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.
May
23
Posted by : Matthew Wild | On : May 23, 2008
Category: Antitrust, FTC Actions, New York Cases, Per Se Analysis, Resale Price Maintenance, Rule of Reason, Section 1 (Sherman Act), State Antitrust and Consumer Protection Claims, State Attorneys General
Tags:attorney general, colgate, dr. miles, ftc, Herman Miller, leegin, matthew wild, Nine West, Resale Price Maintenance, section 1, sherman act
May
08
Posted by : Matthew Wild | On : May 8, 2008
Category: Antitrust, Consent Decrees, FTC Actions, Per Se Analysis, Resale Price Maintenance, Rule of Reason, Section 1 (Sherman Act), State Antitrust and Consumer Protection Claims
Tags:Antitrust, consent decree, ftc, Herman Miller, matthew wild, Nine West, Resale Price Maintenance, rpm, section 1, sherman act, state antitrust law
On May 6, 2008, the FTC granted Nine West’s petition to modify its consent decree to allow Nine West to engage in resale price maintenance with its dealers. In 2000, Nine West — a footwear manufacturer — had entered into a consent decree with the FTC and several state attorneys general to resolve allegations that it fixed the prices at which its retailers may sell its shoes. Because of the Supreme Court’s recent decision in Leegin Creative Leather Products v. PSKS, 127 S.Ct. 2705 (2007), which allowed such agreements to be treated under the rule of reason rather than subject to per se condemnation, the FTC allowed Nine West to engage in resale price maintenance but did not rule that such conduct would be necessarily lawful. Rather, the consent decree requires to Nine West to provide periodic reports to the FTC of prices and output during periods when it has engaged in resale price maintenance. As a practical matter, modification of the consent decree may be bring little comfort as some state attorneys general have taken the position that resale price maintenance is still a per se violation of their antitrust statutes. Herman Miller (discussed in the March 31, 2008 post) is an example of such an application of the state antitrust antitrust laws. Attached is the FTC’s order in Nine West. Nine West (Order)
Mar
31
Posted by : Matthew Wild | On : March 31, 2008
Category: Antitrust, Consent Decrees, New York Cases, Per Se Analysis, Resale Price Maintenance, Rule of Reason, Section 1 (Sherman Act), State Antitrust and Consumer Protection Claims, State Attorneys General
Tags:aeron, Antitrust, chair, consent decree, ergonomic, Herman Miller, leegin, maintenance, matthew wild, price, resale, state attorney general
On March 21, 2008, Herman Miller, Inc. entered into a consent decree with the attorneys general for New York, Michigan and Illinois to resolve allegations of resale price maintenance over its Aeron chair — an ergonomic desk chair. Filed in the United States District Court for the Southern District of New York, the Complaint alleged that Herman Miller used its Suggested Retail Price policy to enforce a resale price maintenance scheme over the Aeron chairs. According to the Complaint, Herman Miller coerced retailers to agree not to advertise or discount Aeron chairs below Herman Miller’s Suggested Resale Price or a pre-determined discount set by Herman Miller. The states alleged violations of Section 1 of the Sherman Act and the New York, Illinois and Michigan antitrust statutes. Although this action was brought after the Supreme Court in Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 127 S.Ct. 2705 (2007), held that resale price maintenance was subject to analysis under the rule of reason (and no longer a per se violation of Section 1), the Complaint pled only a per se violation. The consent decree requires Herman Miller to refrain from resale price maintenance and enforcement of its Suggested Retail Price policy for all of its products. Herman Miller also was required to pay a $750,000 fine. This case serves as a cautionary tale to manufacturers who take too much comfort from Leegin. With aggressive enforcement by state attorneys general and potential litigation by terminated retailers under more stringent state laws, manufacturers would be well advised to act unilaterally under the Colgate doctrine. They are free to terminate discounters unilaterally but should not require retailers to agree to adhere to resale prices as a condition of receiving shipments. Similarly, to reduce the chance that any termination of a discounter could be considered the product of a conspiracy between the manufacturer and other retailers, manufacturers should refuse to listen to complaints from retailers about discounting. The Herman Miller Complaint and Consent Decree are attached. Herman Miller Complaint; Herman Miller Consent Decree