Dr. Miles Goes (Back) to Court
This morning, the SCOTUS will hear argument in Leegin Creative Leather Products Inc. v. PSKS, Inc. (06-480). Leegin is a straightforward case of resale price maintenance. The plaintiff, Kay's Kloset, is a reseller of Leegin products. When Leegin discovered Kay's reselling Leegin products at prices other than those Leegin required, Leegin ceased doing business with Kay's. Kay's brought an antitrust suit. Because retail price maintenance is per se illegal under the nearly 100-year-old Dr. Miles rule, Kay's naturally prevailed in the trial court and Fifth Circuit. The SCOTUS agreed to hear Leegin's case.
According to SCOTUSBlog's preview:
Leegin’s main point for doing away with the per se rule for resale price maintenance agreements is that it is based upon an “antiquated common-law rule” against “alienating” the rights of property once sold, and that the Supreme Court for 30 years has been casting aside other per se rules under the antitrust laws.
Leegin's position seems to be that it is "antiquated" to insist on the passage of title to the buyer in connection with a sale of the goods -- i.e., the notion that you actually own what you buy is an anachronism. Hyperbole aside, the case asks whether resale price maintenance is always anti-competitive such that Dr. Miles' prescription for per se proscription remains indicated (sorry for that). Leegin argues it does not and that the Court should instead view a seller's post-sale retention of rights -- here, the right to dictate the resale price -- through the lens of the "rule of reason."
Medill's On the Docket has more on the facts and procedural history; the Antitrust Review has more on the law and policy.
