State faces suit over competition lawMADISON — The state of Wisconsin is being sued in federal court over a law designed to ensure fair competition among gas station owners.
By: By SCOTT BAUER/Associated Press Writer, The Daily Telegram
MADISON — The state of Wisconsin is being sued in federal court over a law designed to ensure fair competition among gas station owners.
The filing comes after a federal magistrate judge ruled in another lawsuit last year that the law is unconstitutional.
Flying J filed a new lawsuit Jan. 29 in light of the previous ruling asking the court to force the state to stop enforcing the minimum markup law. Flying J operates gas stations in Black River Falls and Oak Creek.
The state did not appeal the earlier ruling but still is enforcing the law despite it being found unconstitutional, Flying J argues. Doing that “chills open competition” in the state’s fuel pricing market, challenges the authority of federal courts to enforce the law, and undermines the Constitution, according to the lawsuit.
A spokesman for Attorney General J.B. Van Hollen had no comment on the lawsuit. The state has until Feb. 19 to reply.
Attorney Jonathan Dibble, who represents Utah-based Flying J in the lawsuit, said getting rid of the law would result in greater competition among gas sellers and lower prices for customers.
Democratic Gov. Jim Doyle and Republican lawmakers have long opposed the law, saying it raises prices artificially. But they have failed to overcome supporters who say the law keeps small retailers from being driven out of business.
Magistrate Judge William Callahan ruled Oct. 12 that because the state does not actively supervise its minimum markup law, the law violates federal antitrust laws and the supremacy clause of the U.S. Constitution.
In that case, Flying J was sued by Kenosha-based Lotus Business Group, which argued that Flying J’s gas stations were selling fuel at a price lower than the law allowed.
The law makes it illegal for retailers to sell gasoline without marking it up either 6 percent over what they paid or 9.18 percent over the average local wholesale price — whichever is higher.
Violators face stiff fines from regulators and can be sued by competitors for selling gas too cheap.
Passed in 1939, the law was intended to ensure fair competition and prevent larger companies from driving smaller ones out of business. It includes an exemption allowing gas stations to match competitors’ prices.
The law requires retailers to sell all products at least at the cost they paid. Only gas, alcohol and tobacco must be sold at about 9 percent above cost.