The Wisconsin Supreme Court agreed to hear a price-fixing lawsuit that has been brewing in lower courts since March 2004. Filed by two former UW-Madison students, the lawsuit asks the court to eliminate the ban on drink specials and create a class of persons eligible for damages.
The group eligible for compensation would consist of individuals who drank past 8 p.m. on a Friday or Saturday since Sept. 12, 2002, in any one of the 24 bars accused of price fixing. Yes, you read that correctly.
These two students, who are literally fighting for their right to party, might strike one as heroes. After all, it is common knowledge that litigation is neither easy nor inexpensive. But the unfortunate reality is that whatever the outcome, bar owners will be forced to pay hundreds of thousands of dollars to defend their innocence of an alleged crime—a crime arguably committed in response to a city crackdown on alcohol abuse.
In 2002, city officials showed bar owners a plan backed by the Alcohol Licensing Review Committee to eliminate all drink specials all the time. This gave the bars a ""wink-wink, nudge-nudge"" to get with the program and self-regulate. The Tavern League subsequently got together and agreed to all stop giving discounts on the weekend as a compromise. The ALRC dropped discussion of the original ordinance.
Price fixing is illegal under the Sherman Anti-Trust Act, a piece of legislation initially designed to break up corporate juggernauts like Standard Oil. Price fixing constitutes a per se violation of the law and has been historically blind to circumstance.
But as the Reasonable State Action Clause states, and as the 4th District Court ruled before it dismissed the case, the city's regulation of liquor licenses immunizes tavern owners from antitrust scrutiny. The alleged antitrust conduct stemmed from an ""irresistible regulatory force"" and was merely a political dispute, settled as part of broader ""regulatory scheme.""
Ultimately, this case is not about a conspiracy to jack up prices and swindle Madison's bar crowd. Drink specials are, well, special. The decision to eliminate Friday and Saturday-evening specials is a matter of reinstating baseline prices, not hiking profit.
The court should not sanction an absurd recompense for all patrons who paid an extra dollar or so per drink. It should affirm the 4th District Court's decision and acquit the accused bars of noncompetitive practices.
