Alcohol controversy reaches Wis. high court

updated 9:35 p.m. ET Oct. 3, 2007

MADISON, Wis. - The state Supreme Court is deciding whether an agreement among bar owners to abandon weekend drink specials was a legal effort to discourage binge drinking or a possible antitrust violation.

In oral arguments Wednesday, lawyer Kay Hunt asked the justices to reinstate a lawsuit claiming the 2002 agreement by about two dozen bars in this college town was an illegal price-fixing conspiracy. She represents drinkers who claim they were overcharged in a lawsuit rejected twice by lower courts.

"Here, you have a group of competitors that bound together to eliminate drink specials," a deal that "constituted an unreasonable restraint of trade," Hunt said.

A lawyer representing the bars told the justices that the voluntary agreement was a response to local government. At the time, some city officials were threatening to ban drink specials altogether and University of Wisconsin-Madison officials were pressuring bar owners to help reduce binge drinking among students.

"This wasn't some secret meeting of the bar owners," said Kevin O'Connor, a lawyer representing 20 bars and the Dane County Tavern League. "This was all initiated by the city."

Angry bar customers sued in 2004
The bars, about half of those near campus, announced in September 2002 they would voluntarily ban drink specials on Friday and Saturday nights after 8 p.m.

Hunt's firm filed the lawsuit in 2004 on behalf of UW-Madison students and other customers who sought "tens of millions of dollars" in damages for being forced to pay too much for their booze.

The bars withdrew the ban after the lawsuit was filed. A university-sponsored study also showed that serious alcohol-related crime continued to go up despite the policy.

A judge dismissed the case in 2005, and an appeals court upheld the decision last year. Both courts said the bars' action was exempt from antitrust laws because they were reacting to regulatory pressure from the city.

Eric Wilson, a state lawyer representing UW-Madison, said the case was not about price fixing but about trying to combat dangerous drinking among college students.

"The bars tried to work with the city and the university to be part of the solution, rather than part of the problem," he said.

Justices did not indicate how they intend to rule and had tough questions for both sides.

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