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Federal judge rejects lawsuit over gas pump signs touting gas tax freeze

Posted in:

* Bloomberg

An Illinois law requiring gas stations to post notices of a reduction in gas taxes will stand for now after a federal trial court rejected a trade association’s challenge.

The Illinois Fuel & Retail Association sought to overturn recent amendments to Illinois’s motor fuel tax that require retailers to inform customers that the state suspended the inflation adjustment to the tax from July 1 through the end of the year. Failure to comply results in a $500 per day fine. The group argued the amendments violated retailers’ free speech and equal protection rights under the US Constitution.

* From US District Judge Sue Myerscough’s decision

The parties agree that SB 157 involves governmentally compelled speech. However, the parties disagree as to whether the compelled speech SB 157 mandates is political or commercial.

Defendants argue that the mandatory signage is commercial speech and should be analyzed under the Supreme Court’s decision in Zauderer v. Office of Disciplinary Counsel of the Supreme Court […]

In response to Defendants’ arguments, Plaintiffs argue that Zauderer is inapplicable because SB 157’s mandatory signage constitutes political speech and is, therefore, subject to strict scrutiny. But the mandated signage states, “As of July 1, 2022, the State of Illinois has suspended the inflation adjustment to the motor fuel tax through December 31, 2022. The price on this pump should reflect the suspension of the tax increase.” 35 ILCS 505/2(a-5). That is a purely factual statement about what the Illinois General Assembly did, and the signage does not contain controversial statements. Plaintiffs cite no case law or authority, binding or otherwise, to support their contention that the signage is political. […]

Applying Zauderer, SB 157’s signage mandate survives Plaintiffs’ facial challenge. As stated, the signage contains “purely factual and uncontroversial information” about what taxes are assessed on the price of gasoline. That information furthers the Defendants’ stated goal of “ensuring that customers actually are aware of and obtain the benefit of the General Assembly’s suspension of the inflation adjustment to the gas tax. […]

Lastly, the mandated signage is hardly burdensome. […]

This is not such an unusual case, so the Court declines to extend its exercise of supplemental jurisdiction over Plaintiffs’ claim under the Illinois Constitution. Therefore, Plaintiffs’ claim arising under the Illinois Constitution is dismissed. […]

Plaintiffs are given leave to file an amended complaint within 14 days of the entry of this Order. If Plaintiff fails to do so, this case may be subject to dismissal with prejudice for failure to prosecute under Local Rule 7.1(B)(2).

…Adding… Tribune

Josh Sharp, CEO of the fuel and retail organization, said Myerscough’s ruling, which came ahead of a scheduled Friday hearing that was then canceled, defied “common sense and the Constitution.”

“I think it was absolutely rushed by the judge,” Sharp said. “This type of speech should be relegated to campaign commercials and direct mail.”

The group, which Sharp said is considering an appeal, has argued the signage forces gas stations to “speak on behalf of the Illinois government” or get fined $500 for each day they fail to post the notice.

posted by Rich Miller
Friday, Jun 24, 22 @ 2:45 pm

Comments

  1. I remember when a GOP governor, George Ryan, did this in the past and there were posted signs at each gas pump. Not sure how is now burdensome.

    Comment by Publius Friday, Jun 24, 22 @ 3:08 pm

  2. “Plaintiffs cite no case law or authority, binding or otherwise, to support their contention that the signage is political.”

    This still really bothers me how courts are being used like this. Zero evidence at all.

    The goal was never to win in court. The goal was to keep it alive for awhile to make a bunch of noise, and to have a chance to spread more lies about constitutional issues.

    Comment by TheInvisibleMan Friday, Jun 24, 22 @ 3:11 pm

  3. ==I remember when a GOP governor, George Ryan, did this in the past and there were posted signs at each gas pump.==

    And this said gas tax suspension, coupled with Illinois First, led to the beginning of 21 years of the state budget in the crapper.

    Comment by Just Sayin Friday, Jun 24, 22 @ 3:12 pm

  4. Another one bites the dust…

    Comment by Norseman Friday, Jun 24, 22 @ 3:30 pm

  5. Cutting gas tax = cutting funding for road and bridge repairs and replacements. The cost of asphalt is going higher because it is made among other things, out of oil. Concrete takes a lot of energy to produce. Cutting highway funding as a political stunt is a very bad idea, both at the state and federal level.

    Comment by DuPage Friday, Jun 24, 22 @ 3:39 pm

  6. As a former c-store owner selling gasoline I understand the concern of petroleum marketers. If I had a large multi pump operation ensuring constantly that the signage was in place always and everywhere less some inspector was playing “gotcha” would add undue stress to an already stressful transaction. Contrary to popular suspicion the retail operators margins on fuel is, at the end of the day, slim.

    Comment by Gordon Willis Friday, Jun 24, 22 @ 3:45 pm

  7. Josh Sharp, I would be happy to make sure my local gas stations all have your signs. In fact, I’d be happy to give them to the adjoining businesses as well. You should consider making them available to people to give out; give the legislature more than they bargained for…

    Comment by ;) Friday, Jun 24, 22 @ 3:59 pm

  8. People: I don’t read direct mail.

    Also people: These stickers will make a big difference.

    Comment by Oswego Willy Friday, Jun 24, 22 @ 4:03 pm

  9. === Contrary to popular suspicion ===

    We know you normally make your money off cigarettes and soft drinks.

    We also know that retailers don’t disapprove of the signs because they are burdensome, but because they were demanding that the entire fuel tax be suspended or repealed which was never happening.

    Instead of being happy with 1/3 of a loaf, your lobbyists and association and the IPI have convinced you to have a hissy fit, because hissy fits create billable hours and fundraising opportunities.

    Never mind that the signs are there because experience shows when the tax is cut or frozen, retailers just raise the price to absorb it as profit. Which means you should actually be quite happy with lawmakers you have been allowed to inflate prices temporarily.

    Comment by Thomas Paine Friday, Jun 24, 22 @ 4:10 pm

  10. I’m betting an Amended Complaint with more argument as to the obviously disparate treatment of the fine issue is forthcoming. There is no rational basis to only fine gas dealers if they do not post the notice; stores can also adjust prices to make more money during the cessation period.

    Comment by thisjustinagain Friday, Jun 24, 22 @ 4:26 pm

  11. It’s a Friday afternoon…

    The absurdist angle in all of this would be that the Democratic legislature passed a bill to point out gas taxes are being lowered. Republicans and their business groups get mad at this and claim it is political speech.

    I can honestly see why they think this, because it is a cornerstone of the two santa claus theory that only Republicans can use the messaging of cutting taxes, and under no circumstances can anyone else claim to. Democrats have to be forced to either cut services or increase taxes to pay for those republican cuts.

    They tried to use the courts to stop the shattering of the message in *their* political speech. Democrats can’t tell people they are lowering taxes, that’s not how we want people to see them. So to people like that, I can see why this was very political.

    Which makes it more of a self-own, really.

    Comment by TheInvisibleMan Friday, Jun 24, 22 @ 4:49 pm

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