The Resale Price Maintenance (and Minimum Advertised Price) Conundrum Post-Leegin: State and Federal Law at a Crossroads

Abstract

As one of the counsel for Respondent in the Supreme Court’s Monsanto Company v. Spray-Rite Service Corporation decision, it has been difficult since 2007 to acknowledge that vertical minimum resale price maintenance (“RPM”) is now to be adjudged under the rule of reason, at least, in the federal courts. While the Supreme Court in Leegin Creative Leather Prods. v. PSKS, Inc. radically altered the Sherman Act Section 1 landscape on RPM by abandoning the per se test used in Monsanto, the reasoning of the Court in Leegin was that this relaxed rule would allow manufacturers more leeway with respect to dealing with free riders and promoting goodwill and brand integrity. But since the Leegin decision was issued in 2007, there has not been empirical evidence presented as to whether these purported procompetitive benefits have actually transpired. As we now exist in a data driven world, there has been ample time to collect this empirical information to determine if the Leegin decision has actually spawned the type of economic state that the Court envisioned in its reasoning for abandoning the per se treatment of RPM. Many of the States, meanwhile, have taken matters into their own hands, with or without any empirical data to support their views, to legislatively and prosecutorialy recast such claims as being subject to per se treatment in their respective jurisdictions.