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Minneapolis lawyers file lawsuit against bars, implicating UW
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by Joanna Salmen
Wednesday, March 24, 2004
Bar patrons who have visited downtown bars participating in the weekend drink-special ban may be entitled to receive part of the millions of dollars a team of Minneapolis lawyers expects to recover from a lawsuit to be filed Wednesday.
The team of lawyers plans to file a class-action lawsuit in federal court against the University of Wisconsin regarding the Policy, Alternatives, Community and Education Project’s recommendation of a voluntary weekend drink-special ban. The lawsuit also targets the estimated 24 bars participating in the ban since it began in September 2002.
The lawsuit, according to one of the lawyers pursuing the case, could generate “tens of millions of dollars” in damages, which would be awarded to students who visited bars since the time the weekend drink specials began.
According to UW law professor and antitrust expert Peter Carstensen, the case is valid. He said if a group of Madison bars agreed to raise prices, they are lucky they are only getting sued civilly.
“People go to jail for doing that,” Carstensen said. “It is illegal for competitors to agree on what they are going to do, no matter how benign their alleged motives are.”
If each bar that participated in the voluntary weekend drink-special ban agreed to raise its prices and not have drink specials during certain time periods, which forces students to pay more for their drinks, the university and the bar owners could be in trouble, according to Carstensen.
The case, which is being filed by attorney Jim Lockhart and other attorneys from the firm Lommen, Nelson, Cole and Stageberg in Minneapolis, alleges the university and bars participating in the weekend drink-special ban are engaged in a price-fixing conspiracy. The purpose of the lawsuit is to break up the bar cartel and return downtown bars to competitive pricing, Lockhart said. The suit will also attempt to uncover the nature of the cartel and recover money lost by patrons.
Lockhart and his team have collected class representatives for the case. These class representatives include a group of four individuals who have visited the targeted establishments since September 2002. The representatives are UW juniors Brian Dougherty and Greg Gautam, UW law student Nick Eichenseer and Madison resident Eric Stener. They will provide receipts from bar visits and will meet with lawyers to discuss the downtown bars and pricing.
Dougherty’s father, who works with Lockhart, contacted Dougherty about participating in the case. Dougherty said he has become involved in the case because what the bars are doing is illegal.
“The university should not be pressuring private businesses,” Gautam said. “They are making a profit because the ban has not deterred people from going to the bars.”
Dougherty and Gautam were unsure if they would receive money for their efforts. Dougherty explained it would depend on the outcome of the case. However, Gautam said money was not the issue.
“I am not doing this because of money,” Gautam said. “I am doing this because what is going on is not fair.”
In order to find out if downtown bars and the university did conspire to raise prices, the prosecuting attorneys will search for records and communications, such as e-mails, for evidence.
The lawyers will most likely also infer as to whether or not establishments raised prices at the same time or if they eliminated drink specials at a particular time, according to Carstensen.
“A big challenge is getting the proof together,” Carstensen said, although he maintained it can, and most likely will, be done.
Carstensen said some statements used in PACE material may prove the organization told bars if they agreed to raise prices the bars would make more money, which could potentially harm the university’s defense.
If the case is won, students who visited bars implementing weekend drink-special bans would receive money lost by the price fixing. Carstensen said this amount would be calculated by the extra amount bar patrons paid without the discount they received before the ban and multiplied by the number of drinks each bar has sold since that time. This figure would then be multiplied by three, as is standard practice in antitrust cases. Since bars keep precise records, damages should be able to be accurately calculated, Carstensen said.
“If it is correct that they agreed on eliminating drink specials, they have no defense that I can identify that is a valid and workable defense,” Carstensen said.
Sue Crowley, PACE director, said she had no comment on the issue.
Erik Christianson, UW System spokesperson, said the university and the system do not comment on pending lawsuits or cases.
