Enforcer
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| Posted: Wed Mar 28, 2007 1:08 pm Post subject: Supreme Court decision may drive retail prices up |
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Insiders the end of an era is at hand. See this:
High Court's 'Leegin' Antitrust Case May Mark the End of an Era
Thomas B. Leary and Janet L. McDavid
The National Law Journal
March 20, 2007
The U.S. Supreme Court will soon hear argument in Leegin Creative Leather Products Inc. v. PSKS Inc., No. 06-480, a case in which the only issue is whether to sustain or to overrule the per se condemnation of minimum resale price agreements between a manufacturer and its customers, also known as resale price maintenance (RPM). Leegin presents the issue squarely because there is no dispute about the existence of resale price agreements.
The Supreme Court held in Dr. Miles Medical Co. v. John D. Park & Sons, 220 U.S. 373 (1911), that it was per se illegal for a manufacturer and a retailer to agree on the resale prices that the retailer would charge. The Court reasoned, first, that a restriction on the retailer's prices for goods that it owned would violate the centuries-old prohibition against "restraints on alienation." The Court also found that an agreement between a manufacturer and a retailer was equivalent to a horizontal agreement between the retailers themselves, and "can fare no better." Only eight years later, however, the Court held in U.S. v. Colgate & Co., 250 U.S. 300 (1919), that a manufacturer could legally establish a price that it wanted retailers to charge and announce that it would refuse to sell to any retailers that deviated from it -- so long as it was wholly unilateral and the retailers did not verbally "agree" to the policy. The rationale was that a seller should be free to choose its own customers, and that absent agreement there could be no violation of §1 of the Sherman Act.
Read the entire article at:
http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1174307783008 |
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