Resale Price Maintenance No Longer a Per Se Antitrust Offense: Leegin Creative Leather Products v. PSKS, Inc.

^Pr^ep^ar^{ed f}^o^r^M^e^m^b^ers^an^d^Com^mⁱ^t^t^ees^of^C^ong^r^e^ss

The plaintiff in Leegin Creative Leather Products v. PSKS, Inc. successfully asked the Supreme
Court to soften the longstanding treatment of resale price maintenance (RPM, vertical imposition
of direct, minimum price restraints) as a per se (automatic, and not capable of being justified)
antitrust offense. RPM had been so analyzed since the Court decided in 1911 that a manufacturer
of patent medicines could not lawfully agree with retailers of its products on the prices at which
those products would be sold (Dr. Miles Medical Company v. John D. Park & Sons Company,
220 U.S. 373). Such agreements, the Court had said in Dr. Miles, constituted both unlawful
restraints of trade under the common law, and violations of the Sherman Act’s prohibition against
“contract[s] or combination[s] ... in restraint of trade” (15 U.S.C. § 1). Leegin’s practice of
entering into contracts with its retailers of the Brighton line of leather products to set the prices at
which the dealers would resell those products was challenged by a discounting retailer whose
replacement shipments were terminated; the trial court found a per se violation of section 1 (2004
WL 5254322), and the Court of Appeals for the Fifth Circuit affirmed that decision (171
Fed.Appx. 464 (2006)). Leegin argued in the Supreme Court that because RPM may sometimes
be pro-consumer (might, for example, allow the retailers to profitably provide extra services
desired by some consumers), the practice should not be conclusively presumed unreasonable
“without elaborate inquiry as to ‘its precise harm or business justification for its use.’” Agreeing
with Leegin, the Court overruled Dr. Miles, stating that allowing RPM to be analyzed as a Rule of
Reason violation (pursuant to which the procompetitive effects of a judicially determined antitrust
violation are weighed against the anticompetitive results of the challenged activity) should be
allowed: “Notwithstanding the risks of unlawful conduct, it cannot be stated with any degree of
confidence that [RPM] always tend[s] to restrict competition ....” 551 U.S. ___, 127 S.Ct. 2705,
2709 (2007), quoting, Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S. 717, 723
(1988).
This report will not be updated.

Background and Context.................................................................................................................1
Leegin Creative Leather Products v. PSKS, Inc..............................................................................2
Author Contact Information............................................................................................................5

Resale price maintenance has been called “vertical price fixing” because it involves entities at
different levels of the supply/marketing chain. It generally entails an agreement (via formal
contract or otherwise) between a manufacturer and a retailer that the dealer will charge some
specific price for the manufacturer’s products. As such, the agreement is considered a “conspiracy ¹
in restraint of trade” in violation of section 1 of the Sherman Act. The practice, particularly when
a floor has been set under permissible resale prices (minimum RPM), has been considered a per se ²
violation of the antitrust laws since 1911, when the Court decided in Dr. Miles Medical Company ³
v. John D. Park & Sons Company that such imposition and agreement was not analytically
different from an agreement among the dealers themselves to fix their prices, thus depriving
consumers of the advantages of competition.
Imposition of maximum resale prices (a “ceiling” on permissible resale prices, as opposed to a
“floor” below which a price is not permissible) or some other agreement which may affect price
but does not require any specific level or term, on the other hand, has more recently been ⁴
analyzed under the more lenient Rule of Reason standard.
Significant inroads in the law of vertical restraints generally were made by three cases decided in
the 1970s and 1980s. First, in Continental T.V., Inc. v. GTE Sylvania Inc., the Court distinguished
between vertically imposed price and non-price restraints, specifically overruling a barely 10-⁵
year-old, and very contentious case. The Sylvania Court concluded that it was “appropriate,”
given the “complex” market impact of non-price vertical restraints, to return to the Rule of
Reason analysis for evaluating them (433 U.S. at 51, 52, 59). Then, in two dealer-termination
cases, the Court further clarified its thinking on the “proper dividing line between” per se vertical
price restraints and Rule of Reason non-price restraints. It required the plaintiff in Monsanto v.
Spray-Rite Service Corp. to provide evidence of activity on the part of the manufacturer and the
non-terminated dealer that “tends to exclude the possibility that [they] were acting independently”
(465 U.S. 752, 764 (1984)). Finally, in Business Electronics Corp. v. Sharp Electronics Corp. the
Court determined that neither (1) all of those agreements which affect price (because nearly all
vertical agreements do), nor (2) all of those which contain the word “price” should be treated as
per se violations. Per se illegality should be reserved for only those restraints that include “some
[express or implied] agreement on price or price levels” (485 U.S. 717, 719, 728 (1988)).
Having distinguished between the proper analysis of vertically imposed price and non-price
restraints, the Court, in 1997, imposed further, and more direct, delineations in the law of vertical

¹^{15 U}^.^S.C.^§^1.^Se^c^tion^1,^a^s^a^r^e^a^{ll of}^the^o^t^he^{r se}^c^tio^ns^of^the^aⁿ^tⁱ^t^r^{ust la}^w^s^{, is a}^l^m^o^{st “}^c^onstitu^tio^na^lly^”^brie^f^,^a^{nd ha}^s
^be^eⁿ^ju^dicⁱ^a^lly^inte^rpre^te^d^ov^e^r^th^e^y^e^a^r^{s in tho}^u^sa^nds^of^pa^g^e^{s of}^c^a^se^la^w^.
²^P^u^r^s^ua^nt^t^o^p^e^{r se}^an^al^y^sⁱ^s^{a co}^u^r^tⁿ^eedⁿ^o^t^l^o^o^k^an^y^f^u^rt^h^e^{r t}^h^{an t}^h^at^t^h^{e act}ⁱ^o^{n o}^ccu^{rred t}^o^fⁱⁿ^d^{a vi}^o^l^atⁱ^oⁿ^;^t^h^{ere can}
^ne^v^e^{r be}^aⁿ^y^justif^ic^a^{tion (}^i.e^.^,ⁱ^tⁱ^sⁿ^’^t^po^ssi^b^l^{e t}^o^con^v^ert^a^p^e^{r se}^off^eⁿ^s^{e i}ⁿ^t^o^{a reaso}ⁿ^a^b^l^{e act}ⁱ^oⁿ^(se^eⁿ^.^5,ⁱⁿ^f^r^a^{) w}^ith,
^e.^g^.^{, “}^I^{t w}^a^s^ne^c^e^s^s^a^r^y^be^c^a^us^e^....”^).
³²²^{0 U}^.^S^.³⁷³⁽¹⁹¹¹⁾^,^he^rein^af^{ter referred}^to^as^{Dr. M}^ile^s.
⁴^P^u^rsua^{nt t}^o^t^h^e^Rule^of^Re^a^s^on,^de^spite^the^fⁱⁿ^d^ing^of^aⁿ^aⁿ^titrust^vⁱ^ola^tion^,^the^c^ourt^m^a^y^eⁿ^g^a^ge^{in a}^“^b^a^l^aⁿ^cⁱ^ng^”
^an^al^ysi^s^t^h^at^al^l^o^w^sⁱ^t^t^o^con^sⁱ^d^er^t^h^{e reaso}ⁿ^a^b^l^en^ess^o^f^t^h^{e vi}^o^l^atⁱ^v^{e act}ⁱ^oⁿ^—^i.e^.^,^w^h^e^t^he^{r its c}^o^m^p^e^titiv^e^ha^rm^is
^outw^e^ig^he^{d by}^the^proc^om^pe^titiv^e^re^{sults, if}^aⁿ^y^.
⁵⁴³^{3 U}^.^S^.³⁶⁽¹⁹⁷⁷⁾^,^o^verru^ling^,^Uⁿ^ite^{d S}^t^a^t^e^s^v^.^A^r^{nold Sc}^hwⁱⁿⁿ^&^C^o^.,³⁸^{8 U}^.^S.³^{65 (}¹⁹⁶⁷⁾^{, w}^h^ic^{h ha}^d^he^l^d^a
^man^u^f^act^u^r^er-i^m^p^o^s^ed^,^f^r^an^chⁱ^s^e-l^o^catⁱ^o^{n rest}^ri^ctⁱ^oⁿ^t^o^b^e^a^p^e^{r se}^aⁿ^{titrust v}ⁱ^ola^tio^n.

restraints; in State Oil Co. v. Khan, a unanimous Court acknowledged that although maximum
RPM might be used “to disguise arrangements to fix minimum prices, ... we believe such conduct
... can be appropriately recognized and punished under the rule of reason.” Notwithstanding that
the per se treatment of maximum RPM had been in effect for approximately 30 years, Justice
O’Connor noted, the Court had never been confronted with an “unadulterated” maximum RPM ⁶
arrangement, and so found the “conceptual foundations [of that rule to be] gravely weakened.”

Continuing the erosion of its precedents in the law of vertical restraints/RPM, a divided (5-4)
Court overruled Dr. Miles, the final barrier to the Rule of Reason treatment of minimum RPM.
Justice Kennedy, joined by Chief Justice Roberts and Justices Scalia (who had authored the
Business Electronics opinion, supra, note 1), Thomas and Alito, stated that
^[^v^]^e^r^{tical r}^e^tail^-^p^rⁱ^{ce ag}^r^e^e^m^eⁿ^ts^h^a^v^e^e^ith^er^p^r^o^c^o^m^p^e^tit^iv^{e o}^r^an^tico^m^p^e^titi^v^e^e^f^f^ects,
^depen^dⁱⁿ^g^oⁿ^t^h^{e circum}^s^t^ancesⁱⁿ^w^h^ic^h^t^h^e^y^w^e^re^f^o^r^m^{ed; an}^{d th}^{e l}ⁱ^m^{ited e}^m^pirical
^e^vⁱ^d^eⁿ^c^e^a^v^aⁱ^l^a^b^l^e^d^o^e^{s no}^t^sugge^st^[^t^ha^t^]^e^f^fi^cⁱ^eⁿ^t^u^s^e^s^o^f^t^h^e^a^g^r^e^e^m^eⁿ^t^s^a^r^eⁱⁿ^fr^e^q^ue^nt^o^r
^hy^pot^h^e^tⁱ^cal^{. 127 S}^.^C^t^{. at}²⁷⁰^9.
Therefore, the opinion continued,
^{[a] per}^s^e^ru^{le s}^h^ou^{ld n}^o^{t be ad}^{opted f}^o^{r a}^d^mⁱⁿⁱ^s^t^rativ^{e conv}^eⁿ^ien^{ce alo}ⁿ^e.^S^u^ch^r^u^l^e^s^c^aⁿ^b^e
^c^o^uⁿ^t^e^r^p^r^o^d^u^c^tⁱ^v^e^,ⁱⁿ^c^r^e^a^sⁱⁿ^g^t^h^e^aⁿ^tⁱ^t^r^u^s^t^s^y^s^t^e^m^’^s^t^o^t^a^l^c^o^s^t^b^y^p^r^o^hⁱ^bⁱ^tⁱⁿ^g^p^r^o^c^o^m^p^e^titi^v^e
^con^d^u^c^{t t}^h^{e an}^ti^tru^s^{t la}^w^s^s^h^o^u^{ld en}^cou^r^a^g^e.^Aⁿ^{d a}^p^e^{r se}^r^u^{le can}ⁿ^o^{t b}^e^j^u^sti^f^ied^b^y^th^e
^p^o^ssib^ilit^y^o^f^hⁱ^g^h^er^p^r^{ices ab}^sen^t^{a f}^u^r^t^h^e^r^sh^o^wⁱⁿ^g^o^f^aⁿ^ti^c^o^m^p^e^titi^v^e^coⁿ^d^u^c^{t. T}^h^{e an}^titr^u^s^t
^la^w^s^p^rⁱ^m^ar^il^y^ar^{e d}^e^si^gⁿ^e^d^to^p^r^o^t^{ect in}^ter^b^r^aⁿ^d^co^m^p^etitioⁿ^f^r^o^m^w^h^ich^lo^w^e^r^p^r^{ices ca}ⁿ
^later^r^e^su^lt.^Ibi^d^.
In apparent anticipation of its decision to overrule Dr. Miles (notwithstanding the doctrine of
precedent known as stare decisis, which counsels that prior judicial precedents generally should
not be upset), the opinion devoted a number of pages to presentation of its justifications. After
acknowledging that “we do not write on a clean slate, for the decision in Dr. Miles is almost a
century old,” Justice Kennedy set out the reasons the majority felt it appropriate to abandon stare
decisis in this case (127 S.Ct. at 2720). His justifications included first, the fact that even though
“concerns about maintaining settled law are strong when the question is one of statutory
interpretation,” precedents involving the Sherman Act present a lesser compulsion: “The general
presumption that legislative changes should be left to Congress has less force with respect to the ⁸
Sherman Act.” Second, the Sherman Act has been considered and approached as a common-law
statute, and,

⁶⁵²^{2 U}^.^S^.³^,¹⁷^,²¹^{, 2}²⁽¹⁹⁹⁷⁾^,^o^v^erru^lin^g^,^A^l^br^e^c^h^{t v}^.^H^e^r^a^{ld C}^o^.^,³⁹⁰^U^.^S.¹^{45 (}¹⁹⁶⁸⁾^{, w}^h^ic^{h f}^oun^{d tha}^t^a^ne^w^s^pa^pe^r
^pub^lis^he^r^ha^d^p^e^{r se}^vi^o^l^at^ed^t^h^e¹⁵^U.^S^.^C.^§¹^p^r^o^hⁱ^bⁱ^tⁱ^oⁿ^agaiⁿ^s^t^agree^m^en^t^sⁱⁿ^rest^raiⁿ^t^o^f^t^r^ad^{e wh}^enⁱ^t^{gave t}^h^e
^cu^st^o^m^{ers o}^f^oⁿ^e^o^fⁱ^t^s^dⁱ^st^ri^bu^t^o^r^s^t^o^ano^t^h^e^r^b^ecau^{se i}^t^s^dⁱ^st^ri^b^u^t^o^{r h}^a^d^exceed^ed^t^h^e^p^u^b^lⁱ^s^h^e^{r’s advert}ⁱ^s^ed^p^rⁱ^{ce f}^o^r
^its^pa^pe^r^.
⁷⁵⁵^{1 U}^.^S^.^_^_^_^_^,¹²^{7 S}^.^C^t^.²⁷⁰⁵⁽²⁰⁰⁷⁾^,^de^cⁱ^de^{d J}^u^ne²⁸^,²⁰⁰⁷^.
⁸¹²^{7 S}^.^C^t^{. a}^t²⁷²⁰^,^q^uotⁱⁿ^g^,^S^t^at^{e Oi}^l^v.^Kh^an^,⁵²²^U.^S^.^at²⁰^.

^J^u^s^t^as^th^{e co}^m^m^oⁿ^la^w^adapts^{to m}^odern^un^de^rs^taⁿ^d^ing^an^{d greater ex}^perien^{ce, s}^o^too^d^o^e^s
^th^{e S}^h^er^m^aⁿ^A^c^t^’^{s p}^r^o^h^ib^itioⁿ^oⁿ^‘^r^estr^ain^t⁽^s⁾^o^f^tr^ad^e’^e^v^o^l^v^e^to^m^{eet t}^h^{e d}^yⁿ^a^mⁱ^{cs o}^f
^pres^en^t^econ^o^mⁱ^{c co}ⁿ^dⁱ^tⁱ^ons^{. 127 S}^.^C^t^{. at}²⁷^20.
Third, it would create a “chronically schizoid statute” to have an evolving rule of reason that
takes into account “new circumstances and new wisdom,” but leaves an “immovable” per se line ⁹
that “remains forever fixed where it was.” Fourth, there is ample evidence in economic literature
that the per se rule is not appropriate for use in any RPM context. Fifth, both the Department of
Justice and the Federal Trade Commission (FTC)—“the antitrust enforcement agencies with the
ability to assess the long-term impacts of resale price maintenance”—have urged that the ¹⁰
distinctions between classes of RPM be abandoned. Finally, prior to reviewing its decisions in
the cases described in the “Background” portion of this report, as well as others it considered
relevant, the Court quoted from a 2000 opinion to note that “we have overruled our precedents ¹¹
when subsequent cases have undermined their doctrinal underpinnings.”
Addressing PSKS’s argument that when Congress repealed the authorization for state Fair Trade ¹²
Laws it was, essentially, ratifying the per se rule, the Court replied,
^T^hⁱ^sⁱ^sⁿ^o^t^s^o^{. T}^h^{e t}^e^x^t^of^t^h^e^Con^s^um^{er G}^oods^Pri^cⁱⁿ^g^A^c^t^[P.L^{. 94-}^{145] di}^{d n}^o^t^codi^f^y^t^h^e
^ru^l^e^of^p^e^{r se}ⁱ^lleg^a^lit^y^f^o^r^v^e^r^{tical p}^r^{ice r}^e^str^aⁱⁿ^{ts. I}^t^r^e^sciⁿ^d^e^d^statu^t^o^r^y^p^r^o^v^isioⁿ^s^t^h^at
^ma^d^e^t^h^e^m^{per s}^e^le^g^a^l.^C^ong^res^s^on^{ce a}^g^aiⁿ^{placed t}^h^es^{e res}^t^rain^ts^wⁱ^t^h^{in th}^e^a^m^{bit o}^f^{§ 1}
^of^th^{e S}^h^er^m^aⁿ^A^c^{t.... C}^oⁿ^g^r^es^{s in}^teⁿ^d^{ed § 1}^{to g}ⁱ^v^e^cou^r^{ts the abilit}^y^‘^t^{o dev}^e^{lop g}^o^v^e^rⁿⁱⁿ^g¹³
^p^rⁱⁿ^cip^l^{es o}^f^la^w^’ⁱⁿ^t^h^{e co}^m^m^oⁿ^-^l^a^w^tr^ad^itioⁿ^.
The Leegin case, therefore, was remanded to the 5^th Circuit, which. in turn, remanded to the ^th
district court “for proceedings consistent with the Supreme Court’s opinion” (498 F.3d 486 (5
Cir. 2007)).
The dissent, written by Justice Breyer and joined by Justices Stevens, Souter and Ginsburg, took
issue with the majority’s justification for “its departure from ordinary considerations of stare
decisis....” (127 S.Ct. at 2725). Although the lawfulness of particular practices is often determined
pursuant to the Rule of Reason, they acknowledged, there are some practices whose “likely
anticompetitive consequences” are either so serious, with so few possible justifications, or whose
justifications are “so difficult to prove [that] this Court has imposed a rule of per se

⁹¹²^{7 S}^.^C^t^{. a}^t²⁷²¹^,^q^uotⁱⁿ^g^{, N}^a^tio^na^{l Soc}ⁱ^e^t^y^of^P^r^of^e^s^sⁱ^ona^{l E}ⁿ^gⁱⁿ^e^e^r^s^v^.^U^.^{S., 4}^{35 U}^.^S.⁶⁷^9,⁶⁸^{8 (}¹⁹⁷⁸⁾^,^aⁿ^d
^Bu^sin^e^{ss Electro}^nics,^su^p^r^a^,^note^1,^a^t⁷³^2.
¹⁰^T^h^e^Aⁿ^{titrust Div}ⁱ^sion^of^the^De^pa^rtm^e^nt^of^Justic^e^ha^{d a}^r^g^u^e^dⁱⁿ^{its brie}^f^a^s^am^ic^us^c^u^rⁱ^ae^{on be}^ha^lf^of^M^ons^anto^,
^s^upr^a^,^p.^2,^tha^t^the^Ru^le^of^Re^a^s^{on s}^h^o^u^ld^be^use^d^to^aⁿ^a^l^y^z^e^a^{ll i}ⁿ^staⁿ^c^e^s^of^RP^M^.^Be^tw^e^eⁿ^the^f^iling^of^tha^t^br^ie^f^a^nd
^ora^l^a^r^g^u^m^e^{nt in the}^c^a^s^e^(W^illia^m^Ba^x^t^e^r^{, the}ⁿ^A^ssistaⁿ^t^A^ttorne^y^g^e^ne^ra^{l in c}^h^a^r^g^e^of^the^Aⁿ^titrust^Divⁱ^sion,
^p^r^esen^t^e^d^t^h^{e o}^r^al^am^ic^us^argu^m^eⁿ^t^),^C^oⁿ^g^{ress en}^act^ed^P^.^L^.⁹⁸^-16⁶^,^“Dep^art^m^en^t^s^o^f^Co^mmerce,^Ju^stⁱ^ce,^an^d^S^t^at^e,^t^h^e
^J^udicⁱ^a^r^y^,^a^{nd R}^e^la^te^{d A}^g^eⁿ^cⁱ^e^s^A^ppr^opr^ia^ti^{on A}^c^{t, 19}⁸⁴^,”^w^h^ic^h^c^ontaⁱ^ne^d^a^pr^ov^is^{o t}^h^a^t^pr^ohi^bite^{d the}^Dⁱ^vⁱ^sⁱ^oⁿ^f^r^om
^e^x^pe^nding^aⁿ^y^of^the^a^ppr^o^p^rⁱ^a^t^e^d^f^unds^t^o^m^a^k^e^tha^t^a^r^g^u^m^e^nt.
¹¹¹²^{7 S}^.^C^t^{. a}^t²⁷²¹^,^q^uotⁱⁿ^g^{, D}ⁱ^c^k^e^r^s^{on v}^.^U^.^S.^{, 5}³⁰^U^.^S.⁴²^8,⁴⁴^{3 (}²⁰⁰⁰⁾^.
¹²^“^F^aⁱ^r^T^r^a^d^e^L^a^w^s^”^w^e^r^e^the^pr^od^uc^ts^of^pr^ov^is^os^a^d^de^dⁱⁿ¹⁹³⁷⁽^t^o^s^e^c^tion^{1 of}^the^S^h^e^r^m^a^{n A}^c^t)^by^the^Mil^l^e^r^-
^Ty^dⁱⁿ^g^s^A^c^{t (P}^u^b^lic^{, N}^o^{. 3}¹⁴^,^A^u^g^.¹⁷^,¹⁹³⁷^{, c}^h^.⁶⁹⁰^,^T^itle^V^III,^§¹^,⁵⁰^Sta^t^.⁶⁹³⁾^{; a}ⁿ^dⁱⁿ¹⁹⁵²^(t^o^s^e^c^tioⁿ⁵^o^f^th^e
^FT^{C A}^c^{t) by}^the^McG^u^ire^A^c^{t (P}^ublic^L^a^w^{542, J}^u^ly^{14, 1}⁹⁵²^{, c}^h^.⁷⁴⁵^{, §}^2,⁶⁶^Sta^t^{. 6}³¹⁾^{. N}^o^tw^iths^t^a^nding^t^h^e^aⁿ^titr^us^t
^la^w^prohibitⁱ^oⁿ^a^g^aⁱ^{nst “}^r^e^s^traⁱ^nt^of^tra^d^e^,^”^the^y^pe^r^m^itte^{d (}^but^di^d^{not re}^quire^{) t}^h^e^sta^t^e^s^{to e}ⁿ^a^c^t^“^f^aⁱ^{r tra}^d^e^”^la^w^sⁱⁿ
^orde^{r t}^o^a^llow^m^a^nuf^ac^ture^rs^{to e}ⁿ^te^{r int}^o^a^g^re^e^m^eⁿ^ts^w^ith^theⁱ^{r re}^t^a^ile^rs^s^e^tting^the^pric^e⁽^s⁾^a^t^w^h^ic^h^g^oods^c^oul^{d be}
^s^o^{ld t}^o^t^h^e^p^ubl^ic^{. T}^h^e¹⁹⁵²^la^w^f^u^r^t^he^r^a^l^l^o^w^e^{d a}^m^a^nuf^a^c^t^ur^e^r^{to r}^e^quir^e^al^l^s^e^lle^r^s^of^his^pr^o^duc^t(^s⁾^{in a}^gⁱ^v^e^{n s}^t^a^t^e^to
^se^{ll a}^t^{his e}^s^ta^blishe^{d f}^a^{ir tra}^d^e^pr^ic^e^if^aⁿ^y^one^sel^l^e^{r i}ⁿ^t^h^at^st^at^{e had}^si^gn^ed^{a so}^-cal^l^e^d^“f^ai^{r t}^r^ad^{e” agree}^m^en^t^.
¹³¹²^{7 S}^.^C^t^{. a}^t²⁷²³^{, 2}⁷²⁴^,^qu^otiⁿ^g^,^T^e^xa^s^I^ndus^tr^ie^s^,^Iⁿ^c^.^v^.^R^a^dc^lif^f^Ma^te^rⁱ^a^l^s^,^Iⁿ^c^.,⁴⁵^{1 U}^.^S^.⁶³⁰^,⁶⁴³⁽¹⁹⁸¹⁾^.

unlawfulness—a rule that instructs courts to find the practice unlawful all (or nearly all) of the
time” (127 S.Ct. at 2726). The “upshot” of ample economic evidence that RPM can result and has ¹⁴
resulted in increased consumer prices, as well as the other side of the argument—that RPM can ¹⁵
be beneficial to consumers—leads Justice Breyer to “ask such questions as, how often are harms
or benefits likely to occur? How easy is it to separate the beneficial sheep from the antitrust
goats?” (127 S.Ct. at 2729).
Moreover, the dissent continued, while it is rational to allow economic discussions to inform
antitrust analysis, there is a significant difference between recognizing that economics is a
discipline which necessarily contains conflicting views and abandoning the necessity for antitrust
law to be administered in such a way as to provide adequate certainty in the “content of rules and
precedents” to be applied by the courts and used by “lawyers advising their clients” (127 S.Ct. at
2729). The “special advantages” of a “bright-line rule” they suggested, also might include the
potential unfairness and impracticality of pursuing certain potentially criminal offenses (127 S.Ct.
at 2731). In its reply to the majority’s assertion that the Consumer Goods Pricing Act had not
“codified” the per se rule of RPM, but rather, had merely “intended § 1 to give courts the ability
‘to develop governing principles of law’ in the common-law tradition,” the dissent emphasized
that
^Coⁿ^g^r^e^ss^dⁱ^dⁿ^o^{t p}^r^o^h^ib^it^th^is^Co^u^r^t^f^r^o^m^r^ecoⁿ^s^id^erⁱⁿ^g^th^e^p^e^{r se}^r^u^{le. B}^u^{t e}ⁿ^actiⁿ^g^m^a^j^o^r
^legⁱ^s^l^atioⁿ^p^r^e^mⁱ^s^ed^u^p^oⁿ^th^e^ex^isteⁿ^{ce o}^f^th^{at r}^u^{le co}ⁿ^s^tit^u^t^{es i}^m^p^o^r^taⁿ^t^p^u^b^{lic r}^e^lian^c^e
^u^pon^t^h^at^ru^l^e^.^Aⁿ^{d doi}^ng^s^o^a^w^{are o}^f^t^h^e^rel^e^v^aⁿ^t^argumen^t^s^coⁿ^s^tⁱ^t^u^t^e^s^e^v^en^s^t^rong^er
^relian^{ce u}^pon^th^e^C^o^u^r^t^’^s^k^eepⁱⁿ^g^t^h^{e ru}^{le, at leas}^{t i}ⁿ^th^{e abs}^eⁿ^{ce of}^s^o^m^e^sⁱ^gnⁱ^f^icaⁿ^t^c^h^an^g^e¹⁶
ⁱⁿ^res^p^{ect to th}^os^{e argum}^ents^.
Finally, the dissent argued, “every relevant factor ... mention[ed]” by Justice Scalia (a member of
the Court’s majority here), concurring in the judgment of an earlier case decided this Term,
Federal Election Comm’n v. Wisconsin Right to Life, Inc. (127 S.Ct. 2652, 2007 WL 1804336),
“argues [here] against overturning Dr. Miles” (127 S.Ct. at 2734). Those reasons are listed and
discussed by Justice Breyer at 127 S.Ct. at 2734-2737:
• First, this case (Leegin) is statutory, despite the Court’s assertion that it is more
properly to be considered in the realm of common-law adjudication; therefore,
the Court should accord the deference due stare decisis concerning cases
involving statutory interpretation.
• Second, although “the Court does sometimes overrule cases that it decided
wrongly only a reasonably short time ago,” Dr. Miles is nearly a century old (not
to mention that in overruling Dr. Miles this decision also serves to overrule every
case that has followed or applied it).

¹⁴^In^cl^udⁱⁿ^{g t}^h^at^f^r^o^m^t^h^{e Dep}^a^rt^men^t^o^f^Ju^stⁱ^{ce an}^d^t^h^{e F}^T^{C (bo}^t^{h of}^w^h^o^m^ad^vo^cat^ed^{a Ru}^l^e^o^f^Reasoⁿ^app^r^o^{ach i}ⁿ
^t^hⁱ^s^{case) p}^r^esen^t^e^d^at^o^r^{a f}^e^w^y^e^{ars af}^t^e^{r t}^h^{e t}ⁱ^m^{e o}^f^t^h^{e 1}⁹⁷⁵^rep^e^al^o^f^t^h^{e au}^t^h^o^rⁱ^zatⁱ^oⁿ^f^o^{r st}^at^{e “fai}^{r t}^r^ad^{e” l}^a^w^s^.
^S^ee,^e.^g^.^,^H^e^a^r^ing^s^oⁿ^H^.^R.²³⁸⁴^[Cons^um^e^r^G^oods^P^r^ic^ing^A^c^t]^be^f^o^re^the^Subc^om^m^itte^e^{on Mo}^no^p^o^lie^s^aⁿ^d^th^st
^Co^mmerci^a^l^L^a^w^o^f^t^h^{e Ho}^u^s^{e Co}^mmⁱ^t^t^{ee o}ⁿ^t^h^{e Jud}ⁱ^ci^ary^,⁹⁴^C^ong^.,¹^sess.^at¹¹³^-¹¹^4,¹²^{2 (}¹⁹⁷⁵⁾^;^Hearⁱⁿ^{gs on}^S.
⁴⁰⁸^[^t^he^Se^na^te^e^q^uⁱ^v^a^le^{nt to}^S.²³⁸⁴^{] be}^f^o^re^the^S^ubc^om^m^itte^e^{on A}ⁿ^{titrust a}ⁿ^d^Mo^no^poly^of^the^Se^na^te^Com^m^itte^e^th^st
^{on t}^h^e^J^u^dicⁱ^a^r^y^,⁹⁴^Cong^{., 1}^s^e^s^s^.^a^t¹⁷^0-¹^72,¹^73,¹^76-¹⁷^{7 (}¹⁹⁷⁵⁾^{; B}^u^r^e^a^u^of^Ec^on^om^ic^s^Staf^f^R^e^por^t^{to t}^h^e^FT^C^,
^T^.^Overst^r^eet^,^R^e^sa^l^e^P^rⁱ^{ce Ma}ⁱⁿ^t^eⁿ^aⁿ^{ce: E}^c^on^o^mⁱ^c^T^h^eo^ri^{es an}^d^E^m^pⁱ^ri^ca^l^E^vⁱ^d^en^ce^at¹⁶^{0 (}¹⁹⁸³⁾^.
¹⁵^C^ite^{d by}^the^dⁱ^s^s^e^{nt a}^t¹²⁷^S.C^t^.^a^t²⁷^28-²⁷^29,^aⁿ^d²⁷³²^.
¹⁶^Id^.^a^t²⁷³²⁽^see^n.^15,^s^upr^a,^and^su^r^r^o^un^diⁿ^g^t^e^xt⁾^.

• Third, there is no credible argument that keeping the per se rule associated with
Dr. Miles creates or maintains an “‘unworkable’ legal regime.”
• Fourth, overruling Dr. Miles “unsettles” the law to a far greater degree than
keeping it would.
• Fifth, the “considerable reliance upon the per se rule” of Dr. Miles that has led to
the involvement of property or contract rights in RPM cases “argues against
overruling [that case].”
• Sixth, overruling a “rule of law [that] has become ‘embedded’ in our ‘national
culture,’” as has the per se rule for RPM, is both improper and unwise.
Accordingly, Justice Breyer concluded:
^T^h^{e on}^l^y^s^a^f^e^predicition^s^to^m^a^k^e^{about toda}^y^’^s^decisⁱ^oⁿ^{are th}^{at it}^wⁱ^l^l^li^k^e^l^y^rai^s^{e th}^e
^prices^of^g^oods^{at retail an}^{d that it}^w^{ill create}^con^s^{iderable leg}^a^{l t}^u^rb^u^l^en^{ce a}^s^lo^w^e^{r cou}^r^ts
^s^eek^t^o^dev^e^l^op^w^o^rk^abl^e^priⁿ^ci^pl^es^{. I do n}^o^t^belⁱ^e^v^e^t^h^at^t^h^e^m^a^j^o^ri^t^y^h^a^s^s^h^o^wⁿⁿ^e^w^or
^ch^ang^e^{d con}^dⁱ^tⁱ^ons^suf^fⁱ^cⁱ^eⁿ^t^t^o^w^a^rran^t^o^v^erru^lⁱⁿ^g^{a deci}^si^on^of^su^ch^l^ong^s^t^aⁿ^di^ng^.^A^l^l
^ordiⁿ^a^ry^s^t^ar^{e decis}ⁱ^s^con^sⁱ^d^er^atⁱ^oⁿ^sⁱⁿ^di^cat^{e t}^h^{e cont}^rar^y^{. 127 S}^.^C^t^{. at}²⁷³^7.
^J^aⁿⁱ^c^e^E^.^Rubⁱⁿ
^L^e^gⁱ^s^l^at^iv^{e A}^t^torn^e^y
^j^r^u^bⁱⁿ^@^c^rs^.loc.g^ov^{, 7}^-⁹⁰⁷⁹