WAUSAU, Wis. -- A Shawano, Wis., gas station was wrongly ordered to pay nearly $5,000 to each of six competitors after being accused of violating the state's minimum markup law in pricing its fuel below cost, a state appeals court ruled Wednesday, reported the Associated Press.
Midwest Oil Mobil Service Station acted within the bounds of the Wisconsin Unfair Sales Act in meeting a competitor's price, the 3rd District Court of Appeals said in overturning a decision by Shawano County Circuit Judge Thomas Grover.
The dispute involved [image-nocss] how the seven stations set prices for unleaded regular gasoline in fall 2002 during a time of rising prices.
Grover had ordered Midwest Oil to pay a total of $29,815 in damages and attorneys fees to the six plaintiffs who sued the company claiming it sold gasoline below cost for one day.
According to court records, Midwest Oil sold unleaded regular for $1.54 a gallon on Oct. 17, 2002, after Manager Naarah Kindseth surveyed competitors in the morning and another station, Auto Prep Center, charged the same price. About an hour later, Auto Prep Center raised its price to $1.59, leaving Midwest Oil as the only station in the area at $1.54, which was below cost, court records said.
Kindseth did not conduct another pricing survey until late the next day, but by then another competitor, Kwik Trip, had lowered its price to $1.54 after its own survey of competitors and matched Midwest Oil's price.
Six competitors sued Midwest Oil for violating the minimum markup law after state regulators looked at complaints and issued Midwest Oil a warning, court records said. The competitors said Midwest Oil's decision put them in an unfair dilemma of either raising prices and losing sales of gasoline and other goods or setting the lower price and losing money on the gasoline sales.
Grover ruled Midwest Oil violated the Unfair Sales Act, failing to aggressively survey its competition, thus acting in bad faith in setting its price.
In overturning that decision, the three-judge appeals court said the law does not specify how often price surveys must be conducted"state regulators recommend daily surveys"or during what time period. Midwest Oil acted in good faith to comply with the law because it performed daily price surveys, the panel said.
There was no evidence Kindseth delayed her price survey or set the station's gasoline price "with the intent to defraud or seek an unconscionable advantage," the appeals court said.
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