US Resale Price Maintenance

Anticompetitive practices

The US Court of Appeals for the Ninth Circuit clarifies analysis of alleged hub-and-spoke conspiracies under the Sherman Act (J. Ramsey / NAMM)
Siemens (New York)
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Patterson Belknap Webb & Tyler
Ninth Circuit Clarifies Analysis of Alleged Hub-and-Spoke Conspiracies Under the Sherman Act* Yesterday, the Ninth Circuit issued an opinion affirming the dismissal of plaintiffs’ consolidated complaint in In re Musical Instruments and Equipment Antitrust Litigation. In addressing plaintiffs’ (...)

The US District Court for the Northern District of California receives a complaint likely to provide lessons about manufacturers’ efforts regarding resale prices (Costco / Johnson & Johnson)
University of Michigan
Costco v. J&J: The Latest and Largest in a Long Line of Pricing Cases* It’s not often that one Fortune 50 company sues another – but that’s what happened earlier this week when Costco sued Johnson & Johnson (J&J) in California federal court over J&J’s attempts to limit Costco’s (...)

The US District Court of Dallas dismisses a class action lawsuit filed by an online travel discount company against 12 dominant hotel chains and 9 online travel agencies alledging unfair exclusion from the market (OTC / Hotel Booking)
Ashurst (Milan)
U.S. District Judge in Texas dismisses class action lawsuit against conspiracy by online travel agencies and hotels to fix the price of hotel rooms* On 18 February 2014, U.S. District Judge Jane Boyle of the Northern District of Texas Dallas Division dismissed a class action lawsuit that (...)

The US District Court of Dallas dismisses antitrust claims because plaintiffs did not plausibly state an agreement on the market for direct online sale of hotel room reservations leaving the question of potential anticompetitive effect of the most favored nation (MFN) clause without an answer (OTC / Hotel Booking)
University of Michigan
OTA Case Turns Out to Be Less about MFNs and More about Agreement* Back in September 2012, the potential anticompetitive aspects of most favored nation (MFN) clauses was the hot antitrust topic. While antitrust counselors (and courts) had found the clauses to be innocuous almost all the time, (...)

The US District Court for the Southern District of New York establishes collusion to eliminate retail price competition for e-books and imposes restrictions on deals with publishers for the next five years (Apple)
DLA Piper Weiss-Tessbach (Vienna)
U.S. District Court rules Apple colluded on E-Book Prices* On 10 July 2013 the District Court in Manhattan ruled in United States v. Apple Inc., et al that Apple conspired with five major publishers to raise prices on e-books. The publishers settled and denied any wrongdoing. However, the case (...)

The US Court of Southern District of New York clarifies what determines liability of the vertical participant B in an A-B-C information exchange (Apple)
University of Cambridge
e-books: Vertical participation in hub and spoke agreements* The 10 July judgment in the American e-books case (US v Apple) addresses an important question not yet examined under European competition law: what determines the liability of the vertical participant (“B”) in an A-B-C information (...)

The New York Appellate Court rejects NY Attorney General’s challenge of alleged minimum resale price maintenance (RPM) scheme, holding that New York state statute does not render RPM agreements illegal per se and that restrictions that merely relate to minimum advertised prices do not constitute RPM agreements (Tempur-Pedic)
McDermott Will & Emery (Washington)
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McDermott Will & Emery (Chicago)
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McDermott Will & Emery (Chicago)
A recent New York state appeals court decision highlights the need for suppliers to continue exercising caution when adopting and implementing a resale price maintenance policy. On May 8, 2012, the Appellate Division of the New York Supreme Court affirmed a lower court’s decision that (...)

The US Kansas Supreme Court holds resale price maintenance is per se illegal under state law, but ruling subsequently overturned by state legislature (O’Brien / Leegin Creative Leather Products)
McDermott Will & Emery (Washington)
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McDermott Will & Emery (Washington)
The Kansas Supreme Court recently determined resale price maintenance is per se illegal under state law, becoming the latest state to reject the rule of reason standard mandated by the Supreme Court of the United States. The decision serves as a reminder that although a supplier’s pricing (...)

The Kansas Supreme Court holds that resale price maintenance, whether purely vertical or in a dual distribution setting, is per se illegal and rejects applicability of federal rule of reason analysis to claims brought under Kansas antitrust law (O’Brien / Leegin Creative Leather Products)
Crowell & Moring (Washington)
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Crowell & Moring (Irvine)
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Crowell & Moring (Washington)
UPDATE NOTE: On April 16, 2013, the Kansas legislature reversed the decision discussed below, and adopted a "reasonableness" standard for analyzing vertical price agreements. On May 4, 2012, Kansas joined the growing trend among states to limit the distribution flexibility that had been (...)

The Kansas Supreme Court condemns vertical price fixing agreements as per se illegal under the Kansas Restraint of Trade Act (O’Brien / Leegin Creative Leather Products)
Wolters Kluwer (Riverwoods)
Kansas Supreme Court Condemns Vertical Price Fixing Agreements as Per Se Illegal* Earlier this month, the Kansas Supreme Court ruled that the reasonableness of a vertical price fixing agreement is not to be considered when determining whether such an agreement violates the Kansas Restraint of (...)

The New York Southern District Court holds that enforcement of a Minimum Advertised Price (MAP) policy against Internet retailers does not amount to minimum resale price maintenance (Worldhomecenter.com / Franke Consumer Products)
Pepper Hamilton (Philadelphia)
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Pepper Hamilton (Philadelphia)
Courts May Try to Harmonize Federal and State Law on the Legality of Resale Price Maintenance* Ever since the United States Supreme Court ruled in Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007), that resale price maintenance (i.e., agreements to set minimum resale (...)

The New York Supreme Court issues a decision on resale price maintenance in the mattress manufacturing sector applying the rule of reason standard (Tempur-Pedic International)
Wolters Kluwer (Riverwoods)
New York’s Challenge To Mattress Maker’s Resale Pricing Policy Fails* The State of New York was not entitled to an order enjoining mattress manufacturer Tempur-Pedic International, Inc. from restricting discounting by its authorized retailers, a New York state court has ruled. The New York (...)

A Californian Superior Court issues a decision on resale price maintenance in cosmetic sector applying the per se rule (Bioelements)
Wolters Kluwer (Riverwoods)
New York’s Challenge To Mattress Maker’s Resale Pricing Policy Fails* The State of New York was not entitled to an order enjoining mattress manufacturer Tempur-Pedic International, Inc. from restricting discounting by its authorized retailers, a New York state court has ruled. The New York (...)

The US Court of Appeals of Atlanta (Eleventh Circuit) affirms a ruling of dismissal of an action brought on behalf of a class of purchasers of visco-elastic foam mattresses against a distributor (Benny Jacobs Wanda / Tempur-Pedic)
Sheppard Mullin (Los Angeles)
Lights Out for Resale Price and Dual Distribution Class Action* On December 2, 2010, the Court of Appeals for the 11th Circuit affirmed a ruling of dismissal entered by the United States District for the Northern District of Georgia. Jacobs v. Tempur-Pedic Int.’l, Inc., No. 08-12720. Plaintiff (...)

The US Court of Appeals for the 11th Circuit affirms dismissal of price-fixing conspiracy claims in the mattress manufacturing industry for not meeting Twombly pleading requirements (Jacobs, Tempur-Pedic)
Wolters Kluwer (Riverwoods)
Consumers’ Price Fixing Claims Against Mattress Maker Did Not Meet Twombly Pleading Requirements* A decision from a divided U.S. Court of Appeals in Atlanta earlier this month continues the debate over the appropriate pleading standard for antitrust plaintiffs under Bell Atlantic Corp. v. (...)

A US Court of Appeals finds that in order to allege a viable vertical restraint claim a plaintiff must plausibly allege the defendant’s market power (PSKS / Leegin Creative Leather Products)
Sheppard Mullin (Los Angeles)
Fifth Circuit Dismisses Leegin Resale Price Maintenance Case Anew, Following Supreme Court Remand* In 2007, the United States Supreme Court, updating the application of the cumulative advances in antitrust economics as applied to vertical restraint cases, overruled the venerable Dr. Miles Med. (...)

The New York Attorney General relies on New York General Business Code in a petition challenging restrictions on advertised prices used by a leading mattress manufacturer (Tempur-Pedic)
Mayer Brown (Chicago)
In a series of articles and public statements, enforcement officials from the New York Attorney General’s office have warned that vertical agreements to fix minimum resale prices, also referred to as minimum resale price maintenance (RPM) agreements, may remain per se unlawful under existing New (...)

The Superior Court of the State of California (County of Alameda) challenges minimum resale price maintenance as per se illegal (DermaQuest)
Jones Day (Los Angeles)
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Jones Day (Sillicon Valley)
In the 2007 Leegin Creative Leather v. PSKS case, the Supreme Court held that, under the federal antitrust laws, minimum vertical resale price fixing agreements are no longer per se illegal, but governed by the rule of reason, like maximum resale price fixing. Antitrust observers were quick to (...)

The US DOJ Assistant Attorney General provides guidance on vertical price Fixing/Resale Price Maintenance (RPM)
Jones Day (Washington)
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Jones Day (Houston)
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Jones Day (Washington)
On October 7, 2009, Department of Justice Assistant Attorney General Christine Varney used a speech to the National Association of Attorneys General to reaffirm the DOJ’s commitment to a closer cooperation with the state enforcers. She also devoted a major portion of her remarks to offering a (...)

The US DoJ proposes a framework for post-Leegin resale price maintenance
3M (St. Paul)
Introduction Two years ago, the U.S. Supreme Court, in Leegin Creative Leather Products v. PSKS, Inc. , held that minimum resale price agreements were not per se violations of Section 1 of the Sherman Act. Rather, the Court held such agreements should be evaluated under the “rule of reason” (...)

The US State of Maryland enacts a state antitrust law making minimum resale price maintenance agreements per se illegal
Jones Day (Washington)
The enactment of a Maryland state antitrust law prohibiting minimum resale price maintenance (RPM) agreements and U.S. House of Representatives Judiciary Committee hearings on similar pending federal legislation are reminders that minimum RPM programs must be approached with caution. (...)

The US House of Representatives Judiciary Committee holds hearings on pending resale price maintenance (RPM) federal legislation
Jones Day (Washington)
The enactment of a Maryland state antitrust law prohibiting minimum resale price maintenance (RPM) agreements and U.S. House of Representatives Judiciary Committee hearings on similar pending federal legislation are reminders that minimum RPM programs must be approached with caution. (...)

The US State of Maryland rejects federal rule of reason standard established by US Supreme Court in Leegin, amending its state antitrust statute to make minimum resale price maintenance agreements per se illegal
McDermott Will & Emery (Washington)
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McDermott Will & Emery (Chicago)
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McDermott Will & Emery (Chicago)
New state law could affect implementation of minimum resale price maintenance programs. Suppliers should review their minimum resale price programs for their resellers in the United States following the passage of a new law in the State of Maryland prohibiting agreements that establish minimum (...)

The US FTC modifies a 2000 consent order and sets aside the prohibitions imposed on a manufacturer to set minimum resale prices in contracts with retailers (Nine West Group)
Crowell & Moring (Washington)
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Crowell & Moring (Washington)
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Crowell & Moring (Washington)
Shoe seller Nine West Group Inc. has successfully petitioned the FTC to modify a 2000 consent order in which the company agreed not to undertake agreements with its retailers setting minimum resale prices. The case provides a significant guidepost for U.S. manufacturers who have been searching (...)

The New York District Court enters a consent decree in a case brought by Attorneys General of New York, Illinois and Michigan, requiring furniture manufacturer to terminate alleged minimum resale price maintenance program (Herman Miller)
McDermott Will & Emery (Washington)
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McDermott Will & Emery (Chicago)
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McDermott Will & Emery (Chicago)
District court case could affect implementation of minimum resale price maintenance programs. Sellers must still exercise great caution when designing minimum resale price programs for their resellers in the United States following the recently settled New York v. Herman Miller, Inc. case. (...)

The US Supreme Court sets aside Dr. Miles rule on resale price maintenance agreements as per se illegal replacing it with the rule of reason standard (Leeging)
Grant & Eisenhofer
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Porter Wright Morris & Arthur (Washington)
Dr. Miles: Will the Supreme Court Find a Cure?* On December 7, 2006, the U.S. Supreme Court agreed to hear Leegin Creative Leather Products, Inc. v. PSKS, Inc.,which presents the Court with an opportunity to address the per se minimum resale price rule established almost a century ago in Dr. (...)

The US Supreme Court overrules prohibition against vertical agreements between manufacturers and their dealers setting minimum resale prices as a per se violation (Leegin Creative)
Kozyak Tropin and Throckmorton Law Firm
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Holland & Knight (Miami)
Vertical Price Agreements in the Wake of Leegin v. PSKS: Where Do We Stand Now?* I. INTRODUCTORY REMARKS For nearly a century, agreements between retailers and suppliers stipulating a minimum retail price were considered per se violations of the Sherman Act. Resale price maintenance (“RPM”) (...)

The US Supreme Court reverses the 96 year old-doctrine governing resale price maintenance agreements as per se illegal replacing it with the rule of reason standard (Leegin Creative)
Hahn Loeser & Parks (Columbus)
Introduction In the summer of 2007, the United States Supreme Court overruled a ninety-six year old precedent when it overruled the historical decision of Dr. Miles in Leegin Creative Leather Products, Inc. v. PSKS, Inc.. Relying on economists’ views, the majority took a drastic measure and (...)

The US Supreme Court overturns its long-standing prohibition against vertical agreements between manufacturers and their dealers setting minimum resale prices (Leegin Creative)
White & Case (Washington)
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White & Case (Washington)
This article is part of a set of 5 articles released in Concurrences N°3-2008: Resale price regulation: Leegin and much more * The authors gratefully acknowledge the contributions of summer associates Christel Green and Aaron McAllister. I. Introduction 1. In 2007, the Supreme Court of the (...)

The US Supreme Court overrules the nearly 100-year-old per se prohibition of vertical minimum price restraints finding that they are to be judged by the rule of reason (Leegin Creative)
Berlin Freie Universität
I. Background After the per se prohibition of non-price vertical restraints and of maximum resale price maintenance have long been abolished by overruling Supreme Court decisions [Continental T.V. v. GTE Sylvania Inc., 433 U.S. 36 (1977) and State Oil v. Kahn, 522 U.S. 3 (1997)], Leegin is the (...)

The US Supreme Court reaffirms market power requirement to determine a tying arrangement as per se unlawful (Independent Ink)
BakerHostetler (Washington)
Are tying arrangements illegal per se?* In the deep, dark antitrust dungeon reserved for per se offenses, only one species of conduct remains that does not involve a horizontal conspiracy: tying arrangements. Minimum resale pricing agreements tunneled their way out thanks to the Supreme (...)

The US Northern District Court of Texas holds that the supplier’s policy of linking the wholesale price to the distributor’s retail price does not amount to illegal resale price maintenance as long as the distributor is free to set its retail price (Lubbock Beverage / Miller Brewing)
United First Partners
Introduction The Lubbock Beverage Co. v. Miller Brewing Co.case involves allegations by a distributor that the supplier’s practice of linking the wholesale price to the distributor’s retail price amounted to illegal resale price maintenance (“RPM”) and vertical price fixing. The federal district (...)

The US Supreme Court overrules 30-year old precedent and declares maximum resale price maintenance agreements should be reviewed under the rule of reason in a case against a gasoline wholesaler (State Oil / Khan)
Greenberg Traurig (Dallas)
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Baker Botts (Washington)
Three years ago this summer, the U.S. Supreme Court abandoned the 100 year-old Dr. Miles doctrine that established a rule of per se illegality for minimum resale price maintenance (RPM) agreements in favor of the more lenient “rule of reason” test. Leegin Creative Leather Products, Inc. v. PSKS, (...)

The US Northern District Court of California holds that a price restriction provision that fixed price at which a licensee could make first sale of copyrighted videogames software is not illegal resale price maintenance (LucasArts Entertainment / Humongous Entertainment)
United First Partners
In LucasArts Entertainment Co. v. Humongous Entertainment Co. the district court held that price restriction provisions included in a license agreement of copyrighted software were not per se illegal or otherwise anticompetitive because “[t]he right to license a patent or copyright (and to (...)

The US Court of Appeals of Iowa (Eighth Circuit) finds a distributorship scheme to be a genuine agency relationship where a manufacturer retains significant business risks (Ryko Manufacturing / Eden Services)
United First Partners
Introduction Ryko, a manufacturer of car-wash equipment, filed an action for declaratory judgment against Eden, one of its distributors, for breach of a distributorship contract. Eden counterclaimed on several grounds, including antitrust violations, and won a jury verdict of $1.1 million in (...)

The US Supreme Court finds agency relationship between a manufacturer and its distributors to be a sham amounting to Resale Price Maintenance (RPM) focusing on the competitive effects and the purpose behind the agreements (Simpson / Union Oil)
United First Partners
Introduction Under the U.S. antitrust laws a manufacturer is free to set the prices at which it sells its own goods and is free to use intermediaries to facilitate the sales. When intermediaries come into the picture, however, one of the antitrust issues that may arise is whether, on the one (...)

The US Supreme Court finds a genuine agency relationship between a manufacturer and its distributors focusing on the form of consignment contracts and the parties’ actual practices (General Electric)
United First Partners
Introduction Under the U.S. antitrust laws a manufacturer is free to set the prices at which it sells its own goods and is free to use intermediaries to facilitate the sales. When intermediaries come into the picture, however, one of the antitrust issues that may arise is whether, on the one (...)

The US Supreme Court issues an opinion allowing a supplier to establish a system of resale prices enforced by unilateral refusal to deal (Colgate)
United First Partners
In a brief and unanimous decision in United States v. Colgate & Co., the Supreme Court announced in 1919 that in the absence of any purpose to create or maintain a monopoly, the Sherman Act “does not restrict the long recognized right of trader or manufacturer engaged in an entirely private (...)

The US Supreme Court holds it is per se illegal for a manufacturer to set minimum resale prices in agreements with independent resellers (Dr. Miles Medical / John D. Park & Sons)
Baker Botts (Washington)
In 1911, the U.S. Supreme Court in Dr. Miles Medical Co. v. John D. Park & Sons Co. held that a manufacturer’s setting the minimum prices at which independent resellers may resell its products was unlawful under the common law and Section 1 of the Sherman Act.That result spawned the (...)

Dominance

The US District Court of Miami dismisses claims on monopolization and resale price maintenance on the market for beauty products in duty free shops (Duty Free Americas / Estée Lauder)
Sheppard Mullin (Los Angeles)
Claims of Providing Truthful Marketing Information to Airports Issuing Bids for Duty Free Shops Fails to Allege Actionable Conspiracy or Attempted Monopolization* Conclusory allegations of parallel business conduct which are in the economic self-interest of the actor do not state an actionable (...)

Procedures

The US Supreme Court affirms the judgment of the Court of Appeals for the Sixth Circuit and gives voice to criticism against the traditional standing test for antitrust claims (Lexmark International / Static Control Components)
Womble Carlyle Sandridge & Rice (Washington D.C.)
Supreme Court Creates New Standing Test For Asserting False Action Claim Under Lanham Act* On March 25, 2014, the Supreme Court issued a unanimous opinion, authored by Justice Scalia, in Lexmark International, Inc. v. Static Control Components, Inc. In a previous post, I discussed my (...)

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