An antitrust challenge to Hermès’ system of allocating its hardest-to-get handbags is now playing out before a federal appeals court. In an opening brief filed on February 17, plaintiffs Tina Cavalleri, Mark Glinoga, and Mengyao Yang ask the U.S. Court of Appeals for the Ninth Circuit to revive their lawsuit (and in particular, their tying claim under Section 1 of the Sherman Act), alleging that Hermès unlawfully conditions the sale of Birkin handbags on customers buying thousands of dollars’ worth of additional Hermès products.
According to the newly-filed brief, the district court in California applied an improperly demanding pleading standard to allegations that Hermès conditions access to its Birkin handbags on customers’ prior purchases of “ancillary products,” including ready-to-wear apparel and accessories. At issue, according to the plaintiffs, is whether what Hermès describes as relationship-based retailing amounts to illegal tying under federal antitrust law.
The Background in Brief: In proposed class action lawsuit that they filed in March 2024, Cavalleri, Glinoga, and Yang accuse Hermès of engaging in an unlawful tying scheme by requiring customers to purchase ancillary products – such as scarves, jewelry, footwear, or home goods – as a condition of buying a Birkin or Kelly bag. The plaintiffs also assert false advertising and fraud claims, along with violations of federal antitrust and California state law.
Earlier versions of the complaint were dismissed for failing to plausibly allege a relevant product market, Hermès’ market power, or a cognizable antitrust injury. The plaintiffs amended their complaint twice in 2024, attempting to redefine the relevant markets and argue that Hermès’ practices “artificially inflate the true prices” of its handbags.
They have argued that the nominal retail price of a Birkin – often upwards of $10,000 – is “a facade,” masking a system that effectively forces consumers to spend heavily on ancillary goods. According to the plaintiffs, the practice increases the true cost of a Birkin and generates revenue from customers who never “qualify,” leaving them with products they would not otherwise have purchased.
Hermès again moved to dismiss in October 2024, arguing that the plaintiffs’ evolving market definitions overstated its dominance, that the complaint alleged no cognizable antitrust injury beyond frustration over scarcity, and that the fraud and state-law claims either lacked specificity or merely duplicated the federal theories.
In September 2025, U.S. District Judge James Donato dismissed the second amended complaint, holding that the plaintiffs failed to plausibly plead a relevant product market, market power, and injury to competition – the core elements of their tying theory. He dismissed the federal claims with prejudice and declined supplemental jurisdiction over the state-law claims. In doing so, he rejected the proposed “elitist luxury handbag” market as inadequately defined and found no plausible allegations that Hermès wields market power over the Birkin or causes anticompetitive effects in the alleged tied markets. And he also emphasized that prioritizing top-spending customers, without more, does not violate antitrust law.
The Tying Theory Revisited
Setting the stage in their opening brief, the plaintiffs describe the Birkin as being sold in a manner contrary to “the way consumers typically buy products.” Birkin handbags are not available online, are not publicly displayed on store floors, and cannot simply be requested and purchased, they assert. Instead, they allege that Hermès instructs sales associates to offer Birkin bags only to customers who have built a sufficient purchase history of ancillary products. The alleged tied market spans luxury ready-to-wear apparel and accessories, including clothing, scarves, footwear, watches, jewelry, fragrances, and home goods.
According to the plaintiffs, the tying structure is straightforward. The Birkin handbag serves as the tying product, while the tied products consist of Hermès ready-to-wear, accessories, jewelry, footwear, home goods, and similar items. The alleged condition is that access to the Birkin is effectively contingent on prior ancillary purchases. The plaintiffs further contend that Hermès’ commission structure reinforces this system. Sales associates, they argue, earn higher commissions on non-Birkin products and no commission on Birkins, incentivizing them to steer customers toward ancillary goods. The district court was unpersuaded. The Ninth Circuit will now decide whether it should have been.
The Pressure Points on Appeal
The appeal centers on the dismissal of the plaintiffs’ federal tying claim under Section 1 of the Sherman Act. While the district court also dismissed the state-law claims, the plaintiffs’ appeal centers on reviving the federal tying claim. Their appellate strategy rests on four principal arguments, each targeting what they contend were errors in the district court’s analysis. In short, they argue that the court demanded too much at the pleading stage and prematurely rejected a viable tying claim.
1. Market Definition: Can “Elitist Luxury” Be a Market?
The most immediate issue on appeal is market definition. The plaintiffs defined the tying market as “elitist luxury handbags in the U.S.,” citing industry reports that segment luxury into accessible, aspirational, and elitist tiers. They allege that the Birkin accounts for between 60 and 75 percent of this elitist submarket and that its craftsmanship, price point, and resale performance distinguish it from broader luxury offerings.
Judge Donato rejected that definition, concluding that the complaint did not plausibly allege a legally cognizable relevant market. On appeal, the plaintiffs argue that Ninth Circuit precedent does not require them to plead market definition with precision at the motion-to-dismiss stage. They argue that the district court erred in rejecting their market definition, contending that dismissal is appropriate only if a proposed market is facially unsustainable.
2. Single-Brand Power and the Birkin’s “Singularity”
Courts are typically wary of single-brand markets, but the plaintiffs lean on the Birkin’s cultural and economic “singularity,” arguing that Hermès can effectively exercise market power because there are no close substitutes in terms of prestige, access model, and resale value. They point to restricted output, consistently supra-competitive resale premiums, and barriers to entry rooted in brand identity and artisanal production to bolster their claim that Hermès wields market power and can control prices or exclude competition.
According to the plaintiffs, the Birkin is not merely a luxury good but a tightly controlled asset whose limited availability supports an inference of market power.
3. Per Se vs. Rule of Reason
Another key issue on appeal is how the district court analyzed the tying claim. At a hearing before the second amended complaint was filed, Judge Donato expressed skepticism about per se tying claims – which treat certain tying arrangements as unlawful without a detailed analysis of competitive effects – suggesting they may be “out of date.” The plaintiffs argue that this skepticism shaped the court’s reasoning and led it to demand a more rigorous, rule-of-reason-style showing at the pleading stage.
Although courts have narrowed the circumstances in which tying is automatically condemned, the per se framework remains in place. The Ninth Circuit must now decide whether the district court required the plaintiffs to allege broad market-wide harm rather than simply a not-insubstantial amount of foreclosed commerce.
4. Injury to Competition vs. Injury to Consumers
In dismissing the complaint, the district court signaled that prioritizing top-spending customers, without more, does not amount to an antitrust violation. The plaintiffs argue that the alleged scheme distorts competition in the tied market by diverting demand away from rivals like Chanel or Louis Vuitton, as customers purchase Hermès scarves or ready-to-wear they otherwise would have bought elsewhere.
The brief points to resale data suggesting that a higher percentage of non-handbag Hermès goods appear on secondary markets in pristine condition compared to competitors, which the plaintiffs argue supports an inference of coerced purchasing.
THE BOTTOM LINE: For decades, Hermès has built its brand on disciplined scarcity, and the Birkin – deliberately controlled, carefully rationed, and steeped in mythology – is the foundation of that effort. The company’s strategy underpins the bag’s pricing power, sustains its resale premiums, and reinforces the brand mystique. The plaintiffs’ case asks whether that same architecture – when coupled with alleged purchase-history requirements – crosses the line from brand management into antitrust territory.
The case is Cavalleri, et al. v. Hermès International, et al., 3:24-cv-01707 (N.D. Cal.)
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