Wisconsin Court Rules Against Cheap Gas Prices

J. Justin Wilson
J. Justin Wilson · January 23, 2009

Arlington, Va.—On Wednesday, the Dane County Circuit Court in Madison ruled that the state of Wisconsin can threaten small retailers with thousands of dollars in fines because their gas prices are not high enough.

The court’s ruling dismissed a June 2007 lawsuit filed by the Institute for Justice (IJ), the nation’s leading legal advocate for economic liberty, on behalf of Raj Bhandari, a Merrill, Wis., small-business owner.  Bhandari had been offering popular discounts on gasoline to senior citizens and people who donated to support the local youth-hockey league, but was forced to stop after discovering that his discounts could subject him to thousands of dollars in fines under Wisconsin’s “Unfair Sales Act.”

“It is disappointing that the court did not recognize that protecting consumers from gasoline that is too inexpensive makes no more sense than protecting consumers from pillows that are too soft,” said IJ Staff Attorney Robert McNamara.  “Three different state supreme courts have struck down laws like this one without any negative effects for consumers or small businesses.”

In 2006, Bhandari purchased and renovated a gas station on the verge of bankruptcy.  He quickly turned the business around, in part by using special discounts to build closer ties with the surrounding community.  In addition to drawing attention from the community, however, those discounts drew attention from the agency responsible for enforcing the “Unfair Sales Act,” which makes it illegal to sell gasoline without marking it up at least 9.18 percent over the local wholesale price.

“Raj is not asking for special government protection—all he wants is the opportunity to use his work ethic and business judgment to provide his customers with the best service at the lowest price he can.” concluded McNamara.  “We are analyzing the court’s opinion closely and will be deciding how to respond in the coming days.”