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Conservative Group Sues To Overturn Minimum Markup Law

The Wisconsin Institute For Law And Liberty Contends The 'Unfair Sales Act' Is Unconstitutional

Jessica Hill/AP Photo

A conservative group has filed a lawsuit that seeks to overturn Wisconsin’s Depression-era Unfair Sales Act after repeated attempts to repeal it in the state Legislature went nowhere.

The act, which is also known as the minimum markup law, prevents companies from selling products below cost. Its aim is to prevent larger retailers from driving smaller ones out of business, but some conservatives say it violates free market principles.

“In our view, the law is based upon what is at best an antiquated economic theory,” said Wisconsin Institute for Law and Liberty President Rick Esenberg. “We believe that the minimum markup law does not have a plausible justification.”

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WILL filed its lawsuit in Vilas County on behalf of Krist Oil Company, which operates stores in both Wisconsin and Michigan. The lawsuit states Krist Oil “believes that its business objectives are best served by providing consumers of gasoline with the best product at the lowest possible prices.”

Krist contends it can do that in Michigan but Wisconsin’s minimum markup law makes it “impossible.” WILL’s lawsuit states the Wisconsin law “unduly restricts the economic liberty guaranteed by the Wisconsin constitution” and is therefore unenforceable.

Krist Oil’s position puts it at odds with many other Wisconsin gas stations and convenience stores, which have successfully fought efforts to repeal the Unfair Sales Act. The Wisconsin Petroleum Marketers and Convenience Store Association issued a statement saying it was disappointed there was yet another challenge to a law that it says works for Wisconsin consumers.

“This is just another attempt to create a solution for something that’s not a problem in Wisconsin,” said WPMCA President Matt Hauser.

The Wisconsin Department of Justice, which is currently led by Republican Attorney General Brad Schimel, plans to defend the state in the case, according to DOJ Spokesman Johnny Koremenos.

The Unfair Sales Act has survived repeated attempts at repeal in the Wisconsin Legislature, regardless of which party is in charge. Some conservatives hoped that might change this past legislative session with big GOP majorities in both houses of the Legislature and a Republican governor. In the end, GOP leaders left the law alone, saying they had questions about how a repeal would affect Wisconsin’s economy.

Editor’s note: This story has been updated with new information about the DOJ’s plan to defend the state.