Ports Petroleum Co., Inc. v. Tucker

Annotate this Case
PORTS PETROLEUM COMPANY, Inc., of Ohio v. Jim
Guy TUCKER, as Governor of the State of
Arkansas; Winston Bryant, as Attorney General
of the State of Arkansas; Lone Star Company,
Inc.; Thomas Oil Company; and Arkansas Oil
Marketers Association

95-705                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                Opinion delivered March 11, 1996


1.   Statutes -- statutes presumed constitutional -- construction
     of penal statutes. -- Statutes are presumed constitutional in
     Arkansas, and if it is possible to construe a statute so as to
     pass constitutional muster, the supreme court will do so; if
     a statute is penal in nature, it is strictly construed in
     favor of the offender; here, the penalties in Act 380 of 1993
     rendered it a clear penal statute, and so it must be strictly
     construed it in favor of appellant.

2.   Trade regulation -- subject matter of Act within General
     Assembly's police powers to regulate industry of general
     public interest -- The subject matter of Act 380 falls within
     the General Assembly's police powers to regulate an industry
     of general public interest; the court has taken an expansive
     view of the State's general ability to regulate professions
     and businesses under its police powers; a commodity of general
     use and consumption is impressed with a public interest and,
     thus, subject to regulation under the police powers of the
     state.  


3.   Trade regulation -- exercise of state police powers -- acts
     can be sustained only if they enhance general welfare. -- The
     General Assembly has no right to take away a valuable property
     right unless it has the right by virtue of its inherent police
     power to protect the public welfare; where competition is
     preserved to a degree under the provisions of an act, but it
     is also restricted to a degree, the act can be sustained only
     if it enhances the general welfare and not if it restricts it
     to only a small extent; the exercise of police power must have
     a substantial basis and cannot be made a mere pretext for
     legislation that does not fall within it; the Legislature has
     no power, under the guise of police regulations, arbitrarily
     to invade the personal rights and liberty of the individual
     citizen, to interfere with private business or impose unusual
     and unnecessary restrictions upon lawful occupations, or to
     invade property rights.

4.   Trade regulation -- mere cutting of prices does not equate to
     predatory practice. -- The mere fact of cutting prices does
     not equate to a predatory practice. 

5.   Trade regulation -- difference between predation and
     competition relative to lowering prices discussed. -- A firm
     that cuts its prices or substantially reduces its profit
     margin is not necessarily engaging in predatory pricing, it
     may simply be responding to new competition, or to a downturn
     in market demand; there is a real danger in mislabeling such
     practices as predatory, because consumers generally benefit
     from the low prices resulting from aggressive price
     competition.  

6.   Trade regulation -- purpose of federal antitrust laws. -- 
     The purpose of federal antitrust laws is to permit vigorous
     price competition and is not to protect firms from losing
     profits due to competition; a perverse result might flow from
     disallowing firms to reduce prices to enhance market share
     because the mechanism by which a firm engages in predatory
     pricing -- lowering prices -- is the same mechanism by which
     a firm stimulates competition; cutting prices in order to
     increase business often is the very essence of competition;
     mistaken inferences may chill the very conduct the antitrust
     laws are designed to protect.

7.   Trade regulation -- predation distinguished from legitimate
     price cutting. -- What separates predation from legitimate
     price cutting is the intent of the predator to damage and
     destroy competition and then recoup the losses through a
     greater share of the market. 

8.   Trade regulation -- review of state economic regulations for
     due process violation -- standard to be used. -- Generally,
     when reviewing state economic regulations for due process
     violations, the test is whether the legislation is designed to
     accomplish an end within legislative competence and whether
     the means it employs are reasonably designed to accomplish
     that end without unduly infringing upon protected rights;
     specifically, in "sale below cost" cases, the primary issue is
     whether the legislation too broadly imposes restrictions on
     individuals' liberty to conduct their business as they choose;
     if the act penalizes innocent acts not reasonably related to
     the problem of monopolistic practices or other deceptive,
     disruptive, or destructive price cutting, the act strikes too
     broadly.

9.   Trade regulation -- Act 380 overbroad in that it prohibited
     legitimate competition -- due process unconstitutionally
     impaired. --  The supreme court concluded that Act 380 was
     overbroad in that it prohibited legitimate and innocent
     competition fostered by below-cost sales; the Act failed to
     include a prohibition against such sales made with predatory
     intent to damage and destroy competition, thereby precluding
     legitimate and innocent below-cost strategies; Section 4 of
     Act 380 of 1993 violates the due process clause of the
     Arkansas Constitution and is void and of no effect. 


     Appeal from Pulaski Chancery Court; Collins Kilgore,
Chancellor; reversed and remanded.
     Williams & Anderson, by:  Peter G. Kumpe and Leon Holmes, for
appellant.
     Winston Bryant, Att'y Gen., by:  Angela S. Jegley, Sr. Asst.
Att'y Gen., for appellee.
     Mitchell, Williams, Selig, Gates & Woodyard, by:  Sherry P.
Bartley and Marshall S. Ney, for appellees Lone Star Company,
Thomas Oil Company, and Arkansas Oil Marketers Ass'n.

     Robert L. Brown, Justice.

Associate Justice Robert L. Brown
March 11, 1996          *ADVREP8*



PORTS PETROLEUM COMPANY, INC.
OF OHIO,
                    APPELLANT,

V.

JIM GUY TUCKER, AS GOVERNOR OF
THE STATE OF ARKANSAS; WINSTON
BRYANT, AS ATTORNEY GENERAL OF
THE STATE OF ARKANSAS; LONE
STAR COMPANY, INC.; THOMAS OIL
COMPANY; AND ARKANSAS OIL
MARKETERS ASSOCIATION,
                    APPELLEES,

95-705




APPEAL FROM THE PULASKI COUNTY
CHANCERY COURT,
NO. 93-2447,
HON. COLLINS KILGORE, JUDGE,




REVERSED AND REMANDED.






     The issue before this court is whether the Arkansas Petroleum
Trade Practices Act (Act 380 of 1993) violates the Arkansas
Constitution by impinging on the due process rights, the equal
protection rights, and the privileges and immunities of appellant
Ports Petroleum Co., Inc.  We hold that Act 380 is constitutionally
infirm because of its failure to include an element of predatory
intent for a violation.  As a consequence, the Act is overbroad in
its effect and impermissibly impinges on the due process rights of
Ports Petroleum.

                            I. Facts
     On April 20, 1993, Ports Petroleum Company, Inc. ("Ports
Petroleum") filed its complaint for declaratory judgment in
chancery court.  Ports Petroleum owns Fuel Mart gasoline stations
in Little Rock and Jonesboro, which sell unbranded motor fuel. 
Lone Star and Thomas Oil sell retail gasoline in Arkansas.  Through
their attorneys, Lone Star and Thomas Oil contacted Ports Petroleum
and threatened to sue if Ports Petroleum did not raise its price
per gallon above below-cost levels.  The letters asserted that
Ports Petroleum was selling its gas in violation of the Arkansas
Petroleum Trade Practices Act (Act 380 of 1993).  Ports Petroleum
sued first and named Lone Star and Thomas Oil as defendants based
on the threatening letters.  It further named Governor Jim Guy
Tucker and Attorney General Winston Bryant as parties defendant
because they constitute the enforcement mechanism under the Act.
     Ports Petroleum's declaratory judgment complaint alleged that
Act 380 violates the Arkansas and United States Constitutions
because it does not require an antitrust injury or predatory intent
to run afoul of the Act.  Its argument was framed in terms of due
process, privileges and immunities, and equal protection
violations.  Ports Petroleum claimed that, as a practical matter,
the prohibition on selling unbranded fuel below cost inhibited fair
competition because unbranded fuel sellers are by necessity
required to sell a greater volume of fuel at a discounted price in
order to compete with branded fuel companies like Exxon and Texaco. 
It further alleged that the prohibition under Act 380 of below-cost
sales violated its property and liberty interests by regulating
innocent pricing decisions, which do not adversely affect
competition.  
     Other claims made by Ports Petroleum were: (1) as an unbranded
dealer, it does not receive the same protection as branded dealers
under the Arkansas Constitution and that the denial of its rights
resulted in a deprivation of business opportunity without just
compensation, and (2) Act 380 violates the United States
Constitution by negating the requirement of antitrust injury in
pricing cases, which has the ironic effect of hindering competition
and amounts to an unreasonable exercise of the state's police
power, all of which is contrary to federal legislation.  According
to the complaint, the Supremacy Clause of the United States
Constitution preempts Act 380.  Ports Petroleum prayed for an
injunction to halt enforcement of the Act.
     The Arkansas Oil Marketers Association ("AOMA") moved to
intervene as a defendant in the suit.  The organization is
comprised of approximately 200 independent petroleum marketers in
the state, and, according to the motion, it played an instrumental
role in developing the Act.  The parties did not oppose the
intervention of AOMA, and the trial court granted the motion.
     Ports Petroleum moved for summary judgment.  Attached to the
motion were the two letters of intent to sue by Lone Star and
Thomas Oil and an affidavit by Michael D. Ports, the president of
Ports Petroleum.  In the affidavit, Ports substantiated the claims
in the complaint that unbranded fuel sellers are required to sell
at a discount price in order to compete with other types of fuel
retailers.  Ports also averred that the volume of Fuel Mart sales
had dropped since the Jonesboro store raised its fuel price but
that the Little Rock price was sufficiently low to sustain its
volume of sales.  Ports opined that the enforcement of the act
would ultimately drive Ports Petroleum out of business.
     Ports Petroleum also attached the deposition of Mike Coulson,
the former president of AOMA.  Coulson described the differences
between branded and unbranded fuel markets.  He testified that AOMA
retained counsel to draft the legislation which was later enacted
as Act 380.  According to Coulson, the Act does not distinguish
between branded and unbranded dealers.  He testified that if you do
not have a branded product, "then price is probably what you're
selling."
     As a fifth exhibit, Ports Petroleum attached an affidavit from
Leonard A. White, a professor of economics at the University of
Arkansas in Fayetteville.  He predicted that the Act would cause
higher prices and decrease competition, which would injure the
consumer.  White pointed out that it was not automatically
predatory for a business to sell a product at below cost.  As
examples, he listed giving away a free radio with the purchase of
a car and selling gasoline below cost to reap an inflated price on
ice cream cones.  
     Thomas Oil, Lone Star, and AOMA filed a response to Ports
Petroleum's motion for summary judgment and filed their own cross-
motion for summary judgment.  They too attached affidavits.  Gerald
J. Lynch, an economics professor at Purdue University, analyzed the
Act and opined that the dynamic nature of competition will not
suffer under the Act.  Lynch concluded that "[t]he Act is a
reasonable one that will allow dynamic competition [in] the short
run, and protect the market from monopoly power in the long run." 
The affidavit of Professor David R. Kamerschen, a professor of
economics at the University of Georgia, was submitted in addition. 
Kamerschen recognized that below-cost pricing is seldom prudent. 
He noted that the per se rule, as stated in the Act, has advantages
in that it offers certainty among businesses with respect to the
legality of their pricing schemes.  Kamerschen estimated that the
Act will ultimately help more dealers survive in the market place
because more dealers will be able to survive competitive price
battles.
     The affidavit of Al Heringer, the president of Lone Star, was
submitted in support of the appellees' cross-motion for summary
judgment.  He stated that the purchase of fuel is extremely price
sensitive regardless of whether it is branded or unbranded. 
According to Heringer, the fact that a company sells unbranded fuel
makes no difference because neither can survive without making a
profit.
     A hearing was held on the motions, and arguments of counsel
were made.  The trial court granted summary judgment in favor of
the appellees.  In its order, the court found:
          1.  Motor fuel is a commodity of general use and
     consumption and is impressed with the public interest for
     purposes of regulation under the State's police power.  
          2.  The purposes of Act 380 of 1993, subtitled the
     Arkansas Petroleum Trade Practices Act (the "Act"), as
     set forth in Section 3 of the Act are proper purposes for
     the exercise of the State's police power.
          3.  The prohibition of sales of motor fuel at below
     cost to the retailer of motor fuel unless such sales are
     exempt under the Act is a reasonable means to accomplish
     the Act's purposes.  
          4.  The Act is not preempted by federal anti-trust
     law.
          5.  The act is rationally related to a legitimate
     state purpose and does not violate the Arkansas
     Constitution or the United States Constitution.
     The pertinent sections of the Act are sections 3 and 4:
          SECTION 3.  PURPOSE.
                              ....
          (b)  Independent and small dealers and distributors
     of motor fuel are vital to a healthy, competitive market
     place, but are unable to survive subsidized below-cost
     pricing at the retail level by others who have other
     sources of income.  Fair and healthy competition in the
     marketing of motor fuel provides maximum benefits to
     consumers in this state, and certain marketing practices
     which impair such competition are contrary to the public
     interest.  Predatory pricing practices are unfair trade
     practices and restraints which adversely affect motor
     fuel competition.  Subsidized pricing is inherently
     predatory because it is unfair and destructive to, and
     reduces competition in, the motor fuel marketing
     industry....
          (c)  Recovery under the anti-trust laws has become
     increasingly difficult due to the requirement of
     establishing an "antitrust injury."  The legislature has
     determined that subsidized and predatory pricing
     presumptively injure competition by damaging independent
     dealers and distributors of motor fuel.  Proof of
     "antitrust injury" is unnecessary to recover under this
     act.
          SECTION 4.  SALES BELOW COST TO RETAILER.  (a)  No
     dealer shall make, or offer or advertise to make, sales
     at retail at below cost to the retailer of motor fuel,
     where the effect may injure competition, unless such
     sales at retail are exempt under Subsection (c) or (d) of
     this Section....
          (c)  Nothing in this section shall prohibit a dealer
     from making, or offering or advertising to make, sales at
     retail of motor fuel which are made in good faith to
     compete with the equally low or lower retail price of a
     competitor.  However, while the previous sentence allows
     a dealer to make, offer or advertise, sales at a price
     equal to the price of a competitor, it does not authorize
     such dealer to make, offer or advertise to make, sales at
     retail at a price below such competitor if such sales
     would be in contravention with the provisions of this
     section.  
          (d)  The provisions of this section shall not apply:
               (i)  Where motor fuel is advertised, offered
     for sale, or sold in a bona fide clearance sale....
               (ii)  Where motor fuel is sold upon the final
     liquidation of a business; or
               (iii)  Where motor fuel is advertised, offered
     for sale, or sold ... under the order or direction of any
     court; or
               (iv)  Where motor fuel is sold during a grand
     opening to introduce a new or remodeled business....
     The Act then provided that violation would subject the
offender to civil penalties of $1,000 a day and three times the
amount of actual damages for knowing and willful violations.  A
showing that the cost exceeded the price constitutes a prima facie
case.  The Act states that it is "remedial" and should be
"liberally construed."
     This case is one of first impression in Arkansas in that it
provides the first opportunity for this court to decide whether the
General Assembly may constitutionally abrogate a business's right
to sell fuel below cost when there is no requirement that the
business intended to put its competition out of business or even to
damage it.  Indeed, we have found that there is a paucity of
authority on this precise point from other jurisdictions as well.
     It is true, as the appellees underscore, that statutes are
presumed constitutional in Arkansas, and if it is possible to
construe a statute so as to pass constitutional muster, we will do
so.  Clinton v. Bonds, 306 Ark. 554, 816 S.W.2d 169 (1991); Love v.
Hill, 297 Ark. 96, 759 S.W.2d 550 (1988).  It is also true that if
a statute is penal in nature, it is strictly construed in favor of
the offender.  Wal-Mart Stores, Inc. v. American Drugs, Inc., 319
Ark. 214, 891 S.W.2d 30 (1994); State Farm Mut. Auto Insur. Co. v.
Thomas, 316 Ark. 345, 871 S.W.2d 571 (1994).  The penalties in Act
380 render it a clear penal statute, and we must strictly construe
it in favor of Ports Petroleum.  This is so, even though the Act
itself states that it should be liberally construed.
     We have no hesitation in affirming the trial court on the
point that the subject matter of Act 380 falls within the General
Assembly's police powers to regulate an industry of general public
interest.  Unlike the State of Georgia [see Strickland v. Ports
Petroleum Co., Inc., 353 S.E.2d 17 (Ga. 1987)], we have taken an
expansive view of the State's general ability to regulate
professions and businesses under its police powers.  See Noble v.
Davis, 204 Ark. 156, 161 S.W.2d 189 (1942) (regulatory authority of
state over barbers proper in general, though price-fixing act in
question was not a legitimate exercise of state police powers).  We
have further stated that a commodity of general use and consumption
like ready-mixed concrete is impressed with a public interest and,
thus, subject to regulation under the police powers of the state. 
Concrete, Inc. v. Arkola Sand and Gravel Co., 230 Ark. 315, 322 S.W.2d 452 (1959).  The question then becomes whether the police
powers have been used by Act 380 to interfere arbitrarily with the
business rights of Ports Petroleum and, thus, violate the due
process clause of the Arkansas Constitution.  We conclude that that
is the case.
     The issue of an impermissible exercise of state police powers
was raised in Union Carbide & Carbon Corp. v. White River Distrib.,
Inc., 224 Ark. 558, 275 S.W.2d 455 (1955).  There, the appellant
argued that it had the right under the Act in question to require
all retailers of Prestone antifreeze to sell its product at a fixed
price.  This court disagreed and cited Ark. Const. art. 2  8,
which states that no one can be deprived of property without due
process of law.  We also observed that the General Assembly has no
right to take away a valuable property right unless it has the
right by virtue of its inherent police power to protect the public
welfare.  We concluded:
     We recognize that competition is preserved to a degree
     under the provisions of the Act, but it must be admitted
     that it is also restricted to a degree.  The Act can be
     sustained only if it enhances the general welfare and not
     if it restricts it to only a small extent.
                              ....
     The exercise of the [police] power must have a
     substantial basis and cannot be made a mere pretext for
     legislation that does not fall within it.  The
     Legislature has no power, under the guise of police
     regulations, arbitrarily to invade the personal rights
     and liberty of the individual citizen, to interfere with
     private business or impose unusual and unnecessary
     restrictions upon lawful occupations, or to invade
     property rights.
Union Carbide, 224 Ark. at 563, 566, 275 S.W.2d  at 458, 460.  We
held that the price-fixing statute violated the due process clause
of the Arkansas Constitution.
     Admittedly, the distinction between predatory practices and
competitive pricing may appear to blur at times.  But one point has
been made abundantly clear by both this court and the U.S. Supreme
Court -- the mere fact of cutting prices does not equate to a
predatory practice.  In Wal-Mart Stores, Inc. v. American Drugs,
Inc., supra, we examined a provision of the Arkansas Unfair
Practices Act, which included a prohibition against below-cost
sales "for the purpose of injuring competitors and destroying
competition."  Ark. Code Ann.  4-75-209(a)(1) (Repl. 1991).  We
held that the use of loss leaders was not enough to infer an intent
to destroy competition, as the trial court had done.  We added that
we were not willing to interpret the Act to contemplate a prima
facie case of predation absent a clear directive from the General
Assembly.  We did not reach the issue, however, of whether
eliminating predatory intent altogether would comply with
constitutional mandates.  We quoted with approval from an Eighth
Circuit Court of Appeals case concerning the difference between
predation and competition relative to lowering prices:
     The difficulty, of course, is distinguishing highly
     competitive pricing from predatory pricing.  A firm that
     cuts its prices or substantially reduces its profit
     margin is not necessarily engaging in predatory pricing. 
     It may simply be responding to new competition, or to a
     downturn in market demand.  Indeed, there is a real
     danger in mislabeling such practices as predatory,
     because consumers generally benefit from the low prices
     resulting from aggressive price competition.  See e.g.,
     Barry Wright Corp. v. ITT Grinnell Corp., 724 F.2d 227,
     231 (1st Cir. 1983).
Wal-Mart Stores, Inc., 319 Ark. at 222, 891 S.W.2d  at 35; quoting
Morgan v. Ponder, 892 F.2d 1355, 1358-1359 (8th Cir. 1989).
     The U.S. Supreme Court in interpreting federal antitrust laws
has acknowledged that the purpose of those laws is to permit
vigorous price competition and is not to protect firms from losing
profits due to competition.  Cargill, Inc. v. Monfort of Colorado,
Inc., 479 U.S. 104 (1986).  The Court noted the perverse result
that might flow from disallowing firms to reduce prices to enhance
market share:.
     "[T]he mechanism by which a firm engages in predatory
     pricing -- lowering prices -- is the same mechanism by
     which a firm stimulates competition; because `cutting
     prices in order to increase business often is the very
     essence of competition ...; mistaken inferences ... are
     especially costly, because they chill the very conduct
     the antitrust laws are designed to protect.'"  Cargill,
     supra, 479 U.S., at 122, n. 17, 107 S.Ct., at 495, n. 17
     (quoting Matsushita, supra, 475 U.S., at 594, 106 S.Ct.,
     at 1360).  It would be ironic indeed if the standards for
     predatory pricing liability were so low that antitrust
     suits themselves became a tool for keeping prices high.
Brook Group, Ltd. v. Brown & Williamson Tobacco Corp., 113 S. Ct. 2578, 2589-2590 (1993).
     What separates predation from legitimate price cutting is the
intent of the predator to damage and destroy competition and then
recoup the losses through a greater share of the market.  Brook
Group, Ltd. v. Brown & Williamson Tobacco Corp., supra.  The one
case from a foreign jurisdiction that involved a state statute
regulating sales below cost that approximates the facts of the
present appeal is State v. Mapco Petroleum, Inc., 519 So. 2d 1275
(Ala. 1987).  In that case, the Alabama Supreme Court first noted
the shift in analysis caused by Nebbia v. New York, 291 U.S. 502
(1934).  In Nebbia, the U.S. Supreme Court held that state economic
regulation of businesses withstood due process challenges unless
the regulation was arbitrary, discriminatory or demonstrably
irrelevant to the policy that the legislature is free to adopt, all
of which equated to an interference with individual liberty.  The
Alabama Supreme Court then adopted a standard to use when reviewing
state economic regulations for a due process violation:
     Generally speaking, the test is whether the legislation
     is designed to accomplish an end within legislative
     competence and whether the means it employs are
     reasonably designed to accomplish that end without unduly
     infringing upon protected rights. ... Specifically, in
     these "sale below cost" cases, the primary issue will be
     whether the legislation too broadly imposes restrictions
     on individuals' liberty to conduct their business as they
     choose.  If the act penalizes innocent acts not
     reasonably related to the problem of monopolistic
     practices or other deceptive, disruptive, or destructive
     price cutting, the act strikes too broadly.
Mapco Petroleum, 519 So. 2d  at 1284-1285.
     The Alabama Supreme Court then went forward and construed the
state's Motor Fuel Marketing Act to prohibit below-cost sales that
tended to destroy or substantially lessen competition.  But the
Court further read into the Act the ability of a defendant to offer
the defense of an absence of harmful intent, after the plaintiff
had made a prima facie case by showing a sale below cost with an
injurious effect on competition.  What distinguishes the Alabama
Motor Fuel Marketing Act factually from the Arkansas Petroleum Fair
Practices Act is the Alabama Act does require predatory intent in
one section, where Act 380 is devoid of any such provision.  Hence,
the Mapco decision offers little precedential guidance for the case
at hand.
     Nevertheless, the standard employed by the Alabama Supreme
Court in Mapco of whether the Act works too broad an impingement on
individual liberty is useful.  We observe that this standard bears
a strong kinship to the one adopted by this court in Union Carbide
& Carbon Corp. v. White River Distrib., Inc., supra, which is
quoted above.  In the instant case, there is a laudable purpose
stated in Act 380 -- to foment competition and prevent predation by
prohibiting subsidized below-cost pricing at the retail level,
which can have a deleterious impact on competition.  But is Act 380
reasonably designed to accomplish that purpose?  We think not. 
Indeed, in some instances the Act appears to have exactly the
opposite effect from its stated purpose, and the plight of Ports
Petroleum is a case in point.  The flip side of prohibiting below-
cost pricing is that smaller enterprises and single retail outlets
(the mom and pop stores) are not able to use this strategy as a
means of attracting customers and, thereby, competing with larger
firms.  Though completely free and innocent of predatory intent,
these smaller outlets are foreclosed by the Act from engaging in a
pricing mechanism that is one of the few competitive tools they
have at their disposal.
     The appellees urge that Act 380 bears a rational relationship
to a legitimate objective of state government, and for that reason
it cannot be the product of arbitrary action.  See Arkansas Hosp.
Ass'n v. Arkansas State Bd. of Pharmacy, 297 Ark. 454, 763 S.W.2d 73 (1989); Streight v. Ragland, 280 Ark. 206, 655 S.W.2d 459
(1983).  But we cannot agree that legislation which hampers
innocent and legitimate competition can in any wise be deemed to be
rational irrespective of the goal to be accomplished.
     We conclude that Act 380 is overbroad in that it prohibits
legitimate and innocent competition fostered by below-cost sales. 
Had the Act included a prohibition against such sales made with
predatory intent to damage and destroy competition comparable to
what the Arkansas Unfair Practices Act [Ark. Code Ann.  4-75-
209(a)(1) (Repl. 1991)] provides, due process impairment would not
be a concern.  But here legitimate and innocent below-cost
strategies are precluded, and that is a burden on legitimate
competition that we cannot condone.  Because we reverse due to the
absence of an intent to damage and destroy competition, we need not
address Ports Petroleum's associated argument that the Act is also
deficient in eliminating the element of antitrust injury.
     We hold that Section 4 of Act 380 of 1993 violates the due
process clause of the Arkansas Constitution and is void and of no
effect.  To the extent Section 4 is independent from the balance of
the Act, its invalidity shall not affect the other provisions and
applications of the Act.  U.S. Term Limits, Inc. v. Hill, 316 Ark.
251, 872 S.W.2d 349 (1994), aff'd ___ U.S. ___, 115 S. Ct. 1842,
129 L. Ed.2d (1995); Faubus v. Kinney, 239 Ark. 443, 389 S.W.2d 887
(1965).
     Reversed and remanded for entry of an order consistent with
this opinion.

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