A PYMNTS Company

A Civil Conflict: Can the States Overturn Leegin?

By  |  February 2, 2010

Leiv Blad, Bryan Killian, Jan 27, 2010

Overturning a 96-year-old rule, the United States Supreme Court held in Leegin that minimum resale price maintenance (“RPM”) agreements would no longer be considered illegal per se under Section 1 of the Sherman Act, but instead would be evaluated under the more lenient “rule of reason.” A number of states immediately objected to the change, vowing to legislatively reverse Leegin. Maryland has already done so and other states may follow.

 

This flurry of legislative activity raises the question: Can a state overturn Leegin consistent with the United States Constitution? The answer to that question is no, at least to the extent the state regulates conduct that is wholly outside its borders.