Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

The following is not meant to be legal advice.

On December 7, 2006, the Supreme Court granted certiorari in Leegin Creative Leather Products v. PSKS, Inc. Leegin Creative Leather Products (Leegin) is a family-run business that designs women’s fashion accessories. Leegin sells its product in boutique stores and focuses on service as a way to distinguish itself from competing products. Leegin had a policy to conduct business only with retailers that adhere to its suggested retail prices.

The Leegin Creative Leather Products v. PSKS, Inc. lawsuit arose after a retail store, PSKS began selling the products below Leegin’s suggested retail price. Leegin stopped all shipments of its products to PSKS.

Analysis

The Supreme Court decided that a manufacturer can announce its resale prices in advance and refuse to deal with those who fail to comply. A distributor is free to acquiesce in the manufacturer's demand in order to avoid termination.