Saturday, June 30, 2007

Price Wars and Judicial Activism, Conservative Style

I've been reluctant to really jump on the Court-bashing bandwagon, because I think a lot of the time, people are more prone to calling a decision bad based on what they want the law to be, not because they disagree with the rationale behind the law.

However, I think that when you have two recently appointed members to the Supreme Court who, during confirmation hearings insisted they respected stare decisis (precedent), and they make up 40% of the majority decision in a case that overturns a 96 year old precedent, then there is evidence of a problem.

The case decided was Leegin Creative Leather Products v. PSKS Inc. In the decision, the Court overruled the "Dr. Miles Rule," which held that minimum price standards established by manufacturers were per se violations of the Sherman Antitrust Act. The decision was written by Justice Kennedy, who determined that the per se rule was of "slight relevance," and that "Vertical price restraints are to be judged according to a rule of reason."

What this decision essentially does is place the burden on the consumer (i.e. you) to show collusion on the part of the manufacturers (i.e. business). It allows the manufacturers to set the minimum price for a product, and to sell the product at that price, until that price is proven in a court of law to be unreasonable. The burden of proving that it's unreasonable is on the person buying the product, who, probably doesn't have the means to try a case on the price of a shirt, or vase. This thought process is voiced by the lead dissenter, Justice Breyer, who said "The only safe predictions to make about today's decision are that it will likely raise the price of goods at retail and that it will create considerable legal turbulence." Who's going to pay for that legal turbulence? Not the manufacturers, who will pass the price on to you.

Of course, there are those who say that this decision is all well and good. For example, Quentin Riegel, the National Association of Manufacturers vice president for litigation said "[T]his ruling does not legalize resale price maintenance. ... Resale price maintenance will be illegal, and subject to triple damages and attorneys' fees, if the manufacturer can provide no reasonable, pro-competitive justification for it." (emphsasis mine) That is not a tough standard to meet, and it's shameful that the Court would make such an activist decision in the absence of Congressional action on the matter. This is exactly what Justice Scalia complains about time and again, that if the people are unhappy with a decision, they need to seek remedy through the legislature, yet, when the people clearly are not unhappy with a decision, and legislature has had ample time to reverse through legislation what the Court did in interpreting prior legislation, what does he do? He throws the decision out the door, whimsically, hypocritically. It weakens his arguments in past Court decisions, where he's dissented on the point that the People have a legislative remedy, and it hurts his credibility in my eyes, just a little bit. (I single Scalia out because he's opined on this precise issue time and again over the past 20 years, yet apparently determined that he needn't practice what he preaches when he has the majority vote.)

I will still look at each decision independently, and won't skewer the Court as a whole, but this one was bad, in my opinion.

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