Background on: Leegin Creative Leather Products, Inc. v. PSKS, Inc.

This article is part of a Chronicle. See more from this Chronicle

Mar 27, 2007

This backgrounder was originally published on January 16, 2007, updated on March 27, 2007, and further updated on June 28, 2007.

Issue: On December 7, 2006 the United States Supreme Court granted certiorari to hear the case of Leegin Creative Leather Products, Inc. v. PSKS, Inc. This case involves the question of whether vertical minimum resale price maintenance agreements will continue to be deemed per se illegal under  1 of the Sherman Antitrust Act.

Factual and Procedural Background: The Petitioner, Leegin, a clothing manufacturer, entered into an agreement with PSKS pursuant to which PSKS would sell a women’s clothing line manufactured by Leegin. Leegin instituted a policy stating that it would only do business with retailers that would apply Leegin’s suggested retail prices, and would not discount items contrary to that policy. When it discovered that PSKS had, in fact, violated this policy, it discontinued shipments of the products to PSKS. PSKS subsequently brought an action under  1 of the Sherman Antitrust Act alleging that Leegin entered into illegal agreements with retailers to fix prices, and seeking damages. The jury in the District Court found for PSKS and awarded damages.

On Appeal: The Fifth Circuit subsequently affirmed the trial court’s decision and affirmed that the per se rule applicable to cases involving vertical price fixing applied to this case. Beginning