On April 14, Governor Martin O’Malley signed Maryland Senate Bill 239, which amended Maryland’s antitrust laws and made it illegal for manufacturers to require retailers to charge minimum prices for goods. The law specifically prohibits any “contract, combination, or conspiracy that establishes a minimum price below which a retailer, wholesaler, or distributor may not sell a commodity or service.” This practice, also known as minimum resale price maintenance (RPM), was the subject of the Supreme Court’s 2007 ruling in Leegin Creative Leather Products, Inc. v. PSKS, Inc., 127 S. Ct. 2705 (2007). In that case, the Court overturned a 100-year-old antitrust doctrine and found that RPM was not per se illegal, but rather that such claims would be subject to the “rule of reason,” whereby a plaintiff must demonstrate actual harm to competition arising from the challenged practice. Maryland’s new law, which takes effect on October 1, is a direct response to the Supreme Court’s ruling in Leegin and restores the rule of per se illegality for RPM, at least for sales in Maryland.
Maryland’s antitrust law already bans price-fixing; however, its state antitrust law follows the federal courts’ interpretations of the Sherman Act. Since the Supreme Court determined that claims of RPM, a type of price-fixing, would be subject to the rule of reason analysis, Maryland courts would follow that federal interpretation when interpreting its own state antitrust law. Now, with this amendment to Maryland law, Maryland courts can once again explicitly forbid RPM under state antitrust law.
Other states may follow Maryland’s lead, as more than thirty states’ attorneys general had filed amicus curae briefs with the Court in connection with Leegin, arguing in favor of per se analysis for RPM claims. In addition, Sen. Herb Kohl has introduced a bill in the U.S. Senate titled the Discount Pricing Consumer Protection Act. This legislation, if passed, would once again make RPM per se illegal under federal antitrust law. Hearings on the bill are scheduled to take place next month.