On the Ramifications of Leegin V. PSKS: Are Tie-Ins Next

Better late than never. From an economic perspective, the per se rule against resale price maintenance - established by the 1911 Supreme Court decision, Dr. Miles - was unquestionably one of the worst antitrust decisions of the twentieth century. Yet, in intransigent and pertinacious fashion, the Court refused to overrule its former erroneous decision despite having had several opportunities to do so. As a result, and notwithstanding the bedrock principle that antitrust cases must make economic sense, the rule that vertically imposed minimum price based restraints are illegal has remained in force for almost a hundred years. The Supreme Court’s 2007 decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc. to overrule Dr. Miles, then, was not so much an iconoclastic judgment as it was a long overdue implementation of ubiquitously accepted principles of price theory. Nevertheless, the case arguably stands for more than the correction of a century old mistake. It sends a meaningful message about the direction the Roberts Court is taking in analytic jurisprudence.