Retail Price Maintenance Programs Legal Background
July 1, 2010 - Senate Judiciary Committee passes Leegin repeal
As predicted the Senate Judiciary Committee approved a bill (Kohl Bill, see below) that would overturn the Supreme Court's 2007 decision in Leegin. The bill is the Discount Pricing Consumer Protection Act of 2009. Leegin eliminated per se illegality for a manufacturers' setting of a minimu resale price. Instead, the Supreme Court ruled that each case had to be judged on its own merits under the "Rule of Reason". The Supreme Court made that change based on economic evidence that resale price maintenance was not inherently anticompetitive. Instead, evidence showed that it actually helped to promote inter-brand competition in some cases.
April 28, 2010 - New York sues Tempur-Pedic for alledged vertical price fixing
New York Attorney General Andrew Cuomo recently brought suit against Tempur-Pedic, the maker of luxury foam mattresses, for conduct that allegedly amounts to vertical price-fixing. The state's complaint alleges that Tempur-Pedic secured agreements from its retailers to prohibit any discounting of the mattresses by means of its imposition of a draconian Minimum Advertised Price ("MAP") policy. The lawsuit represents the latest effort by state officials to combat practices that are arguably allowed under federal law.
Click here for link to article covering MAP background, the complaint, implications and why it matters
Related article April 21, 2010 - Tempur-Pedic sales soar 43.5% in 1st Quarter - click here for link to article
April 28, 2010 - A Window into Washington: Proposed Legislation to Prohibit Resale Price Maintenance Agreements
Link to article
Kohl Bill to restore ban on vertical price fixing - Link to press release on Senator Herb Kohl's website:
http://kohl.senate.gov/newsroom/pressrelease.cfm?customel_dataPageID_1464=2696
Maryland Antitrust Act Amendment Synopsis - Link to Bill #239
http://mlis.state.md.us/2009rs/billfile/SB0239.htm
"This bill making agreements on price unlawful is significant for manufacturers and resellers. By amending the Maryland Antitrust Act, Maryland's legislature recognized the strong preference of its citizens for a marketplace free of collusive activities that provide no benefit to consumers. As one of the 37 states in opposition to vertical price fixing, contrary to the Supreme Court's position in deciding Leegin, Maryland has now made such agreements on price illegal again in Maryland. This decision will hasten other states adoption of similar laws and should provide impetus to the Discount Pricing Consumer Protection Act, introduced jointly by Senators Herb Kohl of Wisconsin and Senator Sheldon Whitehouse of Delaware, which would restore the antitrust rule in place for nearly a century that prohibited agreements between manufacturers and resellers on price. All manufacturers and their reselling partners would be wise to examine pricing policies they currently have in place to be sure these are consistent with the new Maryland law."
Link to Bill #239
http://mlis.state.md.us/2009rs/bills/sb/sb0239t.pdf
U.S. vs. Colgate link - Decision basis for Unilateral Pricing Policy
http://supreme.justia.com/us/250/300/case.html
Leegin vs. PSKS link
http://www.supremecourtus.gov/opinions/06pdf/06-480.pdf
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