A bill that would overturn the Supreme Court’s 2007 decision in Leegin Creative Leather Products, Inc. v. PSKS Inc. has been introduced in the U.S. House of Representatives. In Leegin the Court overturned a nearly century-old precedent under which minimum resale price agreements between sellers of products and their resellers were deemed per se illegal under U.S. antitrust law. The Court determined that such agreements should not necessarily be condemned in all instances and instead should be evaluated on a case-by-case basis under the antitrust rule of reason. That analysis involves weighing the potential efficiency and procompetitive benefits of the agreement against the potential anticompetitive harm.
Shortly after the Court’s ruling, Senator Herb Kohl (D-Wis.), who chairs the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced a bill to restore the ban on minimum resale price agreements. Although it initially stalled, Senator Kohl reintroduced the bill (S. 148) on January 6 of this year. Now, Representative Henry Johnson (D-Ga.), chair of the House Judiciary Subcommittee on Courts and Competition, has introduced a bill (H.R. 3190) that mirrors the Senate bill. Thus, the push to legislatively overturn Leegin appears to be gaining momentum at the federal level. At the state level, Maryland has already enacted legislation banning minimum resale price agreements, and state enforcers in some other states (including New York and California) have indicated that their states’ existing laws already prohibit the practice.
Businesses that implemented or entered into minimum resale price programs after Leegin, or are considering doing so, should monitor the status of the bills pending in the U.S. Congress and should carefully review whether the agreements create antitrust risk under state laws.