State Law Resale Price Maintenance: We're not in Kansas anymore
By Jason Hicks
I recently participated in a roundtable discussion on state law resale price maintenance actions presented by the ABA Section of Antitrust Law.
The discussion focused on the Kansas Supreme Court's decision in O'Brien v. Leegin, in which the court determined that vertical price fixing was still per se illegal under Kansas antitrust laws despite the fact that such conduct is analyzed under the rule of reasons under federal antitrust law. One of the participants suggested that the if the logic of the Kansas Supreme Court's decision was extended, then all types of vertical restraints (i.e. geographic restrictions, non-compete agreements) which are typically analyzed under a reasonableness standard, may be subject to attack under the per se rule. Other participants dismissed such concerns, but noted that state antitrust law can be (and often is) more restrictive than federal antitrust law.
A Deputy Attorney General for the State of California described several post-Leegin developments in state prosecutions of RPM and MAP agrements, including New York's action against Tempur-Pedic. The takeaway from that discussion seemed to be that, regardless of the outcome of those cases (which were resolved in favor of the manufacturer), state enforcers may still consider certain RPM and MAP agreements as per se antitrust violations. Additionally, state enforcers may take an especially narrow view of the Colgate doctrine, which allows a business to unilaterally announce the terms and conditions upon which it will do business with its retailers/resellers.
At the conclusion of the program, one participant suggested that attorneys practicing in this area should give advice to their clients as if Leegin were never decided. In other words, sometimes state law trumps federal law. That is exactly what we have been saying on this blog ever since the Leegin decision was announced.
The discussion focused on the Kansas Supreme Court's decision in O'Brien v. Leegin, in which the court determined that vertical price fixing was still per se illegal under Kansas antitrust laws despite the fact that such conduct is analyzed under the rule of reasons under federal antitrust law. One of the participants suggested that the if the logic of the Kansas Supreme Court's decision was extended, then all types of vertical restraints (i.e. geographic restrictions, non-compete agreements) which are typically analyzed under a reasonableness standard, may be subject to attack under the per se rule. Other participants dismissed such concerns, but noted that state antitrust law can be (and often is) more restrictive than federal antitrust law.
A Deputy Attorney General for the State of California described several post-Leegin developments in state prosecutions of RPM and MAP agrements, including New York's action against Tempur-Pedic. The takeaway from that discussion seemed to be that, regardless of the outcome of those cases (which were resolved in favor of the manufacturer), state enforcers may still consider certain RPM and MAP agreements as per se antitrust violations. Additionally, state enforcers may take an especially narrow view of the Colgate doctrine, which allows a business to unilaterally announce the terms and conditions upon which it will do business with its retailers/resellers.
At the conclusion of the program, one participant suggested that attorneys practicing in this area should give advice to their clients as if Leegin were never decided. In other words, sometimes state law trumps federal law. That is exactly what we have been saying on this blog ever since the Leegin decision was announced.
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