Nearly a century ago, the Supreme Court interpreted the still-new Sherman Antitrust Act to prohibit a manufacturer from requiring a retailer to set a minimum price for its product. Congress could have overturned the rule against “resale price maintenance,” but it never has. A few years ago, lawmakers even went so far as to prohibit the Justice Department from arguing in court to scrap the rule.

Last month, however, the Bush administration joined a variety of business groups in urging the Supreme Court to do just that. And the court’s conservatives, including possibly Chief Justice John G. Roberts Jr., seem determined to do so — or at least open to the argument. For Roberts, the case, Leegin Creative Leather Products Inc. v. PSKS Inc., may be the most clear-cut test so far of his commitment to the role of precedent in Supreme Court decision-making. Repeatedly during his confirmation hearings in September 2005, Roberts deflected fears from Democratic senators that he would bring a conservative agenda to the court by stressing his respect for the principle of stare decisis — Latin for “let the decision stand.”

Roberts sent mixed signals, however, during the March 26 argument in the case. So did Justice Anthony M. Kennedy, the swing vote between the court’s conservative and liberal blocs. With the four liberal justices seemingly strongly inclined to preserve the existing rule, business groups need both Roberts and Kennedy to overturn the prior decision.

Antitrust law can be complex, but the rule against minimum retail pricing is a straightforward application of the Sherman Act’s basic prohibition against price-fixing — either by competitors or, in this instance, by a manufacturer and its dealers. This rule has readily observable real-world consequences, too, although consumer groups and business lobbies disagree about the impact.

Consumer groups say the rule against resale price maintenance has been the basis for the growth of discounters such as Wal-Mart, and the resulting lower retail prices. Business groups, however, say manufacturers have a legitimate interest in requiring their dealers not to set prices too low, for fear that they will skimp on customer service and shortchange manufacturers on product promotion.

Those supposed benefits of resale price maintenance did not figure in the court’s 1911 decision declaring the practice a “per se” violation of antitrust law — that is, virtually always illegal. Writing for the court in Dr. Miles Medical Co. v. John D. Park & Sons Co., Justice Charles Evans Hughes said such restrictions were “injurious to the public interest and void.” Seven years later, however, the court gave manufacturers a different way to control their dealers. In the so-called Colgate case, it said manufacturers could recommend a uniform price for their products and then refuse to provide their wares to dealers that did not agree to abide by that figure.

That seemingly artificial distinction has helped drive arguments by academic economists in recent years against preserving the rule. More broadly, though, the antitrust skeptics who seem to dominate academia strongly argue for a manufacturer’s right to control its product distribution. They want resale price maintenance agreements to be judged under a “rule of reason” — weighing the costs to competition against the benefits in consumer service.

The issue reached the high court in an antitrust suit brought by Kay’s Kloset, a women’s clothing store in Texas, after Leegin, a Los Angeles-based manufacturer of women’s accessories, cut the store off for selling its trademarked goods at a discount. The store won at trial, and Leegin was ordered to pay $3.6 million in damages.

Representing Leegin, attorney Theodore Olson told the justices that the 1911 rule against resale price maintenance is “widely recognized as outdated, misguided and anti-competitive.” For Kay’s Kloset, attorney Robert Coykendall countered that discouraging price cuts is “bad antitrust policy.”

Liberals Stephen G. Breyer and David H. Souter were most forceful in defending the existing rule. They asked Olson and deputy solicitor general Thomas Hungar why the court should change the rule on the basis of economists’ views when Congress has left it standing. Conservatives Antonin Scalia and Samuel A. Alito Jr. made clear their views on the opposite side. What’s wrong with allowing some companies to make money out of service instead of cheap prices, Alito asked.

In his questions, Roberts focused on the Colgate case. Why change the rule if manufacturers can use that 1918 decision to get around it, he asked. But later Roberts turned that point around and asked, why preserve the rule if it can be so readily circumvented?

Precedent figures strongly in some higher-profile cases before the court this term — notably, the challenge to the federal ban on “partial birth” abortions and cases from Seattle and Louisville on race-based pupil assignments in public schools. By the time they are all decided, probably in late June, the Roberts Court will have given liberals and conservatives alike some telling clues about how far it will use its power to rethink or even reverse prior decisions.

Kenneth Jost is the Supreme Court editor for CQ Press.