Corporate & Securities Law

Maryland Enacts the First Leegin Repealer Statute

By Matthew S. Wild

Maryland has amended its antitrust law to make resale price maintenance agreements per se illegal, thus overruling Leegin Creative Leather Products v. PSKS, 127 S.Ct. 2705 (2007).  In Leegin, the Supreme Court overruled Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U. S. 373 (1911), and held that a resale price maintenance agreement in which the manufacturer requires a reseller to sell at a certain price is no longer a per se violation of Section 1 of the Sherman Act but instead is subject to rule of reason analysis.  Application of the rule of reason creates a burden on plaintiffs because they have to show that the restraint had an adverse effect on the relevant market and not just the price of the manufacturer?s goods that were subject to restraint.  This abrupt change in the law has been poorly received by state antitrust authorities.  As reported in the May 23, 2008 Post, 35  state attorneys general petitioned Congress to amend the Sherman Act to overrule Leegin.  And as reported in the March 31, 2009 Post, the state attorneys general of New York, Illinois and Michigan obtained a consent decree against Herman Miller in the United States District Court for the Southern District of New York for resale price maintenance involving the Aeron chair.  Their position was that their state antitrust law do not recognize the departure by Leegin and still provide that resale price maintenance is a per se offense.

Full post as published by Antitrust Commentary on May 04, 2009 (boomark / email).