Court Overturns $3.9M Leegin Antitrust Award

(CN) - After a trip to the Supreme Court, a leather accessory maker won its appeal of a nearly $4 million antitrust judgment for refusing to sell products to a discount retailer.

Leegin Creative Leather Products makes and sells Brighton brand handbags, belts, jewelry and other accessories. It not only sells the Brighton products wholesale, but also owns and operates more than 100 Brighton retail stores. The company controls the price of its products by forcing other retailers to sell the items at a certain price.

When the owner of Kay's Kloset in Lewisville, Texas, refused to stop discounting Brighton items, Leegin quit selling its goods to the retailer, PSKS.

PSKS accused Leegin of running a vertical resale price scheme, and a jury awarded it more than $3.9 million.

The 5th Circuit affirmed, but that judgment was overturned by the Supreme Court, which held that vertical price restraints often have pro-competitive justifications and should be judged under the "rule of reason."

On remand, the federal judge dismissed the case in light of the high court's 2007 ruling in Leegin v. PSKS.

The New Orleans-based federal appeals court again agreed, saying PSKS failed to define the relevant market or allege anticompetitive injury.

"Even accepting PSKS's factual allegations as true, nothing in its complaint plausibly alleges a harm to interbrand competition," Judge Jerry Smith wrote for the unanimous three-judge panel.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit