The Houston Court of Appeals, 1st District, Adopts the Federal “Rule of Reason” for Vertical Nonprice Restraints: Red Wing Shoe Co. v. Shearer’s, Inc., 769 S.W.2d 339 (Tex. App. – Houston [1st Dist.] 1989, no writ)
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Analyzes the Texas case Red Wing Shoe Co. v. Shearer’s, Inc. The Houston Court of Appeals decided that Texas legislature, in enacting the Texas Free Enterprise and Antitrust Act of 1983, intended for the courts to adopt the federal rule of reason for vertical nonprice restraints such as the one in this case. This method requires the courts to consider the true economic effects of vertical agreements.