FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

WILLIAM O. GILLEY ENTERPRISES, 

INC., a Nevada corporation doing

business in California and the

estate of William O. Gilley,

deceased; DENNIS DECOTA, an

individual; PATRICK PATRICK

PALMER, an individual on behalf of

themselves and all others similarly

situated,

Plaintiffs-Appellants, No. 06-56059

v. D.C. No.

ATLANTIC RICHFIELD COMPANY;  CV-98-0132-BTM

CHEVRON CORPORATION; EXXON ORDER AND

CORPORATION; MOBIL OIL OPINION

CORPORATION; EXXON/MOBIL

CORPORATION; SHELL OIL COMPANY;

TEXACO INC.; TOSCO CORPORATION;

ULTRAMAR DIAMOND SHAMROCK;

VALERO CORPORATION; CONOCOPHILIPS PETROLEUM CORPORATION;

CHEVRON/TEXACO CORPORATION;

TESORO CORPORATION,

Defendants-Appellees. 

Appeal from the United States District Court

for the Southern District of California

Barry T. Moskowitz, District Judge, Presiding

Argued and Submitted

February 13, 2008—Pasadena, California

Filed December 2, 2009

15675
Before: Stephen S. Trott, Richard R. Clifton and

Consuelo M. Callahan, Circuit Judges.

Per Curiam Opinion

15676 GILLEY v. ATLANTIC RICHFIELD
COUNSEL

Charles M. Kagay, Spiegel, Liao & Kagay LLP, San Francisco, California, for the plaintiffs-appellants.

Timothy D. Cohelan, Cohelan & Khoury, San Diego, California, for the plaintiffs-appellants.

Hojoon Hwang, Munger, Tolles & Olson LLP, San Francisco,

California, for the defendant-appellee. 

Peter H. Mason, Fulbright & Jaworski LLP, Los Angeles,

California, for the defendant-appellee.

David M. Foster, Fulbright & Jaworski LLP, Washington DC,

for defendant-appellee. 

Patrick J. Sullivan, Law Offices of Patrick J. Sullivan, Oceanside, California, for the defendant-appellee.

15678 GILLEY v. ATLANTIC RICHFIELD
ORDER

The Opinion filed April 3, 2009, slip op. 4188, and appearing at 561 F.3d 1004 (9th Cir. 2009), is withdrawn. It may not

be cited as precedent by or to this court or any district court

of the Ninth Circuit.

The superseding opinion will be filed concurrently with this

order. The parties may file an additional petition for rehearing

or rehearing en banc. All other pending motions are denied as

moot.

OPINION

PER CURIAM:

The district court granted Defendants’ motion to dismiss

Plaintiffs’ antitrust claim founded on § 1 of the Sherman Act,

holding that 1) Aguilar v. Atlantic Richfield Co., 24 P.3d 493

(Cal. 2001), precludes the allegations made in the operative

pleading; 2) Defendants’ exchange agreements can not be

aggregated to establish market power and anticompetitive

effect; and 3) even if the exchange agreements could be

aggregated, the absence of a conspiracy to limit supply and

raise prices eliminates a causal connection between the

exchange agreements and anticompetitive effect. We have

jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

I

BACKGROUND

Plaintiff-Appellant William O. Gilley filed this class-action

lawsuit in 1998 on behalf of himself and other wholesale purchasers of CARB gasoline in the state of California. CARB

gas is a cleaner-burning fuel, and since 1996 it is the only

GILLEY v. ATLANTIC RICHFIELD 15679
type of gas that can be sold in California. The complaint

alleged that Defendants-Appellees, major oil producers, violated § 1 of the Sherman Act by entering into a conspiracy to

limit the supply of CARB gasoline and to raise prices.

The allegations of the complaint were plainly similar to

those alleged in Aguilar, a class-action suit filed in California

Superior Court in 1996. That suit was brought under the Cartwright Act, CAL. BUS. & PROF. CODE § 16720 et seq., California’s equivalent to the Sherman Act. Aguilar, 24 P.3d at 502.

The plaintiff in Aguilar was a retail purchaser and consumer

of gasoline and sought to represent a class of retail purchasers. The plaintiff in this action was a wholesale purchaser and

retail dealer of gasoline and sought to represent a class of

wholesale purchasers. Both plaintiffs were represented by the

same attorneys, and both actions targeted the same defendants

for essentially the same allegedly unlawful conduct. Because

of the similarity in the cases, the district court hearing this

case stayed the suit pending the outcome of Aguilar. 

In Aguliar, the state superior court granted summary judgment to the defendants, concluding that there was insufficient

evidence presented by the plaintiffs to allow a reasonable

juror to find a conspiracy to limit supply and raise prices

among the several gasoline companies. Id. at 503. The California Supreme Court affirmed. Id. at 521. As a result, Defendants in this case brought a motion for summary judgment

arguing that Gilley’s claims were barred by collateral estoppel. In response, Gilley offered a proposed amended complaint, which the court found insufficient. The district court,

however, granted Gilley leave to provide another proposed

amended complaint, which he did.

On May 6, 2002, the district court granted Defendants’

motion for summary judgment on that complaint, holding that

Gilley was precluded by Aguilar from relitigating whether a

conspiracy existed to limit supply and raise prices. However,

the court granted Gilley further leave to amend the complaint

15680 GILLEY v. ATLANTIC RICHFIELD
to allege that “each of the bilateral agreements, entered into

independently between various defendant gasoline companies,

ha[s] anti-competitive effects and therefore violate[s] the

Sherman Act.” 

On May 24, 2002, Gilley filed the third post-Aguilar complaint, alleging that forty-four bilateral exchange agreements

had the effect of unreasonably restraining trade in violation of

§ 1 of the Sherman Act and in violation of CAL. BUS. & PROF.

CODE § 17200. On March 27, 2003, the district court granted

Defendants’ motion to dismiss that complaint with prejudice.

With respect to the § 1 claim, the court explained that Gilley

had not alleged any theory as to how any individual exchange

agreement, which accounts for a small percentage of the relevant market, is able to inflate the price of CARB gasoline.

The district court rejected Gilley’s argument that the court

could consider the aggregate effects of the individual bilateral

agreements to allege an anticompetitive effect—namely

higher gas prices.

Gilley appealed to this Court, which reversed and

remanded, holding that the district court erred in not giving

Gilley an opportunity to correct the newly identified deficiencies. After the remand, the second amended complaint

(“SAC”) was filed.

The district court granted Defendants’ motion to dismiss

the SAC, holding that Plaintiffs failed to allege that the

exchange agreements, when considered individually, would

be capable of producing significant anticompetitive effects.

We now review the district court’s dismissal of the SAC. 

II

DISCUSSION 

A. Standard of Review

We review de novo a dismissal for failure to state a claim

pursuant to Rule 12(b)(6). Knievel v. ESPN, 393 F.3d 1068,

GILLEY v. ATLANTIC RICHFIELD 15681
1072 (9th Cir. 2005). All allegations of material fact are taken

as true and construed in the light most favorable to the nonmoving party. Id. On a motion to dismiss in an antitrust case,

a court must determine whether an antitrust claim is “plausible” in light of basic economic principles. Bell Alt. Corp. v.

Twombly, 550 U.S. 544, 556 (2007).

B. Analysis

We address the following issues in this appeal: 1) the preclusive effect of the California Supreme Court’s decision in

Aguilar; 2) the pleading standard for § 1 claims; 3) the sufficiency of Plaintiffs’ SAC; and 4) the state law claim under

CAL. BUS. & PROF. CODE § 17200.1

1. The Preclusive Effect of the California Supreme

Court’s Aguilar Decision.

Gilley does not dispute that the decision in Aguilar has

some preclusive effect in the current lawsuit, but he contends

that his current claim is not entirely extinguished by Aguilar.

In contrast, Defendants argue that all of the allegations as

pleaded in the SAC are precluded by Aguilar. We conclude

that Gilley’s claims are precluded by the California Supreme

Court’s decision.

[1] Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several

States.” 15 U.S.C. § 1. The Supreme Court has clearly established that the section is limited to prohibiting unreasonable

restraints of trade. See Texaco Inc. v. Dagher, 547 U.S. 1, 5

(2006). Whether a plaintiff pursues a per se claim or a rule of

reason claim under § 1, the first requirement is to allege a

1Our holding renders moot the issue of Plaintiff’s standing to add

Tesoro as a Defendant. 

15682 GILLEY v. ATLANTIC RICHFIELD
“contract, combination in the form of trust or otherwise, or

conspiracy.”

[2] The core of the plaintiff’s claims in Aguilar was a per

se claim based on an alleged unlawful conspiracy among

petroleum companies. The California Supreme Court’s opinion in Aguilar states:

Just as the superior court’s order granting the petroleum companies summary judgment was not erroneous as to Aguilar’s primary cause of action for an

unlawful conspiracy under section 1 of the Cartwright Act to restrict the output of CARB gasoline

and to raise its price, neither was it erroneous as to

her derivative cause of action, which was for an

unlawful conspiracy under the unfair competition

law for the same purpose.

. . . 

The petroleum companies carried their burden of

persuasion to show that there was no triable issue of

material fact and that they were entitled to judgment

as a matter of law as to Aguilar’s unfair competition

law cause of action. They did so by doing so as to

her Cartwright Act cause of action. Again, they carried their burden of production to make a prima facie

showing of the absence of any conspiracy, but she

did not carry her shifted burden of production to

make a prima facie showing of the presence of an

unlawful one.

It is true, as Aguilar argues, that her unfair competition law cause of action is not based on allegations

asserting a conspiracy unlawful under the Cartwright

Act. But it is indeed based on allegations asserting a

conspiracy, specifically, one unlawful at least under

the unfair competition law itself. As stated, the

GILLEY v. ATLANTIC RICHFIELD 15683
petroleum companies showed that there was no triable issue of the material fact of conspiracy. Aguilar

claims that conspiracy is not an element of an unfair

competition law cause of action in the abstract as a

matter of law. Correctly so. (See Bus. & Prof. Code,

§ 17200). But she simply cannot deny that conspiracy is indeed a component of the unfair competition

law cause of action in this case as a matter of fact.

Id. at 521 (emphasis in original).

[3] This portion of Aguilar holds that the plaintiffs had

failed to demonstrate the existence of a conspiracy that was

per se illegal or otherwise illegal under the Sherman Act. 

The preclusive effect of Aguilar is woven through the

numerous court decisions in Gilley’s federal action. Gilley

filed this class action in 1998, and its proceedings were stayed

pending the outcome of Aguilar. After the California Supreme

Court issued its opinion in Aguilar, the defendants filed a

motion for summary judgment. Gilley opposed the motion

and also offered to file an amended complaint. The district

court granted the motion for summary judgment. The district

court held that pursuant to the doctrine of issue preclusion,

Gilley was barred from relitigating the conspiracy alleged in

Aguilar. The court denied Gilley’s request to amend the complaint to allege continuing violations of antitrust laws subsequent to the time period involved in Aguilar, reasoning:

The exchange agreements were already judged by

the California Supreme Court not to be evidence of

a conspiracy. The court finds that the proposed

amended complaint merely alleges the ongoing use

of these supply agreements and not any new conduct. Issue preclusion therefore bars Gilley from relitigating whether use of the ongoing agreements

constitute an illegal conspiracy under the Sherman

Act.

15684 GILLEY v. ATLANTIC RICHFIELD
The district court, however, agreed with Gilley that “his

rule-of-reason claim has not been litigated to the extent that

he is alleging that the individual bilateral exchange agreements violate the anti-trust laws due to their anti-competitive

effect.” Accordingly, it granted Gilley leave to file an

amended complaint “only to the extent that it alleges that each

of the bilateral agreements, entered into independently

between various defendant gasoline companies, have unreasonable anti-competitive effects and therefore violate the

Sherman Act.” 

Gilley amended his complaint. Defendants responded by

filing a motion to dismiss the First Amended Complaint

(“FAC”). The district court granted the motion, explaining:

After careful scrutiny of the FAC, the court has been

unable to discern any allegation that any of the parties in any of the bilateral agreements entered these

agreements with an unlawful intent or purpose to

restrain competition. In the few instances that Plaintiff does allege an improper purpose, he does so by

alleging joint action among all, or substantially all of

the defendants. As discussed below, Plaintiff’s

pleading of such joint purpose or action regarding

the various defendants is improper and will not be

considered by the court. Therefore, Plaintiff has

failed to properly allege “concerted action” regarding any individual bilateral exchange agreement.

The district court dismissed the case with prejudice, commenting that because “Plaintiff was already granted leave to

amend his complaint previously, and at this late date was

unable to set forth a valid anti-trust claim, it appears that

Plaintiff cannot allege sufficient facts constituting a valid § 1

claim.”

Gilley appealed, and we reversed and remanded to allow

Gilley an opportunity to file a further amended complaint. We

GILLEY v. ATLANTIC RICHFIELD 15685
held that the district court had abused its discretion by denying Gilley an opportunity to amend his complaint. 

When Gilley filed a Second Amended Complaint, defendants again moved to dismiss, and the district court granted

the motion. It explained:

Plaintiffs do not allege that each exchange agreement has a discrete effect on competition which can

be viewed together with the separate effects of the

other exchange agreements. Instead, Plaintiffs allege

the existence of a network of exchange agreements

that allow Defendants to coordinate their production

and output, thereby limiting the amount of CARB

gasoline on the rack or spot market and allowing

Defendants to raise prices to branded dealers.

Even if a single defendant and all of the defendants

who contracted with that defendant cumulatively had

sufficient market power to substantially impair competition, Plaintiffs would need to make the further

showing that all of these defendants worked together

through the use of the exchange agreements and strategic shutdowns or decreased production to stabilize

the spot market and avoid the depression of gasoline

prices. . . . 

Plaintiffs cannot avoid the fact that their Sherman

Act claim is, at its core, a conspiracy claim. Plaintiffs’ theory of recovery rests upon the existence of

a web of exchange agreements that allegedly allows

all of the Defendants to engage in a precise dance of

give-and-take with the goal of maintaining the delicate balance of CARB production. Coordinated

action is essential to Plaintiffs’ claim.

After four attempts to plead around a conspiracy

claim, Plaintiffs still fail to allege that the bilateral

15686 GILLEY v. ATLANTIC RICHFIELD
exchange agreements, viewed independently, constitute an unreasonable restraint on trade. Plaintiffs’

inability to establish a causal connection between the

individual exchange agreements, and anticompetitive harm is fatal to Plaintiffs’ Sherman Act

claim.

[4] A critical aspect of the district court’s perspective was

its determination that the SAC did not allege “that each

exchange agreement has a discrete effect on competition

which can be viewed together with the separate effects of

other exchange agreements.” Rather, the district court saw the

SAC as alleging “a network of exchange agreements” that

“allow Defendants to coordinate their production and output.”

In essence, the district court read the SAC as not alleging that

the bilateral agreements “violate the anti-trust laws due to

their anti-competitive effect,” but rather that the agreements

facilitate coordinated action by the defendants that unlawfully

restrains trade. We agree.

[5] This distinction is critical. If the bilateral agreements in

themselves have an illegal effect on competition (when aggregated), then the bilateral agreements constitute the “contract,

combination or conspiracy” required for a claim under § 1 of

the Sherman Act. If, however, the bilateral agreements only

facilitate coordinated activity, then to maintain a claim under

§ 1 of the Sherman Act, Gilley must show some meeting of

the minds, some “contract, combination or conspiracy,”

between those defendants whom Gilley alleges coordinated

their actions. Although a plaintiff might well be able to do so

in the abstract, here, Gilley is precluded by Aguilar from

asserting that the defendants so conspired.

[6] The Second Amended Complaint implicitly, if not

explicitly, asserts a conspiracy. The charging paragraphs of

the SAC describe the defendants’ parallel actions and imply

the existence of a conspiracy. The SAC asserts:

GILLEY v. ATLANTIC RICHFIELD 15687
California’s CARB gas supply is generally manufactured primarily by defendants, California branded

refiners, who are engaged in the business of refining,

distributing and selling almost 100% of the CARB

gas in the state of California during the class period.

California remains largely isolated from external

sources of supply.

All California refiners, now also major retail marketers, control supply and pricing from production to

distribution, in part, through supply agreements that

require dealers to purchase gasoline exclusively at

each branded refiner’s present DTW price, a price

that is always greater than the rack price and cost of

distribution.

California refiners’ weekly refinery production

decisions are influenced by, among other things, spot

price impact, refiner margins, bilateral exchange

partners’ market needs, ability to draw inventory

from bilateral exchange partners, and overall market

supply.

With the impending introduction of CARB gasoline in 1996, each of the defendants or their predecessors in interest, entered into new sales and/or

exchange agreements with other defendants, many of

which provided for the provision of CARB gas “as

mutually agreed” (AMA) with no minimum or maximum.

The determination that these paragraphs assert a conspiracy is

reinforced by the next paragraph of the SAC which reads: 

The sales and exchange agreements known to plaintiffs that are subject of this action are listed on the

attached Exhibit . . . . On information and belief,

plaintiffs allege that defendants have entered into

15688 GILLEY v. ATLANTIC RICHFIELD
other sales and exchange agreements, presently

unknown to plaintiffs, with similar intent and effect.

Certainly the tenor of this paragraph is that the “similar intent

and effect” violates antitrust laws. Moreover, in light of the

preceding paragraphs and the failure to assert any other specific violation of the Sherman Act, the alleged violation must

be one of conspiracy or collusion.

This allegation of conspiracy is carried forward in the

SAC’s allegations against particular defendants, starting with

Chevron.2 It lists three exchange agreements that Chevron

entered into with Exxon, Shell, and Tosco Refining Co., and

alleges, on information and belief, that Chevron has entered

similar agreements “for the delivery of CARB in Northern

California.” The SAC then alleges:

Chevron’s intent and purpose in entering into

these exchange agreements was to limit refining

capacity for CARB gas and/or to keep CARB gas

out of the spot market and away from unbranded

marketers.

Through the use of these exchange agreements,

coupled with its own refining capacity and that of

its contracting partners, Chevron has obtained sufficient market power to limit the supply of CARB

gas to unbranded marketers and to raise the price at

which it sells CARB gas in Northern California to

supracompetitive levels. These agreements have had

the effect of raising CARB gas prices in Northern

California above competitive levels, without any

countervailing procompetitive benefit.

2The allegations against the other defendants are similar to the allegations against Chevron. 

GILLEY v. ATLANTIC RICHFIELD 15689
(emphasis added).

[7] These paragraphs reveal how Gilley proposes to meet

the market power requirement for a claim under § 1 of the

Sherman Act, but they leave the reader uninformed as to how

the individual exchange agreements allegedly violated the

Sherman Act “without a conspiracy to control supply or to set

prices.” In his brief, Gilley responds by pointing to the paragraphs concerning the relationship between Chevron and

Tosco. These paragraphs set forth various reasons for why the

defendants purportedly entered into particular agreements,3

suggest an industry-wide conspiracy,4 and assert that the individual agreements facilitated a combination or conspiracy.5

3For example, the SAC sets forth a 1994 individual exchange agreement

between Chevron and Tosco and alleges: 

Chevron’s intent and purpose in entering into this agreement with

Tosco was to place its surplus CARB gas with other branded

refiners to maximize returns. Chevron intended to and did rearrange its CARB gas supply to avoid a market imbalance caused

by CARB gas flowing to independent marketers. 

If Chevron and Tosco agreed to restrain the production of gas, the individual exchange agreement might well be a contract to restrain trade pursuant

to § 1 of the Sherman Act. The paragraph, however, does not say that the

parties agreed. Instead, it only addresses Chevron’s intent and purpose.

This purpose and intent would presumably motivate Chevron to act independently or interdependently without any agreement as to purpose or

intent with Tosco. 

4For example, the SAC alleges that “[t]hrough the use of these exchange

agreements, coupled with its own refining capacity and that of its contracting partners, Chevron has obtained sufficient market power to limit the

supply of CARB gas to unbranded marketers and to raise the price at

which it sells CARB gas.” This implies a broader conspiracy, though the

SAC does not allege that there was a meeting of the minds of the parties

to raise the price of gasoline specifically in connection with any of the

individual exchange agreements. 

5For example, the SAC alleges that “Tosco’s intent and purpose in

entering into this agreement with Chevron was [to] join the ‘club’ of major

branded refiners and to give Chevron the opportunity to place its surplus

CARB gas with other branded refiners to maximize returns.” This is confusing, as it indicates that Tosco’s intent was to give Chevron “the opportunity” to maximize its return. This seems to suggest that the individual

exchange agreement facilitated, but did not in itself provide for, the maximization of Chevron’s return. 

15690 GILLEY v. ATLANTIC RICHFIELD
Again, the paragraphs seem to allege a conspiracy. They certainly do not clearly allege that the exchange agreements

themselves constitute a restraint of trade or suggest why the

defendants’ actions were “collusive, rather than independent,

action.” See Aguilar, 24 P.3d at 519. 

[8] In sum, the SAC, plainly and fairly read, is not limited

to alleging that the bilateral exchange agreements are themselves restraints of trade. Instead, its broad allegations encompass conspiracy claims that are precluded by Aguilar. 

[9] The breadth of the SAC is inconsistent with the spirit

of Twombly, 550 U.S. 544. Although Twombly involved an

alleged conspiracy based on parallel conduct and this case is

ostensibly not a conspiracy case, we have held that Ashcroft

v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1953 (2009), makes

clear that the pleading requirements stated in Twombly apply

in all civil cases, including this one. Doe I v. Wal-Mart Stores,

Inc., 572 F.3d 677, 683 (9th Cir. 2009). The Supreme Court

reiterated that Federal Rule of Civil Procedure 8(a)(2)

requires “ ‘a short and plain statement of the claim showing

that the pleader is entitled to relief,’ in order to ‘give the

defendant fair notice of what the . . . claim is and the grounds

upon which it rests.’ ” Twombly, 550 U.S. at 554-55 (quoting

Conley v. Gibson, 355 U.S. 41, 47 (1957)).6 It commented that

a plaintiff’s obligation “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of

6The Court went on to disapprove the language in Conley that “a complaint should not be dismissed for failure to state a claim unless it appears

beyond doubt that the plaintiff can prove no set of facts in support of his

claim which would entitle him to relief.” Twombly, 550 U.S. at 561 (quoting Conley, 355 U.S. at 45-46). The Court held that: 

[t]he phrase is best forgotten as an incomplete, negative gloss on

an accepted pleading standard: once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint. 

Twombly, 550 U.S. at 563. 

GILLEY v. ATLANTIC RICHFIELD 15691
action” and that “[f]actual allegations must be enough to raise

a right to relief above the speculative level.” Id. at 555 (internal citations omitted). The Supreme Court reaffirmed its earlier decisions holding that “something beyond the mere

possibility of loss causation must be alleged, lest a plaintiff

with a largely groundless claim be allowed to take up the time

of a number of other people with the right to do so representing an in terrorem increment of the settlement value,” and

that “when the allegations in a complaint, however true, could

not raise a claim of entitlement to relief, this basic deficiency

should . . . be exposed at the point of minimum expenditure

of time and money by the parties and the court.” Id. at 558

(internal quotation marks and citations omitted). The Court

concluded that allegations of parallel conduct in themselves

do not provide a sufficient basis to sustain a conspiracy claim.7

Moreover, in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), the

Supreme Court affirmed that its decision in Twombly “expounded the pleading standard for all civil actions.” Id. at

7The Court noted: 

We think that nothing contained in the complaint invests either

the action or inaction alleged with a plausible suggestion of conspiracy. As to the ILECs’ supposed agreement to disobey the

1996 Act and thwart the CLECs’ attempts to compete, we agree

with the District Court that nothing in the complaint intimates

that the resistance to the upstarts was anything more than the natural, unilateral reaction of each ILEC intent on keeping its

regional dominance. The 1996 Act did more than just subject the

ILECs to competition; it obliged them to subsidize their competitors with their own equipment at wholesale rates. The economic

incentive to resist was powerful, but resisting competition is routine market conduct, and even if the ILECs flouted the 1996 Act

in all the ways the plaintiffs allege, . . . there is no reason to infer

that the companies had agreed among themselves to do what was

only natural anyway; so natural, in fact, that if alleging parallel

decisions to resist competition were enough to imply an antitrust

conspiracy, pleading a § 1 violation against almost any group of

competing businesses would be a sure thing. 

550 U.S. at 566. 

15692 GILLEY v. ATLANTIC RICHFIELD
1953 (internal quotation marks and citation omitted). The

Court reiterated that “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged — but it has not ‘show[n]’

— ‘that the pleader is entitled to relief.’ Fed. R. Civ. P.

8(a)(2).” Id. at 1950.

In this case the district court read the complaint as not stating a viable cause of action. It determined that the SAC did

not allege that “each exchange agreement has a discrete effect

on competition which can be viewed together with the separate effects of other exchange agreements,” but rather as

alleging “the existence of a network of exchange agreements

that allow Defendants to coordinate their production and output.” We read the SAC as not asserting that the bilateral

agreements, in themselves, restrain trade, but that they facilitate or make it easier for the defendants to coordinate their

actions to restrain trade. The district court explained:

Even if a single defendant and all of the defendants

who contracted with that defendant cumulatively had

sufficient market power to substantially impair competition, Plaintiffs would need to make the further

showing that all of these defendants worked together

through the use of the exchange agreements and strategic shutdowns or decreased production to stabilize

the spot market and avoid the depression of gasoline

prices. . . . 

This is the type of “in terrorem increment of the settlement

value” that the Supreme Court mentioned in Twombly. Id. at

558. Moreover, when viewed in the light of the preclusive

effect of Aguilar, the SAC simply “does not raise a claim of

entitlement to relief.” Id.

[10] There can be little doubt that the broad scope of the

SAC was intentional. Gilley has known since 2002 that following Aguilar, he was precluded from alleging a conspiracy.

GILLEY v. ATLANTIC RICHFIELD 15693
Nonetheless, he has thrice been given the opportunity to

amend his complaint to limit it to a claim based solely on the

alleged anti-competitive effect of the individual exchange

agreements absent a conspiracy, and has thrice proffered

amended complaints that continue to assert, albeit ever more

subtly, the existence of a conspiracy. It might be possible for

Gilley to allege an antitrust claim limited to issues that are not

precluded by Aguilar, but he has declined to do so. Accordingly, the district court properly struck the SAC.

[11] Furthermore, the district court’s final denial of leave

under the circumstances of this case was not an abuse of discretion.8

III

CONCLUSION

We recently reiterated in Kendall v. Visa U.S.A., Inc., 518

F.3d 1042, 1047 (9th Cir. 2008), that “[t]o state a claim under

Section 1 of the Sherman Act, 15 U.S.C. § 1, claimants must

plead not just ultimate facts (such as a conspiracy), but evidentiary facts which, if true, will prove: (1) a contract, combination or conspiracy among two or more persons or distinct

8

In Griggs v. Pace Amn. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999),

we held that the “district court determines the propriety of a motion to

amend by ascertaining the presence of any of four factors: bad faith, undue

delay, prejudice to the opposing party, and/or futility.” Generally, “this

determination should be performed with all inferences in favor of granting

the motion.” Id. Nonetheless, “we have noted that a district court does not

abuse its discretion in denying a motion to amend a complaint . . . when

the movant presented no new facts but only new theories and provided no

satisfactory explanation for his failure to fully develop his contentions

originally.” Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2004) (quoting

Vincent v. Trend W. Technical Corp., 828 F.2d 563, 570-71 (9th

Cir.1987)) (internal quotation marks omitted). Here, assuming that Gilley

could, in the abstract, amend his complaint to state a claim that is not precluded by Aguilar, his repeated failure to do just that suggests that it

would be futile to offer him another chance to do so. 

15694 GILLEY v. ATLANTIC RICHFIELD
business entities; (2) by which the persons or entities intended

to harm or restrain trade or commerce . . . (3) which actually

injures competition.” Gilley, in order to state a § 1 claim,

must plead “a contract . . . by which the persons or entities

intended to harm or restrain trade.” Despite its length and

detail, the SAC does not clearly assert which individual agreement or agreements constitute in themselves a “contract . . .

by which the persons or entities intended to harm or restrain

trade.” Rather, the SAC is fairly read as alleging the existence

of a network of exchange agreements that arguably allowed

the defendants to unlawfully coordinate their production and

output. But given the preclusive effect of Aguilar, Gilley cannot show such coordination. The SAC is not saved by the

argument that it could be read to encompass a claim that the

individual agreements in themselves constitute a restraint of

trade because the SAC does not provide the defendants fair

notice of such a claim and the grounds upon which it rests.

See Twombly, 550 U.S. at 555. Moreover, aggregation does

not save the SAC because it does not show that the defendants’ adjustments of CARB production were part of any

agreement or conspiracy, rather than independent efforts to

maximize profits. See Twombly, 550 U.S. at 566. For these

reasons, we affirm the district court’s dismissal of the Second

Amended Complaint without leave to amend, and we affirm

the court’s dismissal of Plaintiffs’ state law claim brought

pursuant to CAL. BUS. & PROF. CODE § 17200.

AFFIRMED.

GILLEY v. ATLANTIC RICHFIELD 15695