Court Opinion

ID: 6260773
Source: CourtListenerOpinion
Date Created: 2022-02-17 22:03:27.868219+00
Date Added: 2024-06-11T08:59:42.219910
License: Public Domain

Dissenting Opinion by
Mb. Chief Justice Jones:
I do not believe the Main Line Board of Realtors or the multiple listing service maintained by that organi*359zation constitutes an unreasonable restraint of trade and, therefore, I dissent.
In concluding that the multiple listing service operated by the Main Line Board of Realtors is a combination in restraint of trade and therefore illegal, the majority has ignored much of the evidence presented to the court below as well as the chancellor’s determination based on that evidence. There is no question that the multiple listing service operated in the Main Line area is a useful merchandising tool or that members of the Main Line Board of Realtors benefit substantially from its operation. Nor can it be denied that under certain circumstances members of the multiple listing service may enjoy some competitive advantage over realtors who do not participate in the program.
This Court has the power to strike down any agreement, association or contract which unreasonably restrains trade. However, not every agreement which creates a restraint of trade is unreasonable. As stated by Justice Brandéis in Chicago Board of Trade v. United States, 246 U.S. 231, 238 (1918) : “[T]he legality of an agreement or regulation cannot be determined by so simple a test, as whether it restrains competition. Every agreement concerning trade, every regulation of trade, restrains. To bind, to restrain, is of their very essence. The true test of legality is whether it is such as may suppress or even destroy competition.”
In this case there was a lengthy trial with both sides presenting numerous witnesses and exhibits. The chancellor stated in his initial adjudication: “[T]he multiple listing service of the Main Line Board of Realtors is not an economic necessity in the buying and selling of real estate. There was a great amount of evidence at trial bearing on the percentage of sales obtained from the service and, while the statistics were often in con*360fusion, most brokers who testified stated that the use of the service, while advantageous, was not essential for economic survival as a real estate agent.” The chancellor concluded: “In all, the Main Line Board of Realtors is a reasonable banding together of licensed real estate brokers who have a legitimate interest in the qualifications of new members. The association, while having an effect on trade, does not impose an unreasonable restraint thereon. ...” I believe the chancellor’s findings are adequately supported by the record and are in accord with the general principles of law applicable to these facts.1
Relying primarily on the decision of the United States Supreme Court in Associated Press v. United States, 326 U.S. 1 (1945), and the decision of this Court 'in Schwartz v. Laundry & Linen Supply Drivers Union, 339 Pa. 353, 14 A. 2d 438 (1940), the majority holds that the multiple listing service operated by the Main Line Board of Realtors “per se restricts competition unreasonably.” I cannot agree for two reasons: (1) the authorities relied on by the majority are factually distinguishable and (2) the decision that this agreement “per se restricts competition unreasonably” is not supported by the facts presented at the hearing.
There were two primary considerations in Associated Press v. United States, which motivated the *361United States Supreme Court to strike down certain by-laws of the Associated Press. Neither of those factors is present in the instant case. First, the Associated Press by-laws absolutely prohibited the sale of news by members of the association to nonmembers. This rule made it impossible for any nonmember to obtain news from an Associated Press member. The by-laws of the Main Line Board of Realtors and the multiple listing service are clearly distinguishable. There is no rule, either written or informal, which prohibits members of the Main Line Board from cooperating with nonmembers in the sale of any parcel of real estate. Indeed, there was testimony presented at the hearing and the chancellor found as a finding of fact that “ [m] embers of defendant Board have on numerous occasions participated in and cooperated with plaintiffs in the sales of real estate in the Board’s territory.”2
The second provision of the Associated Press bylaws which the Supreme Court found objectionable concerned the disparate membership requirements demanded of newspapers seeking to join the association. Whereas newspapers which would not be in competition with established Associated Press members could join the association quite easily, it was virtually impossible for a newspaper in competition with an existing member to gain admittance. The effective exclusion of all competitiors denounced in Associated Press clearly is not present in this case. At the time of the hearing there *362were eighty-three individual firms who were members of the Board-all selling real estate in the three-township Main Line area. Moreover, the record reveals that the Board was continuing to accept new members who fulfilled the admission requirements set forth in the by-laws.3 In Associated Press, the Supreme Court ruled that the “joint effect” of the exclusive dealing requirement coupled with the systematic exclusion of all competitiors from membership was an unreasonable restraint of trade. Since neither of the factors crucial to the decision in Associated Press is present in this action, it is difficult to discern how that case can be regarded as primary or even persuasive authority for the decision reached by the majority.
Similar distinctions can also be drawn between the provisions of the Main Line Board of Realtors’ multiple listing service and the contract which was invalidated in Schwartz v. Laundry & Linen Supply Drivers Union. The effect of the invalid contract provisions was to prevent the entry of any more independent laundry jobbers into the industry by prohibiting all signatories of the contract from dealing with any independent jobbers not under contract at the time the contract was executed. Once again the distinction is obvious: members of the Main Line Board are not only permitted to cooperate with non-members—they are encouraged to do so. The majority is in error when it states that “such cooperation is irrelevant.”
*363T cannot agree with the majority’s statement that the multiple listing service at issue in this case “per se restricts competition unreasonably.” The lengthy testimony presented at the hearing and the facts as found by the chancellor do not support that conclusion. As noted earlier, not every restraint of trade or every agreement which confers some competitive advantage on its principals is void as a restraint of trade. It is only when the agreement results in an unreasonable restraint that it is subject to judicial interference. I agree with the chancellor that the operation of the Main Line Board’s multiple listing service does not unreasonably restrain trade. An analysis of all real estate sales negotiated by members of the Main Line Board from 1965 through 1969 reveals three major categories of sales made during that period: (1) sales of properties by a member broker which were never listed with the multi-list service; (2) direct sales which, although listed on the multi-list service, were sold by the listing broker and did not involve cooperation between brokers; and (3) cooperative multi-list sales where the property was listed by one broker and sold by another member broker. Only the third category, cooperative sales, involved the active operation of the multiple listing service. Between 1965 and 1969 this category of sales never exceeded 42% of the total dollar volume of sales negotiated by members of the Main Line Board of Realtors. In other words, 58% of the sales consummated by member realtors were independent of the multi-list service, involving only the seller, the listing broker and the buyer. On the basis of those figures I believe the chancellor was justified in finding that the multiple listing service, while admittedly benefiting its members, did not constitute an unreasonable restraint of trade.
One other area of the majority opinion requires comment. The majority seems to intimate that private as*364sociations with restrictive membership requirements are impermissible in fields which are regulated and licensed by the Commonwealth. I cannot find any support for that position and strongly disapprove it. The Legislature has created licensing provisions for virtually every occupation which involves some measure of public trust—from auctioneers to weighmasters. The purpose of state licensing is to insure that every person engaged in a regulated activity meets certain minimum standards of honesty and competency. There is nothing in this legislatively created scheme of regulation which suggests that individuals engaged in a regulated occupation should be prohibited from banding together in professional associations with an eye toward enhancing the prestige and expertise of their members. Judicial intervention in the membership decisions of private associations is only warranted when association membership is such an essential element of the profession that a nonmember is precluded from practicing his profession, provided that the membership requirements do not violate rights created by statute or by the Constitution. Commonwealth Human Relations Commission v. Loyal Order of Moose, Lodge No. 107, 448 Pa. 451, 294 A. 2d 594 (1972). See Falcone v. Middlesex County Medical Society, 34 N.J. 582, 170 A. 2d 791 (1961) (compelling admission of Doctor of Osteopathy to County Medical Society where membership in the society was necessary in order to have hospital privileges).
The majority’s rule that the Main Line Board of Realtors must accept all realtors who fulfill the state-mandated minimum requirements is predicated on the assumption that membership on the Board is essential for all realtors. The record clearly demonstrates that that assumption is erroneous. It can hardly be said that the Main Line Board was “privately deciding that someone should not be a licensed broker” where there *365was ample evidence that membership in the Main Line Board and participation in its multiple listing service was found not necessary for economic survival as a realtor in that area.
In holding that the Board must open its membership to all licensed brokers, the majority opinion overlooks the substantial interest the existing members of the Board have in selecting those they desire to bind themselves to in a contractual manner. The heart of the multi-list service is its mandatory nature. Any property not sold by the broker who initially lists the property must be referred to the multi-list service for dissemination to all other members. Thereafter, if another member produces a buyer for the property, the original listing broker is required to share his commission with the selling broker. The effect of the majority decision is to force the existing members of the multi-list service into a binding relationship with anyone who meets the minimum qualifications prescribed by the State. Since participation in the multiple listing service is not essential for survival as a realtor on the Main Line and the operation of the service does not constitute an unreasonable restraint of trade, there is no justification for this invasion of private contract rights.
I would affirm the decree of the chancellor.
Mr. Justice Roberts and Mr. Justice O’Brien join in this dissenting opinion.

 At issue in this appeal is the question of whether an appellate court, acting under the aegis of eliminating combinations in restraint of trade, can compel a nonprofit corporation to accept members the association has previously deemed unqualified for membership. The general rule applicable to this matter is summarized as follows in Annot., 89 A.L.R. 2d 964, 966 (1963) : “Although the Courts wiU compel reinstatement of a member of an association or society who has been wrongfully or arbitrarily expelled, the general rule is that the courts cannot compel admission of an individual into a voluntary association, since membership is a privilege and not a right, and even if a person’s application is arbitrarily refused, he is without legal remedy.”

 The Main Line Board’s practice of permitting and even encouraging cooperation with non-member realtors also distinguishes this ease from Grillo v. Board of Realtors of Plainfield Area, 91 N.J. Superior Ct. 202, 219 A. 2d 635 (1966). Although the Grillo decision is not cited by the majority, it was the first decision to apply common-law restraint-of-trade principles to multiple listing services. A key factor in that decision was the by-laws of the service which prohibited all members from dealing- with non-members and provided severe penalties for violators.

 Frank R. S. Sellers, who was presiding over the Board of Directors of the Main Line Board of Realtors in 1967, testified that in February of 1967 eight applications for membership were presented, including the appellant’s application. Six of those applications were approved and two were disapproved. Cf. Oates v. Eastern County Multiple Listing Service, Inc., 113 N.J. Superior Ct. 371, 273 A. 2d 795 (1971), where a multiple listing service which limited its membership to fifty-four original members or their successors was declared in violation of the New Jersey anti-trust law. N.J. S.A., 56:9-l et seq.