Supreme Court of the United States · 2007-06-28
Case and law context
Role: rule-announced; posture: civil treble-damages suit by terminated discounting retailer against manufacturer; jury verdict for plaintiff under per se rule (expert on procompetitive effects excluded), affirmed by CA5; certiorari on whether to overrule Dr. Miles; result: remanded; claim:
Instances and excluded annotation blocks
| Case | Element | Holding and scope | Variant | Exact source quotations |
|---|---|---|---|---|
| /us/551/0877-01 — Supreme Court of the United States · 2007 | Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers | satisfied Counted merits instance applied / merits basis: conceded; party: Leegin Creative Leather Products, Inc. (manufacturer of Brighton goods; defendant, petitioner); PSKS, Inc., d/b/a Kay's Kloset (terminated discounting retailer; plaintiff, respondent); theory: vertical minimum resale price maintenance agreements between manufacturer and retailers; subject: party=Leegin Creative Leather Products, Inc. (manufacturer of Brighton goods; defendant, petitioner); PSKS, Inc., d/b/a Kay's Kloset (terminated discounting retailer; plaintiff, respondent); theory=vertical minimum resale price maintenance agreements between manufacturer and retailers Jury found agreement over a Colgate unilateral-policy defense; the point was abandoned on appeal, so the Supreme Court takes the agreement as given. | vertical-agreement/manufacturer-retailer-minimum-resale-price-pledge | In 1997, Leegin instituted the “Brighton Retail Pricing and Promotion Policy.”Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [2544:2622] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.It offered retailers incentives to become Heart Stores, and, in exchange, retailers pledged, among other things, to sell at Leegin’s suggested prices.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [4017:4167] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Leegin responded that it had established a unilateral pricing policy lawful under § 1, which applies only to concerted action.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [5575:5701] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.On appeal Leegin did not dispute that it had entered into vertical price-fixing agreements with its retailers.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [6107:6217] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37. |
| /us/551/0877-01 — Supreme Court of the United States · 2007 | Restraint of trade or commerce among the several States or with foreign nations | not_reached Excluded from merits counts rule-announced / merits | Unspecified variant | No source quotation recorded for this block. |
| /us/551/0877-01 — Supreme Court of the United States · 2007 | Private antitrust injury and fact of damage (Clayton Act §§ 4, 16; Brunswick Corp. v. Pueblo Bowl-O-Mat) | not_reached Excluded from merits counts rule-announced / meritsJury awarded $1.2 million (trebled) for the terminated retailer; damages/injury not reviewed. | Unspecified variant | No source quotation recorded for this block. |
| /us/551/0877-01 — Supreme Court of the United States · 2007 | Relevant product/geographic market definition and market power under the Rule of Reason | not_reached Excluded from merits counts rule-announced / merits theory: vertical minimum resale price maintenance agreements between manufacturer and retailers; subject: theory=vertical minimum resale price maintenance agreements between manufacturer and retailers | rule-of-reason-factor/market-power-of-manufacturer-or-retailer | As a final matter, that a dominant manufacturer or retailer can abuse resale price maintenance for anticompetitive purposes may not be a serious concern unless the relevant entity has market power.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [33439:33636] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37. |
| /us/551/0877-01 — Supreme Court of the United States · 2007 | Per se illegality for naked restraints manifestly anticompetitive and lacking redeeming virtue | not_reached Excluded from merits counts rule-announced / merits party: Leegin Creative Leather Products, Inc. (manufacturer of Brighton goods; defendant, petitioner); PSKS, Inc., d/b/a Kay's Kloset (terminated discounting retailer; plaintiff, respondent); theory: vertical minimum resale price maintenance agreements between manufacturer and retailers; subject: party=Leegin Creative Leather Products, Inc. (manufacturer of Brighton goods; defendant, petitioner); PSKS, Inc., d/b/a Kay's Kloset (terminated discounting retailer; plaintiff, respondent); theory=vertical minimum resale price maintenance agreements between manufacturer and retailers Overrules Dr. Miles (1911): the judgment below rested solely on per se illegality, so it is reversed without any finding on whether this policy was unreasonable. Mode of analysis only — the case continues under the rule of reason on remand — hence not-reached / rule-announced rather than not-satisfied. Fact polarity is relative to "per se treatment applies" as the law stood under Dr. Miles; the District Court's exclusion of the expert (@5344) is procedural context, hence [neutral]. | per-se-rejected/vertical-minimum-resale-price-maintenance | Following the policy, Leegin refused to sell to retailers that discounted Brighton goods below suggested prices.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [2638:2750] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.In December 2002, Leegin discovered Kay’s Kloset had been marking down Brighton’s entire line by 20 percent.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [4485:4593] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Its request refused, Leegin stopped selling to the store.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [4808:4865] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.As a consequence, the per se rule is appropriate only after courts have had considerable experience with the type of restraint at issue,Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [10049:10185] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Vertical agreements establishing minimum resale prices can have either procompetitive or anticompetitive effects, depending upon the circumstances in which they are formed.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [25368:25540] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.As the rule would proscribe a significant amount of procompetitive conduct, these agreements appear ill suited for per se condemnation.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [26022:26157] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.is now overruled. Vertical price restraints are to be judged according to the rule of reason.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [52662:52755] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37. |
| /us/551/0877-01 — Supreme Court of the United States · 2007 | Presumptive Rule of Reason burden-shifting analysis (antitrust market + anticompetitive effect vs procompetitive justification) | not_reached Excluded from merits counts rule-announced / merits theory: vertical minimum resale price maintenance agreements between manufacturer and retailers; subject: theory=vertical minimum resale price maintenance agreements between manufacturer and retailers Court supplies guidance factors for remand (breadth of use in the industry, source of the restraint, market power) but does not apply them to Leegin. | rule-of-reason/vertical-minimum-resale-price-maintenance | Resale price maintenance should be subject to more careful scrutiny, by contrast, if many competing manufacturers adopt the practice.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [32031:32164] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.If there is evidence retailers were the impetus for a vertical price restraint, there is a greater likelihood that the restraint facilitates a retailer cartel or supports a dominant, inefficient retailer.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [32676:32880] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37. |
| /us/551/0877-01 — Supreme Court of the United States · 2007 | Horizontal cartel / hub-and-spoke conspiracy operating through vertical or dual-distribution arrangements | not_reached Excluded from merits counts background / procedural party: PSKS, Inc., d/b/a Kay's Kloset (terminated discounting retailer; plaintiff, respondent); theory: horizontal cartel among competing retailers: the manufacturer's owner is also a competing retailer; subject: party=PSKS, Inc., d/b/a Kay's Kloset (terminated discounting retailer; plaintiff, respondent); theory=horizontal cartel among competing retailers: the manufacturer's owner is also a competing retailer Alternative horizontal theory (manufacturer's president owns competing retail stores) raised for the first time in the Supreme Court; a second route to the agreement/per-se elements, not considered because not raised below. | not-preserved/manufacturer-owner-also-retailer | Leegin’s president, Jerry Kohl, also has an interest in about 70 stores that sell Brighton products.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [1405:1505] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Respondent did not make this allegation in the lower courts, and we do not consider it here.Source: docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [52949:53041] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37. |
Court interpretations recorded from this case
interpretation
As a consequence, the per se rule is appropriate only after courts have had considerable experience with the type of restraint at issue,
/us/551/0877-01 — Supreme Court of the United States · 2007
As a consequence, the per se rule is appropriate only after courts have had considerable experience with the type of restraint at issue,Source:
docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [10049:10185] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Reserved for horizontal price fixing (Socony-Vacuum), bid rigging, horizontal market/customer allocation (Palmer v. BRG; Cooperative Theatres), certain horizontal group boycotts denying access to an essential facility/market (Northwest Wholesale Stationers; Tunica Web), and tying where the seller has appreciable economic power in the tying product market (Jefferson Parish). Vertical minimum and maximum resale price maintenance are no longer per se unlawful (Leegin, 551 U.S. 877 (2007); State Oil v. Khan, 522 U.S. 3 (1997)).
interpretation
Vertical agreements establishing minimum resale prices can have either procompetitive or anticompetitive effects, depending upon the circumstances in which they are formed.
/us/551/0877-01 — Supreme Court of the United States · 2007
Vertical agreements establishing minimum resale prices can have either procompetitive or anticompetitive effects, depending upon the circumstances in which they are formed.Source:
docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [25368:25540] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Reserved for horizontal price fixing (Socony-Vacuum), bid rigging, horizontal market/customer allocation (Palmer v. BRG; Cooperative Theatres), certain horizontal group boycotts denying access to an essential facility/market (Northwest Wholesale Stationers; Tunica Web), and tying where the seller has appreciable economic power in the tying product market (Jefferson Parish). Vertical minimum and maximum resale price maintenance are no longer per se unlawful (Leegin, 551 U.S. 877 (2007); State Oil v. Khan, 522 U.S. 3 (1997)).
interpretation
Resale price maintenance should be subject to more careful scrutiny, by contrast, if many competing manufacturers adopt the practice.
/us/551/0877-01 — Supreme Court of the United States · 2007
Resale price maintenance should be subject to more careful scrutiny, by contrast, if many competing manufacturers adopt the practice.Source:
docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [32031:32164] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Default standard under § 1 (Ohio v. American Express Co., 585 U.S. 529 (2018); Leegin): three-step burden-shifting framework: (1) plaintiff proves substantial anticompetitive effect in a defined relevant product and geographic market (directly via reduced output/supercompetitive prices, or indirectly via market power + anticompetitive structure); (2) defendant proffers nonpretextual procompetitive justifications; (3) plaintiff shows the efficiencies could be reasonably achieved through less anticompetitive means.
interpretation
If there is evidence retailers were the impetus for a vertical price restraint, there is a greater likelihood that the restraint facilitates a retailer cartel or supports a dominant, inefficient retailer.
/us/551/0877-01 — Supreme Court of the United States · 2007
If there is evidence retailers were the impetus for a vertical price restraint, there is a greater likelihood that the restraint facilitates a retailer cartel or supports a dominant, inefficient retailer.Source:
docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [32676:32880] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Default standard under § 1 (Ohio v. American Express Co., 585 U.S. 529 (2018); Leegin): three-step burden-shifting framework: (1) plaintiff proves substantial anticompetitive effect in a defined relevant product and geographic market (directly via reduced output/supercompetitive prices, or indirectly via market power + anticompetitive structure); (2) defendant proffers nonpretextual procompetitive justifications; (3) plaintiff shows the efficiencies could be reasonably achieved through less anticompetitive means.
interpretation
As a final matter, that a dominant manufacturer or retailer can abuse resale price maintenance for anticompetitive purposes may not be a serious concern unless the relevant entity has market power.
/us/551/0877-01 — Supreme Court of the United States · 2007
As a final matter, that a dominant manufacturer or retailer can abuse resale price maintenance for anticompetitive purposes may not be a serious concern unless the relevant entity has market power.Source:
docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [33439:33636] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Under the Rule of Reason (absent direct proof of actual detrimental effects on price or output under FTC v. Indiana Federation of Dentists, 476 U.S. 447 (1986)), plaintiff must define a relevant product and geographic market and prove defendants possess market power within it.
interpretation
If there is evidence retailers were the impetus for a vertical price restraint, there is a greater likelihood that the restraint facilitates a retailer cartel or supports a dominant, inefficient retailer.
/us/551/0877-01 — Supreme Court of the United States · 2007
If there is evidence retailers were the impetus for a vertical price restraint, there is a greater likelihood that the restraint facilitates a retailer cartel or supports a dominant, inefficient retailer.Source:
docroot/ir/caselaw/us_551.jsonl#/us/551/0877-01; Unicode character offsets [32676:32880] (end exclusive); SHA-256 6dc0b5ffec12ec474152aa4935b052042835b8bd19a739a908c122c1a115df37.Even after Leegin placed vertical resale price maintenance under the Rule of Reason, a horizontal cartel among competing retailers or manufacturers Policed via vertical agreements remains per se unlawful.