[Federal Register Volume 90, Number 73 (Thursday, April 17, 2025)]
[Notices]
[Pages 16134-16136]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-06562]
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[Docket No. C-4815]
Petition of Scott Sheffield To Reopen and Set Aside Order
AGENCY: Federal Trade Commission.
ACTION: Announcement of petition; request for comment.
-----------------------------------------------------------------------
SUMMARY: Scott Sheffield, formerly of Pioneer Natural Resources Company
(``Pioneer''), has asked the Federal Trade Commission (``FTC'' or
``Commission'') to reopen and set aside the Commission's Decision and
Order entered on January 16, 2025, concerning Exxon Mobil Corporation's
acquisition of Pioneer. Publication of Mr. Sheffield's petition is not
intended to affect its legal status or its final disposition.
DATES: Comments must be received on or before May 12, 2025.
ADDRESSES: Interested parties may file comments online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write: ``Sheffield
Petition to Reopen; Docket No. C-4815'' on your comment and file your
comment online at https://www.regulations.gov/docket/FTC-2025-0030/document by following the instructions on the web-based form. If you
prefer to file your comment on paper, please mail your comment to the
following address: Federal Trade Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex M), Washington, DC
20580.
FOR FURTHER INFORMATION CONTACT: Peter Richman (202-326-2563), Bureau
of Competition, Federal Trade Commission, 600 Pennsylvania Avenue NW,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(g) of the Federal
Trade Commission Act, 15 U.S.C. 46(g), and FTC Rule 2.51, 16 CFR 2.51,
notice is hereby given that the above-captioned petition has been filed
with the Secretary of the Commission and is being placed on the public
record for a period of 30 days. After the period for public comments
has expired and no later than 120 days after the date of the filing of
the request, the Commission shall determine whether to reopen the
proceeding and modify the Order as requested. In making its
determination, the Commission will consider, among other information,
all timely and responsive comments submitted in connection with this
notification.
The text of the petition is provided below. An electronic copy of
the filed petition and any public exhibits attached to it can be
obtained from the FTC website at this URL: https://www.ftc.gov/legal-library/browse/cases-proceedings/241-0004-c-4815-exxon-mobil-corporation-matter.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before May 12, 2025.
Write ``Sheffield Petition to Reopen; Docket No. C-4815'' on your
comment. Your comment--including your name and your State--will be
placed on the public record of this proceeding, including, to the
extent practicable, on the www.regulations.gov website.
Because of the agency's heightened security screening, postal mail
addressed to the Commission will be subject to delay. We strongly
encourage you to submit your comments online through the
www.regulations.gov website. If you prefer to file your comment on
paper, write ``Sheffield Petition to Reopen; Docket No. C-4815'' on
your comment and on the envelope, and mail your comment to the
following address: Federal Trade Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex M), Washington, DC
20580. If possible, submit your paper comment to the Commission by
overnight service.
Because your comment will be placed on the publicly accessible
website at www.regulations.gov, you are solely responsible for making
sure that your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include any
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including in particular competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on www.regulations.gov--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from that website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at https://www.ftc.gov to read this document
and the news release describing this matter. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding, as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before May 12, 2025. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
Authority: 15 U.S.C. 46, 5 U.S.C. 552.
April J. Tabor,
Secretary.
Text of Petition of Scott Sheffield To Reopen and Set Aside the Order
Pursuant to section 5(b) of the Federal Trade Commission Act, 15
U.S.C. 45(b), and section 2.51 of the Federal Trade Commission's Rules
of Practice, 16 CFR Sec. 2.51, Scott Sheffield respectfully requests
that the Commission set aside and vacate in its entirety the Decision
and Order entered on January 16, 2025 in Docket No. C-4815 (``Order'').
As contemplated by section 2.51(a) of the Federal Trade Commission's
Rules of Practice, 16 CFR 2.51(a), Mr. Sheffield is
[[Page 16135]]
a ``person . . . subject to a Commission decision containing a rule or
order which has become effective,'' and is therefore entitled to ``file
with the Secretary a request that the Commission reopen the proceeding
to consider whether the rule or order . . . should be altered,
modified, or set aside in whole or in part.'' The public interest
requires that the Order be set aside and vacated in its entirety. 16
CFR 2.51(b).
After the close of business on the final business day of the last
administration, the Federal Trade Commission (``FTC'') by a 3-2 vote
issued the Order prohibiting ExxonMobil Corporation (``Exxon'') from
appointing Mr. Sheffield to its Board of Directors, prohibiting Exxon
from appointing Mr. Sheffield to serve ``in an advisory capacity in any
way'' to Exxon's management, and prohibiting Exxon from appointing
thousands of other current or former employees of Pioneer Natural
Resources Company (``Pioneer'') to its Board. See Decision and Order
Sec. II. Mr. Sheffield requests that the FTC vacate that Order, which
was unsupported by any antitrust law and violates his constitutional
and other legally protected rights.
First, in their thoughtful and well-reasoned dissent from the
Order, now-Chairman Ferguson and Commissioner Holyoak explained in
detail why the Exxon/Pioneer transaction could not be challenged by the
FTC on any established theory of antitrust law: (1) Exxon and Pioneer's
combined share in the alleged global market--and market concentration
metrics generally--falls way below any level of concentration that
would be conducive to coordination; (2) the merger does not eliminate a
maverick; (3) nothing in the Complaint suggests a post-merger change in
incentives that would make the global market conducive to coordination;
and (4) one of twelve board members will likely be less able to
orchestrate coordination than could that same individual when he was a
chief executive officer (and never coordinated the market). See
Dissenting Statement of Comm'r Melissa Holyoak Joined by Comm'r Andrew
N. Ferguson at 2 (Jan. 17, 2025) (``Dissenting Statement''). As the
Dissenting Statement explains, ``There is no reason to believe that
Section 7 has been violated, which invalidates any justification for
the order.'' Id. at 6.
The FTC premised the Order on a Complaint that was filed publicly
in this matter on May 2, 2024. That Complaint alleged that Mr.
Sheffield ``campaigned to organize anticompetitive coordinated output
reductions between and among U.S. crude oil producers, and others,
including the Organization of Petroleum Exporting Countries (`OPEC'),
and a related cartel of other oil-producing countries known as OPEC+.''
Complaint ] 1. As noted by Commissioners Ferguson and Holyoak, however,
``the factual interpretations and context of the Complaint, as written,
[do] not provide reason to believe that the law ha[s] been violated.''
Dissenting Statement at 4. Mr. Sheffield's Comment on the Complaint
further dispelled any notion of a ``campaign[ ]'' of anticompetitive
coordination with OPEC, clarifying that, of the supposed ``hundreds of
text messages with OPEC representatives and officials'' decried in the
Complaint, ``almost all of these were blast text messages containing
public information like news articles that went to many recipients
without any response or `exchange.' '' Ex. 1, Comment on Behalf of
Scott Sheffield at 2 (``Sheffield Comment''). As Commissioners Ferguson
and Holyoak noted, ``Such contact is far less frequent than would be
expected by a central figure allegedly coordinating with OPEC, the
world's most well-known output-fixing cartel that has damaged oil
customers for decades.'' Dissenting Statement at 3.
The Complaint also alleged that Mr. Sheffield exercised his First
Amendment rights in a manner that the three majority commissioners
found objectionable: Mr. Sheffield made public statements about oil
production, and supported a petition by Pioneer to the Texas Railroad
Commission (``TRRC'') during the COVID-19 Pandemic to exercise its
statutory authority to regulate oil production in Texas. See Ex. 1,
Sheffield Comment at 15-19. But protected activities cannot be the
basis for a law enforcement action. The FTC's claim otherwise is a
frontal assault on Mr. Sheffield's constitutionally protected
activities, as acknowledged by Commissioners Ferguson and Holyoak. See
Dissenting Statement at 3.
Conspicuously absent from the FTC's Complaint was any allegation
that Mr. Sheffield had himself violated the law. The Complaint alleged
no instance in which he entered into any agreement in restraint of
trade or any other unlawful conduct. Also absent was any viable theory
that the combination of Exxon and Pioneer would violate antitrust laws.
Pioneer was a comparatively small producer, and its acquisition by
Exxon would not have meaningfully changed the market concentration in
the global oil market. Nor did the FTC allege otherwise. As noted by
the dissenting Commissioners, ``With these egregious failings, the
Complaint does not provide even an `ephemeral possibilit[y]' of harm,
let alone a `reason to believe' the law has been violated.'' Dissenting
Statement at 2. The lack of legal justification for the Order, standing
alone, is sufficient justification to vacate it.
Second, setting aside and vacating the Order would benefit the
efficiency of both the FTC and the federal judiciary. On January 21,
2025, Mr. Sheffield filed a complaint in the Northern District of
Texas, Fort Worth Division against the FTC, then-Chair Khan, and
Commissioners Slaughter and Bedoya. See Complaint, Sheffield v. U.S.
Fed. Trade Comm'n, No. 25-cv-00048 (N.D. Tex. Jan. 21, 2025), ECF No.
1. In his complaint, Mr. Sheffield seeks an order from the district
court, inter alia, ``[v]acating the FTC's Final Consent Order in Docket
No. C-4815.'' Id. at 53. Setting aside and vacating the Order would
resolve those claims and would preserve the FTC's and the United States
Attorney's Office's resources in defending the case, as well as the
district court's resources in adjudicating the case.
Third, the Order is manifestly contrary to the public interest. The
allegations in the Complaint supporting the Order were described by
Commissioners Ferguson and Holyoak as ``fabricated,'' ``embarrassing,''
``indifferen[t] to First Amendment rights,'' ``woefully inadequate,''
``lawless,'' ``nonsensical,'' and ``one of the most ludicrous theories
of harm in [the FTC's] merger-enforcement history.'' Id. at 1-2, 4-6.
In light of the numerous defects of the Order, which ``disregards the
public interest,'' Commissioners Ferguson and Holyoak invited and
encouraged the FTC to ``scrutinize[ ]'' the ``continuing viability of
this order'' under section 5(b) of the Federal Trade Commission Act.
Id. at 6.
The public interest requires setting aside and vacating the Order.
As Commissioners Ferguson and Holyoak noted in their dissenting
statement, section 5(b) of the Federal Trade Commission Act permits the
FTC to ``reopen and alter, modify, or set aside, in whole or in part
any report or order . . . whenever in the opinion of the Commission
conditions of fact or of law have so changed as to require such action
or if the public interest shall so require.'' 15 U.S.C. 45(b) (quoted
in Dissenting Statement at 6 n.46). The Commission will set aside
orders (and order provisions) which ``unnecessarily inhibit[ ]
respondent[s] from engaging in conduct which, in and of itself, is
innocuous and may, in certain circumstances, be procompetitive.'' In
the matter of Occidental Petroleum
[[Page 16136]]
Corp., Dkt. No. C-2492, 101 F.T.C. 373, 1974 WL 175259, at *1 (F.T.C.
Mar. 9, 1983); see also, e.g., In the matter of the Readers' Digest
Ass'n, Dkt. No. C-2075, 102 F.T.C. 1268, 1971 WL 128725, at *2 (F.T.C.
Sept. 30, 1983) (concluding that ``the public interest requires
eliminating'' a provision where ``the costs that the [provision]
imposes on respondent appear to outweigh any consumer benefits [that
it] may confer''). Furthermore, the public interest is served by
setting aside orders and provisions that restrict constitutionally
protected speech where such restrictions ``cause[ ] injury to
[respondent] and the public that outweighs any benefit that may be
derived from the restriction.'' In the Matter of the American College
of Obstetricians and Gynecologists, Dkt. No. C-2855, 104 F.T.C. 524,
1984 WL 565347, at *1 (F.T.C. Aug. 28, 1984).
Here, the Order should be vacated in its entirety because ``the
Complaint does not provide even an `ephemeral possibilit[y]' of harm,
let alone a `reason to believe' the law has been violated.'' Dissenting
Statement at 2. The fact that the Complaint fails to identify any
violation of section 7 ``invalidates any justification for the order,''
id. at 6, and confirms that the Order confers no benefit on consumers.
In light of the utter lack of justification for the Order, the harm
that the Order causes to Mr. Sheffield easily outweighs its nonexistent
benefits. See Readers' Digest Ass'n, 102 F.T.C. 1268, 1971 WL 128725,
at *2. Furthermore, the only restrictions imposed by the Order--
preventing Exxon from appointing Mr. Sheffield or any Pioneer employee
to its Board and prohibiting Exxon from appointing Mr. Sheffield to
serve as an adviser in any capacity to Exxon's management--
``unnecessarily inhibit'' Mr. Sheffield, thousands of Pioneer
employees, and even Exxon ``from engaging in conduct which, in and of
itself, is innocuous and may, in certain circumstances, be
procompetitive.'' In the matter of Occidental Petroleum Corp., 101
F.T.C. 373, 1974 WL 175259, at *1. Vacatur of the Order is warranted to
remove these unnecessary restrictions.
The Order ``ignored the public interest by using [the FTC's]
Complaint to obtain a consent agreement'' that specifically targeted
Mr. Sheffield, ``an individual who was not party to the agreement.''
Dissenting Statement at 1. The public interest is harmed when an
individual's constitutional and other legally protected rights are
trampled upon by a federal agency without due process or other
protections. As outlined in detail in Mr. Sheffield's Comment, the FTC
shared the draft Complaint with Mr. Sheffield only two days before
Exxon signed the Consent Order, without ever engaging with Mr.
Sheffield's counsel on the allegations in the Complaint. See Ex. 1,
Sheffield Comment at 21-22. The ``factual failings'' of the Complaint
are therefore ``exacerbated by the process failings that the Majority
embraced in this investigation,'' including the Majority's decision to
``hide[ ] behind the caption that names only Exxon'' despite the fact
that the Order directly targets Mr. Sheffield, whose name appears ``47
times in an eight-page redacted Complaint.'' Dissenting Statement at 4-
5.
In addition to violating Mr. Sheffield's constitutional right to
due process, the Order and Complaint disregard Mr. Sheffield's First
Amendment rights, leveraging his protected government petitioning to
support the FTC's flawed narrative that Mr. Sheffield is a purported
advocate for collusion among oil producers, see id. at 4-5. Vacatur of
the Order is therefore also warranted to protect Mr. Sheffield's
constitutional rights to due process and to petition the government for
redress. See In the Matter of the American College of Obstetricians and
Gynecologists, 104 F.T.C. 524, 1984 WL 565347, at *2 (modifying order
to clarify that ``this order shall not be construed to prevent
[respondent] from . . . [e]xercising rights permitted under the First
Amendment to the United States Constitution to petition any federal or
state government, executive agency, or legislative body concerning
legislation, rules or procedures.'').
In light of all of these factors, the Order should be set aside and
vacated in its entirety.
Dated: March 14, 2025.
Respectfully submitted,
/s/ David Gelfand
David Gelfand,
Jeremy Calsyn,
Cleary Gottlieb Steen & Hamilton LLP, 2112 Pennsylvania Avenue NW,
Washington, DC 20037, 202-974-1522, Counsel for Scott Sheffield.
[FR Doc. 2025-06562 Filed 4-16-25; 8:45 am]
BILLING CODE 6750-01-P