State v. Amoco Oil Co., No. 77-065

CourtUnited States State Supreme Court of Wisconsin
Writing for the CourtABRAHAMSON
Citation293 N.W.2d 487,97 Wis.2d 226
PartiesSTATE of Wisconsin, Plaintiff-Respondent, v. AMOCO OIL COMPANY, a Foreign Corporation, Defendant-Appellant.
Decision Date27 June 1980
Docket NumberNo. 77-065

Page 487

293 N.W.2d 487
97 Wis.2d 226
STATE of Wisconsin, Plaintiff-Respondent,
v.
AMOCO OIL COMPANY, a Foreign Corporation, Defendant-Appellant.
No. 77-065.
Supreme Court of Wisconsin.
Argued Sept. 11, 1979.
Decided June 27, 1980.

Page 490

[97 Wis.2d 230] W. Stuart Parsons (argued), Milwaukee, for defendant-appellant; Quarles & Brady, Milwaukee, attorneys, and Thomas Armstrong, Milwaukee, of counsel.

James D. Jeffries, Asst. Atty. Gen. (argued), with whom on the brief was Bronson C. La Follette, Atty. Gen., for plaintiff-respondent.

ABRAHAMSON, Justice.

The State of Wisconsin commenced this action to enjoin Amoco Oil Company from continuing its advertising program offering "combination sales," allegedly in violation of sec. 100.18(2), Stats., which prohibits the selling or furnishing of [97 Wis.2d 231] any property or services combined with or conditioned on the purchase of any other property or services without setting forth the total price to be paid. 1 Amoco asserts that its advertisements comply with the requirements of sec. 100.18(2), Stats., and challenges the constitutionality of sec. 100.18(2) on the grounds that sec. 100.18(2) has been preempted by federal law and that sec. 100.18(2) constitutes an undue burden on interstate commerce, contravenes Amoco's first amendment rights and violates due process guarantees. The parties entered into a stipulation of facts, and each filed a motion for summary judgment. The circuit court in a well-reasoned and well-documented opinion upheld the validity of the statute and entered judgment enjoining Amoco from "advertising or otherwise representing the sale or furnishing of any property or services combined with or conditioned on the purchase of any other property or services without clearly and conspicuously setting forth the total price or amount in such advertisement or other representation." We affirm the judgment of the circuit court.

I.

The facts giving rise to this litigation are not in dispute. Amoco Oil Company, a wholly owned subsidiary of Standard Oil Company, an Indiana corporation, is a Maryland corporation doing business in the State of Wisconsin with its principal office and place of business in Chicago, Illinois. Virtually all Standard Oil stations [97 Wis.2d 232] in Wisconsin are operated through independent dealers. Amoco sells, in addition to other products, automobile parts and accessories to independent Standard Oil dealers at wholesale for resale to consumers. Amoco has no authority to require an independent dealer (1) to participate in promotional programs of the kind involved in this litigation, (2) to purchase or offer for sale any of the products involved in the promotional programs, or (3) to resell any product involved in the promotional programs at any particular price.

Beginning in the spring of 1973 and continuing through 1975, Amoco used newspapers, national magazines, television, radio and direct mailings to promote the sale of tires. Although there were several kinds of promotions, in the ones with which we are

Page 491

concerned, the consumer was offered "free" goods or services in conjunction with the purchase of tires. It is this common feature of the promotions, the "combination sale," which brought into question the applicability of sec. 100.18(2), Stats.

In 1973, Amoco's newspaper advertisements in Wisconsin offered 50 gallons of gasoline free with the purchase of four Atlas tires and 25 gallons of gasoline free with the purchase of two tires. Nine styles of tires were shown in the advertisement, but no prices were stated. The advertisement advised the reader: "So see your participating Standard Dealer now." In 1974, newspaper advertisements were published listing "Sale Prices" for tires plus "great gifts." Some advertisements gave prices for the tires. The advertisements ended with the suggestion, "Check your participating dealer," and with the comment, "Prices may vary from dealer to dealer." Amoco apparently wrote to each dealer participating in these promotions requesting the dealer to post the prices which the dealer was charging for the tires involved in the program. The prices posted by the dealer, pursuant to Amoco's request, are referred to by the parties as point-of-sale or point-of-purchase displays.

[97 Wis.2d 233] In 1975, Amoco used newspapers, television, direct mailings to credit card holders, and national magazines such as Time, Newsweek and Sports Illustrated, to advertise a "combination sale" of tires and a free four-month gift membership in the Amoco Motor Club. The participating dealers were asked by Amoco to post prices of the tires which were part of the promotional program. The direct mail and national magazine advertisements did not disclose the prices of the tires and did not refer to the point-of-sale displays. The television advertisements did not disclose the prices of the tires, but a statement was superimposed on the screen saying "Prices for all tire sizes are posted at participating dealers." The newspaper advertisements included a suggested retail price for the featured tires for the particular market served by the respective newspaper and also included the statements, "Actual sale price by participating dealer may vary from dealer to dealer," and "Look for this sign at participating Standard Dealers."

Amoco considered it impractical to include prices for all the market areas in state-wide advertisements, and separate versions of the advertisements for different market areas within the state would have increased the advertising costs considerably. Amoco considered it unrealistic to disclose the tire sizes and prices in television and radio advertisements because of the size of the market reached and the limitations of time in radio advertisements and of time and space in television advertisements.

Amoco could have sent a special version of the direct mail advertisement to Wisconsin credit card holders, at an estimated minimum extra cost of $5,000 and could have obtained separate national magazine advertisements for Wisconsin at an estimated minimum extra cost of $5,000 per magazine edition.

Representatives of Amoco and the State of Wisconsin have over the years attempted to resolve their differences relating to the application of sec. 100.18(2), Stats., to [97 Wis.2d 234] Amoco's promotional programs. At a meeting in October, 1975, Amoco's representatives stated that Amoco had fashioned its 1975 advertisements to "meet the Department of Agriculture's views as Amoco understood them to have been developed in the previous communications about the 1974 program." Representatives from the Wisconsin Departments of Justice asserted that Amoco's advertisements did not meet the requirements of sec. 100.18(2), Stats., and suggested that a lawsuit alleging violation of sec. 100.18(2), Stats., could be avoided if Amoco signed a voluntary assurance against future violations. On or about October 15, 1975, Amoco advised the State of Wisconsin that it declined to sign a voluntary assurance against further violations. The State commenced this action on October 31, 1975.

The circuit court found that Amoco's advertisements failed to state the price or amount the purchaser would have to pay in

Page 492

order to receive the purchased goods and the free property or services and concluded as a matter of law that the advertisements violated sec. 100.18(2), Stats.

II.

Amoco asserts that its advertisements satisfy the requirements of sec. 100.18(2), Stats. Sec. 100.18(2), Stats. requires that the price or amount to be paid in a "combination sale" must be set forth clearly, conspicuously and in such manner that the total price or amount to be paid may be readily ascertained. Sec. 100.18(2), Stats., states:

"(2) In advertising or otherwise representing the sale or furnishing of any property or services combined with or conditioned on the purchase of any other property or services described in such advertisement or other representation, it is deceptive to fail to state the price or [97 Wis.2d 235] amount which must be paid for the property or services included in such sale, along with any other requirement which is a condition to the receipt of such property or services. The price or amount which must be paid shall be set forth clearly, conspicuously and in such manner that the total price or amount to be paid may be readily ascertained."

Amoco maintains that its advertisements standing by themselves, satisfy sec. 100.18(2), because they inform the consumer of the basic terms of the promotional program, including information about the tires, the "free goods and services," and the price, by revealing that the actual prices are posted by the participating dealers and that the actual retail prices might vary from any price stated in the advertisement. Because Amoco has no control over the price charged by the dealer and the dealer's prices vary within a market area and from market area to market area, Amoco claims that its advertisements could not quote the actual price of the tires in the combination sale. Amoco asserts that it complied with sec. 100.18(2), Stats., because it, a manufacturer-supplier whose advertisements reach persons in several market areas, told the consumer as much as it possibly could about the promotional sale.

Amoco also argues that its advertisements, taken together with the point-of-sale displays at each dealer's premises, clearly informed the consumer, in advance of purchase, of the total price to be paid as required by sec. 100.18(2), Stats. Thus Amoco contends that its advertisements, integrated with the point-of-sale displays, satisfy the basic requirements of sec. 100.18(2), because the two advertisements together set forth the total price. We conclude, as did the circuit court, that sec. 100.18(2), Stats., requires that the actual price or amount which is to be paid for the property sold must be included in the advertisement itself.

[97 Wis.2d 236] Amoco's...

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  • Good v. Altria Group, Inc., No. 06-1965.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • August 31, 2007
    ...(D.D.C.2003) (emphasis omitted); see also Katharine Gibbs Sch., Inc. v. FTC, 612 F.2d 658, 667 (2d Cir.1979); Wisconsin v. Amoco Oil Co., 97 Wis.2d 226, 293 N.W.2d 487, 496 (1980); accord Wabash Valley Power Ass'n v. Rural Electrification Admin., 903 F.2d 445, 454 (7th Cir.1990) (declining ......
  • ANTWAUN A. v. Heritage Mut. Ins. Co., No. 97-0332.
    • United States
    • United States State Supreme Court of Wisconsin
    • July 9, 1999
    ...of the 1978 distinction because the creation of such a distinction is more properly left to the legislature. In State v. Amoco Oil Co., 97 Wis. 2d 226, 259, 293 N.W.2d 487 (1980) (citing Ferguson v. Skrupa, 372 U.S. 726, 730-731 (1963)), this court The court should not substitute its social......
  • Dept. of Social Serv., v. Heritage Mutual Ins. Co.
    • United States
    • United States State Supreme Court of Wisconsin
    • December 1, 1998
    ...of the 1978 distinction because the creation of such a distinction is more properly left to the legislature. In State v. Amoco Oil Co., 97 Wis.2d 226, 259, 293 N.W.2d 487 (1980) (citing Ferguson v. Skrupa, 372 U.S. 726, 730-731 (1963)), this court The court should not substitute its social ......
  • First Nat. Bank and Trust Co. of Racine v. Notte, No. 78-604
    • United States
    • United States State Supreme Court of Wisconsin
    • June 27, 1980
    ...will be entitled to receive back payments he has previously made under the contract. It is true that the status quo cannot be restored by [97 Wis.2d 226] granting rescission in this case. If granted, rescission will require the creditor to bear the loss even though the misrepresentations ma......
  • Request a trial to view additional results
14 cases
  • Good v. Altria Group, Inc., No. 06-1965.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • August 31, 2007
    ...(D.D.C.2003) (emphasis omitted); see also Katharine Gibbs Sch., Inc. v. FTC, 612 F.2d 658, 667 (2d Cir.1979); Wisconsin v. Amoco Oil Co., 97 Wis.2d 226, 293 N.W.2d 487, 496 (1980); accord Wabash Valley Power Ass'n v. Rural Electrification Admin., 903 F.2d 445, 454 (7th Cir.1990) (declining ......
  • ANTWAUN A. v. Heritage Mut. Ins. Co., No. 97-0332.
    • United States
    • United States State Supreme Court of Wisconsin
    • July 9, 1999
    ...of the 1978 distinction because the creation of such a distinction is more properly left to the legislature. In State v. Amoco Oil Co., 97 Wis. 2d 226, 259, 293 N.W.2d 487 (1980) (citing Ferguson v. Skrupa, 372 U.S. 726, 730-731 (1963)), this court The court should not substitute its social......
  • Dept. of Social Serv., v. Heritage Mutual Ins. Co.
    • United States
    • United States State Supreme Court of Wisconsin
    • December 1, 1998
    ...of the 1978 distinction because the creation of such a distinction is more properly left to the legislature. In State v. Amoco Oil Co., 97 Wis.2d 226, 259, 293 N.W.2d 487 (1980) (citing Ferguson v. Skrupa, 372 U.S. 726, 730-731 (1963)), this court The court should not substitute its social ......
  • First Nat. Bank and Trust Co. of Racine v. Notte, No. 78-604
    • United States
    • United States State Supreme Court of Wisconsin
    • June 27, 1980
    ...will be entitled to receive back payments he has previously made under the contract. It is true that the status quo cannot be restored by [97 Wis.2d 226] granting rescission in this case. If granted, rescission will require the creditor to bear the loss even though the misrepresentations ma......
  • Request a trial to view additional results

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