On May 4, 2012, the Kansas Supreme Court held that resale price maintenance [“RPM”] agreements, or vertical price-fixing, should be treated as per se unlawful under Kansas’s state law. This is an important decision because it is the first time that a state court has refused to follow the U.S. Supreme Court’s landmark 2007 Leegin decision eliminating per se treatment of RPM under federal antitrust law.
In 2007, the Supreme Court in Leegin reversed the nearly 100 year old Dr. Miles decision and held that resale price agreements would no longer be condemned as illegal per se under federal antitrust law but would instead be judged under the rule of reason. Many manufacturers seized on Leegin as offeringan opportunity to enter into agreements with resellers of their products to ensure desired minimum prices.
Many states were unhappy with the Supreme Court ruling: a number of them had signed an amicus brief urging the Court to retain the per se rule in RPM cases. Since Leegin, some state attorneys general have launched challenges to RPM policies, seeking to enjoin manufacturers from engaging in the practice. And Maryland passed a “Leegin repealer” law expressly declaring RPM unlawful under Maryland state law even without proof of anticompetitive harm.
But until now, no state supreme court has weighed in on the question of whether state antitrust laws should be construed differently from the Sherman Act in this controversial area. So the Kansas decision is a significant milestone in the post-Leegin landscape, with important implications for how firms should operate in the marketplace.
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