OIA asking SNEWS readers to help block attempt to repeal Leegin decision

OIA is alerting SNEWS® readers and its members that Sen. Herb Kohl, D-Wis., is increasing his efforts to repeal the Leegin decision impacting Minimum Resale Price Maintenance agreements. Kohl is working to attach bill S. 148, called the Discount Pricing Consumer Protection Act, to the Financial Reform measure being debated in the U.S. Senate. Kohl has filed S. 148 as an amendment to the Financial Reform measure — which means if you are a brand or retailer concerned about this bill and do not want it to pass, you need to act now by contacting your senators and expressing your opposition to the bill.

The Discount Pricing Consumer Protection Act of 2009 seeks to reverse the 2007 Supreme Court ruling in Leegin Creative Leather Prods., Inc. v. PSKS, Inc. In Leegin, the court found that Minimum Resale Price Maintenance agreements should be judged under the rule of reason analysis. That means a court should look at the facts and circumstances of a case and decide whether the specific agreement in question is anti-competitive, versus the legislation’s proposal to rule any such agreement as per se illegal.

On April 23, Bill Parks of NRS wrote a guest editorial for SNEWS, “Guest Editorial: Stop Leegin repeal now — save Main Street business,” asking companies to get behind an effort to stop this bill. Parks believes that overturning the Leegin decision will lead to the devaluation of manufacturer products and the closure of specialty brick-and-mortar stores — click here to read.

Unless retailers and manufacturers pick up the phone now to oppose this, it could mean legislation is passed that reverses the Supreme Court ruling. OIA is encouraging all retailers and vendors to contact the state senators where their headquarters and stores are located and specifically express opposition to Sen. Kohl’s attempt to attach S. 148 as an amendment to the Financial Reform package. Talk about the jobs you support in your state and the negative impact to specialty retail as you see it. It is helpful to be specific and speak about your personal business.

OIA has prepared key talking points to guide the conversation:

1. Should the Discount Pricing Consumer Protection Act pass Congress, specialty retailers will be forced to compete in a distorted retail environment where deep discount pricing is the norm. It will threaten our ability to provide jobs, pay leases and taxes on commercial space, and otherwise serve our local communities by giving back to the cities and towns where we are located. 
2. While the proponents of the legislation believe they are supporting the consumer, the fact is this bill would encourage a tidal wave of online and other discount retailers to undercut the fair and market-based prices we offer. 
3. Specialty outdoor stores provide services that ensure American consumers are properly fitted for technical outdoor footwear and apparel, and receive expert advice when buying technical products such as skis, bicycles, tents and climbing gear.
4. Specialty retailers offer consumers a unique experience among the broad spectrum of today’s retail offerings. With passage of this bill, we are in danger of becoming showrooms for customers trying out the latest in outdoor footwear, apparel and gear and later going online to find a price that is unsustainable for brick-and-mortar retailers.
5. You want your senator to know you strongly oppose the Discount Pricing Consumer Protection Act (S. 148) being offered by Sen. Kohl as an amendment to the Financial Reform package, and you want your senator to prevent this bill from moving forward.

Click here for access to the U.S. Senate website to easily find your senators’ phone numbers. When calling, ask to speak to the staff member handling the Financial Reform bill. 

Want to learn how Leegin might affect your business?

Make plans to attend the “Minimum Resale Price Maintenance Panel” at Outdoor Retailer Summer Market on Aug. 4 from noon to 1:30 p.m. at the Marriott in Salt Lake City, Utah.

Despite the current debate over S. 148 and the Leegin ruling at a federal level, SNEWS readers and OIA members need to remain cognizant that many state laws continue to prohibit Resale Price Maintenance agreements as illegal and the Leegin ruling does not affect those state laws. Due to the wide variances in state law, OIA will be hosting the panel at Summer Market to be a resource for retailers and manufacturers about the nuances of the agreements.

–Michael Hodgson