The state attorneys general continue to be hostile to the Supreme Court’s decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc., 127 S.Ct. 2705 (2007), which overruled Dr. Miles Medical Co. v. John D. Parke & Sons. Co., 220 U.S. 373 (1911), and made resale price maintenance subject to the rule of reason under Section 1 of the Sherman Act. 35 state attorneys general have written to Congress asking that it pass S. 2261 which would make resale price maintenance a per se violation of Section 1. State Attorney General Letter; S. 2261. The March 31, 2008 post reported that the New York, Michigan and Illinois attorneys general obtained a consent decree under state law against Herman Miller for its resale price maintenance scheme. The May 8,2008 post reported that although the FTC modified Nine West’s consent decree that had prohibited resale price maintenance, the FTC reminded Nine West that it was still subject to state restrictions. This most recent letter further confirms that counselors must be cognizant of state law when they advise clients about the legality of resale price maintenance. It would be prudent for clients to act unilaterally and follow the Colgate doctrine rather than rely on Leegin.
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Posted by : | On : May 23, 2008
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Posted by : | On : April 14, 2008
The Connecticut Supreme Court recently held that the Connecticut Attorney General may pursue “damages to its general economy caused by violations of the Connecticut Antitrust Act.” State of Connecticut v. Marsh and Mclennan Companies, Inc., SC 17861 (Ct. Apr. 15, 2008). In Marsh, the Connecticut Attorney General claimed that the bid rigging scheme orchestrated by Marsh — in which Marsh decided which insurance companies should win individual contracts and which should submit high bids — caused far reaching harm to the entire Connecticut general economy. Insurance companies that did not comply with Marsh’s demands would be cut-off from all of Marsh’s customers. The Connecticut Attorney General argued that Connecticut was particularly vulnerable to Marsh’s scheme as Connecticut is home to many insurance companies. While the Court recognized that its decision conflicted with Hawaii v. Standard Oil Co. of California, 405 U.S. 251 (1972) (holding that Clayton Act does not confer standing for general economic harm), the Court observed that the relevant language of the Connecticut Antitrust Act differed from the Clayton Act. The Court noted that unlike the Clayton Act, the Connecticut Antitrust Act provides specifically that the attorney general may bring an action as parens patriae “with respect to damages to the general economy of the state or any political subdivision thereof.” The Court recognized that although the state may have difficulty proving those damages, it would be improper to grant a motion to dismiss the Complaint on that basis. A copy of the opinion is attached.