United States: Resale Price Maintenance Programs Still At Risk

District court case could affect implementation of minimum resale price maintenance programs.

Sellers must still exercise great caution when designing minimum resale price programs for their resellers in the United States following the recently settled New York v. Herman Miller, Inc. case.  This is despite the Supreme Court of the United States' landmark ruling just last year in Leegin Creative Leather Products, Inc. v. PSKS, Inc. that minimum resale price maintenance (MRPM) programs are no longer illegal per se but are to be evaluated under the Rule of Reason by weighing their anticompetitive harm against their pro-competitive benefits. 

The Herman Miller case, which was brought by the Attorneys General of the States of New York, Illinois and Michigan, alleged that Herman Miller, Inc. (Herman Miller), a seller of high-end ergonomic office chairs, violated federal and state antitrust laws by establishing an MRPM program that had the effect of raising prices to consumers.  On March 27, 2008, the U.S. District Court for the Southern District of New York entered a consent decree settling the case wherein Herman Miller agreed to cease its MRPM program and pay civil penalties of $750,000.  As a result, sellers should note that certain states, 37 of which formally opposed the outcome in Leegin, are actively prosecuting MRPM programs, despite the Supreme Court's ruling in Leegin.

The Complaint

The states of New York, Illinois and Michigan alleged that Herman Miller's suggested retail price (SRP) policy was actually an MRPM program that violated Section One of the Sherman Act and various state antitrust laws, because the policy allegedly sought to "stabilize and artificially raise retail prices and retail price levels" for Herman Miller's Aeron" chairs.  Under the SRP policy, resellers allegedly had to agree with Herman Miller not to advertise below its dictated prices for Aeron" chairs "in any medium where prices can be seen by consumers," including in-store price tags and resellers' own internet websites, or face termination or loss of access to Herman Miller's products for one year. 

The complaint also alleged that Herman Miller implemented its SRP policy as a result of complaints from some of its resellers that other resellers were discounting the prices of Aeron" chairs and causing margins to fall.  The complaint went on to allege that as a result of the SRP policy "the vast majority of retailers raised and maintained their retail price at the SRP level," and that the SRP policy "eliminated the advertised price as a selling tool."  To cure this allegedly anticompetitive conduct, the complaint sought an injunction preventing Herman Miller from continuing its MRPM program as well as having Herman Miller pay for New York's, Illinois' and Michigan's costs, including attorneys' fees.


The Herman Miller case has several notable aspects for sellers and how they distribute their products.  Sellers should take these into account when deciding whether to implement their own MRPM programs.

First, the complaint does not clearly lay out under which of the two legal standards, per se illegality or the Rule of Reason, Herman Miller's program violated the antitrust laws.  Rather, the complaint merely alleges that Herman Miller's SRP policy was an unreasonable restraint of trade.  Thus, these states do not appear to be analyzing MRPM programs under the Rule of Reason as Leegin holds they should.  Indeed, the complaint does not allege that Herman Miller possessed a large share of any market.  Instead, the complaint merely alleges that Aeron" chairs are "very popular and highly sought-after."  Thus, even sellers with small market shares that implement MRPM programs may be at risk for prosecution.  Also, it is clear that these states did not consider whether the SRP policy promoted inter-brand competition against other brands of high-end office chairs, even if it reduced intra-brand competition for Herman Millers Aeron" brand office chairs.

Second, sellers should note that Herman Miller's SRP policy only prohibited advertising below a certain price and did not actually prohibit resellers from selling below the minimum advertised price set by Herman Miller.  In other words, Herman Millers SRP policy was a minimum advertised price program and not by its terms an explicit MRPM program.  While Herman Millers SRP policy was aggressive by prohibiting retailers from advertising prices below minimums set by Herman Miller even on retailers' in-store price tags and their own internet websites, the complaint does not allege that Herman Miller sought actually to prohibit resellers from setting lower prices. 

Third, the complaint alleged that Herman Miller implemented its SRP policy only after receiving complaints from some of its resellers about discounting by other resellers.  This fact, if true, undermined Herman Miller's ability to argue that it enacted its SRP policy for pro-competitive purposes.

Thus, sellers considering a MRPM program since the Leegin decision should proceed very cautiously.  They should, at a minimum, ensure that any MRPM program promotes inter-brand competition and only minimally restricts price.


The Herman Miller case illustrates that certain states, such as New York, Illinois, Michigan and California, will likely continue to prosecute MRPM under a per se approach, despite the Leegin decision.  One possible explanation for this inconsistency is that the Herman Miller case resulted from a five-year investigation that predated the Leegin decision and was filed in conjunction with a consent decree without any admission of liability.  Nevertheless, Herman Miller still had to endure a five-year investigation and a costly settlement to resolve these claims.  This should give all sellers, not just those with high market shares, pause before implementing any MRPM program.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions