Utica Energy Sued by 42 Retailers

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Utica Energy Sued by 42 Retailers

OSHKOSH, Wis. -- Forty-two Green Bay-area gas retailers filed suit against ethanol production company Utica Energy LLC and its associated retailer, Renew E-85, for $12 million, accusing the company of violating the state's Unfair Sales Act, Gannett Wisconsin Newspapers reported, citing a Winnebago County civil suit.

The lawsuit, which has come before Judge Barbara Key, is a case that could have implications for the rest of Wisconsin's ethanol producers, convenience store operators and consumers, attorney for the defendant, Bruce Bauer of the law firm Quarles and Brady, told the paper.

"This represents an effort by at least some gasoline retailers to take aggressive action against at least one ethanol seller utilizing a state minimum mark-up law," Bauer said. "I think a great many consumers in this state would be astonished to know there is such a law on the books."

The gas station owners claim Renew's two-pump station in Howard, Wis., sold fuel below the minimum price allowed under the state's Unfair Sales Act for 143 days from Aug. 12, 2006, to Jan. 1, 2007, the report stated, citing court documents. Each station owner asked the court to require Utica Energy to pay each station a $2,000-per-day per-violation, or $286,000 total.

Bauer denied the claims against the company, and argued that the case is without merit, based on the due process clause in the 14th Amendment that prohibits excessive penalties, the paper reported. Bauer is also confident of his argument that the financial payouts requested are not related to any actual financial losses.

"It really boils down to a question of fairness," Bauer told the paper. "The amount of money these plaintiffs are asking for bears no reasonable relationship to the state's interest in regulating (the motor fuel) field."

He argued in a response to the lawsuit that the station owners' claims are more about the threat ethanol producers pose to "big oil" than anything else, adding the stations "ganged up" on Renew and Utica, the report stated.

"The obvious goal is to put not just that station, but Renew itself, out of business," a March 29 filing stated.

The 42 store operators are also seeking a permanent injunction to keep Renew from selling vehicle fuel, the report stated. Frank Kowalkowski, the attorney representing all 42 of the gas stations, was not available for comment.

The station operators claim Renew's sale of 10-, 20- and 85-percent ethanol fuel below the required minimum mark-up gives Utica a competitive advantage, and forced other vendors to lower their prices, resulting in revenue loss and attempts to persuade the operators to buy ethanol directly from Utica Energy, the report stated.

In addition, Renew stations have drawn the attention of Wisconsin Department of Agriculture, Trade and Consumer Protection officials, who have issued several warning letters to Utica about selling fuel below the price other companies charge, according to the report. However, state governor Jim Doyle told officials not to pursue cases against ethanol producers and blenders such as Utica Energy, the report stated.