a competitive disadvantage. The policy prohibits dealers from advertising any current model year RV at any price below the manufacturer's minimum advertised price. Conard and his attorney consider that policy to possibly be a violation of federal restraint of trade laws.

"The company is threatening RV dealerships with termination if they, out of necessity, cannot adhere to the one-price-throughout-the-country policy," said Conard. "Dealers can only stay in business if they are allowed to set and advertise prices that reflect market conditions in their areas."

“Keystone's retroactive and unilaterally enacted Internet policy violates the Pennsylvania State Board of Motor Vehicle Manufacturers, Dealers, and Salesmen prohibitions against a manufacturer’s attempt to terminate a dealership and other unlawful acts involving threats of termination, unless agreeing to prejudicial conditions, pursuant to the Board of Vehicles Act,” said Chris DeVito, an attorney with the law firm of Morganstern, MacAdams and DeVito. DeVito is representing Conard in the case.

“Under Pennsylvania law, Keystone’s proposed advertising policy would work be unfair, without due regard for the equities of Coopers’ RV, and without just cause, upon the Cooper's RV in their business operations as a Keystone Passport dealer,” he added.

Keystone's policy has meant that Keystone dealers may have lost sales this summer by forcing dealers to advertise RVs at higher prices in a stagnant economy, Conard explained. "Other companies, like Forest River, allow their dealers to set their own prices when advertising units. So, naturally, they can advertise prices considerably lower than the prices I am allowed to advertise for RVs of similar sizes and features.

"The policy is so ridiculous that an RV dealer who accepts a current model year trade in during the current model year can't advertise it online the used RV for anything other than the manufacturer's minimum advertised price," he added. “With the Internet being our No. 1 source for driving traffic to a dealer’s lot, this is a bad policy.”

Conard said it is bad policy for an RV manufacturer to dictate to RV dealers that they must mark up units at a specific percentage over invoice -- and insist that is the only price at which the RVs may be advertised. Doing so literally gives business to other manufacturers and the dealers they represent who can engage in aggressive pricing, he said.

"I would say 75 percent of RV dealers don't understand the ramifications of this policy," said Conard. "It is restraint of trade for a manufacturer to tell dealers how they can advertise and at what prices -- and to apply that policy on a one-size-fits-all basis. It's almost like price fixing because it's impossible to have a national price for an RV since every market is different. I feel badly for RV dealers who want to move their products, but can't do so because of Keystone's advertising policy."

For example, Conard said he can buy a 21-foot trailer for a wholesale price of $13,600. Even if he thinks consumers in his market can only afford a trailer at $16,995, he must continue to advertise it at $18,600. "I think a $5,000 profit on a 21-foot travel trailer is ridiculous, but Keystone is requiring us to advertise one price throughout the country to create the impression among consumers that that price is the set price of the RV," he explained. "I fear that Keystone dealers aren't even getting people coming onto their lots because consumers have already determined they can't afford $18,600 for an RV when the dealer across town sells a 21-foot trailer with similar features for $16,000 or even a lot less."

Keystone sent a memo to RV dealers May 6 outlining the new advertising policy. Signed simply "The Keystone Sales Team," the memo stated:

"Effective immediately, no Keystone RV Company dealer may publish or advertise any current model year products, new or used, outside of the dealer's immediate market are through any advertising media including newspapers, magazines, flyers, radio, television, or the internet at a price less than the Minimum Advertised Price (MAP). The MAP for each product will be provided by various Keystone product groups and is subject to change at Keystone's discretion.

"Regarding internet auction sites such as eBay, no "But It Now" pricing can be lower than the MAP. Any suggestion that customers may purchase a product on an internet auction site below MAP is prohibited.

"For non-current model year products, the MAP advertising policy shall be lifted on all products sixty (60) days after the model year change. Therefore, effective June 1, 2008, the MAP advertising policy will no longer apply to all 2008 model year products. Please note in future years the exemption date of the MAP for non-current model year products may vary depending on a new model year introduction date.

"Any sales advertisement of a new or used non-current model year product with a price below the MAP must also have the model year of the product listed.

"All dealers are further restricted from representing, publishing or advertising that a retail customer may take delivery of a Keystone product outside the dealer's immediate market area, or at one of Keystone's plant facilities regardless of model year.

"Any violation of the Advertising Policy will be addressed by the product group in which the violation occurred on an individual basis. Keystone does not desire to terminate relationships based on the Advertising Policy; however, Keystone reserves the right to do so at its sole discretion. In such an event, Keystone will take the necessary steps to terminate the relationship in accordance with, and subject to, any applicable dealer agreement along with federal and state laws."

DeVito said he welcomes the opportunity to discuss the case with other RV dealers who feel they may have been harmed by the policy. He can be reached at 216.687.1212 or by e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

October 31, 2008 15:14

Greg Gerber