Legal Document

62 United States Supreme Court Reports Lawyer’s Edition 2d Series KF101.8 U54 441 100 Reporter 502 444 U.S. 232 James Jefferson McLAIN et al., Petitioners,v.REAL ESTATE BOARD OF NEW ORLEANS, INC., al. Number 78-1501. Argued Nov. 6, 1979. Decided Jan. 8, 1980. Syllabus Petitioners, claiming individually and on behalf of a certain class real estate purchasers sellers, instituted this private antitrust action in Federal District against respondents, firms trade associations consisting brokers who had transacted realty brokerage business the Greater New Orleans area during four years preceding filing complaint. Petitioners alleged, inter alia, that respondents engaged price-fixing conspiracy violation § 1 Sherman Act through an agreement to conform fixed rate commissions sales residential property. The complaint also included allegations respondents' activities were "within flow interstate commerce have effect upon commerce," assisted their clients securing financing title insurance which came from sources outside State. Respondents moved dismiss for failure state claim under Act, contending purely local nature did not substantially affect commerce. granted motion complaint, holding Goldfarb versus Virginia State Bar, 421 773, 95 2004, 44 572, there must be substantial volume involved overall transaction challenged activity essential, integral part transaction, inseparable its aspects; here broker's participation presumably aspects was only incidental rather than indispensable. Appeals affirmed, supra, jurisdiction exist because petitioners failed demonstrate are either necessary or participants insurance. Held: should been dismissed at stage proceedings. Pp. 241-247. (a) To establish plaintiff allege relationship between some aspect and, if these controverted, submit evidence defendants' is itself or, it nature, has other appreciable demonstrably Here, may jurisdictional element by demonstrating generated activity, need make more particularized showing caused alleged fix commission rates, those unlawful. 241-243. (b) courts below misinterpreted as requiring addressed "effect commerce" test no way restricted 243-245. (c) what submitted shows sufficient basis satisfying Act's requirements theory so entitle go forward. record makes clear proceed trial where will opportunity amount property insuring titles such property, commercial occurred commerce, allegedly infected have, matter practical economics, insubstantial involved. 245-247. 583 Reporter, 2nd 1315, vacated remanded. Richard G. Vinet, Orleans, La., petitioners. Frank Haw. Hawai‘i KFH45 A2 Easterbrook, Washington, D. C., U. S., amicus curiae, special leave Court. Harry McCall, Jr., respondents. Mr. Chief Justice BURGER delivered opinion question case whether extends among market 2 * action, filed Eastern Louisiana 1975, alleges ch. 647, 26 Statutes-at-Large 209, amended, 15 Code KF62 1. No yet merits claims since component jurisdiction. 3 asserts persons employed services respondent broker purchase sale parishes (the area) two associations, six named firms, time period covered charged fee services. unlawful conduct continuing combination fix, control, raise, stabilize prices systematic use widespread splitting, suppression information useful buyers anticompetitive practices. injured fees maintained artificially high noncompetitive level, with properties raised. seeks treble damages injunctive relief authorized §§ 4 16 Clayton 38 731, 737, 15, 26. pertinent establishing federal are: 5 (1) commerce"; 6 (2) connection "persons moving into out area"; 7 (3) "assist area," "financing obtained move [respondents]"; (4) restraint "interstate offering brokering services." 8 within ambit Act. This supported memorandum affidavits officers Real Estate Board Orleans. affiants testified licensed perform function only, legal requirement Louisiana, personal knowledge transactions occurring without assistance brokers. described essentially completed when buyer seller brought together agreeable terms. stated obtain instrumental obtaining credit sales, save few cases, nor they examination sales. 9 support sought distinguish 572 (1975), we held violated conformance bar association's minimum-fee schedule established performed attorneys purchases. construed applicability limited language lawyers financing. U.S., 784-785, S.Ct., 2011-2012. In contrast, respect case, asserted "the role . purchases neither inseparable." contended nature; allegation controverted affidavits; conclusory assertion "are insufficient 10 Petitioners' response adequate pretrial discovery up precluded pursuant order, full substantiate advanced independent theories jurisdiction: stream commerce; even wholly character depended affected both people. 11 Accompanying affidavit stating one assist relocation. There loan guarantee officer Veterans' Administration disclosing VA-insured loans 1973-1975 amounted $46.3 million, $45.9 $53.5 respectively. 12 After briefing issue, hard oral argument received postargument briefs. court then conference counsel, substance carefully recorded minute entries Judge: 13 "The advised counsel appears plaintiffs satisfy said bringing facts parameters Court's Bar. It recognized, however, further needed issue Goldfarb's sub judice. More specifically, determine whether, first place, requisite interdependence defendants and/or secondly, involvement via thereof." 14 Following conference, deposed nine witnesses, produced various documents. deponents government officials, brokers, mortgage lenders, insurers. directed area. deposition testimony president Security Homestead Association, nearly 40 savings institutions area, revealed Association lent excess $100 million capital deposits investors, whom lived state, borrowings Home Loan Bank Little Rock, Ark. Toward close relevant period, entered secondary market, existing mortgages sold raise new future loans. Another deponent Carruth Mortgage Corp., Arkansas corporation doing Mississippi, Texas. Its originate home loans, sell financial paper market. showed made overwhelming proportion guaranteed Housing Administration. With FHA-guaranteed collected remitted premiums FHA periodic each account. 17 Both often play borrower lender together, but after introductory phases progressed broker. his company required all made. accompanied Lawyers Title Insurance 30 companies writing coverage subsidiary branch another state. 18 additional briefs, took submission having considered memoranda documents record, issued order granting 432 F.Supp. 982 (1977). ground "brokerage intrastate occur beyond anti-trust prohibition." Id., 983. line view expressed earlier see 237-238, viewed inquiry narrowly confined: could holding. view, "any based [Goldfarb ] twofold: 1) 'substantial' 2) aspects." F.Supp., 984. assumed, arguendo, tile character, ruled inescapable conclusion drawn (presumably interstate) indispensable occurrence transactional chain events." 985. 19 Fifth Circuit affirmed dismissal 1315 (1978). Examining specific acts complained concluded "in test. Realty quintessentially product, pleadings found intrastate. 1319. Second, rejected petitioners' argument. interpretation guided analysis adopted Appeals, "unlike whose statutorily mandated, 'interstate aspects' insurance." F.2d, 1321-1323. 20 noted styled judgment Rule Civil Procedure 12(b)(6) granted, treated summary insofar matters considered. appropriate designation lack subject-matter 12(b)(1), basis. 21 We certiorari. 942, 99 2159, 60 1043. II Atlantic 22 broad authority Congress Commerce Clause has, course, long interpreted extend actually reach activities, while nevertheless Wickard Filburn, 317 111, 63 82, 87 L.Ed. 122 (1942); Darby, 312 100, 61 451, 85 609 (1941). correspondingly Hospital Building Rex Trustees, 425 738, 743, 96 1848, 1851, 48 338 (1976); Employing Plasterers' Assn., 347 186, 189, 74 452, 454, 98 618 (1954); South-Eastern Underwriters 322 533, 558, 64 1162, 1176, 88 1440 (1944); Cleaners & Dyers, Incorporated States, 286 427, 435, 52 607, 609, 76 1204 (1932). During near century experience, forms modes changed along changes communication travel, innovations methods conducting particular businesses altered relationships Application reflects adaptation changing circumstances. Compare E. C. Knight Co., 156 1, 12-15, 249, 253-255, 39 325 (1895), Hopkins 171 578, 587-592, 40, 43-45, 43 290 (1898), Mandeville Island Farms, American Crystal Sugar 334 219, 231-235, 68 996, 1003-1006, 92 1328 (1948), Plasterers 454. 23 conceptual distinction "in" "affect" preserved seen fit preserve related laws limiting provisions commerce." Maintenance Industries, 422 271, 2150, 45 177 (1975); Gulf Oil Corporation Copp Paving 419 392, 42 378 (1974); FTC Bunte Bros., Inc., 349, 580, 881 can longer doubted, satisfied theory. 1851; 194-195, 398-399; Women's Sportswear Manufacturers 336 460, 464, 69 714, 716, 93 805 (1949); 235-237, 1005-1007. 24 Although cases breadth prohibitions, invoked statute unless identified; merely rely identification presume interrelationship unspecified critical 202, 402. 25 would activity. thatare validity approach confirmed law. If defeated demonstration intended effect. rule our cases. See Tobacco 328 781, 811, 66 1125, 1139, 90 1575 (1946); Socony-Vacuum 310 150, 225, n. 59, 846, 84 1129 (1940). A still circumstances civil liability proof purpose Gypsum 438 422, 436, 13, 2864, 2873, 57 854 (1978); Container 393 333, 337, 89 510, 512, 526 (1969); National Assn. Boards, 339 485, 489, 70 711, 94 1007 (1950); 224-225, 844-846. Nor relying effects plaintiff's quantify adverse impact defendant's conduct. Zenith Radio Hazeltine Research, 395 123-125, 1562, 1576-1578, 129 Bigelow RKO Pictures, 327 251, 265-266, 574, 580-581, 652 (1946). Even inability prove concerted resulted legally cognizable damages, impaired, though confine available remedies relief. Georgia Pennsylvania R. 324 439, 452-463, 65 723-729, 1051 (1945); Keogh Chicago N. W. 260 156, 47, 67 183 (1922). B 27 application figured prominently case. Goldfarb. As previously noted, court, similar Goldfarb, 1322. 28 second phase disagree. attorneys' Since valid insured "an part" "inseparability" process, turn "integral transaction." By placing established. adopt restrictive urged us return era past. stated: "At late day willing take backward step." 235, 1005. Contract 29 On thus far made, cannot presidents many lending committed hundreds millions dollars demonstrates Funds raised out-of-state investors interbank institutions. Multistate programs entailed transfers settlements. obligations physically constructively traded instruments Before making usually, always, insurance, furnished corporations. Reading pleadings, supplemented, most favorably petitioners, present purposes At trial, opportunity, choose, own contradicting factual showing. hand, possible that, apart financing, arising movement people, otherwise. 31 remains shown "as economics" 745, 1852; 784, 11, 2011; Burke Ford, 389 320, 321-322, 443, 444, 554 (1967). clear, shows, bring For service charges generally calculated percentage price. Brokerage necessarily frequency terms transactions. Ultimately, whatever stimulates retards price, affects demand Where, here, able show 32 axiomatic "it doubt set him relief." Conley Gibson, 355 41, 45-46, 78 99, 101-102, 80 (1957); Wright Miller, Practice 1202, 1205-1207, 1215-1224, 1228 (1969). applies less force claim, requisites cause existence demonstrable nexus effect-on-commerce therefore conclude error vacated, remanded proceedings consistent opinion. 33 Vacated 34 MARSHALL consideration decision

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