Evening star., 1950-05-09
RealtorsExpecf
Fees 10 Stand
=
Despite Ruling
Government Victory
In Supreme Court
Discounted by Boord
By Robert X. Walsh


Justice Department.
The court yesterday held that
a 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 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 fix 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
soeiation's executive secretary
Herbertt U. Nelson, Judge Holtzof
held that the agreement on COM
mission rates did not violate the
antitrust law. Realtors, he said,
performed personal services" of
the End not covered by the law.
The Supreme Court, in a 6-1
decision. ruled that Judge HoltZoff
erred in dismissing the case
against the Washington board. It
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
1900 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-
nents 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 as "a Pyrrhic victory for
the Justice Department"
The practical effect will be "nil'
30 far as<brokers' commission rates
In the District are concerned, he
predicted.
He. as well as Charles ]. Rush,
Washington board executive Sec
retary, contended that the uni
form rate schedule which was
suspended was merely a guide
for members and no one was ever
penalized for charging a 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 declared.
Effect on Other Areas Studied.
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, a board official said he
believed there would be little il
any change from the usual rate
of 5 per cent in sales up to $50,-
600 and per cent on larger sales
The majority opinion by Justice
Douglas, from which Justice Jack.
son dissented, said the "critica,
question is whether the business oi
q real estate agent is included ir
the word trade" within the mean.
ing of the Sherman Antitrust Act
It held that an illegal price.
fixing scheme has been proved
and that sit is not for the courts
to determine whether, in particular
settings. price-fixing serves ar
honorable or worthy end" Price.
fixing in itself is an unreasonable
restraint of trade, the opinion de.
clared.
Noting that the board held il
did not punish members who de-
waited from the uniform rates
the opinion commented:
Subtle influences may be jus
as effective as the threat or us'
of formal sanctions to hold people
in line"
AS for the National Association
OF Real Estate Boards and Mr.
Nelson, the opinion said the cour