Price Fixing Case Before Court, DINKS Weigh In

by Dual Income No Kids on March 26, 2007 · 0 comments

Commenting on the news is something that we DINKS do only somewhat frequently. There is however a case coming before the U.S. Supreme Court which us of potential great importance to all consumers, and therefore merits some comment.

The case is being brought before the court is an appeal being filed by Leegin Creative Leather Products. Leegin Leather is a high end consumer clothing retailer in California. Back in 2002, Leegin was selling their handbags to a company in Dallas called Kay’s Closet. Kays started selling Leegin’s purses at a 20% discount, so Leegin cut them off. As a result, Kays business dropped by half. Kay’s Purses sued and won a judgement of $3 million. Leegin appealed all the way to the supreme court.

At issue is Leegins ability to punish a business partner for charging less than the suggested retail price. Kay’s says this is illegal price fixing, but Leegin says its necessary to compete with larger retailers (Info here and here).

So thats the issue.

Where do the DINKS stand on this? Well, I can’t speak for my wife Miel, but as near as I can tell, the only reason this issue has gone to the Supreme Court is that the law on minimum pricing and retail vs. wholesaler agreements isn’t well established. All legalese aside, I think Leegin’s actions are defacto price fixing, pure and simple. Price fixing is bad for the economy for obvious reasons that don’t need to be repeated here. Furthermore, price fixing is un-American. Its contrary to the best interests of consumers and contradicts many American values such as fair play and free markets.

Best,

James

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