## Facts

- Herald Co. published the *St. Louis Globe-Democrat* and distributed it through independent carriers who bought papers at wholesale and resold to subscribers at retail.
- Carriers operated in exclusive territories, and their appointments were terminable if they exceeded Herald’s advertised maximum retail price.
- Lester J. Albrecht, a carrier, raised his retail price above Herald’s advertised maximum.
- Herald protested Albrecht’s price increase and notified subscribers it would deliver the newspaper directly at the lower advertised price.
- Herald hired Milne, an independent agency, to solicit Albrecht’s subscribers to switch to Herald’s direct delivery at the lower price.
- About 300 of Albrecht’s approximately 1,200 subscribers switched to direct delivery.
- Herald then transferred those customers, without charge, to another carrier (Kroner), who understood Herald’s purpose and knew he might have to return the route if Albrecht resumed the advertised price.
- Herald told Albrecht he could regain the customers if he complied with the advertised maximum price.
- Herald later terminated Albrecht’s carrier appointment; Albrecht sold his route and claimed the sale price was reduced because he had lost subscribers.

## Issues

1. Whether the uncontroverted facts established a “combination” under § 1 of the Sherman Act among Herald, Milne, and Kroner to force Albrecht to comply with Herald’s maximum retail price.
2. Whether fixing maximum resale prices by agreement or combination is a per se violation of § 1 of the Sherman Act.

## Decision

- The Supreme Court reversed the Eighth Circuit and remanded.
- The Court held that the undisputed facts showed a § 1 “combination” between Herald, Milne, and Kroner to compel Albrecht’s compliance with the advertised maximum retail price.
- The Court held that maximum resale price fixing by agreement or combination is per se unlawful under § 1, like minimum resale price fixing.
- The Court rejected reliance on speculative “price gouging” justifications tied to exclusive territories where the legality and economic power associated with those territories were not established on the record.

## Legal Principles

- A supplier’s enlistment of third parties (such as solicitation agents and replacement dealers) to implement and enforce resale price policies may constitute concerted action (“combination”) actionable under § 1 of the Sherman Act, rather than unilateral conduct.
- Agreements or combinations fixing maximum resale prices are per se unlawful restraints of trade under § 1 of the Sherman Act (as held in 1968).
- Courts may not justify per se unlawful price restraints by assuming exclusive territories are lawful or necessary to prevent retailer overcharging when those predicates are not established in the case.

## Conclusion

The Court treated Herald’s use of Milne and Kroner to enforce a retail price ceiling as concerted action under § 1 and held that maximum resale price fixing achieved through such a combination was per se illegal, requiring reversal of the judgment for Herald and a remand for further proceedings.


Albrecht v. Herald Co., 390 U.S. 145 (1968)