United States v. National Ass'n of Real Estate Boards

• Decision Date: 04 June 1948
• Docket Number: Criminal No. 950 — 47.
• Citation: 80 F. Supp. 350
• Parties: UNITED STATES v. NATIONAL ASS'N OF REAL ESTATE BOARDS et al.
• Court: U.S. District Court — District of Columbia

80 F. Supp. 350

UNITED STATES v. NATIONAL ASS'N OF REAL ESTATE BOARDS et al.

Criminal No. 950 — 47.

United States District Court District of Columbia.

June 4, 1948.

Roger J. Whiteford and John J. Wilson, both of Washington, D. C., for National Ass'n Real Estate Boards.

William E. Leahy, of Washington, D. C., for Washington Real Estate Board.

Victor H. Kramer, Herbert N. Maletz, C. Heyward Belser, and Joseph P. Kelly, Jr., Attys., U. S. Department of Justice, all of Washington, D. C., for the United States.

CURRAN, Justice.

Last Tuesday and Wednesday there was argued before this court two motions for judgments of acquittal; one made by the National Association of Real Estate Boards and one made by the Washington Real Estate Board, two co-defendants in this suit brought by the United States against the two defendants, in the form of an indictment, charging both of the defendants with a conspiracy between themselves and co-conspirators not named, in violation of Section 3 of the Sherman Anti-Trust Act, 15 U.S.C.A. § 3.

Authorities have been presented very capably by counsel on both sides in this matter, and have been of great assistance to the court in coming to a conclusion.

As I see it, the question here is: What is the nature of the business of the defendants, that is the National Association of Real Estate Boards and the Washington Real Estate Board and its members, and are the constitutions, the by-laws, and the codes of ethics or any subdivision thereof, in their direct effect in restraint of trade or commerce in the District of Columbia? Is the business of the defendants interstate commerce in the sense of that word as it has been used and understood in the decision of the courts, or is it a business which is an aid or facility to commerce and which, if it affects interstate commerce thereon in the District of Columbia, does so only in an indirect and incidental manner?

The facts of the matter are that the defendants, who are real estate men, have entered into voluntary associations for the purpose of bettering the conduct of their business, and after entering such associations they still continue their individual businesses in full competition with each other, and that the associations themselves, as associations, do no business whatever, but are simply a means by and through which the individual members who have become thus associated are the better enabled to transact their business, to maintain and uphold it in the proper way, and to create methods of preserving integrity amongst the members of the associations.

In my view the charges of a real estate broker on account of his personal services are nothing more than charges for aids or facilities furnished to clients whereby their objects may be the more easily and readily accomplished. It is my view that charges or commissions of real estate brokers in the District of Columbia are based on personal services performed for clients, and their effect in the sale of real estate are not directly connected with or form a part of interstate commerce in the District of Columbia, because I feel that charges for services of this character and nature do not immediately touch upon or act upon nor do they directly affect the sale of real estate in the District of Columbia.

Of course, indirectly and as an incident, they may enhance the cost to the owner of real estate, or they may add to the price paid by the purchasers, but they are not, in my opinion, charges which are directly laid upon real estate itself. Rather are they charges for facilities given or provided to clients in the course of the sale of real estate.

Here in this case the conspiracy condemned by the statute is one whose direct and immediate effect is a restraint upon trade or commerce in the District of Columbia. As I say, charges for such facilities, in my opinion, are not restraints upon the trade or commerce, although, as I have indicated, the total cost of selling the real estate may be increased.

The right of the owners of real estate in the District of Columbia to sell their own property in any way whatever is not affected or touched by the agreement in question, while the privilege of having their property sold for the real owner, with the aid of a broker, is a privilege which they are charged for and which is not attached to their right to sell their own property.

If charges of the nature that I have mentioned do not amount to a regulation of interstate trade or commerce in...