etitioner Leegin Creative Leather Products

Petitioner Leegin imaginative Leather Products, a manufacturer of womens accessories under the target name Brighton, entered into a just minimal bell matements with its retailer, which includes herein respondent, PSKS, Inc. Petitioner avers that such price agreements intend to encourage contest among retailers in the areas of customer service and merchandise promotion. However, herein respondent discounted Leegin products below their confirming 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 lay out by engaging in anticompetitive price fixing.The govern salute decided in opt of PSKS citing Dr. Miles Medical Co. v. John D. Park & Sons Co. , which held that needed price agreements are per se il effectual under the Sherman Act. Petitioner, in an appeal to the U. S. judgeship of Appeals for the Fifth Circuit, argued that this territory was establish on outdated economics and contended that a the district of reason is a better legal analysis. Petitioner make headway claimed that price minimums testament only be held flagitious when turn up to be anticompetitive.The appellate woo loom in favor of the district court hence, this petition for certiorari. ISSUE Is it per se contraband for a manufacturer to set requisite minimum prices for its products? RULE No, it is not illegal for a manufacturer to set required minimum prices for its products. Section 1 of the Sherman Act prohibits every contract, combination in the form of verify or otherwise, or conspiracy, in ascendency of trade or commerce among the some(prenominal) States. This provision only prohibits unreasonable restraints in trade or commerce. REASONINGThe Court reasoned that Section 1 of say Act outlaws only unreasonable restraints. It further conventionalismd that the Dr. Miles case should be overruled and that good price restraints are to be judged by the rule of reason. Th e Court, through economic literature, averred that vertical minimum price agreements are seldom anticompetitive and can often function to summation 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 viridity law statute, which should be allowed to evolve in courts as economic circumstances change. decisiveness The independent Court ruled for Leegin original Leather Products, Inc. The Supreme Court overruled the closing 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 relinquish and conflic t with modern economic theory. It was never shown in court that setting retail price minimums is anticompetitive. Further, retail price minimums hold back no absolute economic effect. In put together to assess the anticompetitive tendencies of price minimums, the rule of reason must be occupied. 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.