By Jody Coultas, J.D.
A gas station and convenience store operator in Bridgeport, West Virginia was unable to state a West Virginia Unfair Practices Act claim against a competitor for allegedly selling gasoline below cost was properly dismissed by a West Virginia state court, according to the Supreme Court of Appeals of West Virginia. The circuit court found, and the appellate court agreed, that the calculation of a retailer’s cost does not include tax as argued by the plaintiff (Alan Enterprizes LLC v. Mac’s Convenience Stores LLC, February 7, 2018, Davis, R.).
The WVUPA makes it unlawful for a retailer to sell or advertise for sale merchandise at less than the cost thereof to the vendor in order to unfairly diverting trade from or otherwise injuring competitors. The provisions does not apply to any sale made in good faith to meet the legal prices of a competitor as herein defined selling the same article, product, or item of merchandise, in the same locality or trade area.
Alan Enterprizes LLC alleged that Mac’s Convenience Stores LLC violated the West Virginia Unfair Practices Act by selling gasoline below cost. Both parties moved for summary judgment seeking a determination as to whether WVUPA § 47-11A-6(a) includes taxes within the calculation of a retailer’s cost.
The circuit court concluded that the calculation of a retailer’s cost does not include tax, finding that § 47-11A-6 directs that calculating cost for a wholesaler includes "the invoice cost of the merchandise to the wholesaler plus applicable taxes . . . .", whereas cost for a retailer omits any mention of "applicable taxes." Alan appealed, arguing that it should have been permitted to include taxes in its calculation of cost.
At issue was whether § 47-11A-6(a) includes within the calculation of a retailer’s cost taxes that the retailer pays upon the acquisition of goods it purchases for resale, such as the motor fuel taxes on gasoline at issue herein, for purposes of determining whether the retailer is selling said item below cost in violation of the WVUPA.
The court found that the plain language of § 47-11A-6(a) makes clear that the legislature did not reference or mention taxes in the calculation of a retailer’s cost. However, § 47-11A-6(b) specifically references and includes taxes in the calculation of a wholesaler’s cost. The legislature’s intention not to include taxes in the calculation of a retailer’s cost was also made clear by recent statutory amendments to § 47-11A-6(a). Because the case presented a unique scenario given that the retailers sell gasoline, which is subject to state and federal motor fuel taxes, such policy decisions are better suited for legislative consideration and decision, the court concluded. Thus, § 47-11A-6(a) does not include taxes in the calculation of a retailer’s cost, and the court affirmed the circuit court’s ruling.
The case is No. 17-0087.
Attorneys: John C. Palmer IV (Robinson & McElwee PLLC) for Alan Enterprizes LLC. Michael Bonasso (Flaherty Sensabaugh Bonasso PLLC) and Zach Chaffee-McClure (Shook, Hardy & Bacon LLP) for Mac’s Convenience Stores LLC d/b/a Circle K.
Companies: Alan Enterprizes LLC; Mac’s Convenience Stores LLC d/b/a Circle K
MainStory: TopStory Antitrust StateUnfairTradePractices WestVirginiaNews
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