The court lifted an order imposed last year that put enforcement of the law on hold after U.S. District Judge Rudolph Randa concluded it violated federal antitrust law and increased the price at the pump by up to 30 cents [image-nocss] a gallon said the Associated Press.
The court of appeals' decision rejected a district court's holding that the act offended federal law prohibitions on collusive pricing. The appellate court's decision, written by Judge Michael S. Kanne, concluded to the contrary: "On the face of the statute, there is simply nothing that compels collusive private conduct that would violate the Sherman Act... Second, there is simply no evidence in the record that gasoline dealerswholesalers, retailers or otherwiseare colluding to fix or raise the price of gasoline in Wisconsin."
Flying J Inc., which brought the lawsuit, offered no evidence gas stations are colluding or manipulating gasoline prices in the state, the court ruled. The company argued that Wisconsin citizens had paid millions of dollars more than they should have for gas over the decades.
WPMCA, which represents more than 80% of the convenience stores in Wisconsin, argued that its members would be driven out of business from larger competitors without the law. The association intervened to continue the case after state Attorney General J.B. Van Hollen and state regulators had decided not to appeal Randa's ruling.
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The appellate court's decision supports the position of the independent businesses represented by WPMCA that have been fighting to keep the law on the books. "The law has kept Wisconsin's gasoline marketplace fiercely competitive and it has been protecting consumers' pocketbooks for generations," said WPMCA.
Matt Hauser, president of WPMCA, said, "The Unfair Sales Act protects all consumers by ensuring a competitive marketplace that leads to more jobs in local communities. That is its greatest valueand at a time when local economies are struggling, we need to do all we can to keep these good jobs in local communities."
He added, "Time and time again, those who have opposed the Unfair Sales Act infer that eliminating the law will reduce gas prices. The fact is that the price of gas will continue to rise and fall due to market forces. Wisconsin gas prices track national trends, and in many cases, often fall below national averages due to strong competition. We've found through the years that states with fair marketing laws in place often have lower gas prices than states that have repealed those protections."
The law requires retailers to sell gasoline for 6% above what they paid, or 9.18% above the average local wholesale price, whichever is higher. Stores can go below the minimum to match a competitor's advertised price. State regulators have rarely brought enforcement actions in recent years, but stations have taken advantage of the law to sue their rivals for violations.
Flying J argued that it could sell gasoline lower than the markup required and still make a profit. The chain sued to strike down the law after Kenosha, Wis.-based Lotus Business Group filed a lawsuit claiming Flying J's stations did not mark up gasoline enough.
In its case, Flying J cited a 2003 report by the Federal Trade Commission (FTC) that said the law was unnecessary, deterred competitive price-cutting and caused some stores to raise prices. A separate 1999 report by the Wisconsin Policy Research Institute, a conservative think tank, reached a similar conclusion and raised the specter of collusion among stations.
Jimmy Peltier, a marketing professor at University of Wisconsin-Whitewater who has done consulting work for WPMCA, however, said his research of states' gasoline prices over 20 years shows those that have minimum markup laws have seen a slower decline in the number of gasoline retailers, which has preserved competition and kept prices low.
Flying J attorney John Mackay declined comment to AP.
Click hereto view the case documents.
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