Were below-cost gasoline sales illegal in South Carolina under the 2012 law?

Plain-English summary

A senator forwarded allegations that a convenience store was selling gasoline below cost. The Attorney General said in 2012 that South Carolina prohibited a motor-fuel retailer from selling fuel below acquisition cost plus taxes and transportation when the intent or effect was to destroy or substantially lessen competition or injure a competitor. The statute also contained exceptions, including bona fide clearance, liquidation, court-directed, limited promotional, and isolated inadvertent sales.

The AG could not determine whether the reported store had actually sold below cost or met the legal conditions. It said an injured station owner could bring an unfair-trade-practices action for relief under the statute discussed in the opinion.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did any low gasoline price automatically violate the statute? A: The 2012 provision addressed sales below acquisition cost plus taxes and transportation when the specified competitive harm or intent was present. The opinion also quoted exceptions, so a low price alone did not settle a violation.

Q: Were promotional fuel sales exempt?
A: The statute quoted in the opinion included a promotional-sales exception with a calendar-year duration limit. The AG did not decide whether the retailer in the complaint qualified.

Q: Could a competing station owner sue?
A: The AG said an owner injured by a competitor's unlawful below-cost fuel sales could file an action under the unfair-trade-practices remedy it quoted.

Q: Did the AG find that the named convenience store broke the law? A: No. It expressly declined to judge the truth of the allegations because an AG opinion addressed legal questions rather than factual disputes.

Background and statutory framework

The opinion quoted the 2012 motor-fuel below-cost provision and its list of exceptions. It also quoted a private-action remedy for a person who suffered an ascertainable loss from an unlawful unfair trade practice. The analysis was general because the evidence about the particular retailer was outside the AG's fact-finding role.

Citations and references

Statutes: S.C. Code Ann. § 39-5-325(A); S.C. Code Ann.§ 39-5-140(a).

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/april-24-2012/
• Original PDF: https://www.scag.gov/wp-content/uploads/2012/04/reese-g-g-os-9411-4-24-12-below-cost-sales-of-gasoline.pdf

Original opinion text

ALAN WrLSON
ATTORNEY GENERAL

April 24, 2012

The Honorable Glenn G. Reese
Senator, District No. 11
P. 0 . Box 142
Columbia, South Carolina 29202
Dear Senator Reese:
We received your letter requesting an opinion of this office concerning allegations of belowcost sales of gasoline outlined in a January 27, 2012 letter from Mr. Mark Rhodes. In his letter, Mr. Rhodes references competition from a Quick Trip convenience store and makes overtures of below-cost gasoline sales. As you know, opinions written by this office only address law, not facts. As such, we cannot opine on the veracity of Mr. Rhodes' factual allegations. With regard to the legality of the practices alleged by Mr. Rhodes, S.C. Code Ann.§ 39-5-325 provides a prohibition against below-cost gasoline sales. S.C. Code Ann. § 39-5-325(A) reads as follows: (A) Except as otherwise permitted to meet competition as provided by this chapter, it is declared an unfair trade practice and unlawful for any person who is in the retail business of selling motor fuel to sell motor fuel of like grade and quality at retail at a price which is below the cost of acquiring the product plus taxes and transportation where the intent or effect is to destroy or substantially lessen competition or to injure a competitor. [Emphasis added.] The plain language of this statute indicates that below-cost sales of gasoline are illegal in South Carolina. In addition, the South Carolina Unfair Trade Practices Act, S.C. Code Ann. § 39-5-10 through 39-5-170, addresses unfair trade practices. It provides statutory relief for persons injured by an unfair trade practice in S.C. Code Ann.§ 39-5-140(a), which reads as follows: (a) Any person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of an unfair or deceptive method, act or practice declared unlawful by Section 39-5-20 may bring an action individually, but not in a representative capacity, to recover actual damages. If the court finds that the use or employment of the unfair or deceptive method, act or practice was a willful or knowing violation of Section 39-5-20, the court shall award three times the actual damages sustained and may provide such

R EMBERT

c. D ENNIS B UILDING • POST O FFICE Box 11549 • COL UMBIA, SC 2921 1-1549 • TELEPHONE 803-734-3970 • FACSIMILE 803-253-6283

The Honorable Glenn G. Reese
Page 2
April 24, 2012
other relief as it deems necessary or proper. Upon the finding by the court of a violation of this article, the court shall award to the person bringing such action under this section reasonable attorney's fees and costs. It is this office's opinion that the owner of a gasoline station injured by a competitor's below-cost sales of gasoline could file a lawsuit to seek relief under this statute. It should be noted that S.C. Code Ann. § 39-5-325(8) provides several exemptions to the general prohibition against below-cost gasoline sales in S.C. Code Ann.§ 39-5-325(A): (B) The provisions of subsection (A) shall not apply in the following situations where: (1) motor fuel is advertised, offered for sale, or sold in a bona fide clearance sale for the purpose of discontinuing trade in such motor fuel, and the advertising, offer to sell, or sale shall state the reason therefor and the quantity of such motor fuel advertised, offered for sale, or to be sold; (2) motor fuel is sold upon the final liquidation of a business; (3) motor fuel is advertised, offered for sale, or sold by any fiduciary or other officer under the order or direction of any court; (4) motor fuel is sold for promotional purposes including, but not limited to, grand opening, anniversary, or promotional sales. However, the total number of days for promotional sales shall not exceed fourteen days within each calendar year; or (5) an isolated or inadvertent incident occurs that does not exceed two days. I hope that this information is useful to you and Mr. Rhodes. Please let me know if you have further questions.

#~&,~
Robert D. Cook
Deputy Attorney General