Gasoline Markup Law May Survive

 

Wisconsin’s controversial minimum markup law for gas is still alive, at least for now, the Associated Press reported.

 

The 7th U.S. Circuit Court of Appeals is allowing a business group to appeal the February ruling that ruled against the law, which requires gas stations to add on 6% more than what they paid or 9.18% over the average wholesale price of gas, whichever is higher.

 

Critics have argued that the law is outdated and hurts motorists. Meanwhile, supporters say it keeps smaller gas stations in business.

 

Judge Richard Posner sided with mom-and-pop gas stations, who claim the law has protected them from the possibility of larger rivals undercutting their prices. He was critical of Wisconsin Attorney General J.B. Van Hollen’s decision to not appeal the ruling on his own.

 

The Wisconsin Petroleum Marketers & Convenience Store Association can appeal in the attorney general’s place, he wrote, because the hundreds of businesses it represents would be directly hurt without the law. “They would lose much or even all of their business to their larger, more efficient competitors,” he added.

 

The gas stations had no indication that “the attorney general was planning to throw the case-until he did so by failing to appeal,” Posner noted.

 

U.S. District Judge Rudolph Randa ruled in February that the law was unconstitutional and could not be enforced because it conflicted with federal antitrust law.

 

Van Hollen announced in March that he would not appeal. He noted that the state agency that enforces the law did not request an appeal and said lawmakers, not a federal appeals court, should rewrite the law to address constitutional issues, the Associated Press noted.

 

Posner said the appeals court would rule on whether the law is constitutional after receiving briefs from both sides. He said they should address whether Randa’s ruling complies with a 1978 U.S. Supreme Court decision, which upheld a Maryland law requiring oil companies to temporarily cut their prices to gas stations.

 

Matt Hauser, president of the Wisconsin convenience store group, said he hoped the law, which has survived 10 legal challenges since the 1990s, would remain. “The law helps level the playing field for independent retailers,” he said. “Given the economy, it’s never been more important to keep those retailers vibrant and gainfully employed.”

 

 

 

 

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