In the 1997 case of State Oil Company v. Barkat U. Khan and Khan & Associates, Inc., the United States Supreme Court unanimously ruled that vertical maximum price fixing is not always illegal per se under Section 1 of the Sherman Antitrust Act but should be evaluated on a case-by-case basis using a "rule of reason" analysis. The dispute arose when Barkat U. Khan, who leased a service station from State Oil Company, sued for damages alleging that his profits were limited by an agreement with State Oil to charge its suggested retail prices and remit any excess to it as rent credit - effectively creating a cap on gasoline prices he could charge customers. The court's decision overruled Albrecht v Herald Co., which had previously held such arrangements as automatically unlawful.

In the dissenting opinion of STATE OIL COMPANY v. BARKAT U. KHAN AND KHAN & ASSOCIATES, INC., Justice Stevens argued that the majority's decision to overturn a longstanding precedent was unnecessary and inappropriate. He contended that there were no compelling reasons to revisit Albrecht v. Herald Co., which had held for nearly three decades that vertical maximum price fixing is per se illegal under antitrust law. Furthermore, he criticized the majority for failing to respect principles of stare decisis and undermining legal certainty by overruling a settled case without any significant changes in economic theory or empirical evidence justifying such an action.