Bargain Basement Pricing, epilogue

This is a follow-up to prior post Can I Stop Bargain Basement of My Branded Products?

On May 8, 2012, the New York Supreme Court, Appellate Division, affirmed a trial court’s dismissal of People of the State of New York v. Tempur-Pedic International, Inc. In addition to finding that a New York law merely made contracts to mandate minimum pricing unenforceable, as opposed to illegal, the court held that a vertical minimum advertised pricing agreement is not an agreement to fix prices, and also that Tempur-Pedic was protected by the “unilateral conduct” principles emphasized by the U.S. Supreme Court in its Leegin Creative Leather Products (2007) and Monsanto (1984) rulings. It remains to be seen whether the Attorney General’s office will appeal to New York’s highest court.

On the flip side, at the May 2012 International Franchise Association Legal Symposium, a prominent European attorney told this author that any vertical arrangements or practices intended to or causing resale price maintenance remains per se illegal in the European Community, regardless of the size of the manufacturer, distributor and/or retailers involved.