Leegin: All Bark, No Bite?

Three years ago this summer, the U.S. Supreme Court abandoned the 100 year-old Dr. Miles doctrine that established a rule of per se illegality for minimum resale price maintenance (RPM) agreements in favor of the more lenient "rule of reason" test. Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007). Under the rule of reason standard, courts are forced to consider the pro-competitive effects of vertical price restraints, only striking down such restrictions where the anti-competitive effects outweigh the competitive advantages. The Leegin decision—heralded by those favoring economic analysis of vertical price restraints—bookends an earlier opinion, State Oil v. Khan, where the Court declared that maximum RPM agreements should be reviewed under the rule of reason standard. State Oil v. Khan, 522 U.S. 3 (1997).