Supreme Court's <i>Leegin</i> Decision Opens Door to Resale Price Controls ' Or Does It?

In June, the Supreme Court revisited the per se ban on resale price maintenance. In a 5-4 opinion, the Court, in <i>Leegin Creative Leather Products v. PSKS, Inc.</i>, overruled nearly a century of precedent, and adopted a 'rule of reason' analysis that allows an alleged violator to attempt to justify price controls. As a result, news reports predicted widespread changes in resale price agreements and a decline in competitive discounts, giving the impression that companies are now free to impose price controls with little or no oversight, without fear of legal consequence, regardless of the specific nature of their products. The actual ruling, however, is neither so sweeping nor revolutionary. It is not an endorsement of resale-price controls in every case, or even in most cases. Companies that engage in resale-price maintenance may no longer face a charge of per se illegality, but they must tread extremely carefully in what is still dangerous territory.

22 minute read August 28, 2007 at 10:11 AM

By

David C. Reymann