## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 09

- 1883 F LY I NG J, I NCO RPORATE D , P la intif f-A pp ellee, v. J
. B. V AN H OLLEN, Att o r ne y Ge ne r alo fW i sc o ns i n, R OB N IL S ES TUEN, Se c re ta ry of th e W isc on sin Depa r tmento fAgr i cul tu r e, Tr ade a nd Con su m erPr o te ct i o n, D efend a nts. A PP E A L OF : W I S CONS I N P E T R OL E U M M ARK ETERS & C ONV ENI ENCE S TORE A S S OC I A T I ON, Inte rve nor-App el lant.

A pp eal from the United S t ates Di strictC our t fo r the E astern Di stricto f Wisc onsin
. No . 2:08- cv-00110

—Rudo lphT. Rand a, Judge .
A RGUED A PRI L 14, 2010

— D ECI DE D S EP TE MBE R 3, 2010

Befo re P OSNER, R IPPLE, a nd K ANN E , C ircu it Judges . K ANN E , Cir cu i tJudg e . F l yi ng J, In c . , br ought a f aci al ch al l en g e to W i sc o ns i n’ s g as o l i ne pr i cingr egul at i o ns . The2 N o. 09

- 1883 d istri ct cou rt grante d F ly ing J’ s m otion for su m m ary j udg m en t an d pe r m an en t i nj unc ti o n a g ains t en f o r cing the pr ovi si ons, fin d ing that the pro vi si ons w er e pr ee mpt e d b y the S he r manAc ta nd n o ts a v e d b y s t ate ac ti o n i m m uni ty
. W e g r an te d the W isc o ns i n P et r o l eu m M ar ket er s & C onveni ence St or e Associ ati on’ s m oti on to i nter vene afterthe or i gi nalDefendants

— the s tat e o ffi ci al s ch ar g ed wi thenf o r cingthe pr o vi si o ns

— decl i ned to a p p ealthe di st r i ctc o ur t’ s dec i si o n. Be ca us e we fi nd that the provi si ons ar e not preem pted by th e Sh er m an A ct, the dist ri ct c ourt ’ s g ra nt o fFl yin g J’s m oti on f or sum m ar y j ud gm ent i s r eve rs ed, the perm anent inj uncti on i s di sso l ved, an d t h e case i s r em anded to the dist ri ct cour t with dir ecti ons to enterj ud gm ent in f avo r ofDefendants.

I. B ACK GR OUN D A
. Wis consin U nfairSale s A ct W i sco nsi n passed the U nfa i r Sal es A ct ( “A ct”) i n 193 9. I n i ts o r i g i na l f o r m , th e Act m an dat ed a 3 per ce ntmar k up at w holesale an d a 6 perce nt m ar k u p a t retailon allm erchandise so l d i n W i sco nsin, i ncl ud i ng g aso l i ne. The A ct re m ai ned m or e o r l ess i n i ts or i gi nalf or m u nti l19 86 w h en th e W isc on sin L eg isla tu re rem ov ed th e m in im um m ar kup provi si ons f orev er ythi ng exce pt to bacco , al co hol ic b ev er ag es , a nd

— m ostr el evantto the case be f o r e us

— m ot or ve h icle fu el. Seegene rally O r i on Fl ight Se r vs . , Inc . v. Bas l e rFl ightSe r v. , 7 14 N
. W
. 2d 130, 14 6- 47 (W is. 2006).N o. 09

- 1883 3 Inge n er al, th e A c t p ro h ibit s re ta i l e r s o f m ot or ve h icle fuel from sell ing the fue l below cost. W is. Stat. § 100.30(3). T he statu te carefu ll y d efi ne s t h e “ cost to retailer. ” For a re tai l ero fm oto r vehi cl e fuelo th erthan a whole sal ero r r efi ne r, co st i s th e g r ea te r o f ( 1) i nv o i ce o rreplace m en t co st, l es s ce r ta i n de duct i o ns , pl us a 6 % mar k up, o r( 2) “ th e averag e pos ted te rm i nalpri ce a t the te rm i nall oca ted c l o s e s tt o the r e t a i l e rp l us a ma r k up o f9
. 18%
. ” Id. ( 2) ( 1m ) ( c)
. T he “aver age p ost ed ter m i nalpri ce” i s defi ned as: the a ver age post ed ra ck pri ce, as publi sh ed by a petro l eum pri ce r epor ti ng se rv i c e, at w hi ch m oto r veh icle fueli s o ffer ed f orsa l e a t the cl ose o fb us i ne ss o n the det er m i na ti o n dat e bya l lr efi ner s a nd wh ol esa l er s of m oto r vehi cl e fuelata t e r mi n a lp l u s a n y e x c i s e , s a l e s o ru s e t a x e s i mpo se d o n the m otor v eh i cl e fue lo ro n i ts s al e, a ny cos t i ncurr ed f or tr anspor tat i on and a ny other ch ar g es tha t ar e no t o th er wi se inc luded in the av er age po st ed r ac kpr i ce . In thi s par ag r aph, “a ve r ag e” mean s th e ar i th m et i c m ea n. Id. ( 2) ( a)
. A te rm i nali s “ a m oto r veh icle fuelst or age a nd di s t r ib ut i o n f a c i l i t y tha t i s s up pl i e d b y a pi pe l i ne o r m ar i ne ve sse l, fro m w h ich f aci l i ty m oto r vehi cl e fuel m ay be r em ove d a t a r ack and fr om wh i ch f aci l i ty at l eas t 3 r efi n er s o r w hol esa l er s o fm oto r vehi cl e fuel sel lm oto r vehi cl e fuel
. ” Id. ( 2)(j ). T he A ct req uires sim il ar m a r k up s by w holesalers an d r efin er s w h o s ell m ot or ve h icle fu el a t re ta il. Id. ( 2) ( 1m ) ( a) ( defini ng a re fin er ’ s co st as the g re ate r of4 N o. 09

- 1883 i nv o i ce o rr epl ac ementc ost p lus a 9. 18 % mar k up o rthe a verage pos ted term inal price plu s a 9. 18% m arku p ); id
. ( 2)(1m )(b) ( sa m e de fi nition of cost forw holesalers). T h e A c t a lso inc lu d es oth er m in im u m m ar ku p s in the defi ni ti on o fthe “co st” o fm oto r vehi cl e fue l s old at w h ole sa l e, see i d. (2)(c )(1g ) & (1r), or oth er n on -re ta il sa les , s e ei d. ( 2)(d) & ( e). The W i sc o ns i n Dep ar tmento fAgr i cul tu r e, Tr ade , a nd Consum erPro tect i on (“DA TC P”) o r a di str i ct a tto rney m ay sue v i ol ato rs o fthe A ct o n behal fo fthe sta te to re cove r speci fi ed fi nes. Id. ( 4)
. DATCP m aya l so i ss ue ceas e-and -des ist orders for vi olations, an d D A T C P or a di st r i cta tt o r ne y m ays ue t o r ec o ve rfi ne s f o rv i o l at i ng th os e o rd er s. Id. ( 5) ( a)
. DA TC P or a di str i ct a tto rney m ay als o s u e to enj oin vio lat ion s o f th e A c t. Id. ( 5) ( b)
. The A ct a l so gi ves a pri vate cause o fact i on t o “[a ] ny per son w ho is i njured or th reaten ed w ith inj ury as a result of a sal e o r pu rchas e ofm oto r vehi cl e fuel
. ” Id. ( 5m)
. The ag g r i ev ed par tymay su e f o ra n inj unc ti o n a g ains t th e vi ol ato r orf ortr ebl e dam age s, “t oge therwith c ost s, i ncl ud i ng ac counti ng feesa nd r e a s o nab l e a tto rneyfees . ” Id. The pr i va te c au se o fa ct i o n e xpi r es 1 80 da y s aft erthe vio lat ion oc c u rs . Id. Fin ally , th e A c t a llow s a bu sin es s s elli n g m ot or ve h icle fuelto char ge l ess than the m i ni m um m ar ku p provisions w ou ld oth e r w ise req uire if“[t] he price of m erchandise i s m ade i n go od f ai th to m ee t an exi sting pri ce of a co m peti tor
. ” Id. (6)(7 ). To ta ke ad va n ta ge of th is e xc e pt i o n, h o we v e r, the s e l l e rmus tg i v e n o t i c e t o DAT CP “in the f o r m a nd th e m anne rr equi r ed by ” DA TCP o n theN o. 09

- 1883 5

sa m e d ay th at it m at c h es its co m p et ito r’s p ric e. Id. (7)(a ). I f ti m ely n ot ice i s no t g i ven, the sel l ercannotas ser t a s a defen se the pr i ce - m at ch i nge xcep ti o n t o the min i m um m ar ku p p ro vis ion s. Id. ( 7 ) ( b )
. T he p r i c e - mat c hinge xc e ptio n is av aila b l e to ret aile rs , w h ole sa ler s, an d refin er s. Id. (7)( a)-( c). I n a not he rs ta tu te , W i sc o ns i n r equi r es a ny o ne s el l i ng m oto r vehi cl e fuelto postthe “net sel l i ng pri ce perga l l on ofal lgr ades o fm ot or fu el a nd the am ount o fal lta xes per gal l on there on. ” W i s. S tat
. § 100 .18( 8)
. The post ed pri ces “s h allr em ai n i n effect f oratl eas t 2 4 ho urs after they ar e pos ted. ” Id. F r o m t he e nd o fApr i l 20 0 3 thr o ugh 2 0 0 8 , DAT CP re c eiv ed 15 41 co m p lain ts alleg in g v iola tio n s o f th e m in im u m m ar ku p p r ov isio n s fo r m ot or ve h icle fu el. DAT C P d i d n o t, h o we v e r, p r o s e c u t e a s i n g l e a c t i o n i nvo lving vi ol ati ons ofthe A ct fro m J anuary20 03 thro ugh A pri l20 08. DA TC P has pr om ulg ate d adm i nistr ati ve r egul at i o ns r eg ar di ngthe en fo r ce m en t o f§ 1 00
. 30 , i ncl ud i ng r egul ati ons speci fyi ng the f orm and m anner of gi vi ng D A T CP not i ce o fm atchi ng a com peti tor ’ s pri ce. See ge ne r al l y W i s. A dm i n. Code ch. A TC P 105
. The re cord in t h is c ase i ncl ud es tw o re port s. The fi rs t, conduc te d bythe Feder alTra de Com m i ssi on in 200 3, co nc l ude d tha t th e Act ha r m ed co m petiti o n a t th e expense o fW i sc onsi n consum er s by“dete r[ i ng] pro c o m p etitive price-cu tting an d cau s[i ng ] som e ven d ors to r ai se thei rpr i ce s. ” F ede r alTr ade Co m m i ss i o n, R e: Wis co nsi n’s U nfairSale s A ct (O c t. 15 , 200 3), avai l ab l eat http: //w w w . ftc. gov/b e/v030 015. shtm ( l astvi si ted A ug. 16 ,6 N o. 09

- 1883 20 10 ) ( th e “F TC Re po r t” )
. The FTC Re po r t al so c o ncl ud ed that the W i sco nsi n A ct w as unnecessary because fe d e r a la n t i t r u s t l a w wa s a d e q u a t e t o p o l i c e th e s a me c on d u c t t ar ge te d by th e W isc on sin A c t. Id. T h e s ec on d rep or t , c o n d u c t e d b y th e W isc on sin Po l i cyRe se ar chIns titute i n 1 99 9, c o nc l ude d tha t “the ev id en c e s u gg es ts th at th e p ri m a r y r es u lt of [t h e m in im um m ar kup provi si ons of t he A ct] has been to i nfl ate th e pr i ce o fg as o l i ne f o rW i sc o ns i n c o ns um er s an d f aci l i tat e t aci t co l l usi on in r eta i lga sol i ne m ar ket s. ” J am es I. B ra n n on & Fra n k K elly , P um pin g Up G a s P rices in Wisco ns i n: TheEff

e cts of theU nf ai rSa l es A ct o n Re t ai l Gas ol i ne P ri ce s in Wis consin , 12 W i s. Pol i cy R es ea rch I nst. 7, at1 ( Oct. 19 99) ( the “ W PRI Report ”)
. A lth ou gh the author s o f th e W PRI Reportar gue that “ [ m ] osto fthe em pir i cal re sea rch done on re ta i lga sol i ne m ar ket s s ugges ts that t h e prim ary p roblem i n th e m arket is not p red atory p ric in g, bu t ra th er a p ro p en sit y t ow ar d s p r i c e c ollu sio n,” ther e i s no ev i den c e i n the W PRI Reporto fany actual col l usi on in the W i sco nsi n m oto r vehi cl e fu el m ar ket
. Se ei d. 3- 4.

B
. P roc edu ral H isto ry Pl ai nti ff

- A pp el l ee Fl yi ng J, Inc. , i s a U tah co rpor ati on w ith its p rin c ip al p lac e o f bu sin es s in O gd en , U ta h . I t is a ve r ti ca l l y in te g r at ed su ppl i ero fmot o rv eh i cl e fue la nd m ai ntai ns thati t cou ld s ellm oto r vehi cl e fuelf orsubst an tia lly les s t h an th e s ta t u to ry m in im u m an d st ill m ake a profi t. Defendants ar e J
. B. Van H ol l en, A tto rney Generalo fW i sco nsi n, and Rod N i l ses tu en , S ecr eta ryo fN o. 09

- 1883 7 D A T C P . Flyin g J su ed in fe d er al d is t ric t c ou rtto enj oin D e f en d an ts from en for c in g t h e m in im u m m ar ku p p ro visio n s o f th e A c t a s t h ey rela te to m ot or ve h icle fu el, al l egi ngtha t th o se pr o vi si o ns a r e pr ee m pte d b y the She rm an A ct. Th e d istri ct cou rt agreed w ith Flyi ng J, fi nd i ng tha t the st atute was pree m p ted bythe Sher m an A ct and that i t w as not save d b y sta te actor im m u ni ty. The dis tr i ct c ourti ssued a p er m anent inj uncti on pro h ibit in g D efe n d a n ts from en for c in g t h e m ot or ve h icle fu e l p r ov isio n s o f th e A c t. Flyi ng J , Inc . v. J
. B. Van Ho llen , 597 F. Supp. 2d 848 ( E.D. W i s. 200 9). Defe nd ants dec i ded no t to fi l e a m o ti o n t o r ec o ns i der o rt o s ta y the i nj uncti on; theyal so deci ded notto appealthe dist ri ct co ur t’ s dec i si o n. I nt erven or-A p p ell an t W iscons in Petroleu m M arketers a nd Co nv e ni e nc e S t o r e As s o c i a t i o n ( “W PM CA ” ) , a t r a de as so ci at iono fW i sc o ns i n g as o l i ne de al er s, move d the di st r i ct co ur t to al l o w WPM CA to i nt er ve ne , to rec o nsi der i ts deci si on, and to st ay i ts i nj uncti on. The di stri ct co ur t den i ed W M PCA’s m o ti o n t o i nt er ve ne , a nd W M PC A ap peal ed. In ourwri tte n opi ni on o fA ugust 2 0, 2009 , w e vaca ted the d istri ct cou rt’s den ia l o f W PM C A ’s m ot i on t o i nter vene and dir ecte d the par ti es ( that i s, W M PCA st an di ngi n De fen dan ts ’ s ho es o n a ppea l, a nd Fl yi ng J ) to subm i t br i ef s o n the m er i ts.
II. A NA LYSIS W e r evi ew the dist ri ct c ourt ’ s g ra nt o fsum m ar y j ud gm ent deno vo . Tind l ev. Pul t eHom eCorp. , 60 7 F .3d 4 94, 49 5 (7th C ir. 2010). Sum m ary j ud gm en t is ap p rop riate i f “th ere8 N o. 09

- 1883 i s no g enui ne i ss ue a s to a ny mate r i alf ac t a nd
. . . the m o va nti s en ti tl ed to j udg m en t as a matt ero fl aw. ” F ed. R. C i v. P . 56(c )(2) ; C arm ichael v. Vill age of Palatine, Ill
. , 60 5 F.3d 451 , 456 (7th C ir. 2010). The fi r stque sti o n we m us t addr es s i s whethe rthe m i ni m um m ar kup provisions und erthe A ct a re pre empte d b y the S he r m anAct
. To b e pre em pte d, the sta te re gul ato rysche m e m ust i rr eco nci l abl y c onfl i ct w ith th e fe d er al s c h em e. Ric ev. Nor m an Wi l l i a m s Co. , 45 8 U. S
. 6 54, 6 59 ( 19 82)
. A hy po th et i ca lo rthe o r et i ca lc o nflictis i n su fficie n t t o w ar ra n t p re em p tio n . Id. Li kewis e, “[ a] st ate st atute i s no t pr eem pted by the federa lanti tr ust l aw s s i m plybec ause the s tat e s ch em e m i ght ha ve an anti com peti ti ve effect. ” Id. R at h er, a sta tute i s pre em pted

“ ‘ o nly i fi tma nd a t e s o ra utho r i z e s c o nd uc ttha tnece ssa rily c on st itu te s a vio lat ion of th e a n tit ru st law s i n all case s, o ri fi tp l a c e s i r r e s i s t ib l e p r e s s ur e o n a p r i v a te p ar ty to v iola te th e a n tit ru st law s in ord er to co m p ly w i th the st atute
. ’ ” Fis her v . C ity of Berkel ey, Ca li f. , 475 U
. S. 260, 265 (1986) ( q uot i ng R ice, 458 U
. S. at 661). F l y i ngJa r g ue s thatthe mot o rv eh i cl e fue lpr o vi si o ns o fthe Actf ac i l i ta te a “ cl as si c ho r i zo nt alpr i ce fi xi ng schem e. ” (A pp el l ee Br. at19
. ) I t a rgues that byes tabl i shi ng a m i ni m um pri ce forgasol i ne am ong re tai l er s, allo w i ng co m peti tor s t o m eetbut not beato ther s’ pri ces, and provi ding a p riv ate m echani sm f orenf or cem ent, W iscons in has created a sche m e t h a t all ow s retailsell ers o fg as o l i ne t o c o l l ude o n pr i ce s to the de tr i m en t o f co nsum er s. Of cour se, hor i zon talpri ce fi xi ng i s per se i l l ega l u n d er fed er al a n tit ru st law , BC B Anes t he s i a Care, Lt d. v.N o. 09

- 1883 9 P assavant M em ’l Area Hosp. Ass’ n , 36 F. 3d 664, 66 6 ( 7th Cir. 1 99 4), and i fthe A ct r equi re d the co l l usi ve conduct th at Flyi ng Jid en tifies, then w e cou ld q uickly d eclare th e Ac t p re empte d a nd mov e o n t o the ne xtque st i o n. B u ti t i s o n l y wh e n a s t a t e l a w m a nd a tes or a uth o riz es col l usi ve conduct thati t i s pre em pted by federa lanti tr ust law
. See Fish er, 475 U.S
. at265. O n i ts f ace, the A ct doe s no t m andate o r author i ze W i sco nsi n gas ol i n e deal er s t o engag e in conduct thati s i l l ega lunder the S herm an A ct. The case m ostanal ogo u s to the pr ese nt o ne i s Fish er. In Fish er, the Ci t y o fBe r k e l e y e s t ab l i s he d a n o r di nance that fro ze re ntalr ate s a t thei r 1980 l eve l s a nd es tabl i shed a R en t St abi l i zati on Board to contr ol future i ncre ase s in re n ta l rat es . Id. at26 1- 62. The Boar d decided how m uch to al l ow al lr ents to i ncre ase ea ch y ear a nd al so had disc re ti on t o deci de w hetherto allow an i nd i vi du al l andlo rd to i ncre ase herr ents i f s h e peti ti oned to do s o. Id. The o r di na nc e i nc l ude d a numbe ro fe nf o r ce m en t m ec h an ism s, in c lu d in g a llow in g t en a n t s t o s u e if th eir l an dl o r d c ha r ged mor e th anwas a l l o wed un derthe or d in an c e. Id. at26 2- 63. A gr oup ofl andlo rds brou gh t a fac ial c h alle n ge to th e o r d i n a n c e, ar gu in g t h at th e o rd ina nc e i m po se d r en t ce i l i ng s th atc o ns ti tu te d pr i ce fi xi ng invio lat ion of fed er al a n tit ru st law s. Id. at26 5. The Court agr eed thatthe l andlo rds c oul d not hav e l ega l l y e nter ed i nto a pri va te agr eem ent t o stabi l i ze re n ta l p ric es , eve n for b en ev ole n t re as on s. Id. a t2 6 6
. B ut the Cour t found that the o rdi nance was n ot pree m pted because the re nt ce i li ngs were “uni l ate ra l l y i m posed by gov er nm ent upon la nd l or ds to the excl usi on o fpri vate10 N o. 09

- 1883 contr ol
. ” Id. at26 6. The di stincti on betw een uni l ate ra l gov er nm ent a cti on o n one hand and conce rt ed acti on o n the o the rwa s di s po s i t i ve o fthe que s t i o n o fp r e e mpti on be cause “[ a] r est ra i nt i m po sed uni l ate ra l l y b y g overnm en t do es no t be co m e co nc er te d -ac ti o n wi th i n the m eani ng o fthe st at u te si m plybec ause i t has a coe rci ve effect up on par ti es w ho m ust obey the l aw . ” Id. at26 7. W e ca n dis cer n no m eaning ful differ ence between th e u ni l at er al l y i m po se d r en t ce i l i ng s i n Fish era nd the m an d atorym ar kup provi si ons i n W i sco nsi n. On i ts f ace, the Act r equi re s r eta i lse l l er s o fm oto r vehicle fuel to ca lcu lat e t h e m i n im u m p ric e a t w h ich th ey ca n se ll m oto r vehi cl e fuelusi ng r el ati vel y s im p le m athem ati cal f or m ula s. The se l l ercal cul at es its ac tualco sts , subtr acts cer tain i tem s, and ad d s 6 perc ent. The se l l erthen goe s to the ne ar est te rm i nal, ave ra ges the pri ces bei ng o ffer ed at th e term i nal, and adds 9. 18 perce nt. The se l l erthen c om p ar es th e a c tu al c os t p l u s t h e m ar ku p w ith th e e st im at ed co stfr o m the t er m i na lpl us the mar k up

— gener al l y, th e Act r equi r es the s el l ert o c ha r g e no l es s th anthe hi ghero ftho se tw o num ber s. The o ne exce pti on i s that th e se l l eri s al l o wed t o c ha r g e l es s i n o r dert o matc h a c om p e t i to r’s ad ve rt ise d p ric e. Se llers m u st m ain ta in thei r poste d pri ces f ora t l eas t 2 4 ho urs. The st atute nei therr equi re s no r author i zes ga sol i ne deal er s t o get tog etherand agr ee on wh at pri ce they wil lal lchar ge f orga sol i ne. N ordoes the sta tu te re quir e o r author i ze w hol esa l er s t o getto gether to deci de w hat pr i ces they w i l lcha rg e at the ter m i nal
. On the f ace ofthe sta tute, ther e i s s i m plynothi ng tha t co m pel s co l l u siv e pr i vate conduct thatwould vi ol ate the Sher m an A ct.N o. 09

- 1883 11 T o b e s u re , i f ga so lin e d ea ler s m etto ge th er an d p riv at ely agr eed o n a m i ni m um pri ce that they woul d al lchar ge, thei r conduct w oul d be per seillega l un d er fed er al a n titrus t l aw. Howev er, j us t as i n Fi s her, “ [ t] he di stincti on between uni l ate ra land conce rt ed act i on i s cr i ti cal he r e. ” 475 U. S
. a t 2 66. T he s ta te o fW i sc o ns i n s et s th e m i ni m u m p ri ce for m ula, and the A ct, o n i ts f ace, d oe s n otreq u i r e o r au th or ize p riv at e p ar tic ip at ion in se tt in g t h e m in im u m p r i c e . T h u s, w e fin d th at th e m in im um m ar kup provi si ons are unil ate ra l l y i m posed by the s tat e and therefor e not pre em pted by the S herm an A ct. The d ist ri ct c ourtf ound that the A ct was a per se r es tr ainto n t rad e be ca us e “[ t] he min i m um mar k up perce ntage cr eat es a r an ge in wh i ch co m peti tor s m ay en gage in collusive pa rall el prici ng, w hich i s exa c erbate d as the w hol esa l e pr i ce o fga sol i ne fl uctuates
. ” Flyi ng J, 59 7 F. Su p p . 2d at85 6. Fi rs t, as not ed abo ve, a sta tute i s o nl y pr eem pted i fi t r equi re s o r author i zes co l l usi ve co nduc t. W he re a s ta tu te do es ne i th er, the f ac t th atthe par ti es o rthe c o ur t ca n e nv i si o n s ce na r i o s u nd erthe regu latory sc h e m e in w hich private p arties cou ld m ore eas i l y c ol l ud e i s ins uffi ci ent t o i nval i date the st atute
. Exxon Corp. v. Gove r norof M aryl and, 43 7 U.S
. 11 7, 13 1 ( 1978 )
. A nd any partythatenga ges in co l l usi ve conduct u n d er su c h a st at u te w ou ld n otbe ab le t o ra ise its co m p lian c e w ith th e s ta te st at u te as a d efe n se . Se cond, ther e i s s i m plyno evi dence in the r eco rd that gasoline d ealers

— w hol esa l er s, r eta i l er s, o r oth er w i se

— are co l l uding t o fi x o rr ai se the pr i ce o fg as o l i ne i n W i sc o nsin . A lth ou gh it h as av oid ed ca l l i n g i t s o, Fly in g J’s ch al-12 N o. 09

- 1883 l enge to the Act i s a f aci alchal l enge. I t i s no t arguingthat th e statu te is pr e em p ted becau se gasoline d ealers i n W i sco nsi n a re co l l ud i ng to r ai se orfi x the pri ce o f g as o l i ne . Ra th er, i ts c ha l l en ge is p r emi se d o n i ts a r g um en t th at th e st atut e r equi r es pr i va te par ti es to hor i zo nta l l y fi x pr i ces. A s d i sc us se d abo ve , F l y i ngJi s wro ng that the s tatute o n it s f ace cre ate s a cl ass i c hor i zonta l pri ce- fi xi ng sc hem e. A nd the onl y e vi dence that i t ci tes ins u p p o r t of its arg u m en t t h at p riv at e p ar tie s a re co ll ud i ng ar e the two r epor ts disc ussed above. A l though both c o nc l ude d tha t th e m i ni m um mar k up pr o vi si o ns ar e u n n ec es sa ry an d m ay in fa c t b e h u r tin g W isc on sin consum er s, o nl y the W PRI Reportr aised the s pectero f c o llu sio n am on g g as olin e d ea ler s, an d it d id so on ly in the theor eti calse nse. See W P R I Re p or t, at3-4 . Th is is sim p ly n oten ou gh to su p p or t a fac ial c h a l l e n ge to th is sta tute. Fl yi ng Jar gues that the Act i s a “hyb ri d” sta tute that i s pre em pted by federa lanti tr ust l aw . A hybri d statute i s on e th at gi ves pri vate part i es disc re ti on t o setpri ces th at th e g ov er n m en t t h e n en for c es . See Fish er, 475 U
. S. at 26 7-6 8. H yb rid st at u te s a re p r e e m p te d
. Se e, e . g. , Sc hwegm ann B ros. v. Cal ve r tD i s t i l l e rs Corp. , 34 1 U.S
. 38 4, 389 (1951 ). I n C alif orn ia Retail Liq uor D eale rs Ass’ n v. M idcal A lum inu m , Inc., th e Sup rem e C ou rt found that Ca li fornia’s w i ne pri ci ng sy ste m was p re em pted. 44 5 U.S
. 97, 10 3 (1980). A statu te requ ired allprod uc ers an d w holesalers to subm it e i therf ai r tr ade co ntra cts orpri ce s chedules to the s ta te
. W i ne de al ers w ere nota l l o wed t o s el lwi neN o. 09

- 1883 13 at any pr i ce o thert h an thatse t bythe f ai r tr ade co ntra cts or p rice sch ed ules. T he state p layed no rol e in d eterm in in g t h e p ric es o f w in e. Id. a t 99

- 10 0. The Co ur t f o und th at th e C alifo rn ia s ta tu te “p lai n l y c on st itu te [d ] res ale pri ce m ai ntenance i n vi ol ati on o fthe Sher m an A ct. ” Id. at 10 3
. T h e C o u r t f o u n d d e c i s i v e th e f a c t th a t th e wi ne pr o ducers c o ul d e l i m i na te c o m pet i ti o n in the wi ne i nd u st ry by se tt in g t h e p ric es th at w h ole sa ler s c ou ld c h ar ge . Id. S i m i l ar l y, i n 324 Liquo r C orp. v. D uffy, the Co ur t f o und that N e w Yo r k ’ s mi ni mum m a r k up l a w o n l i qu o rwas preem pted. 47 9 U.S
. 33 5, 34 2 ( 1987 )
. In a s tatute s om ew hat si m i l art o W i sc o ns i n’ s m o to rv eh i cl e fue lmin i m um m ar kups, N ew Y ork prohibi ted l i quor re tai l er s fro m sel l i ng l i quor bel ow “cost,” w hi ch the sta tute defined as th e “ p os te d bo tt le p ric e” p lu s a 12 % m ar ku p . Id. at33 8- 39. I n ad d iti on to p o sting th e bottle price, w holesalers al so poste d the ca se pri ce. W hol esa l er s had co m ple te disc re ti on t o setbo th the bo tt le pri ce a nd the case pri ce. R etailers m ad e the ir p urc ha ses from th e w holesalers base d on the case pri ce, but had to sel lthe l i quor base d on th e b ott l e pr i ce. Because the tw o pri ces did nothave to r el at e to e ac h o ther, the who l es al er s co ul d l o werthe ca se pr i ce whi l e m aint aini ngthe b o tt l e pr i ce , thus al l o wi ngthe r et ai l er s to s el lthe liqu or f o rmor e th anthe re q u ire d 12 % m ar k u p o ve r w h ole sa le c os t. Id. at34 9- 40. The net e ffect ofthe l aw was “to p er m it whol esa l er s t o m ai ntai n re tai lpri ces at ar ti fi ci al l y hi gh l eve l s. ” Id. at 340. The Courtco ncl ud ed thatthe l aw cr eat ed “a regim e of resale price m ainten an ce o n a llN ew York l i quor re tai l er s” and w as thus pre em p te d
. Id. at34 1.14 N o. 09

- 1883 T h e C o u r tf o u n d th a tN e w Y o r k ’ s r e g ul a t o r y s c h e me w as for alli nt en ts an d pu rp oses th e sam e as C ali fornia’s r e g i me f o u n d t o b e p r e e mpt e d i n M i dc al
. Id. at34 2. T h e p r o b l e m a g a i n w a s th a tth e s t a t u t e d i s pl a c e d c o mpeti ti on but gave pri vate acto rs disc re ti on to set p ri ces. Id. at34 5. W i sco nsi n’s m oto r vehi cl e fuelpri ci ng sc he m e is not a hybr i d s ta tu te
. The Ca l i f o r ni a an d New Yor kpr i cing sy st ems in M idcal a nd 324 Li q uorg av e com ple te disc re ti on t o pri vate enti ti es to setthe p ric es that the sta tutes then e nfo rce d. Th e sta te w as not i nvol ved i n any w ay i n se t t i ngo rde t e r mi ningthe fi na l, e nfo r c e ab l e p r i c es. Altho ug h New Yo r k ’s sc he m e i nv o l ve d a min i m um m ar kup j ust like W isc on sin r eq uir es f or m oto r v e h i c l e fu e l, th e u n i q u e n a t u r e o fN e w Y o r k ’ s s c h e me author i zed wh ol esa l er s t o m ani pu l ate the pri ces to w h ich th e m ar ku p w as ap p lied
. 324 Li q uor, 479 U
. S. at3 48

- 50
. Her e, W i sc o ns i n r equi r es a min i m um mar k up to be incl ud ed i n a r eta i l er ’s “cost, ” but the s tatute does not author i ze w hol esa l er s t o col l ud e o r m ani pu l ate the t er m i na l pri ces to w hi ch the m ar kup i s a pp l i ed or s e tthe r e t a i lp r i c e s t o b e c ha r g e d. The f act that W isc onsin has cr eat ed a pr i vate cause o fa ct i o n t o e nf o r ce i ts min i m um mar k up pr o vi si o ns do es no t m ak e th e st atut e a hybr i d s ta tu te
. Be ca us e th e state i tself is m a n d a t ing the m inim um price, th e m ere f ac t th ati nt er es te d pr i va te pa r ti es may en f o r ce the m in im u m -p ric in g s c h em e d oe s n otm ak e t h e A c t a h yb rid st at u te
. See Fish er, 4 75 U .S. at26 9 ( fi nd i ng tha t a pri vate cause ofact i on in tenant s

— “certa inly a grou p of inter-N o. 09

- 1883 15 est ed pri vate part i es”

— did notchange the unil ate ra l nature of the ci ty or dinance stabi l i zi ng re nt pri ces beca us e th e ci tyr et aine d c o m pl et e co nt r o lo ve rthe r en t ce i l i n g )
. T h e e x c e p t i o n t o th e Wi s c o n s i n mi n i m um mar k u p p r o v i s i o n s a l l o win gr e t a i l e r s t o ma t c h i t s c o mpet i to r ’ s pr i ce i s al so insu ffi ci en t al o ne t o make the sta tute a preem pted hybr i d s tatute. The A ct a u th or i zes paral l elbehav i or, but i t doe s no t au th or i ze re tai l er s t o g ett o g ether and ag r ee o n a po st ed pr i ce . “ W i th o ut m or e, p ar alle l co n d u c t d oe s n otsu gg es t c on sp i ra c y . . . .” B el l Atlanti c Corp. v. Tw om bly, 550 U
. S. 544, 556-57 (2007 ). Fl yi ng Jal so ar gu es that the 32 4 L iquo r Court rej ecte d N e w Y o r k ’ s s c h e me

— th atmandat ed th atthe min i m um m ar ku p be a pp l i ed to the bot tl e pr i ce

—be ca us e th e bot tl e pr i ce “ m ay gr eat l y e xceed w hat th e ret ai l er actual l y pai d for the l i quor. ” 324 Li q uor, 47 9 U.S
. at34 5 n. 6. The Court ’ s co m m ent was m ade i n a foo tnot e dur i ng i ts di sc us si o n o f whethe r th e N ew Yo r kpri cing sch em e qu a lified f or state act or i m m un ity. Th e C ou rt su g g es te d tha t a “s i m pl e m i ni m um mark up pr o vi si o n” coul d sati sfy the “a cti ve supervi si on” re quir em ent o f sta te acto r i m m unity, se e M i dc al , 4 45 U. S
. a t 10 5, b ut fou n d th at th e N ew Y or k m ar ku p w as n o t a s im p le m ar ku p sc h em e. 324 Li q uor, 4 7 9 U. S
. a t 3 4 5 n. 6. The g r ea t vi ce o fthe New Yo r ks ch eme w as not thatthe m ar k up was a ppl i ed to a pr i ce tha t d i d no t r epr es en t th e actu al cost to the retailer, bu t t h a t t he w holesalers co uld se l lt o the r et ai l er s ato ne pr i ce a nd f o r ce the re ta ilers to ap p ly th e m in im u m m ar ku p to an ot h er . Id
. W isc o ns in’s m inim um m arku p prov isi ons at i ssu e here do n ot sufferfro m the sam e v i ce. A l though the 9. 18%16 N o. 09

- 1883

m ar kup i s a pp l i ed to an e sti m at e of the r eta i l er ’ s co st base d o n aver age ter m i nal pri ces ra ther than i ts actual cos ts, the schem e doe s no t au thor i ze w hol esa l er s t o m ani pu l ate wh ol esa l e pr i ces ofga so li ne to guar antee a bi gge r re turn t o re tai l er s. W e a l so note thatthe al l ega ti ons ofpri ce fi xi ng by w h ole sa ler s o f liqu or in32 4 Liquo r w as m or e than hypoth etical or th eoretical. Th er e w a s evide nc e in the record ofwh ol esa l er s a dvert i si ng tha t thei r l owered cas e prices c o ul d g ua r an te e r et ai l er s a hi g he rpr o fi t th anthe st at u to ry 12 p er c en t. 324 Li q uor, 4 7 9 U
. S. at 340. The re w as also eviden ce of w holesalers en cou ra g in g retail ers to bu y in b u l k w h en ca se p ric es w er e low
. Id. T h er e is sim p l y no t s uffi ci ent e vi dence i n thi s ca se’ s r eco rd to supp or t a fi nd i ng tha t g aso l i ne deal er s a re co l l u d i ng o r m an i pul at i ngg as o l i ne pr i ce s i n W i sc o ns i n. T he l ack of eviden ce in t h e record sup p orting Flyi ng J ’s alle ga tio n s o f co llu siv e c on d u c t b y g as olin e d ea ler s is f at alt o i ts c l ai m tha t th e m o to rv eh i cl e fue lpr o vi si o ns o fth e A c ta r e p r e e mp t e d by th e S h e r ma n A c t
. We cannot fi nd o n the fac e of th e s tatute a ny co m pel l ed or author i zed co nd uct that c on st itutes a vi ol ati on o ffedera l anti tr us tl a w. Be c a us e we c o nc l ud e tha tthe Ac ti s n ot preem pted, we need not c onsi der whether the pr ovi si on w ou ld q ua li fy for state act ion i m m un ity un d er P a rker v. Brown , 317U .S. 34 1 (1 94 3). I t m ay wel l be th at g as o l i ne r et ai l er s ar e getting tog etherwith e ach o therand ag re ei ng o n how to est im at e th ei r cos ts orwh at fi nalpri ce t o charg e, o r that reta iler s a nd wh ol esa l er s a re co l l ud i ng to m ani pu l ateN o. 09

- 1883 17 the a ver age post ed ter m in al pri ce. “How eve r, we have been gi ven no i nd i cati on that s uch cor rupti on has ta i nt ed” the ga so l i ne pr i cings ch eme in W i sc o ns i n, a nd b a s e d o n o u rr e a d i n go fth e c h a l l e n g e d pro vi s i o n s , we th ink th e Act “c anha r dl y b e vi ewe d a s a cl o akf o ra ny c on s p i r a c y” am on g re fin er s, w h ole sa ler s, or ret aile rs . See Fish er, 475 U .S. at 2 6 9 . O u r d isp os itio n of th is fa c ial c h allen ge d oe s n otp re c lu d e a fu tu re p lain tiff, p r o p e rly ar m ed w i th ev i dence ofactual co l l usi on a m ong W i sconsin gas ol i ne deal er s, fro m br i ngi ng an as-a p pli ed chal l enge to the A ct or an enf or cem ent acti on a gainst thos e deal er s under anti tr ust l aw s a t a l ate r ti m e.

III. C ON CLU SI ON The dis tr i ct c ourt ’ s j ud gm ent i s R EV ERSED an d the per m an en t i nj unc ti o n b ar r i ngW i sc o ns i n fr o m enf o r cing the Act i s D IS S OLVED . The cas e i s R EMA NDE D t o the di s t r i c t c o ur t wi th i ns t r uc t i o ns t o e nt e r j ud g men t f or Defe nd ants.

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