Clayton Antitrust Act may have an effect on the proposal to allow E15

The United States Congress has only intervened on behalf of two industries to provide special exemptions or protection from antitrust law under the Clayton Antitrust Act: Major league baseball and “gasohol .” In the Energy Tax Act of 1978 gasohol was defined as a blend of gasoline with at least 10 percent alcohol by volume, excluding alcohol made from petroleum, natural gas, or coal. The Gasohol Competition Act does not define gasohol.

In 1980 Congress passed as an amendment to the Clayton Antitrust Act the Gasohol Competition Act. The law provides as follows:

    § 26a. Restrictions on the purchase of gasohol and synthetic motor fuel

    (a) Limitations on the use of credit instruments; sales, resales, and transfers
    Except as provided in subsection (b) of this section, it shall be unlawful for any person engaged in commerce, in the course of such commerce, directly or indirectly to impose any condition, restriction, agreement, or understanding that—
    (1) limits the use of credit instruments in any transaction concerning the sale, resale, or transfer of gasohol or other synthetic motor fuel of equivalent usability in any case in which there is no similar limitation on transactions concerning such person’s conventional motor fuel; or
    (2) otherwise unreasonably discriminates against or unreasonably limits the sale, resale, or transfer of gasohol or other synthetic motor fuel of equivalent usability in any case in which such synthetic or conventional motor fuel is sold for use, consumption, or resale within the United States.

(emphasis supplied).

Any practice or even state law to the contrary can be challenged as violative of the Clayton Antitrust Act. This law has survived numerous constitutional challenges.

The Act does not prevent gasohol retailers from labeling pumps indicating that the gasohol or synthetic fuels were manufactured by a third party, nor from issuing liability disclaimers for damage resulting from the use of such fuels. The retailers also had no obligation to advertise the sale of alternative fuels or to add additional pumps to their facilities for their distribution.

There appears to be no substantial impediment to using the Gasohol Competition Act against parties discriminating against the sale of E15 on the same basis that the Act was used against the oil companies that discriminated against the use of a 10% blend.

James L. Pray
BrownWinick Law Firm
666 Grand Ave. Suite 2000
Des Moines, IA
515-242-2404

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About James Pray

Attorney with BrownWinick Law Firm in Des Moines, Iowa.
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