January 22, 2009 / Law Alert

After Leegin: Will Resale Price Maintenance Revert Back to the Per Se Rule?

The Supreme Court's 2007 decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc. provided that agreements requiring retailers to adhere to a manufacturer's minimum resale prices are to be evaluated under the rule-of-reason instead of the previously applied per se rule, which made them unlawful on their face. 127 S. Ct. 2705 (2007). The decision has faced resistance from its inception, including proposed legislation in Congress, which would reinstate the per se rule, and opposition from a number of states, whose laws and case precedent support continued application of the per se approach. Most recently, a coalition of retailer and consumer advocates, who argue that allowing manufacturers to set minimum resale prices has led to higher prices for consumers, convened in Washington, D.C. to garner further opposition to the Leegin approach. Lower courts and agencies following the Leegin decision have failed to devise clear guidelines regarding resale price maintenance (RPM) programs. Continuing opposition against these programs, despite their support in a number of consumer product market segments, indicates that such programs may not be widely used.