Wednesday, February 23, 2011

High Court Will Not Consider Retailer’s Resale Price Fixing Claim

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The U.S. Supreme Court on February 22 denied a petition to review a decision of the U.S. Court of Appeals in New Orleans (PSKS, Inc. v. Leegin Creative Leather Products, Inc., 2010-2 Trade Cases ¶77,130), rejecting a Texas retailer’s resale price maintenance claims against the manufacturer of handbags and other accessories sold under the “Brighton” brand.

In an earlier decision in the matter, the Supreme Court held that vertical price restraints should be judged under rule of reason analysis (2007-1 Trade Cases ¶75,753).

The retailer purportedly had violated the manufacturer’s resale price maintenance policy by offering Brighton products at a discount. When the retailer refused to stop discounting the goods, the manufacturer ceased to sell Brighton goods to it. The retailer sued.

In its latest ruling, the Fifth Circuit affirmed dismissal of the action for failure to assert a valid relevant market or anticompetitive harm resulting from the manufacturer’s resale price maintenance program.

The retailer had asked the Supreme Court, among other things:

• Whether the appellate court’s rejection of its proof of market definition and power was proper, and

• Whether it was necessary to prove market power where it had presented direct evidence of anticompetitive effects and a lack of procompetitive justifications for the manufacturer’s conduct.

The petition is PSKS, Inc. v. Leegin Creative Leather Products, Inc., Dkt. 10-653, cert denied February 22, 2011. Further information is available here on the U.S. Supreme Court website.

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