Evening star., 1950-05-09
ReaItorsExpect
Fees 10 Stand
Despite Ruling
Government Victory
In Supreme Court
Discounted by Board
By Robert K. Welsh

justice department
The court yesterday held that
O real estate agents business in
the District is trade" within the
meaning of the antitrust laws
and that the Real Estate Board
violated the Sherman Antitrust
Act by setting fees for brokers.
AS a practical matter. board
spokesmen said, rates for sale, ex-
change, lease and management
of real estate here are likely to
remain unchanged.
Board members in 1947, they
said, suspended a uniform rate
schedule attacked by the Justice
Department as price fixing but
defended by the board as a volun-
tary arrangement to protect the
public and maintain good busi-
ness standards.
The Justice Department, how
ever, said 1t would return to Dis
trict Court and ask that the board
be enjoined from ever again "com-
bining or conspiring to Ak the
commission rates for their serv-
ices" in property dealings in the
District.
Six-to-1 Decision.
District Judge Alexander Holtz-
off last June refused to issue such
an injunction. In a civil anti
trust. suit against the Washington
board the National Association of
Real Estate Boards and the as
Sociation's executive secretary
Herbert U. Nelson, Judge Holtzoff
held that the agreement on COM
mission rates did not violate the
antitrust law. Realtors, he said
performed personal services" of
the kind not covered by the law
The Supreme Court, in 6-1
decision, ruled that Judge Holtzoff
erred in dismissing the case
against the Washington board. 1t
upheld his action in clearing
the national association and Mr.
Nelson. The Washington Real
Estate Board is a member of he
national association. and has
about $50 of the approximately
5000 real estate dealers in the
District.
The next move, according to
Justice Department officials, will
be for the department to TASK
that relief be granted" against
the Washington board. That re-
quest will be made when the
Supreme Court mandate reaches
District Court. perhaps late this
month.
The Supreme Court did not
specifically tell the lower court
what to do. Judge Holtzoff. attor-
neys explained. could Immediately
issue an injunction. Or, they
said, he could hear extensive argu-
mentS by the Justice Department
as to what sort of injunction or
other restraint" should be Or
dered, and by Washington board
lawyers as to what other inter-
pretations seem reasonable in
view of the Supreme Courts po-
Sition.
Held "Pyrrhic Victory"
Roger j. Whiteford, attorney to
whom most Washington and ma
tional board officials referred re-
quests for comment, described the
ruling on WREB as "a Pyrrhic
victory for the Justice Depart
ment."
The practical effect will be nil
so far as brokers commission rates
in the District are concerned, he
predicted.
He. as we'll as Charles J. Rush,
Washington board executive Sec
retary, noted that. in Septem-
ber. 1947. the board men,
bers voted to suspend the
suggested schedule of commission
rates. That schedule, they con-
tended, was merely a guide" for
members and no one was ever
penalized for charging lower or
higher commission for real estate
transaction service.
In any event, the commission
rates could not have been enforced
on a District-wide scale because
only a small percentage of real
estate men here belonging to
the Washington board, they de-
clared.
Effect on Other Areas Studied.
Mr.. Whiteford said that, pending
closer study of the opinion, he could
not say how real estate operators
here and throughout the country
might ultimately be affected by the
Supreme Courts finding that they
are engaged in a trade" subject
to antitrust regulation.
But he said it seems unlikely
they will be affected one way or
another.
While the antitrust law section
cited in the courts opinion applied
particularly to the District. there
was some question whether it
would affect commission rate
schedules of real estate boards in
other cities.
! Victor H. Kramer, Justice De-
partment attorney who handled
the cases in criminal and civil
proceedings here, said the depart
ment is studying that question.
So far as Washington is con-
cerned. other attorneys explained,
the Washington board cannot
legally provide any rates. Mem
bers and realtors in general pre-
sumably can set their own fees.
A board official said he believed
there would be little If any change
from the usual rate Of 5 per cent
in sales up to $4,000 and 3 per
cent on larger sales.
The majority opinion by Justice
Douglas, from which Justice Jack
son dissented. said the critical
question is whether the business OF
a real estate agent is included in
the word trade" within the mean
ing of the Sherman Antitrust Act