PSKS, Inc. v. Leegin Creative Leather Products, Inc., 2004 WL 5374523(E.D.Tex. Mar 26, 2004) (NO. CIV.A.2:03CV107)
Judge: T. John Ward
Holding: Motion to Limit Expert Testimony GRANTED
West is just now publishing a three and a half year old ruling in this case, likely because the Supreme Court heard argument and reversed the Fifth Circuit and Judge Ward's ruling in it in Leegin Creative Leather Products, Inc. v. PSKS, Inc., 127 S.Ct. 2705 (June 28, 2007).
This antitrust case involved a claim that the defendant's alleged retail price maintenance agreements with its retailers were unlawful under Section 1 of the Sherman Act. At issue was the plaintiffs' motion to limit the testimony of the defendant's expert witness. Under the current state of the law, Judge Ward held, this case would not accommodate a rule of reason analysis. This is true whether one is assessing directly the reasonableness of the alleged restraint or challenging its per se classification indirectly by urging proof that no antitrust injury has occurred. As such, the court granted the plaintiffs' motion to limit the testimony of the defendant's expert, finding that the alleged agreement, if proven, is unreasonable per se. Testimony as to the effect on the market was therefore irrelevant and would be excluded, whether such evidence is offered to justify the reasonableness of the restraint or the lack of any antitrust injury.
After ruling that per se illegality applied to vertical minimum-resale-price agreements, Judge Ward later entered judgment on jury verdict in the retailer's favor. The Fifth Circuit affirmed, but in a 5-4 opinion, the Supreme Court reversed, holding that stare decisis did not compel continued adherence to the per se rule here (which was only almost a century old). Accordingly, it reversed and remanded for Judge Ward to take another crack at the case under the new law. What's that line from Animal House - "you $%^&ed up - you trusted us."
