Update February 2011: The U.S. Supreme Court denied the plaintiff’s petition for certioari without comment.
The Fifth Circuit affirmed the dismissal of an amended complaint that sought to cast what were originally vertical price fixing allegations has horizontal price fixing. The case brought by a discount retailer originally alleged that Leegin imposed vertical minimum resell price maintenance that prohibited retailers from discounting the price of Leegin goods. The case went to the U.S. Supreme Court, which overturned the century old rule that vertical price fixing was per se illegal, subjecting the practice to review under the Rule of Reason. Because the plaintiff could not establisha relevant market in which Leegin had market power, the vertical price fixing claim was dismissed. The plaintiff attempted to revive the case by arguing that because Leegin itself sells at retail, the prohibition on price cutting amounts to a per se illegal horizontal agreement. According to the court, the plaintiff’s failure to allege that Leegin’s other retailers were responsible for the price restraint doomed its horizontal case.