WASHINGTON – Late last week, the U.S. Supreme Court said it would look at a nearly century old precedent that certain price-setting agreements between manufacturers and retailers should be considered automatically illegal under federal antitrust law. The justices said they would revisit a 1911 Supreme Court ruling “that minimum prices set by manufacturers on what dealers can charge customers for their products are deemed, unquestionably, illegal,” Reuters reports.

The Supreme Court choose to hear an appeal supported by business groups that asked the justices to adopt a less exacting standard – the so-called rule of reason that looks at the impact on competition – in reviewing such agreements.

The case involved a high court appeal by Leegin Creative Leather Products Inc., the manufacturer of the Brighton brand of women’s accessories. In 1997, the company adopted a policy of only doing business with retailers that follow the company’s suggested retail prices for its products and would not provide products to discount retailers.

PSKS Inc., the operators of a retail store known as “Kay's Kloset” in Lewisville, Texas, in 2002 placed the entire line of Brighton products on sale below the company’s suggested price. Leegin then refused to ship its products to the women’s specialty store.

PSKS sued under the antitrust law, claiming illegal price fixing, and a jury awarded PSKS $3.6 million in damages and $375,000 in attorney fees, an award upheld by a U.S. appeals court, Reuters reports. Attorneys for Leegin told the Supreme Court the 1911 precedent “has no foundation in economic theory” because minimum resale pricing agreements often can have “substantial pro-competitive effects.” They opposed the “rigid rule” that such agreements are “per se illegal.”

In March, the U.S. Supreme Court will likely hear arguments in the case, with a decision due by the end of June.