansas did not establish an impaired interest necessary to intervene as a matter of right. The court also declined permissive intervention because Kansas only articulated a collateral issue that would complicate the matter and thus cause undue prejudice and delay (In Re: Shale Oil Antitrust Litigation, No. 1:25-cv-00568-MLG-LF (D.N.M. Jun. 11, 2026)).

Background. In early 2025, several individuals, businesses, and state political subdivisions filed a consolidated class action complaint (CCAC) alleging that eight of the largest U.S. shale oil producers and two of their CEOs conspired to constrain shale oil production to artificially inflate petroleum product prices.

Political subdivision plaintiffs included Ford County, Kansas (Ford County); City of San Diego; City of San Jose; County of San Mateo; and Mayor and City Council of Baltimore (collectively, political subdivisions).

The eight oil producers included: Permian Resources Corporation, known as Centennial Resource Development, Inc. during the relevant period; Chesapeake Energy Corporation, now known as Expand Energy Corporation; Continental Resources, Inc.; Diamondback Energy, Inc.; EOG Resources, Inc.; Hess Corporation; Occidental Petroleum Corporation; and Pioneer Natural Resources Company (collectively, the shale oil defendants).

A Chicago-based trading firm, 3Red Partners, LLC (3Red) filed the last of 29 associated cases (3Red Partners LLC v. Permian Resources Corp., No. 1:25-cv-00447-MLG-LF (D.N.M. May. 12, 2025). In that matter, 3Red alleged that the same shale oil defendants conspired with The Organization of Petroleum Exporting Countries (OPEC) to limit domestic crude oil production, artificially inflating the West Texas Intermediate (WTI) benchmark and related futures contracts. 3Red alleged the conduct violated both the Sherman Act and the Commodity Exchange Act.

The various plaintiffs asked the court to enjoin the shale oil defendants from continuing their anticompetitive conduct and to prohibit such actions in the future. The political subdivisions sought damages on a class wide basis in accord with applicable state statutes.

The defendants filed joint and individual motions to dismiss the complaint in its entirety with prejudice. The defendants disclaimed any wrongdoing and challenged the viability of the plaintiffs’ claims. Among other things, the plaintiffs alleged they mostly increased oil production during the class period. They also questioned whether the CCAC described market structure conducive to collusion given that their collective production is a relatively small share of global crude oil production and U.S. production “remains highly fragmented.” The defendants also asserted the plaintiffs alleged insufficient parallel conduct and plus factors to support a plausible antitrust conspiracy lawsuit. Last, they argued the plaintiffs lacked standing, the political question and act of state doctrines barred their suit, and the state law claims were deficient.

In a wrinkle, the State of Kansas moved to intervene as a defendant in order “to defend its sovereignty and parens patriae and statutory authority” in light of the involvement of Ford County, Kansas, as a plaintiff. The court denied Kansas intervention in an order related to all of the associated cases.

No standing. The court held Kansas was precluded from intervening as a matter of right because it sought relief different than the shale oil defendants and did not have Article III standing. Kansas could not piggyback on the defendants’ Article III standing, and it did not have its own standing. The fact that Kansas sought dismissal, as the other defendants did, was not dispositive because it was not substantive.

A review of applicable case law showed that Kansas sought meaningfully different relief from the oil defendants. Kansas only sought to dismiss the political subdivisions’ claims without prejudice, while the oil defendants requested a final and prejudicial ruling of dismissal.

Kansas did not have its own Article III standing because proclaimed status as an “objecting member of the class” did not establish the type of injury for standing. Kansas’ assertion of class-member status did not establish injury in fact where a class certification motion had not yet been filed and the named plaintiffs represented that all state and federal entities would be excluded from the class.

Kansas’ theory of injury centered on notions of state sovereignty. The argument that the political subdivisions were usurping the state Attorney General’s role to litigate on behalf of the state and its citizens was “inconsistent with state law” and did not establish injury for standing. A disagreement over the political subdivisions’ litigation choices did not qualify as injury in fact for standing purposes.

As for diminution of sovereign interests, the court construed the crux of the argument was the political subdivisions were acting ultra vires. As a state invoking the doctrine, Kansas needed to show a quasi-sovereign interest and injury thereto, but the court said Kansas did not identify any threat to the health, welfare, or economic well-being of its residents if the political subdivisions continued to pursue the action. The possibility of future claims was only speculative. Kansas did not provide any basis for concrete injury.

The asserted distinct property and economic interest of collecting taxes on petroleum products did not explain how the involvement of the political subdivisions as plaintiffs would jeopardize the levying of taxes. An expressed interest in civil penalties was similarly unavailing.

Last, proclaimed fears about preclusive or precedential effects of this case on future hypothetical litigation did not establish a concrete injury. The fears were wholly speculative. The potential effect of stare decisis might pose a future hurdle, but it was not an injury in fact.

No interest. The court continued that even if Kansas had sought the same form of relief as the defendants, it still could not intervene as a matter of right because it did not satisfy an interest relating to the disputed property or transaction pursuant to Fed. R. Civ. P. 24(a)(2). Kansas needed to identify an interest relating to the action and explain how the lawsuit would impair its ability to protect that interest. The burden on Kansas was minimal, but not nonexistent, and Kansas failed to meet it.

Kansas largely relied on claims that the political subdivisions were usurping its sovereign parens patriae authority and affecting its ability to bring claims against the shale oil defendants. The court held that none of these purported injuries supported intervention as of right.

First, Kansas failed to explain the putative impairment of its interest where the political subdivisions were lawfully exercising their statutory authority. Kansas law expressly authorized political subdivisions like Ford County to bring suit, and the Kansas Attorney General cited no authority to the contrary. Kansas law only permitted the Attorney General to intervene on behalf of its political subdivisions, not against them in order to dismiss their claims. An intra-sovereign political or litigation disagreement was not a ground for intervention under R. 24(a).

Second, the political subdivisions’ lawful invocation of state law did not impair the Attorney General’s ability to protect the sovereign interests of Kansas or pursue Kansas’ claims. The impairment argument rested entirely on conjecture that resolution of the political subdivisions’ claims would have some unspecified impact on a suit the Attorney General might or might not bring later. The impact on potential litigation did not constitute an impaired interest.

Third, Kansas did not explain how the litigation would impair its power to tax or to collect civil penalties. The scope of R. 24(a)(2) pragmatic inquiry was not boundless. Kansas still needed to identify an impaired or potentially impaired interest.

Prejudice, delay. In the alternative, the court denied intervention under either R. 24(b)(1)(B) or R. 24(b)(2)(A). Even if Kansas could clear the hurdle of showing a related claim or defense under R. 24(b)(1)(B), the court still needed to consider delay or prejudice to the original parties.

Kansas did not identify any common overlapping issues with the main action about alleged oil market manipulation. Kansas asserted the common question of law was improper usurpation of its parens patriae and statutory authority to bring an action on behalf of all persons, states, and political subdivisions. Kansas did not share the shale oil defendants’ concerns about the sufficiency of the allegations, parallel conduct, plus factors, antitrust standing, or the viability of state law claims.

The argument that R. 24(b)(2)(A) allowed for a state government officer or agency to intervene if a party’s claim or defense was based on a statute administered by the officer was unpersuasive. The Attorney General said he had exclusive authority to appear for the state in federal courts, and he also claimed the sole authority to enforce antitrust and consumer protection claims on behalf of the State, its subdivisions, and its citizens. However, the court said these were “not accurate characterizations” of the statutes. To the contrary, the Kansas legislature provided that its political subdivisions may file damages suits for violation of the Kansas Restraint of Trade Act, Kan. Stat. Ann. § 50-161.

The rule did not provide for intervention on the ground that Kansas was seeking to intervene as a defendant to dismiss claims permissible under state law, but even if it did, the court said it would still have declined permissive intervention under R. 24(b)(3). The court reasoned that Kansas had a collateral concern that would only complicate the case and thereby cause undue prejudice and delay. However, the court suggested Kansas might apply to participate as amicus curia.

The Case is No. 1:25-cv-00568-MLG-LF.

Judge: Garcia, M.

Attorneys: Christopher M. Burke (Burke LLP) for William Basinski.

Companies: Permian Resources Corp.

Cases: Antitrust NewMexicoNews