AG Van Hollen: Will not appeal federal court decision striking down Wisconsin’s minimum markup law

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Bill Cosh 608/266-1221

Madison– Attorney General J.B. Van Hollen released the following statement today announcing his decision not to appeal Flying J v. Van Hollen, a case in which the United States District Court for the Eastern District of Wisconsin struck down as unconstitutional Wisconsin’s Unfair Sales Act with respect to its motor vehicle fuel provisions (the “minimum markup law”):

Last month, a United States District Court found the minimum markup law unconstitutional with respect to its motor vehicle fuel provisions because they were preempted by federal antitrust law.

As district attorney, my office prosecuted violations of the minimum markup law. As Attorney General, my office provided a vigorous defense of this law. And while we supplied the court with numerous arguments in defense of the statute as is our statutory obligation, the state lost.

Today, I am announcing that the Wisconsin Department of Justice will not be initiating an appeal of this decision to the United States Seventh Circuit Court of Appeals.

A number of factors have weighed into my decision. I cannot at this time comment on my legal analysis of whether the minimum mark up law violates federal antitrust law because legal proceedings continue in the District Court. They continue because the Wisconsin Petroleum Marketers & Convenience Store Association moved to intervene in the case after the District Court issued its judgment. The Association’s motion to intervene is pending.

While I can’t comment on my legal analysis, I can explain how other considerations have weighed in my decision not to appeal.

First, under our statutes, the primary agency charged with enforcing the minimum markup law is DATCP. They have not requested an appeal, and it is very unusual to appeal adverse decisions where the primary administrative agency has not requested me to do so.

Second, the public policy considerations that underlie the minimum markup law can be better addressed by the legislature than by a court through an appeal. It may well be on appeal that the Court would attempt to clarify the statute, in effect, rewriting it. That is the job of the legislature. While the case law supports Wisconsin’s ability to craft legislation aimed at preventing gasoline from being sold as a loss leader so that local retailers can better compete with national companies, the minimum markup law can be better designed to avoid constitutional issues should the legislature choose to do so.

Third, we do not appeal every adverse decision. In light of the reasons why this law was struck down combined with the issues I’ve noted, including the Legislature’s ability to craft curative legislation if desirable, I do not believe it is a wise to continue to litigate this case. Moreover, exceptions to the law such as the “meeting competition” exception and the fact the markup has not been applied to ethanol diminishes any regulatory effect, arguably making any potential reversal more symbolic than substantive.

I appreciate the input that my office has received on this matter.

End of Statement