339 U.S. 485 (1950), 428, United States v. National Association of Real Estate Boards

Docket Nº:No. 428
Citation:339 U.S. 485, 70 S.Ct. 711, 94 L.Ed. 1007
Party Name:United States v. National Association of Real Estate Boards
Case Date:May 08, 1950
Court:United States Supreme Court
 
FREE EXCERPT

Page 485

339 U.S. 485 (1950)

70 S.Ct. 711, 94 L.Ed. 1007

United States

v.

National Association of Real Estate Boards

No. 428

United States Supreme Court

May 8, 1950

Argued March 31, 1950

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Syllabus

1. That no interstate commerce is involved is not a barrier to a suit to enjoin violations of § 3 of the Sherman Act involving purely local conduct in the District of Columbia, since Congress specifically made § 3 applicable to such conduct, and had power to do so under Art. I, § 8, Clause 17 of the Constitution. Atlantic Cleaners & Dyers v. United States, 286 U.S. 427. P. 488.

2. If the business of a real estate broker is "trade" within the meaning of § 3 of the Sherman Act, evidence that the Washington Real Estate Board had adopted standard rates of commissions for its members, that its code of ethics required members to maintain such standard rates, that members agreed to abide by the code, and that the prescribed rates were used in the great majority of transactions, although the Board had invoked no sanctions for departure therefrom, is sufficient to show a price-fixing scheme violative of § 3. Pp. 488-489.

(a) That such price-fixing may serve a worthy or honorable end is immaterial. P. 489.

(b) That no penalties were imposed for deviations from the price schedules is immaterial. P. 489.

3. The business of a real estate broker is "trade" within the meaning of § 3 of the Sherman Act. Pp. 489-492.

(a) The services of real estate brokers cannot be assimilated to those of employees, nor can the present case be compared to those involving the application of the antitrust laws to labor unions -- notwithstanding § 6 of the Clayton Act declaring that "the labor of a human being is not a commodity or article of commerce" and exempting labor unions and their members from the antitrust laws. Pp. 489-490.

(b) The fact that the business of a real estate broker involves the sale of personal services, rather than commodities, does not take it out of the category of "trade" within the meaning of § 3 of the Sherman Act, which is aimed at the fixing of prices and

Page 486

other unreasonable restraints in the case of services, as well as goods. Pp. 490-491.

(c) The activity of a real estate broker is commercial and carried on for profit, and the competitive standards which the Sherman Act sought to preserve in the field of trade and commerce are as relevant to the brokerage business as to other branches of commercial activity. P. 492.

4. That appellees were acquitted in a criminal prosecution for conspiracy to violate § 3 of the Sherman Act is no bar to this civil suit to enjoin the same conspiracy, since the doctrine of res judicata is not applicable. Helvering v. Mitchell, 303 U.S. 391. Pp. 492-494.

5. The finding of the District Court that the National Association of Real Estate Boards and its executive vice-president did not in fact conspire with the Washington Board to fix and prescribe the rates of commission to be charged by members of the latter is sustained, since it was not "clearly erroneous" within the meaning of Rule 52 of the Federal Rules of Civil Procedure. Pp. 494-496.

84 F.Supp. 802 affirmed in part and reversed in part.

In a civil suit in a federal district court to enjoin a conspiracy to fix rates of commissions of real estate brokers in the District of Columbia in violation of § 3 of the Sherman Act, judgment was entered for defendants. 84 F.Supp. 802. On appeal to this Court, affirmed in part and reversed in part, p. 496.

Page 487

DOUGLAS, J., lead opinion

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

This is a civil action brought by the United States to enjoin appellees1 from engaging in a price-fixing conspiracy in violation of § 3 of the Sherman Act, 26 Stat. 209, 15 U.S.C. § 3.2 The core of the case is the charge that the members of the Washington Real Estate Board combined and conspired to fix the commission rates for their services when [70 S.Ct. 712] acting as brokers in the sale, exchange, lease, and management of real property in the District of Columbia.

The same conspiracy was charged in a criminal proceedings.3 The criminal case was tried first. At the end of the Government's case, the court granted the defendants' motion for a judgment of acquittal. 80 F.Supp. 350. Appellees then moved for summary judgment in this civil suit, contending that the judgment of acquittal in the criminal case is res judicata here. That motion was denied.4

Page 488

The civil case was then tried. It was stipulated that the trial would be on the record in the criminal case, the United States reserving the right to offer additional exhibits. No evidence was offered by appellees. The court entered judgment for the appellees, holding that the agreement to fix the rates of brokerage commissions, which had been shown, was not a violation [70 S.Ct. 714] of the Act. 84 F.Supp. 802. The case is here on appeal. 32 Stat. 823, 62 Stat. 989, 15 U.S.C. § 29.

First. The fact that no interstate commerce is involved is not a barrier to this suit. Section 3 of the Sherman Act5 is not leveled at interstate activities alone. It also puts beyond the pale certain conduct purely local in character and confined to the District of Columbia. That Congress has the power so to legislate for the District by virtue of Art. I, § 8, Clause 17 of the Constitution, and did so by § 3, was settled by Atlantic Cleaners & Dyers v. United States, 286 U.S. 427, 432-435.

Second. The Washington Board has adopted standard rates of commissions for its members -- charges which cover the wide range of services furnished by a real estate agent. The Board's code of ethics provides that "Brokers should maintain the standard rates of commission adopted by the board, and no business should be solicited at lower rates." Members agree to abide by this code. The prescribed rates are used in the great majority of transactions, although, in exceptional situations, a lower charge is made. But departure from the...

To continue reading

FREE SIGN UP