High Court to Consider Resale Price Maintenance, Implied Antitrust Immunity

This posting was written by Jeffrey May, editor of the CCH Trade Regulation Reporter

The U.S. Supreme Court on December 7 agreed to review two plaintiff-friendly antitrust decisions. The Court will review an unpublished decision of the U.S. Court of Appeals in New Orleans (2006-1 Trade Cases ¶75,166) upholding a multi-million-dollar award to a retailer that was terminated by a manufacturer of women’s accessories for refusing to comply with the manufacturer’s resale pricing policy. Citing the High Court’s 1911 decision in Dr. Miles Medical Co. v. John D. Park & Sons Co. (220 U.S. 373), the appellate court said that it was bound by precedent to apply the per se rule to the agreement. The manufacturer calls on the Court to overturn the “anachronistic per se rule and to bring the law of resale price maintenance into step with the law governing other vertical restraints.” The case is Leegin Creative Leather Products, Inc. v. PSKS, Inc., Dkt. 06-480.

The Court also agreed to consider the appropriate standard for implying antitrust immunity in an action involving conduct in the securities industry. At issue is a decision of the U.S. Court of Appeals in New York City (2005-2 Trade Cases ¶74,943), holding that an antitrust action against the nation’s leading underwriters for engaging in anticompetitive conduct with respect to initial public offerings (IPOs) should not have been dismissed on implied immunity grounds. The U.S. Solicitor General had asked the U.S. Supreme Court to grant the petition by investment banks that underwrite IPOs to “resolve the continuing confusion in the lower courts about the proper manner in which to reconcile the antitrust laws and the securities laws.”

The underwriters asked the Court whether— in a private damages action under the antitrust laws challenging conduct that occurs in a highly regulated securities offering—the standard for implying antitrust immunity is the potential for conflict with the securities laws, or a specific expression of congressional intent to immunize such conduct and a showing that the Securities Exchange Commission (SEC) has power to compel the specific practice.

In its brief, the government contended that, although “the court of appeals failed to give adequate protection to collaborative conduct that is permitted under the securities laws, the district court and petitioners are also wrong in their view that all conduct connected with initial public offerings is impliedly immune from antitrust liability because the SEC exercises ‘pervasive’ regulatory authority over it.” The case is Credit Suisse First Boston Ltd., Dkt. 05-1157.