High Court Overturns Century-Old Antitrust Rule

The Supreme Court case was brought by Leegin Creative Leather Products, a California company that makes purses, belts and other accessories under the brand name Brighton. It had refused to sell its goods to any retailer that did not comply with its pricing and promotion policy, which mostly bans discount prices for Brighton products.

But Kay's Kloset, a women's boutique in the Dallas suburb of Flower Mound, refused to abide by the rules and put all of its Brighton products on sale.

Leegin stopped selling to Kay's Kloset, the store's business suffered, and Kay's parent company, PSKS, sued.

A jury, finding that Leegin's actions were automatically a violation of the Sherman Act, awarded Kay's Kloset $1.2 million, damages that were tripled because the actions violated antitrust laws. The U.S. Court of Appeals for the 5th Circuit upheld the ruling.

The Supreme Court's decision underscored its philosophy that antitrust issues should be judged on economic grounds, said James F. Blumstein, a professor at Vanderbilt University.

"It's more of a question of what the soul of antitrust is," he said, "whether it's focused on preserving competition . . . and not some broader kind of social policy."

The case is Leegin v. PSKS, 06-480.