Supreme Court yet again makes things tougher for middle class
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The Supreme Court, now with a conservative majority, has once again made things tougher for middle class Americans. In a 5-4 decision, they have reversed a basic tenet that has stood for almost 100 years, and decided in favor of corporate profits.
The decision makes it legal for manufacturers to set a fixed price for their products and enforce retailers from offering discounts. The effect of this will be to raise the prices of almost everything you buy, especially that made in the USA. It will open the door even further for foreign competition.
The original decision, in 1911, was based on competition. Today, the SC has decided that most of the time there is more than one manufacturer for a product, and that will provide adequate competition. The reality, of course, is that if one manufacturer sets a high price, and can force all retailers to abide by it, the other manufacturers will raise their prices, as well. The American public has been prevented from being hurt by this price fixing because individual retailers could decide to discount the products and the manufacturer could do nothing about it.
The only reason manufacturers want this change is to raise prices, of course. Under the system that has just been reversed, a manufacturer set their price to the retailers, and it mattered very little to them whether the retailer made a lot of money or a little -- the manufacturer had made thier money based on the price they sold the product, and the final price was out of their hands. Now, they can set not only the price they charge the retailer, but the price the retailer can charge the public -- they will obviously set those prices higher, and retailers will be able to do nothing about it.
According to the article in the Palm Beach Post where I saw this information, this is the 15th time this year the Supreme Court has ruled to benefit business and corporations, and reduce the rights of the public.
The ironic thing, of course, is that most of the people who support the conservatives are middle class, and will be hurt by these decisions. They're getting what they asked for, and I sincerely hope they like having reduced rights, paying higher prices and making it more attractive for foreign business as a result.
Probably my greatest difficulty in understanding the conservatives is WHY they support the right-wingers who care NOTHING about them. The religious right, the "moral values" folks, the smaller government folks, none of them have benefited from their support of the conservatives. The "lower taxes" folks may have achieved some sort term results, but in the long term, the deficits and the interest on the debt will bite them in the butt. I really have trouble understanding why anyone with a net worth of less than $200 Million supports these yahoos.
CAN YOU PROVIDE A LINK TO THESE CLAIMS??? WHERE DID YOU GET THIS INFO YOU ARE BLASTING HERE AS FACT? WHAT IS THE NAME OF THE CASE (EX. SMITH V. TAYLOR)??
As has already been posted in this thread, the case name is Leegin Creative Leather Products v. PSKS Inc. Make sure your web search returns the USSC ruling and not the 5th Circuit ruling. For what it's worth, many of pslOT's claims are dubious at best.
Abstract
Granted:Thursday, December 7, 2006Oral Argument:Monday, March 26, 2007 Decision:Thursday, June 28, 2007Advocates
Not available Facts of the Case
Leegin Creative Leather Products, a manufacturer of women's accessories, entered into vertical minimum price agreements with its retailers. The agreements required the retailers to charge no less than certain minimum prices for Leegin products. According to Leegin, the price minimums were intended to encourage competition among retailers in customer service and product promotion. When one retailer, PSKS, discounted Leegin products below the minimum, Leegin dropped the retailer. PSKS sued, arguing that Leegin was violating Section 1 of the Sherman Act by engaging in anticompetitive price fixing. Under the Supreme Court's 1911 decision in Dr. Miles Medical Co. v. John D. Park & Sons Co., mandatory minimum price agreements are per se illegal under the Act - that is, they are automatically illegal regardless of the circumstances.
Leegin argued that this rule was based on outdated economics. It contended that a better legal analysis would be the "rule of reason," under which price minimums would be held illegal only in cases where they could be shown to be anticompetitive. Both the District Court and U.S. Court of Appeals for the Fifth Circuit rejected these arguments. The courts felt compelled to follow the Supreme Court's rule in the Dr. Miles case, under which Leegin's practices were illegal regardless of the economic arguments put forward by the company.
Question
Is it per se illegal under Section 1 of the Sherman Act for a manufacturer to set mandatory minimum prices for its products?
Conclusion
No. The Court ruled 5-4 that "Dr. Miles should be overruled and that vertical price restraints are to be judged by the rule of reason." Justice Anthony Kennedy's majority opinion held that Dr. Miles had erred by treating vertical minimum price agreements between manufacturers and retailers as analogous to horizontal price-fixing agreements between sellers. The Court cited evidence from the economic literature that vertical minimum price agreements are rarely anticompetitive and can often function to increase interbrand competition. The Court acknowledged that in some cases vertical price minimums might facilitate manufacturer cartels, but it held that instances where the price agreements are abused for illegal anticompetitive purposes can be determined on a case-by-case basis under the rule of reason. The mere fact that vertical price minimums may lead to higher prices for goods cannot reflect negatively on its legality under the Sherman Act, because there are many legitimate business decisions that may ultimately result in higher prices. The majority also acknowledged that the principle of stare decisis would weigh against overruling the nearly 100-year-old precedent in <I>Dr. Miles
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