Case Summary

I need to discuss the antitrust and the contract side of the case. We are doing a project about this case, I chose to analyze and give my personal opinion on the antitrust and discuss anything relates to antitrust. And I also wanted to discuss the contract issues that relate to this case, like what kind of contract is this, what kind of violation that happened here, and what kind of Acts are dealing with this case. Then give a constructive analysis and solution.

Bagging Customers for Having Sales
FACTS: Leegin Creative Leather Products, Inc., designs, manufactures, and distributes leather goods and
accessories under the brand name “Brighton.” The Brighton brand is sold across the United States in
over 5,000 retail stores. PSKS, Inc., runs Kay’s Kloset, a Brighton retailer in Lewis- ville, Texas, that carries
about 75 different product lines but was known as the place in that area to go for Brighton.
Leegin’s president, Jerry Kohl, who also has an interest in about 70 stores that sell Brighton products,
believes that small retailers treat customers better, provide customers more services, and make their
shopping experience more satisfactory than do larger, often impersonal retailers. In 1997, Leegin
instituted the “Brighton Retail Pricing and Promotion Policy,” which banished retailers that discounted
Brighton goods below suggested prices.
In December 2002, Leegin discovered that Kay’s Kloset had been marking down Brighton’s entire line by
20 percent. When Kay’s would not stop marking the
Brighton products prices down, Leegin stopped selling to the store.
PSKS sued Leegin for violation of the antitrust laws. The jury awarded PSKS $1.2 million in damages and
the judge tre- bled the damages and reimbursed PSKS for its attorney’s fees and costs—for a judgment
against Leegin of $3,975,000.80. The Court of Appeals affirmed. Leegin appealed.
DECISION: The Court held that the goal of providing cus- tomers with information and service through
the smaller boutiques was a competitive strategy that offered consumers choices. It was not a per se
violation for Leegin to require minimum prices. Resale price maintenance increases the choices
consumers have by providing them with a full- service retailer. Each case on resale price maintenance
requires examination of the market and the effect on com- petition, but it is not automatically
anticompetitive. The decision was reversed. [Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551
U.S. 877 (2007)]