Wisconsin Attorney General J.B. Van Hollen announced Tuesday his office will not appeal the federal court decision that declared the state’s long-standing minimum markup law unconstitutional.
According to the Wisconsin Legislative Council, under the minimum markup law, gas stations are required to inflate gas prices 6 percent or 9.18 percent over the average wholesale price, depending on which will bring in the greatest profit.
The markup law was enacted in 1939 and is included in the Unfair Sales Act.
Exceptions to the law permit stations to hike gas prices at a lower rate than their competitors. For example, a station in a border city like La Crosse may meet the price of gas sold at a Minnesota station.
In January, Utah-based gas station and restaurant chain Flying J brought suit against the state of Wisconsin over the minimum markup law.
Rudolph Randa, chief judge of the U.S. District Court for the Eastern District of Wisconsin, ruled last month that minimum markup was unconstitutional because it violated antitrust laws.
In 2007, Flying J was involved in a similar case with Lotus Business Group, LLC, of Kenosha, where a magistrate judge ruled minimum markup was unconstitutional.
The state was not required to follow the ruling in the 2007 case because it was between two private parties, according to Department of Justice spokesperson Kevin St. John.
“The state was not a party to [the 2007] case, so strictly speaking that ruling did not have any impact on the ability of the state to enforce the minimum markup law,” St. John said.
St. John added Van Hollen will not pursue an appeal for various reasons, especially because minimum markup’s primary enforcer, Wisconsin Department of Agriculture, Trade and Consumer Protection, has not requested one.
“It’s certainly unusual for the Department of Justice to pursue an appeal absent a request by the primary enforcement agency,” St. John said.
St. John said another reason Van Hollen will not appeal is because the minimum markup can be better designed to avoid constitutional issues by the Legislature.
According to St. John, Van Hollen cannot comment on his legal analysis of the decision yet since legal proceedings on the case still continue in the District Court. The Wisconsin Petroleum Marketers & Convenience Store Association moved to intervene in the case after the District Court issued its judgment.
Flying J’s attorney, Jonathan Dibble, decline to comment on the ruling at this time, as motions are still pending on the case before Randa.
Cynthia Jasper, professor of consumer science and professor and chair of the University of Wisconsin Department of Interdisciplinary Studies, said the ruling has both positive and negative effects, depending on a person’s viewpoint.
“Overall, consumers will save money and do better by not having this law, but for very small retailers there may be some issues in terms of competing,” Jasper said.
Jasper added many people do believe minimum markup to be an archaic law that should be changed.
