a. Can resale price maintenance have anti-competitive effects?
b. If the price agreements have an anti-competitive effect, why did the court decide they were to be judged using rule of reason instead of the per se standard?
Leegin Manufactured belts and other women's fashion accessories under the brand name "Brighton". It sold these products only to small boutiques and specialty stores. The Brighton brand was imported to Kay's Kloset, a boutique in Lewisville, Texas, because it accounted for 40 to 50 percent of the store's profits.
Leegin decided it would no longer sell to retailers how discounted Brighton process. Despite warnings from Leegin, Kay's Kloset persisted in marking down Brighton products by 20 percent. Leegin cut the store off.
Kay's sued Leegin, alleging that is had violated the per se rule against resale price maintenance. The trial court found for Kay's and entered judgment against Leegin for almost $4 million. The Court of Appeals affirmed. The Supreme Court granted certiorari. On appeal, Leegin did not dispute that is had entered into resale price maintenance agreements with retailers. Rather, it contended that the rule of reason should apply to those agreements.