Competitors Sue Gas Station for Setting Prices Too Low

Amid historic gas prices nationwide, several stations are taking drastic action against a competitor keeping prices considerably low.

Several competing stations in the area around Woodman's Market in Waukesha, Wisconsin, have filed a lawsuit against the location alleging that it's selling gasoline below cost, according to local ABC News affiliate WISN. The locations claim that this is in violation of Wisconsin's Unfair Sales Act.

Court documents obtained by WISN name companies that operate nearby BP and Shell gas stations as plaintiffs in the case. Both are demanding $80,000 in restitution, an amount based on the 40 days they claim Woodman's has been keeping prices too low.

As of Saturday, the average price for a gallon of gasoline in Wisconsin was around $3.93, according to data from AAA. Woodman's currently offers gas at $3.59 a gallon, based on listings Newsweek acquired from GasBuddy. BP and Shell locations in Waukesha listed prices of $3.89-3.99 a gallon.

wisconsin gas prices lawsuit
Gas stations in Waukesha, Wisconsin, are suing a competitor for allegedly setting gas prices illegally low. Above, a shot of a gas pump in Wisconsin. Karen Bleier/AFP via Getty Images

Woodman's, for its part, has defended its prices in light of the lawsuit. The station claimed to WISN that its prices are set to compete with Costco, six miles away in Pewaukee, which the station views as its primary competition. GasBuddy listings show that Costco in that area is selling gas at $3.49 per gallon. The company has counter-filed against the suit, seeking its dismissal.

"These assertions lack any basis in law or fact," attorneys Eric Meier and Emily Logan Stedman wrote in the motion for dismissal, according to local newspaper The Freeman. "First, on two dates, the Waukesha Woodman's sold gas above the statutory price. Second, on the 38 other dates, the Waukesha Woodman's lawfully set its price of regular, unleaded fuel to match/attempt to match the Pewaukee Costco, which is one of Woodman's competitors.

"As a result of the foregoing, Woodman's is immune from this lawsuit, and the Court should grant Woodman's motion for summary judgment and dismiss the Gas Stations' claims entirely."

Woodman's customers interviewed by WISN confirmed that they made sure to go to the station because of its lower prices. The station also witnessed long lines at the location on Friday, while others in the area had only a few customers at a time.

Membership-only retailers like Costco and Sam's Club are often able to set much lower gas prices at their on-site stations when compared to standard gas stations in their areas. They are able to charge so little because around 75 percent of their profits come from subscription costs, according to Reader's Digest.

Similar to Costco, Woodman's is a regional chain of grocery stores that offers gas on-site, but it is not membership-only.

Newsweek reached out to the attorneys for Woodman's for comment on this story.