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Seller Challenges State Gas Price Law

Posted on: Tuesday, 30 August 2005, 18:00 CDT

Aug. 30--As rising gasoline prices continue to shock drivers across the country, one small chain of Minnesota gas stations is challenging a state law that requires sellers to charge consumers a minimum price.

Midwest Oil of Minnesota filed suit Monday in Ramsey County District Court, arguing the law is unconstitutional and hinders competition. In June, the state Commerce Department accused Midwest Oil of selling, offering or advertising gas below the state minimum on more than 160 occasions.

Minnesota law prohibits retailers from engaging in unfair discrimination and competition by selling, offering or advertising gasoline below cost. State officials ordered Midwest Oil to stop selling below cost and to respond to the allegations. The case has been moving through the state's administrative court system.

Midwest Oil could face as much as $1.6 million in civil fines if an administrative judge finds the company violated the law.

In court papers, the Shawano, Wis.-based company explained it had acquired four retail locations in Minnesota from operators who had failed in their business operations.

"As distressed properties, Midwest knew it would face serious challenges in re-establishing the retail locations with the buying public," according to the complaint. "To that end, Midwest … developed a business plan which included aggressively pricing its retail gasoline at those locations in order to attempt to attract customers."

Midwest Oil's attorney, Christopher Sandberg, said he could not comment.

Commerce Department spokesman Bruce Gordon said his agency is simply enforcing the law.

"The issue in this complaint is constitutionality," Gordon said. "Our attorney is the attorney general's office, and this will be an issue for them to discuss and to pursue in court."

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Copyright (c) 2005, Pioneer Press, St. Paul, Minn.

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Source: Saint Paul Pioneer Press (St. Paul, Minn.)

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