Saturday, November 30, 2013
Leiv Blad & Maggie Sheer (Bingham McCutchen) provide A Look Back at the Attempts to Repeal Leegin.
ABSTRACT: In 2007, the United States Supreme Court jettisoned 96 years of precedent and held that minimum resale price maintenance ("RPM") agreements were not per se illegal under Section 1 of the Sherman Act, but rather should be subject to "rule of reason" review, a far more lenient process. The reaction to Leegin among many state legislators and attorneys general was swift and dramatic. They vowed to reverse the rule through legislation or to continue prosecuting RPM agreements remained as per se illegal under their existing state laws.
Now, nearly seven years later, has that outrage amounted to anything? Have the states successfully repealed Leegin or outlawed RPM agreements under their own laws? Only one state-Maryland-has enacted a repealer statute, but two others-California and Kansas-are successfully prosecuting RPM claims under a per se rule. That may not sound like much, but these developments have presented companies selling products nationwide with a difficult choice: adopt different distribution practices for the country's largest state or let that state drive their entire distribution strategy.