He argued that the minimum markup law violates the state constitution's equal protection clause because retailers who sell gasoline are unfairly singled out for [image-nocss] regulation. But Dane County Circuit Judge Maryann Sumi last Thursday sided with the state and dismissed the lawsuit.
Bhandari's attorney, Robert McNamara of the Institute for Justice, an Arlington, Va.-based law firm, said he received the decision after business hours and would study it before deciding how to respond. He had earlier vowed to take the fight all the way to the state Supreme Court. "All this law does is protect entrenched businesses from small entrepreneurs like Mr. Bhandari," he said.
Bhandari stopped offering discounts of two cents per gallon to senior citizens and three cents per gallon for donors to a youth hockey league after being warned by state regulators in April 2007 that the programs may violate the law. Gasoline sales dropped by about 20% as a result, he said.
His lawyers argued the constitution protects business owners' right to earn a living free from unnecessary government regulation.
The law, known as the Unfair Sales Act, makes it illegal for retailers to sell gasoline without marking it up either 6% over what they paid or 9.18% over the local wholesale pricewhichever is higher. Violators face stiff fines from regulators and can be sued by competitors for selling gasoline too cheap.
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.
Bhandari wanted the judge to declare the law unconstitutional and to order that enforcement stop. The judge disagreed and sided with the state, saying Bhandari did not prove beyond a reasonable doubt that the law is unconstitutional.
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