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STATE CAPITOL
P.O. Box 8953 | Madison, Wisconsin | 53707-8953
 
To:
 
All
 
Legislators
 
From:
 
State
 
Representatives
 
Bill
 
Kramer
 
and
 
Leah
 
Vukmir
 
Date:
 
March
 
19,
 
2009
 
Re:
 
Wisconsin
 
Petroleum
 
Marketers
 
and
 
the
 
Competitive
 
Marketplace
 
Act
 
(LRB
‐
0924/1)
 
On
 
Tuesday,
 
the
 
Wisconsin
 
Petroleum
 
Marketers
 
and
 
Convenience
 
Store
 
Association
 
(the
 
WPMCA/
 
Association)
 
circulated
 
a
 
memo
 
encouraging
 
legislators
 
to
 
withhold
 
their
 
support
 
for
 
LRB
 
0924/1
 
 –
 
The
 
Competitive
 
Marketplace
 
Act.
 
We
 
recognize
 
that
 
some
 
legislators
 
would
 
prefer
 
to
 
allow
 
the
 
WPMCA
 
to
 
exhaust
 
their
 
legal
 
remedies
 
before
 
signing
 
on
 
to
 
LRB
‐
0924.
 
To
 
that
 
end
 
we
 
are
 
extending
 
the
 
co
‐
sponsorship
 
deadline
 
to
 
April
 
17,
 
2009
.
 
We
 
have
 
also
 
addressed
 
the
 
concerns
 
of 
 
the
 
Association
 
below:
 
WPMCA
 
Statement
 
#1
 
Wisconsin's
 
Unfair 
 
Sales
 
 Act 
 
has
 
been
 
strong
 
and 
 
effective.
 
It 
 
remains
 
so
 
today,
 
even
 
without 
 
the
 
minimum
 
markup
 
 provisions
 
 for 
 
 petroleum.
 
The
 
strength
 
of 
 
the
 
law 
 
is
 
 precisely 
 
why 
 
it 
 
has
 
been
 
the
 
 focus
 
of 
 
attack 
 
over 
 
the
 
years
‐
and 
 
why 
 
even
 
now,
 
without 
 
the
 
minimum
 
markup
 
 provisions,
 
groups
 
still 
 
want 
 
it 
 
completely 
 
repealed.
 
Unfortunately,
 
the
 
current 
 
economic
 
situation
 
of 
 
our 
 
state
 
and 
 
nation
 
 prove
 
that 
 
inadequately 
 
regulated 
 
markets
 
harm
 
consumers.
 
Our
 
Response
 
The
 
1939
 
Unfair
 
Sales
 
Act
 
applied
 
to
 
every
 
wholesale
 
and
 
retail
 
product.
 
In
 
1985,
 
the
 
legislature
 
repealed
 
the
 
markup
 
for
 
every
 
product
 
except
 
for
 
motor
 
vehicle
 
fuel,
 
alcohol
 
and
 
tobacco.
 
Contrary
 
to
 
popular
 
myth,
 
the
 
current
 
Unfair
 
Sales
 
Act
 
has
 
little
 
to
 
do
 
with
 
the
 
original
 
1939
 
statutes.
 
It
 
was
 
significantly
 
overhauled
 
in
 
1998
 
with
 
language
 
promoted
 
by
 
the
 
Association.
 
If 
 
our
 
current
 
economic
 
situation
 
demonstrates
 
anything,
 
it
 
is
 
that
 
regulation
 
developed
 
by
 
special
 
interests
 
can
 
harm
 
the
 
public
 
and
 
the
 
economy.
 
WPMCA
 
Statement
 
#2
 
Our 
 
major 
 
concern
 
with
 
the
 
 proposed 
 
bill 
 
comes
 
 from
 
its
 
three
 
 part 
 
test.
 
While
 
the
 
words
 
might 
 
sound 
 
reasonable,
 
they 
 
are
 
actually 
 
very 
 
difficult 
 
to
 
 prove
 
in
 
Court.
 
 Ask 
 
yourself,
 
if 
 
you
 
are
 
a
 
small 
 
business
 
 
 
owner,
 
how 
 
can
 
you
 
 possibly 
 
make
 
your 
 
case
 
and 
 
 prove
 
beyond 
 
a
 
reasonable
 
doubt 
 
that 
 
your 
 
competitor's
 
 pricing
 
is
 
such
 
that:
 
1I)
 
the
 
 pricing
 
causes,
 
or 
 
is
 
likely 
 
to
 
cause,
 
substantial 
 
injury 
 
to
 
consumers;
 
2)
 
the
 
injury 
 
is
 
not 
 
reasonably 
 
avoidable
 
by 
 
consumers;
 
and 
 
3)
 
the
 
injury 
 
is
 
not 
 
outweighed 
 
by 
 
countervailing
 
benefits
 
to
 
consumers
 
or 
 
competition.
 
Our
 
Response
 
A
 
retailer
 
or
 
wholesaler
 
does
 
not
 
have
 
to
 
initiate
 
a
 
court
 
action.
 
DATCP
 
has
 
the
 
authority
 
to
 
investigate
 
and
 
prevent
 
anticompetitive
 
(predatory)
 
pricing.
 
Further,
 
the
 
Department
 
is
 
given
 
rule
 
making
 
authority
 
that
 
will
 
allow
 
Wisconsin
 
to
 
adopt
 
standards
 
that
 
define
 
predatory
 
pricing
 
practices.
 
This
 
will
 
allow
 
DATCP
 
to
 
prohibit
 
certain
 
monopolistic
 
or
 
anticompetitive
 
conduct
 
before
 
it
 
even
 
occurs
 
in
 
our
 
state.
 
This
 
authority
 
and
 
the
 
standards
 
the
 
WPMCA
 
find
 
objectionable
 
are
 
nearly
 
identical
 
to
 
those
 
assigned
 
to
 
the
 
Federal
 
Trade
 
Commission.
 
In
 
addition,
 
the
 
Department
 
of 
 
Justice
 
may
 
independently
 
initiate
 
an
 
action
 
against
 
predatory
 
pricing
 
and
 
impose
 
substantial
 
penalties,
 
including
 
a
 
$1,000,000
 
forfeiture
 
and
 
a
 
Class
 
H
 
felony.
 
Consistent
 
with
 
the
 
law,
 
retailers
 
who
 
were
 
injured
 
by
 
such
 
conduct
 
may
 
also
 
seek,
 
individually
 
or
 
as
 
a
 
class,
 
treble
 
damages.
 
Finally,
 
the
 
standards
 
found
 
in
 
the
 
Competitive
 
Marketplace
 
Act
 
are
 
drawn
 
directly
 
from
 
the
 
Federal
 
Trade
 
Commission,
 
the
 
United
 
States
 
Supreme
 
Court
 
and
 
Wisconsin’s
 
Supreme
 
Court.
 
Those
 
standards
 
include
 
“reasonable
 
doubt.”
 
The
 
1998
 
modifications
 
to
 
the
 
Unfair
 
Sales
 
Act
 
establish
 
a
 
prima
 
facie
 
case
 
even
 
if 
 
there
 
has
 
been
 
no
 
harm
 
to
 
competitors
 
or
 
competition.
 
That
 
is
 
bad
 
public
 
policy
 
and
 
bad
 
law.
 
As
 
Justice
 
Prosser
 
noted
 
in
 
a
 
decision,
 
“Adoption
 
of 
 
a
 
predatory
 
pricing
 
standard
 
authorizing
 
successful
 
claims
 
when
 
no
 
harmful
 
activity
 
has
 
occurred
 
would
 
be
 
detrimental
 
to
 
market
 
competition
 
and
 
consumer
 
welfare
 
in
 
Wisconsin.”
 
WPMCA
 
Statement
 
#3
 
WPMCA
 
believes
 
Wisconsin's
 
Unfair 
 
Sales
 
 Act 
 
meets
 
all 
 
constitutional 
 
requirements
 
and 
 
will 
 
survive
 
careful 
 
scrutiny 
 
by 
 
the
 
7'h
 
Circuit 
 
Court 
 
of 
 
 Appeals.
 
We
 
have
 
asked 
 
to
 
be
 
made
 
an
 
official 
 
 party 
 
to
 
the
 
case,
 
and 
 
be
 
allowed 
 
an
 
opportunity 
 
to
 
appeal 
 
to
 
the
 
7'h
 
Circuit.
 
Please
 
allow 
 
the
 
law 
 
its
 
day 
 
in
 
court.
 
We,
 
more
 
than
 
anyone,
 
understand 
 
that 
 
courts
 
move
 
slowly.
 
But 
 
by 
 
the
 
end 
 
of 
 
March
 
we
 
will 
 
learn
 
if 
 
we
 
have
 
 party 
 
status
 
in
 
this
 
case.
 
 And 
 
it's
 
reasonable
 
to
 
assume
 
the
 
case
 
will 
 
be
 
granted,
 
or 
 
denied,
 
an
 
appeal 
 
by 
 
early 
 
summer.
 
Please
 
wait 
 
until 
 
then
 
before
 
contemplating
 
a
 
legislative
 
 fix.
 
Our
 
Response
 
This
 
is
 
a
 
fair
 
point.
 
We
 
will
 
allow
 
time
 
for
 
the
 
court
 
to
 
consider
 
allowing
 
the
 
WPMCA
 
to
 
intervene.
 
We
 
will
 
hold
 
our
 
co
 
sponsorship
 
open
 
until
 
April
 
17
th
.
 
We
 
believe
 
the
 
court
 
will
 
quickly
 
reject
 
this
 
request.
 
The
 
court
 
applied
 
precedents
 
established
 
by
 
the
 
U.S.
 
Supreme
 
Court
 
when
 
it
 
found
 
that
 
the
 
Unfair
 
Sales
 
Act
 
fails
 
the
 
immunity
 
test
 
because
 
the
 
state
 
may
 
not
 
"simply 
 
authorize
 
 price
 
setting
 
and 
 
enforce
 
the
 
 prices
 
established 
 
by 
 
 private
 
 parties" 
 
nor
 
can
 
the
 
state
 
enforce
 
a
 
"horizontal 
 
 pricing
 
mechanism." 
 
THE
 
WPMCA
 
appeal
 
only
 
serves
 
to
 
reinforce
 
the
 
courts
 
conclusions.
 
It
 
is
 
a
 
private
 
price
‐
fixing
 
scheme.
 
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