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| Office of the Chancellor / Public Affairs |
Friday, March 26, 2004
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Chronicle of Higher Education 3-26-04 A Right to Drink Cheaply? Students at U. of Wisconsin Sue 24 Bars That
Eliminated Specials |
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Faced with higher prices at local bars, many students might simply have embraced an American campus tradition by drinking in their residences or at their fraternities. But two students at the University of Wisconsin at Madison this week opted for a different American tradition. They sued. In a complaint filed in state court on Wednesday, the students allege that 24 local bars illegally fixed their prices -- an agreement that would violate antitrust laws -- by voluntarily eliminating drink specials on Friday nights and Saturday nights. The bars' owners say they agreed to the ban at the urging of the university's chancellor, John D. Wiley, and as part of the PACE Project, a program at the university that aims to curtail binge drinking. The university was not named as a defendant in the lawsuit, but James M. Lockhart, a lawyer for the students, said that it may be included in the future. The students are also seeking to have the suit certified as a class action. In support of their case, the students' complaint quotes Mr. Wiley as saying: "I think a good case could be made that [the bars] actually could be more profitable businesses if they didn't have to offer such deep discounts trying to outdo each other in lower prices." The suit also quotes unnamed university representatives as saying: "When prices go up, consumption goes down." The students argue that, by agreeing as a group to end the weekend specials, the bar owners essentially increased drink prices in order to reduce consumption and engaged in a conspiracy that "transferred tens of millions of dollars from UW students and other bar patrons to the owners of the defendant bars." The Madison-Dane County Tavern League, which is a defendant in the lawsuit and also represents many of the bars named in the suit, criticized the students' action. "When you combine a student with imagination with a lawyer with time on his hands, this is what you get," said Jon Callaway, a lawyer for the tavern league. "The suit is totally without merit," he said. "What they are trying to establish doesn't exist." Other lawyers, however, are not so sure. "If these facts are true, then it is illegal," said Peter C. Carstensen, a law professor and antitrust expert at the university. Federal and state antitrust laws hold that business competitors cannot agree on matters like pricing, he said. "This was out in public -- it should have been seen right away," he said. "I am embarrassed that I didn't see this sooner." The university's efforts to curb binge drinking could have been accomplished legally in a number of other ways, according to Mr. Carstensen. The City Council could have passed an ordinance banning the drink specials, or their prices could have been inflated through taxes, he said. "From the very beginning, we pushed for an ordinance," said Susan J. Crowley, the PACE Project's director. However, in September 2002 the bar owners agreed among themselves to end the specials. The deal was not negotiated through the university, she said. The lawsuit alleges that the university actively encouraged the agreement, making it the centerpiece of a campaign against excessive drinking. But the University of Wisconsin, the suit says, "does not have the legal authority to organize a cartel among a group of competitors whenever its social scientists believe that a particular product (beer, cigarettes, gasoline, ice cream, music, etc.) is being consumed in excess by its students." John Lucas, a spokesman for the university, called the lawsuit disappointing. "These taverns acted in the public interest," he said, "and they are being challenged for this action." |
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