etitioner Leegin Creative Leather Products

Petitioner Leegin seminal lather Products, a manufacturer of womens accessories beneath the brand name Brighton, entered into a vertical negligible price agreements with its retailer, which includes herein respondent, PSKS, Inc. Petitioner avers that such price agreements intend to encourage competition among retailers in the beas of customer service and product promotion. However, herein respondent discounted Leegin products below their convinced(p) minimum price. After being dropped by Leegin as one of its retailers, PSKS filed a lawsuit, arguing that Leegin violates Section 1 of the Sherman Act by engaging in anticompetitive price fixing.The District Court decided in favor of PSKS citing Dr. Miles medical checkup Co. v. John D. Park & Sons Co. , which held that authorisation price agreements are per se illegal low the Sherman Act. Petitioner, in an appeal to the U. S. Court of Appeals for the Fifth Circuit, argued that this chance was based on outdated economics and c ontended that a the rule of intellect is a better legal analysis. Petitioner further claimed that price minimums pull up stakes only be held illegal when proven to be anticompetitive.The appellate solicit govern in favor of the district court hence, this petition for certiorari. solution Is it per se illegal for a manufacturer to set mandatory minimum prices for its products? RULE No, it is not illegal for a manufacturer to set mandatory minimum prices for its products. Section 1 of the Sherman Act prohibits every contract, combination in the gradation of trust or otherwise, or conspiracy, in restraint of patronage or commerce among the several States. This provision only prohibits un originable restraints in trade or commerce. REASONINGThe Court reasoned that Section 1 of verbalize Act outlaws only unreasonable restraints. It further ruled that the Dr. Miles case should be overruled and that vertical price restraints are to be judged by the rule of reason. The Court, throu gh with(predicate) economic literature, averred that vertical minimum price agreements are rarely anticompetitive and go off often function to increase inter-brand competition. The Court further argued that instances where the price agreements are abused for anticompetitive reasons can be judged on a case-to-case basis under the rule of reason.In overruling the Dr. Miles case, the Court held that the Sherman Act must be treated as a common law statute, which should be allowed to evolve in courts as economic circumstances change. DECISION The Supreme Court ruled for Leegin Creative Leather Products, Inc. The Supreme Court overruled the decision in the Dr. Miles case. It further ruled that in cases where vertical price restraints are involved, the rule of reason should be applied. I agree with the decision of the Supreme Court favoring Leegin Creative Leather Products, Inc. The decision in Dr.Miles was based on reasoning and economic assumptions that lead and conflict with modern eco nomic theory. It was never shown in court that orbit retail price minimums is anticompetitive. Further, retail price minimums have no peremptory economic effect. In order to assess the anticompetitive tendencies of price minimums, the rule of reason must be assiduous. The Supreme Court, in the case at bar, employed the rule of reason in order to determine whether the actions taken by Leegin Creative Leather Products, Inc would hurt the economy. Hence, vertical price restraints should be judged by the rule of reason.