Resale Price Maintenance for Beginners: Beware of the Pitfalls

Abstract

The Supreme Court's 2007 Leegin decision provided that minimum resale price maintenance (RPM) agreements are to be evaluated under the rule of reason. However, the Court's rule of reason analytical approach does not provide clear guidance for practitioners to advise clients considering the adoption of such programs. The decision has faced resistance from its inception, including proposed legislation in Congress, which would reinstate the per se rule, and opposition from a number of states, whose laws, case precedent, or interpretation could support future application of the per se approach. This article points out the obstacles confronting suppliers looking to adopt RPM programs. The lower courts and enforcement agencies have thus far failed to devise clear guidance for practitioners regarding the application of Leegin's rule of reason analysis to the implementation of RPM programs. The article examines the obstacles and recommends alternatives to consider in advising clients who are entertaining the adoption of RPM policies.