Wis. Sued Over Gas Competition Law

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 judge ruled in another lawsuit last year that the law is unconstitutional.

In documents obtained by the Associated Press, 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. The state did not appeal the earlier ruling but still is enforcing the law despite it being found unconstitutional, the Ogden, Utah-based retailer 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, the AP reported.

Attorney Jonathan Dibble, who represents Flying J in the lawsuit, said getting rid of the law would result in greater competition among gas sellers and lower prices for customers.

The Wisconsin law makes it illegal for retailers to sell gasoline without marking it up either 6% over what they paid or 9.18% 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 report said. 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% above cost.

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