United States v. National Association of Real Estate Boards, No. 428

CourtUnited States Supreme Court
Writing for the CourtDOUGLAS
Citation94 L.Ed. 1007,70 S.Ct. 711,339 U.S. 485
PartiesUNITED STATES v. NATIONAL ASSOCIATION OF REAL ESTATE BOARDS et al
Docket NumberNo. 428
Decision Date08 May 1950

339 U.S. 485
70 S.Ct. 711
94 L.Ed. 1007
UNITED STATES

v.

NATIONAL ASSOCIATION OF REAL ESTATE BOARDS et al.

No. 428.
Argued March 31, 1950.
Decided May 8, 1950.

Page 486

Messrs. Peyton Ford and Victor H. Kramer, Assts. to the Attorney General, for the United States.

Mr. William E. Leahy, Washington, D.C., for appellees Washington Real Estate Board et al.

Mr. Roger J. Whiteford, Washington, D.C., for appellees National Association of Real Estate Boards and Herbert U. Nelson.

[Argument of Counsel from page 486 intentionally omitted]

Page 487

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, 15 U.S.C.A. § 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 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. D.C., 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 of the Act. D.C., 84 F.Supp. 802. The case is here on appeal. 32 Stat. 823, 62 Stat. 989, 15 U.S.C. § 29, 15 U.S.C.A. § 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, 52 S.Ct. 607—609, 76 L.Ed. 1204.

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 prescribed rates has not caused the Washington Board to invoke any sanctions. Hence the District Court called the rate schedules 'non-mandatory.'

Enough has been said to show that under our decisions an illegal price-fixing scheme has been proved, unless the

Page 489

fixing of real estate commissions is not included in the prohibitions of § 3 of the Act. Price-fixing is per se an unreasonable restraint of trade. It is not for the courts to determine whether in particular settings price-fixing serves an honorable or worthy end. An agreement, shown either by adherence to a price schedule or by proof of consensual action fixing the uniform or minimum price, is itself illegal under the Sherman Act, no matter what end it was designed to serve. That is the teaching of an unbroken line of decisions. See United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 218 et seq., 60 S.Ct. 811, 841 et seq., 84 L.Ed. 1129; United States v. Paramount Pictures, 334 U.S. 131, 142, 143, 68 S.Ct. 915, 921, 922, 92 L.Ed. 1260. And the fact that no penalties are imposed for deviations from the price schedules is not material. See Eastern States Lumber Assn. v. United States, 234 U.S. 600, 608—609, 34 S.Ct. 951—953, 58 L.Ed. 1490, L.R.A.1915A, 788; American Column & Lumber Co. v. United States, 257 U.S. 377, 411, 42 S.Ct. 114, 121, 66 L.Ed. 284, 21 A.L.R. 1093; Federal Trade Commission v. Pacific States Paper Trade Assn., 273 U.S. 52, 62, 47 S.Ct. 255, 257, 71 L.Ed. 534. Subtle influences may be just as effective as the threat or use of formal sanctions to hold people in line.

Third. The critical question is whether the business of a real estate agent is included in the word 'trade' within the meaning of § 3 of the Act. The District Court thought not. It was of the view that where personal services are involved, a combination to fix the price or compensation is legal. It seemingly was influenced by the declaration in § 6 of the Clayton Act, 38 Stat. 731, 15 U.S.C. § 17, 15 U.S.C.A. § 17, that 'the labor of a human being is not a commodity or article of commerce * * * nor shall such (labor) organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws.' But we think it a misconception to assimilate the services involved here to those of employees or to compare the present case to those involving the application of the

Page 490

antitrust laws to labor unions. Cf. Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044; United States v. Hutcheson, 312 U.S. 219, 61 S.Ct. 463, 85 L.Ed. 788. We do not have here any more than we did in American Medical Ass'n v. United States, 317 U.S. 519, 63 S.Ct. 326, 87 L.Ed. 434, or United States v. Women's Sportswear Mfrs. Ass'n, 336 U.S. 460, 69 S.Ct. 714, cf. Columbia River Packer's Ass'n v. Hinton, 315 U.S. 143, 62 S.Ct. 520, 86 L.Ed. 750, an aspect of the employee-employer relationship to which the antitrust laws have made special concessions.

Members of the Washington Board are entrepreneurs. Some are individual proprietors; others are banks or corporations. Some may have no employees; others have large staffs. But each is in business on his own. The fact that the business 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 Act. The Act was aimed at combinations organized and directed to control of the market by suppression of competition 'in the marketing of goods and services.' See Apex Hosiery Co. v. Leader, supra, 310 U.S. at page 493, 60 S.Ct. at page 992.

Justice Story in The Schooner Nymph, 18 Fed.Cas. No. 10388, pages 506, 507, while construing the word 'trade' in the Coasting and Fishery Act of 1793, 1 Stat. 305, said,

'The argument for the claimant insists, that 'trade' is here used in its most restrictive sense, and as equivalent to traffic in goods, or buying and selling in commerce or exchange. But I am clearly of opinion that such is not the true sense of the word, as used in the 32d section (46 U.S.C.A. § 325). In the first place, the word 'trade' is often, and indeed generally, used in a broader sense, as equivalent to occupation, employment, or business, whether manual or mercantile. Wherever any occupation, employment, or business is carried on for the purpose of profit, or gain or a livelihood, not in the liberal arts or in the learned professions,

Page 491

it is constantly called a trade. Thus, we constantly speak of the art, mystery, or trade of a housewright, a shipwright, a tailor, a blacksmith, and a shoe-maker, though some of these may be, and sometimes are, carried on without buying or selling goods.'

It is in that broad sense that 'trade' is used in the Sherman Act. That has been the consistent holding of the decisions. The fixing of prices and other unreasonable restraints have been consistently condemned in case of services as well as goods. Transportation services, United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 312, 17 S.Ct. 540, 547, 41 L.Ed. 1007; United States v. Joint Traffic Ass'n, 171 U.S. 505, 19 S.Ct. 25, 43 L.Ed. 259, cleaning, dyeing, and renovating wearing apparel, Atlantic Cleaners & Dyers v. United States, 286 U.S. 427, 52 S.Ct. 607, 76 L.Ed. 1204, the procurement of medical and hospital services, American Medical Ass'n v. United States, supra, 317 U.S. 528, 63 S.Ct. 328, 87 L.Ed. 434, the furnishing of news or advertising services, Indiana Farmers Guide Pub. Co. v. Prairie Farmer Pub. Co., 293 U.S. 268, 55 S.Ct. 182, 79 L.Ed. 356; Associated Press v. United States, 326 U.S. 1, 65 S.Ct. 1416, 89 L.Ed. 2013,—these indicate the range of business...

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224 practice notes
  • Pontius v. Children's Hosp., Civ. A. No. 78-987.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • December 30, 1982
    ...professional practice controlling in determining whether § 1 includes professions. United States v. National Assn. of Real Estate Boards, 339 U.S. 485 at 489 70 S.Ct. 711 at 714, 94 L.Ed. 1007. Congress intended to strike as broadly as it could in § 1 of the Sherman Act, and to read into it......
  • INTERNATIONAL ASS'N, ETC. v. UNITED CONTRACTORS, ETC., No. 71-1947.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • July 17, 1973
    ...it was held that a minimum fee schedule is a form of price-fixing. This holding cited as authority United States v. Real Estate Boards, 339 U.S. 485, 70 S.Ct. 711, 94 L.Ed. 1007 In the instant case, nothing which appears in the record controverts the independent-contractor status of the mem......
  • Scott v. Moore, No. 870
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • July 1, 1982
    ...the same evidence will not justify its setting the district court's findings aside. United States v. National Ass'n of Real Estate Bids, 339 U.S. 485, 495-96, 70 S.Ct. 711, 717, 94 L.Ed. 1007, 1016 The court below concluded that the assault on the Alligator Bayou construction site "evolved ......
  • Freeman v. San Diego Assn. of Realtors, No. D030553.
    • United States
    • California Court of Appeals
    • December 27, 1999
    ...concerns were present in other MLS cases relied on by Freeman. (See, e.g., United States v. National Ass'n. of Real Estate Bds. (1950) 339 U.S. 485, 489, 70 S.Ct. 711, 94 L.Ed. 1007 [price fixing for brokers' commissions]; United States v. Metro MLS (E.D.Va., Sept. 20, 1973) 1974-2 Trade Ca......
  • Request a trial to view additional results
223 cases
  • Pontius v. Children's Hosp., Civ. A. No. 78-987.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • December 30, 1982
    ...professional practice controlling in determining whether § 1 includes professions. United States v. National Assn. of Real Estate Boards, 339 U.S. 485 at 489 70 S.Ct. 711 at 714, 94 L.Ed. 1007. Congress intended to strike as broadly as it could in § 1 of the Sherman Act, and to read into it......
  • INTERNATIONAL ASS'N, ETC. v. UNITED CONTRACTORS, ETC., No. 71-1947.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 17, 1973
    ...it was held that a minimum fee schedule is a form of price-fixing. This holding cited as authority United States v. Real Estate Boards, 339 U.S. 485, 70 S.Ct. 711, 94 L.Ed. 1007 In the instant case, nothing which appears in the record controverts the independent-contractor status of the mem......
  • Scott v. Moore, No. 870
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • July 1, 1982
    ...the same evidence will not justify its setting the district court's findings aside. United States v. National Ass'n of Real Estate Bids, 339 U.S. 485, 495-96, 70 S.Ct. 711, 717, 94 L.Ed. 1007, 1016 The court below concluded that the assault on the Alligator Bayou construction site "evolved ......
  • Freeman v. San Diego Assn. of Realtors, No. D030553.
    • United States
    • California Court of Appeals
    • December 27, 1999
    ...concerns were present in other MLS cases relied on by Freeman. (See, e.g., United States v. National Ass'n. of Real Estate Bds. (1950) 339 U.S. 485, 489, 70 S.Ct. 711, 94 L.Ed. 1007 [price fixing for brokers' commissions]; United States v. Metro MLS (E.D.Va., Sept. 20, 1973) 1974-2 Trade Ca......
  • Request a trial to view additional results
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