• Wall Street Journal, Tuesday, November 16, 2010 10:46 AM

Jess Bravin and Thomas Catan report that Harvard law professor Einer Elhauge has filed an appeal with the U.S. Supreme Court on behalf of Dallas boutique Kay's Kloset, which went out of business after the justices authorized manufacturers to set prices at retailers in a 5-4 decision in 2007.

Although Elhauge agrees with the ruling, he claims that lower courts are taking it too far, giving manufacturers carte blanche to fix prices rather than analyzing each pricing agreement for its anticompetitive impact. An appeals court ruling against Kay's Kloset "is not just a problem for vertical price-fixing law but also for antitrust law generally," he says.

Should the court take the case, Bravin and Catan write, the outcome could affect companies as diverse as Tempur-Pedic, Mack Trucks, Scotts Miracle-Gro Co. and others that block discounting of their products.

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