US · won_by_defendant · ~9 min read
Leegin Creative Leather Products v. PSKS (2007)
1997–2007 · retail leather goods, vertical distribution
Can a manufacturer require stores not to discount its products below a set price? For a century Dr. Miles said no—automatically illegal. Leegin changed that: minimum resale prices are judged case-by-case, not banned outright.
The story
Vertical minimum resale price maintenance (RPM) happens when a brand tells retailers the lowest price they may advertise or charge—protecting brand image and store services.
Kay's Kloset discounted Brighton belts and purses; Leegin dropped them as a dealer. PSKS sued claiming illegal price fixing between manufacturer and retailer.
Lower courts applied the old Dr. Miles per se rule: RPM was automatically a Sherman Act violation, full stop.
The Supreme Court's 5–4 Leegin decision said economics had evolved. Minimum prices might help brands compete against rivals by ensuring dealers invest in service and showroom experience.
Instead of automatic illegality, courts must apply rule of reason—weighing pro-competitive benefits against harm in each market.
Justice Kennedy's majority sparked fierce dissent fearing higher consumer prices; some states enacted statutes keeping RPM per se illegal locally.
Leegin remains controversial—manufacturers gained flexibility, consumer advocates warn of higher retail prices, and online discounting battles continue.
Why it matters
Changes default legality of MAP policies and dealer terminations.
Small retailers may gain service protection or face higher floors.
State and federal law can diverge on RPM.
What was claimed
Leegin's minimum prices were unlawful vertical price fixing.
Discount retailers were harmed anticompetitively.
Per se rule should persist.
The other side
Leegin argued RPM promoted brand competition and quality service.
Court agreed not all RPM is anticompetitive.
What it means for you
Manufacturer MAP policies post-Leegin need rule-of-reason defense.
Discount shoppers may see fewer deep cuts on premium brands.
Bottom line
Leegin overturned a 96-year-old ban on minimum resale prices—one of the most pro-business vertical restraint shifts in modern antitrust.
Timeline
1990s
Minimum price policy enforced
Leegin cut off Kay's Kloset for discounting Brighton leather goods.
2007
Per se ban overturned
Court said RPM can promote interbrand competition and service.
Key dates
- PSKS loses discount line
- 1997–2002
- Fifth Circuit rule-of-reason trial
- 2004
- Supreme Court reverses per se rule
- June 28, 2007
Formal snapshot
Summary: The Supreme Court overruled Dr. Miles and held vertical minimum resale price maintenance should be judged under rule of reason—not per se illegal—allowing manufacturers more freedom to set floor prices for retailers.
Regulator / plaintiff argument: PSKS argued Leegin's minimum price policies for Brighton brand accessories were per se unlawful vertical price fixing harming discount retailers.
Outcome: 2007 Supreme Court 5–4 decision for Leegin; rule-of-reason analysis required; states could still ban RPM under state law.
Remedies: N/A—liability framework change.
Conduct tags
Laws referenced
- Sherman Act §1 — 15 U.S.C. §1
Companies
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