Appendix — McLain v. Real Estate Bd. of New Orleans, Inc.
Supreme Court brief1980
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‘Gupreme Court, U, & 7
FILED
JUL 27 1979
APPENDIX MICHAEL RODAK, JR, CLERK
IN THE
Supreme Court of the United States
OCTOBER TERM, 1978
No. 78-1501
JAMES JEFFERSON McLAIN, ET AL.,
Petitioners,
versus
REAL ESTATE BOARD OF NEW ORLEANS, INC., ET AL.,
Respondents.
ON WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH CIRCUIT
PETITION FOR CERTIORARI FILED MARCH 31, 1979
CERTIORARI GRANTED MAY 14, 1979
—_<-..
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1978
No. 78-1501
JAMES JEFFERSON McLAIN, ET AL.,
Petitioners,
versus
REAL ESTATE BOARD OF
NEW ORLEANS, INC., ET AL.,
Respondents.
ON 'VRIT OF CERTIORAR! TO THE
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
INDEX
Page
Chronological List of Relevant Docket Entries ....1
A. Inthe United States District Court for
the Eastern District of Louisiana ......... 1
INDEX (Continued)
. Page
B. Inthe United States Court of Appeals
for the Fiftly Circuit) .. i. . de. c ces cw woeces 5
C. In the Supreme Court of the United
PTDL, Cah ele GAs Caner we eee. ck chee 6
ge ge. a rm McLain Pet.
App. la
Answer, Isabelle McLeod ............eeeeeeeeeees 7
Anbwrer, Stan Pre be ie ka a a eee dee ey abuse 11
PRO Ste CPOE as oo CUER Eek ne pokes Sacevewekebes 15
Defendants’ Motion to Dismiss ................- 18
Affidavit of Max Derbes, Jr. on 2-18-76 ....... 40
Affidavit of Dalton iL. Truax, Jr. on 2-23-76 ...42
Plaintiffs’ Motion for Extension of Time To
Answer Defendants’ Motion to Dismiss ....... 44
Plaintiffs’ Memorandum in Opposition to
Defendants’ Motion to Dismiss .............. 47
Minute Entry filed April 28, 1976 ............... 72
Defendants’ Motion and Order for Con-
TIMUANCE 2. ce cccccvccvcccescvesscconees evens 73
Minute Entry filed May 12, 1976 ............... 75
Minute Entry filed June 2, 1976 ................ 76
Plaintiffs’ Motion for Extension of Time ....... 77
Minute Entry filed August 26, 1976 ............. 79
— —
ili
INDEX (Continued)
Page
Minute Entry entered September 3, 1976 ....... vi
Notice of Deposition of M. P. Turner ........... 83
Notice of Deposition of Gertrude Gardner,
MOU aS 6 ks maaan 4 Tk NO belie oe kv eon hades 84
Notice of Deposition of James Mills ............. 85
Notice of Deposition of Paul Griener ............ 87
Notice of Deposition of Mr. Angel V. Miranda ...88
Notice of Deposition of Julian Hecker ........... 89
Notice of Deposition of Edmond G. Miranne..... 92
Notice of Deposition of Stan Weber ............. 94
Plaintiffs’ Motion to Extend Discovery ......... 97
Plaintiffs’ First Set of Interrogatories to
EEO GRIEG 35.65 k da tee RS BRIN ke dh ote emacs 990
Notice of Deposition of Max Derbes, Jr. ........ 108
Plaintiffs’ Amended Notice of Depositions ...... 109
Defendants’ Objections to Interrogatories ...... 117
Minute Entry filed January 18, 1977 ........... 120
Letter: January 28, 1977, Moise Steeg to Jerry
Meunier, Courtroom Deputy ............... 121
Excerpts from Deposition of Edmond G.
IE abn 5 tae on bina ose OE ees Wb ins Garey eo 122
Excerpts from Deposition of Angel Miranda ....165
iv
INDEX (Continued)
Page
Excerpts from Deposition of Julian O. Hecker ..173
Excerpts from Deposition of James W. Mills,
JP. wore vbdieme a ckcee eiiiwas Men aetOemena wees 207
Excerpts from Deposition of Meaher P.
FUPROT ob. 6. ck ble aeons 220
Excerpts from Deposition of Max Derbes, Jr. ...236
Excerpts from Deposition of Stan Weber ...... 267
Judgment: United States District Court for
the Eastern District of Louisiana ........ vie, 208
Memorandum Opinion and Order,
United States District Court for
the Eastern District of Louisiana ..... McLain Pet.
App. 17a
Opinion, United States Court of
Appeals for the Fifth Circuit ........ McLain Pet.
App. 24a
Order Denying Rehearing, United
States Court of Appeals for
the Fifth Ciscwlt i556 a8 veahiae ta nean McLain Pet.
App. 42a
In the United States District Court for the
Eastern District of Louisiana
JAMES JEFFERSON McLAIN, ET AL.
versus CA NO. 75-3402(D)
REAL ESTATE BOARD OF
NEW ORLEANS, ET AL
Chronological List of Relevant Docket Entries:
DATE NO. PROCEEDINGS
10-31-75 1 Plaintiffs’ Complaint
12-12-75 11 Answer, Defendant Isabelle McLeod
12-17-75 12 Answer, Defendant Stan Weber
1- 5-76 13 Pre-trial order — Defendants relieved
from filing answers until date to be fix-
ed (E.J.B.)
3- 5-76 14 Defendants’ Motion to Dismiss, Notice
of Hearing on 3-31-76, with memo
3-25-76 15 On Plaintiffs’ Motion, ORDERED:
That Defendants’ Motion to Dismiss
be reset for 4-28-76 and that Plaintiffs
reply to Defendants’ Motion to Dis-
miss by 4-7-76 (E.J.B.)
4- 8-76 16 Plaintiffs’ Memorandum in Opposition
to Motion to Dismiss
4-28-76 17 Minute entry: That Motion to Dismiss
| set for hearing 4-28-76 to be continued
upon written motion of Defendants
4-27-76
5-12-76
5-14-76
6- 2-76
6-10-76
6-21-76
7- 2-76
8-26-76
9- 8-76
9-14-76
10-15-76
12-17-76
18
19
20
21
22
23
24
25
26
27
28
29
2
Defendants’ Motion for Continuance
of Hearing on Motion to Dismiss,
ORDERED: That Defendants’ Motion
to Dismiss is continued until 5-26-76
Minute entry: Hearing set for 5-26-76
is continued to 6-2-76 at 10:00 a.m.
Defendants’ first supplemental
memorandum in support of Motion to
Dismiss
Motion to Dismiss: Submitted
ORDER: That Plaintiffs have until 6-
18-76 to file further memoranda
Plaintiffs’ first supplemental
memorandum in opposition to Motion
to Dismiss
Defendants’ second Supplemental
Memorandum in support of Motion to
Dismiss
Minute Entry: Conference is set for 9-
3-76 at 3 P.M. (E.1.B.)
Minute Entry: Conference held 9-3-
76; further conference to be held 10-
13-76
Third Supplemental Memorandum in
support of Defendants’ Motion to Dis-
miss
Minute Entry: Conference held 10-13-
76 adjourned to 1-14-77 at 4:00 P.M.
Plaintiffs’ notice to take the deposition
of Mr. M. P. Turner on 12-28-76 at
9:00 A.M.
12-17-76
12-17-76
12-17-76
12-17-76
12-21-76
12-21-76
12-21-76
12-21-76
12-22-76
12-23-76
12-28-76
30
31
32
33
34
35
36
38
39
41
43
3
Plaintiffs’ notice of deposition of Ger-
trude Gardner Inc. on 12-27-76 at 2
P.M.
Plaintiffs’ notice of deposition of Mr. J.
Mills on 12-28-76 at 2:00 P.M.
Plaintiffs’ notice of deposition of P.
Griener on 12-28-76 at 3:00 P.M.
Plaintiffs’ notice of deposition of A. V.
Miranda on 12-28-76 at 11:00 A.M.
Plaintiffs’ notice of deposition of Mr. J.
Hecker on 12-30-76 at 11:00 A.M.
Plaintiffs’ notice of deposition of Mr.
E. G. Miranne on 1-6-77 at 9:30 A.M.
Plaintiffs’ notice of deposition of Mr.
Stan Weber on 12-29-76 at 3:30 P.M.
On Plaintiffs’ Motion, ORDERED:
That cutoff date for discovery is ex-
tended from 12-31-76 to 1-14-77.
Plaintiffs’ first set of interrogatories.
Plaintiffs’ notice of deposition of Mr.
Max Derbes Jr. on 1-6-77 at 2:00 P.M.
Plaintiffs’ amended notice of deposi-
tion of:
1. P. Turner, 1-3-77 at 9:00 A.M.
2. A. Miranda, 1-3-77 at 11:00 A.M.
3. J. Mills, 1-6-77 at 2:00 P.M.
4. P. Griener, 1-4-77 at 10:00 A.M.
5. A. T. Post, 1-10-77 at 2:00 P.M.
6. S. Weber, 1-10-77 at 10:30 A.M.
7. J. Hecker, 1-7-77 at 10:00 A.M.
8. M. Derbes, 1-13-77 at 2:00 P.M.
1-18-77
1-20-77
1-20-77
2- 2-77
2-14-77
2-18-77
3-11-77
3-29-77
3-29-77
3-29-77
3-29-77
5-31-77
6-24-77
8- 3-77
50
52
53
54
55
56
57
4
Minute entry: Further conference held
1-14-77. Defendants are granted until
3-14-77 to reply to Plaintiffs’
Memorandum.
Deposition of A. Miranda, taken 1-3-
77
Deposition of E. G. Miranne, taken 1-
6-77
Letter: Moise Steeg to Jerry Meunier,
Courtroom Deputy, Section D, re:
Return on subpoena duces tecum to
Carruth Mortgage Corporation
Deposition of J. O. Hecker taken 1-17-
77
Plaintiffs’ second Supplemental Memo
in opposition to Defendants’ Motion to
Dismiss
Defendants’ third Supplemental
Memorandum in support of Motion to
Dismiss
Deposition of J. W. Mills, Jr., taken 1-6-
77
Deposition of M. P. Turner, taken 1-
13-77
Deposition of M. Derbes, taken 1-12-
77
Deposition of Stan Weber, taken 1-11-
ee .
Memorandum Opinion and Order:
Defendants’ Motion to Dismiss is
granted, Plaintiffs’ action is dismissed
Plaintiffs’ Notice of Appeal
Case forwarded to Court of Appeals
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
JAMES JEFFERSON McLAIN, et al., :
Plaintiffs-Appellants,
versus No. 78-2324
REAL ESTATE BOARD OF
NEW ORLEANS, INC., et al.,
Defendants-Appellants.
Chronological List of Relevant Docket Entries:
DATE PROCEEDINGS
11-15-78 Judgment and Opinion of the United States
Court of Appeals for the Fifth Circuit af-
firming dismissal of Plaintiffs’ Action
12-15-78 Denial of panel re-hearing by United States
Court of Appeals for the Fifth Circuit
IN THE
SUPREME COURT OF THE UNITED STATES
JAMES JEFFERSON McLAIN, et al.,
Piaintiffs-Petitioners,
versus No. 78-1501
REAL ESTATE BOARD OF
NEW ORLEANS, INC., et al.,
Defendants-Respondents.
Chronological List of Relevant Docket Entries:
DATE PROCEEDINGS
3-14-79 Plaintiffs’ application for extension of time
to file Petition for Writ of Certiorari
3-15-79 ORDER: That Petitioner is granted until
April 2, 1979 in which to file Petition for
Writ of Certiorari
3-31-79 Plaintiffs’ Petition for Writ of Certiorari
5-14-79 ORDER: “The Petition for a Writ of Cer-
tiorari is Granted.”
ae ee ee eI
ee ee ee eee are ne ne i cesar erecta
cet a Na sat 8 ae ae
Sin Cit aceasta lace +
7
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
JAMES JEFFERSON McLAIN, DOUGLAS ARTHUR
NETTLETON, JR., RAYMOND JOSEPH MUNNA,
IRVING HIRSCH KOCH, and all other parties
similarly situated
Plaintiffs,
versus . CA No. 75-3402(D)
REAL ESTATE BOARD OF NEW ORLEANS, INC.,
JEFFERSON BOARD OF REALTORS, INC., GER-
TRUDE GARDNER, INC., LATTER AND BLUM,
INC., WAGUESPACK AND PRATT, INC., STAN
WEBER AND ASSOCIATES, INC., SANDRA, INC.,
ISABELLE C. McLEOD dba ISABELLE C. McLEOD,
REALTORS, and ali other parties similarly situated,
Defendants.
Filed: Dec. 12, 1975
ANSWER
For the answer to the Complaint of the petitioner in
the above entitled cause, isabelle McLeod d/b/a Isabelle
C. McLeod, Realtors, defendant above named, says:
I.
Defendant denies the allegations contained in
Paragraph I for lack of sufficient information and
belief.
8
I.
Defendant denies the allegations of Paragraph II for
lack of sufficient information and belief.
Ul.
Defendant admits the allegations of Paragraph Ill in-
sofar as Isabelle McLeod d/b/a Isabelle C. McLeod,
Realtors, transacts business and has an office in the
Eastern District of Louisiana.
IV.
’ Defendant denies the allegations of Paragraph IV for
lack of sufficient’ information and belief except that
defendant, Isabelle McLeod d/b/a Isabelle C. McLeod,
did provide real estate brokerage service in connection
with a sole transaction for Douglas Arthur Nettleton,
Jr.
V.
Defendant denies the allegations of Paragraph V.
VI.
Defendant denies the allegations of Paragraph VI ex-
cept that the Real Estate Board of New Orleans, Inc. is a
Louisiana corporation and provides certain services to
its members.
VIL.
Defendant denies the allegations of Paragraph VII
for lack of sufficient information and belief.
ee
a leas
9
VIII.
Defendant denies the allegations of Paragraph VIII
for lack of sufficient information and belief.
IX.
Defendant denies the allegations of Paragraph IX.
X.
Defendant denies the allegations of Paragraph X.
XI.
Defendant denies the allegations of Paragraph XI.
XII.
Defendant denies the allegations of Paragraph XII.
XIII.
Defendant denies the allegations of Paragraph XIII.
XIV.
Defendant denies the allegations of Paragraph XIV
for lack of sufficient information and belief.
XV.
Defendant denies the allegations of Paragraph XV.
XVI. Be
Defendant denies the allegations of Paragraph XVI.
10
XVII.
Defendant denies the allegations of Paragraph XVII.
XVIII.
Defendant denies the allegations of Paragraph XVIII.
XIX.
Defendant denies the allegations of Paragraph XIX.
XX.
Defendant denies the allegations of Paragraph XX
WHEREFORE, defendant prays for:
I.
Judgment that the Complaint of the Petitioner be
dismissed with prejudice and at plaintiffs’ costs.
CHAFFE, McCALL,
PHILLIPS, TOLER & SARPY
‘ | ls) GERALD WASSERMAN
Leon Sarpy
Gerald Wasserman
(Certificate of Service Omitted)
tL ee ei
11
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NEW ORLEANS DIVISION
(Number and Title Omitted)
Filed: Dec. 17, 1975
ANSWER
For answer to the complaint of the petitioners in the
above cause, Stan Weber & Associates, Inc., a defen-
dant above named, says that:
- Defendant denies the allegations contained in
paragraph I for lack of sufficient information and
knowledge to justify a belief.
Il.
Defendant denies the allegations contained in
paragraph IJ for lack of sufficient information and
knowledge to justify a belief.
III.
Defendant denies the allegations contained in
paragraph III except to admit that defendant does do
business and has an office in the Eastern District of —
Louisiana.
12
IV.
Defendant denies the allegations contained in
paragraph IV for lack of sufficient information and
knowledge to justify a belief.
V.
Defendant denies the allegations contained in
paragraph V.
VI.
Defendant denies the allegations contained in
paragraph VI except that it does admit that the Keal Es-
tate Board of New Orleans, Inc. is a Louisiana corpora-
tion and provides certain services to its members.
VIL.
Defendant denies the allegations contained in
paragraph VII except to admit that the Jefferson Board
of Realtors is a Louisiana corporation maintaining an °
office and transacting business in the Eastern District
of Louisiana.
VIII.
Defendant denies the allegations contained in
paragraph VIII for.lack of sufficient information and
knowledge to justify a belief except to admit its name
and that it is a Louisiana corporation domiciled in the
Eastern District of Louisiana where it does business.
a eet ee va eee
ee
13
IX.
Defendant denies the allegations contained in
paragraph IX.
X.
Defendant denies the allegations contained in
paragraph X.
XI.
Defendant denies ‘the allegations contained in
paragraph XI.
XII.
Defendant denies the allegations contained in
paragraph XII for lack of sufficient information and
knowledge to justify a belief.
XIII.
Defendant denies the allegations contained in
paragraph XIII for lack of sufficient information and
knowledge to justify a belief.
XIV.
Defendant denies the allegations contained in
paragraph XIV for lack of sufficient information and
knowledge to justify a belief.
XV.
Defendant denies the allegations contained in
paragraph XV.
14
XVI.
Defendant denies the allegations contained in
paragraph XVI.
XVII.
Defendant denies the allegations contained in
paragraph XVII.
XVIII.
Defendant denies the allegations contained’ in
paragraph XVIII.
XIX.
Defendant denies the allegations contained in
paragraph XIX.
XX.
Defendant denies the allegations contained in
paragraph XX. ;
WHEREFORE, defendant prays for judgment that
the complaint of the petitioners be dismissed with pre-
judice and at their cost.
ls) CHARLES F. BARBERA
CHARLES F. BARBERA
(Certificate of Service Omitted)
— tts Si abit oe
re ee ee arene
Te oo i A al cl Br
a eS ae
15
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NEW ORLEANS DIVISION
(Number and Title Omitted)
Filed: Jan. 5, 1976
PRE-TRIAL ORDER
Counsel for plaintiffs and counsel for defendants
have presented to the Court the following agreed
schedules and dates to orderly progress this cause; and,
the Court finding same to be appropriate and
reasonable;
IT IS HEREBY ORDERED that:
1. Any motion by a defendant to quash service or to
object to the jurisdiction or venue of this Court shall be
filed on or before sixty (60) days from the date hereof.
Plaintiffs’ reply, if any, to such motions, shall be filed
within thirty (30) days of the service of said motions;
and defendants shall file their response to plaintiffs’
reply, if any, within twenty (20) days. Any such
motions shall be noticed for hearing by the plaintiffs on
a date convenient to the Court.
2. Any motion to be filed by a defendant under Rule
12(b) (other than those referred to in paragraph 1
above) or 12(e) shali be filed on or before thirty (30)
16
days following the date on which the Court shall have
rendered its decision on all of the motions filed under
paragraph 1 above. Any such motions shall be noticed
for hearing by the plaintiffs on a date convenient to the
Court.
3. Onor before the date fixed for filing motions un-
der paragraph 2 hereof, defendants will file and serve,
it same are to be filed, interrogatories directed to plain-
tiffs as to the grounds for their pleadings under the
provisions of Rule 11 of the Federal Rules of Civil
Procedure; within sixty (60) days thereafter, plaintiffs
will serve answers or objections to any such interroga-
tories; within thirty (30) days following receipt of
answers to all interrogatories which plaintiffs must
answer, defendants shall file all motions, if any are to
be filed, contemplated by Rule 11 of the Federal Rules
of Civil Procedure. Plaintiffs shall serve any reply to
any such motions within twenty (20) days of the serv-
ice of such motions and within ten (10) days thereafter
defendants shall file any response to plaintiffs’ reply.
4. On or before thirty (30) days following the last
date on which this Court disposes of all motions filed
pursuant to paragraphs 2 and 3 above, the parties to
this action shall initiate discovery proceedings for the
limited purpose of determining whether this action is
to be maintained as a class action under Rule 23 of the
Federal Rules of Civil Procedure, including depositions
of plaintiffs and others, interrogatories and requests
Aw en ol ee acti a. Amin iain
at ee ee a
tee
17
for the production of documents. Such discovery may
be conducted by the parties in one or more stages and
shall be completed within one hundred eighty (180)
_ days or such greater period as may be fixed by the
Court.
5. On or before thirty (30) days following the date
established in paragraph 4 above for the conclusion of
discovery limited to questions involving whether this
action may be maintained as a class action, all motions
involving the class action question will be filed and
served; within forty-five (45) days after service of any
such motion the opposing parties will file their
response thereto and movers shall have ten (10) days
thereafter to reply.
6. All discovery, other than discovery permitted by
paragraphs 3 and 4 above, shall be held in abeyance un-
til further order of this Court following the determina-
tion of the class action questions as provided in
paragraph 5 above; provided, however, the Court may
authorize discovery upon a showing of good cause,
such as the age or infirmity of a potential witness.
7. Designation of counsei to represent all counsel
of the respective parties to receive and forward notices
and notify the Court of responses and actions con-
cerning pre-trial matters, etc., shall await the deter-
mination of the motions contemplated by paragraphs 1
and 5 above.
18
IT IS FURTHER ORDERED that all defendants are
hereby relieved from filing answers until a date to be
fixed by further order of this Court following its deter-
mination of all class action questions as provided in
paragraph 5 above.
IT 1S FURTHER ORDERED that deviations from or
additions to this schedule will be permitted only by a
further order of this Court.
New Orleans, Louisiana, this 5th day of January,
1976.
ls} EDW. J. BOYLE, SR.
UNITED STATES DISTRICT
JUDGE
(Signature of Counsel Omitted)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NEW ORLEANS DIVISION
(Number and Title Omitted)
Filed: Mar. 5, 1976
MOTION TO DISMISS
Defendants move the court to dismiss this action
because the complaint fails to state a claim against
defendants upon which relief can be granted on the
ground that the court lacks jurisdiction for the follow-
ing reasons:
elite be =
19
First, that the alleged claim does not arise under any
act of Congress regulating Commerce or protecting
trade and Commerce against restraints and monopo-
lies as provided under Title 28, Section 1337 of the
United States Code, all as appears more fully from the
affidavits of Max Derbes, Jr. and Dalton L. Truax, Jr.,
annexed hereto as part hereof and marked “Exhibits
A & B’ respectively for identification; and
Second, that the requisite diversity jurisdiction is
lacking because it appears on the face of the complaint
that the controversy is not between citizens of
different states, but that all plaintiffs and defendants
are citizens and residents of or domiciled and have their
principal offices in the State of Louisiana.
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NEW ORLEANS DIVISION -
(Number and Title Omitted)
MEMORANDUM IN SUPPORT OF
MOTION TO DISMISS
MAY IT PLEASE THE COURT:
This Memorandum is filed in support of defendants’
Motion to Dismiss for want of subject matter jurisdic-
tion. The complaint purports to state a claim “for in-
junctive relief and trevle damages under the anti-trust
20
laws” against defendants who are realtors doing
business within the jurisdiction of this Honorable
Court. The jurisdictional allegations, set forth under
the heading “The Nature of Trade and Commerce,” are
contained in paragraphs XI, XIII and XIV.
Paragraph XI alleges no facts, but merely asserts the
conclusion that defendants’ activities “are within the
flow of interstate commerce and have an effect upon
that commerce.” Paragraph XIII alleges that many per-
sons using defendants’ services in connection with the
purchase and sale of real estate “are persons moving
into and out of the Greater New Orleans Area.”
Paragraph XIV alleges that defendants assist their
clients in securing, financing and insurance involved
with the purchase of real estate and that
“.., such financing and insurance are ob-
tained from sources outside the State of
Louisiana and move in interstate commerce
into the State of Louisiana through tke ac-
tivities of the defendants.”
In fact, defendants do not engage in any interstate ac-
tivities and the allegation as to financing and insurance
is directly contradicted by the averments of the affi-
davits of Max J. Derbes, Jr. and Dalton L. Truax, Jr. an-
nexed to defendants’ Motion to Dismiss.
These affidavits recite that real estate brokers in the
State of Louisiana are licensed by the State to perform
a racine steele ila natn
nen Le vac Ne eetiian
21
the function of real estate brckers in that State and no
other. They further aver that there is no legal or other
requirement that the sale or purchase of real estate in
the State of Louisiana be made tiirough a real estate
broker and that the affiants has personal knowledge of
sales made other than through such brokers. These
affidavits further aver that the function of real estate
brokers is to bring buyers and sellers together, that
their commissions are earned wher this has been done
and that they have essentially completed their func-
tion when they have done so. It is finally averred that
real estate brokers do not obtain and are not instri-
mental in obtaining financing of credit sales, save in a
few special cases, nor are they connected with exami-
nation of titles in connection with the sale of real estate
or financing of such sales.
It is submitted that defendants’ activities as real es-
tate brokers are clearly intrastate in nature and have no
effect on interstate commerce. As such, they do not
meet the criteria for application of federal anti-trust
laws:
“ .. The test of jurisdiction is not that the
acts complained of affect a business engaged
in interstate commerce, but that the conduct
complained of affects the interstate commerce
of such business.
“ ... despite the increased thrust of federal
commerce power as_ business operations
become more interrelated and complex, the
22
courts have consistently required that in
order for federal anti-trust jurisdiction to be
sustained the effect on interstate commerce of
an alleged antitrust violation in a local area
must be direct and substantial, and not mere-
ly inconsequential, remote or fortuitous.”
(citing authorities) Page v. Work, 290 F.2d 323,
330, 332 (9th Cir. 1961).
Page v. Work, supra, was an action in behalf of a news-
paper primarily engaged in publication of legal adver-
tising for treble damages for violation of the anti-trust
laws against a bureau representing newspaper owners
in solicitation of legal advertising upon the ground that
acts of the bureau caused alleged Icss of publication of
delinquent tax lists. Affirming a district court judg-
ment of dismissal, the Court of Appeal concluded in its
opinion as follows:
“{11] In our view, the language of Section 18
in no way indicates that Congress intended to
apply the provisions of that Act to purely loca!
activities wholly directed to a local intrastate
market and relating to a product not in the
flow of interstate commerce and where the
effects on interstate activities in which the
parties engage are insubstantial, inconse-
quential and fortuitous, if not nonexistent.” at
333-4.
This requirement that the effect of the activity in
question on interstate commerce be substantial and
23
direct, and not merely remote and incidental, lead to
dismissal of anti-trust actions against realtors in
Marston v. Ann Arbor Property Managers Assn., 302 F. Supp.
1276 (D. C. Mich. 1969), aff’d 422 F.2d 836 (6th Cir.
1970), and Cotillion Club, Inc. v. Detroit Real Estate Board,
303 F. Supp. 850 (D. C. Mich. 1964). It is submitted
that these decisions are precisely in point, are control-
ling and are dispositive of the plaintiffs’ claims herein.
In Marston, supra, the alleged conspiracy was to fix the
price level of rental apartments in Ann Arbor,
Michigan and to control the supply of new apart-
ments; jurisdiction was sought to be invoked under the
provisions of Section 4 of the Clayton Act, as is sought
herein. The district court dismissed the complaint for
lack of jurisdiction, holding:
“{1,2] This court concludes that the pro-
visions found within Section 1 of the Sher-
man Act have not been met and is fatal to
plaintiffs’ case. Section 1 of the Sherman Act
provides that ‘every contract, combination in
the form of trust or other wise, or conspiracy,
in restraint of trade or commerce among the
several States, or with foreign nations, is de-
clared to be illegal * * *.’ Unless interstate or
foreign commerce has been directly and un-
reasonable restrained, there can be no viola-
tion of the Sherman Act and no private cause
of action under the Clayton Act. The court is
aware that a business of which the ultimate
24
object is the operation of intrastate activities,
such as local apartment construction and rent-
al, may make sucha utilization of the channels
of interstate trade and commerce that the
business itself assumes some minor inter-
state character. However, the court does not
find defendants conducting such a business.
Defendants’ business is not of such an in-
terstate character as intended by the Act.
“It is clear from the complaint that the re-
straints alleged relate only to the rental of real
estate in the Ann Arbor area. This is local com-
merce and the competition allegedly restrained and inter-
fered with is local in nature. There is no evidence that
defendants’ business has, or will have, a substantial ad-
verse effect on interstate commerce. (citing
authorities) (Emphasis added.)
“[5] The actions of defendants are purely
local in nature, restricted to the Ann Arbor
area. Any effect their actions would have on
interstate commerce is remote and inconse-
quential. There is no evidence of an intent to
restrain interstate commerce, or a substan-
tial and actual restraint of interstate’ com-
merce. Any conspiracy which only indirectly
or incidentally affects and restrains inter-
state commerce is not within the purview of
Section 1 of the Sherman Act. (cite omitted)
* * 7
25
“The ‘Restraint of Trade’, if any, is strictly a
local problem. Plaintiffs should seek their
remedy under state law. The court would not
hesitate to entertain plaintiffs’ action if Sec-
tion 1 of the Sherman Act had been violated,
but it has not. Plaintiffs have failed to satisfy
the interstate commerce requirement. They
have been unable to satisfactorily demon-
strate that defendants’ activities have oc-
curred within the ‘flow’ of interstate com-
merce, or that such activities have had a direct
and adverse effect on interstate commerce.” at
1279-80.
The district court dismissal of the plaintiffs’ action
was appealed to the Court of Appeals for the Sixth Cir-
cuit, which affirmed in a per curiam opinion quoting
from the district court opinion that the defendants’ ac-
tivities were local commerce and that the competition
allegedly restrained and interfered with was local in
nature, saying:
“We agree with the district judge that plain-
tiffs have not pleaded a Sherman Act case.” at
837.
In Cotillion Club, supra, the alleged conspiracy was
“ _. to create and carry out restrictions and
restraints of interstate trade and commerce in
the purchase, sale, transfer, financing, and oc-
cupancy of real estate, including federally financed
26
and insured real estate and house accommodations in
the Detroit Metropolitan Area.” (Emphasis
added)
The allegations to support federal jurisdiction were
that some members of the defendant organizations re-
ceived and transmitted information and listings to and
from other states, that some such members made and
filed applications, reports and other documents for
transmittal to Washington, D.C. or other out of state
offices of their various federal housing agencies and
that some members of such organizations made in-
vestigations, appraisals and surveys of federally financ-
ed or insured Michigan real estate to be transmitted to
other states.
The court noted that nowhere in the complaint was
there any allegation as to the extent or substantiality of
these alleged interstate activities nor any allegation of
interstate activities of the defendant association, as dis-
tinguished from their members. The court further
noted that*the allegations of the complaint failed to
relate the alleged interstate activities of these members
of the defendant associations to the alleged restraints
complained of in the complaint. The court then said:
“{1] Such incidental activities across state
lines, by members of the defendants, do not
establish the jurisdiction of this Court. The
critical question is whether the alleged re-
straints are operative in interstate commerce,
27
ard not whether the defendants’ members en-
gage, in the overall conduct of their business,
in incidental activities across state lines.
* * *
“(2] It is well settled that the Sherman Act
was not designed to reach alleged restraints
which are local in nature and do not substan-
tially affect interstate commerce. ....
a * *
“It is clear from the complaint in this case that
the restraints alleged relate only to the
purchase and sale of real estate in the Detroit
Metropolitan Area. It is competition for the
purchase and sale of this real estate which is
assertedly injured by the alleged restraints.
This is local commerce and the competition al-
legedly restrained and interfered with is local
in nature. If one assumes the allegations to be
true, they fail to allege facts showing that the
restraints substantially burden interstate
commerce.” at 853-4.
The court observed that the relevant market in-
volved was the sale of real estate in the Detroit
Metropolitan Area and that the members of the defen-
dants were licensed to sell real estate only in the State
of Michigan (just as the defendants herein are licensed
to sell real estate only in the State of Louisiana) and
that the sales related to real property which was en-
tirely local (just as the sales herein complained of are
28
alleged to be in the Greater New Orleans Area, Com-
plaint Pars. XII, XIV). As to the alleged filing of
applications, reports and other documents in connec-
tion with federally insured real estate within the State
of Michigan, the court said:
° The nature of these applications,
reports, and other documents does not
appear. The effect which the alleged re-
straints have upon these ‘applications,
reports, and other documents’ does not
appear, nor does the extent of any such effect
appear. There is no relationship established
between the alleged restraint and the inci-
dental activities involving mailings across
state lines.
“The complexity of modern business leaves
little room for contracts, or business transac-
tions, which cannot be said in some degree to
affect interstate commerce.
“[3] The effect on interstate commerce must
be direct and not remote and must be the
result of intent to restrain interstate com-
merce, or there must be substantial and actual
restraint of interstate commerce; and any con-
spiracy which only indirectly or incidentally
affects and restrains interstate commerce is
not within the purview of this section.” at 854.
In Manion v. Jefferson Board of Realtors, Civil Action No. °
73-2604 of this Honorable Court, speaking through
_
29
Judge Gordon, dismissed a complaint virtually iden-
tical with that herein and this dismissal was affirmed by
the Court of Appeal for the Fifth Circuit in a mem-
orandum opinion in its docket, No. 74-1901. No hold-
ing to the contrary has been cited and it is accordingly
quite clear that plaintiffs’ complaint must be dismissed
for lack of jurisdiction. A copy of the transcript of the
hearing on the Motion to Dismiss in Manion, supra, is at-
tached as Exhibit “C.” Judge Gordon’s reasons for
granting the motion are stated on pages 23-6.
Goldfarb v. Virginia State Bar, U.S. ,44L.Ed.2d
572, 95 S.Ct. 2004 (1975), does not derogate from
the holding in Marston, Cotillion Club or Manion, supra, be-
ing entirely distinguishable on its facts and issues. The
charge in Goldfarb, supra, was that operation of the
Virginia State Bar minimum fee schedule, as applied to
fees for legal services relating to residential real estate
transactions, constituted price-fixing in violation of
Section 1 of the Sherman Act. The Supreme Court's
determination that the schedule and its enforcement
violated the Sherman Act rested upon a careful con-
sideration and analysis of “the nature of the transac-
tions at issue and the place legal services play in those
transactions. ....” at 582-3. The “transactions at
issue” were various aspects of financing the purchase
of real estate:
“ ... petitioners .... contracted to buy a
home in Fairfax County, Virginia. The fi-
nancing agency required them to secure title
30
insurance; this required a title examination,
.” at 578.
No question was raised as to the sale or purchase by the
petitioners of the home in question; the opinions of the
district court, the Court of Appeal and the Supreme
Court are all silent on the question whether the plain-
tiffs’ purchase was made through a real estate broker
but. if so, this phase of the transaction was complete
and had passed out of the picture.
In its careful definition of the “nature of the transac-
tions at issue and the place legal services play in those
transactions,” the Supreme Court adverted to the dis- _
trict court finding that a significant portion of funds
furnished for the purchase of homes in Fairfax County
came from without the State of Virginia and that
significant amounts of loans on Fairfax County real es-
tate were guaranteed by the VA and HUD, both of
which were headquartered in the District of Columbia,
in consequence of which:
“... Thus in this class action the transac-
tions which create the need for the particular
legal services in question frequently are inter-
state transactions. The necessary connection
between the interstate transactions and the
restraint of trade provided by the minimum
fee schedule is present because, in a practical
sense, title examinations are necessary in real
estate transactions to assure a lien on a valid
31
title of the borrower. In financing realty pur-
chases lenders require, ‘as a condition of mak-
ing the loan, that the title to the property in-
volved be examined ....’ Thus a title ex-
amination is an integral part of an interstate
transaction. ...” at 583.
By contrast, in the instant case
“The essential function of a Louisiana real es-
tate broker consists of counselling pur-
chasers or sellers of real estate situated in
the State of Louisiana. Assisting them in es-
tablishing the price of properties and bring-
ing about agreements to purchase and sell.
Brokers earn their commissions upon pro-
curing a purchaser or seller, as the case may
be, and have essentially completed their func-
tion at that time.” (affidavit of Max Derbes, Jr.
and Dalton L. Truax, Jr., Par. VII.)
In contrast to the Supreme Court'’s finding of the “in-
separability of this particular legal service from the
interstate aspects of real transactions .. .” (at 583),
which interstate aspects were the financing of the
purchase of real estate, the role of the defendant real
estate brokers in financing such purchases is neither
integral nor inseparable. In Goldfarb, supra, the evidence
reflected mortgage loans by out-of-state lenders in the
State of Virginia of some Seventy-five Million Dollars
for the years 1970 and 1971, VA loan guarantees in
Fairfax County alone of One Hundred Five Million
32
Dollars in 1972 and HUD insurance of home mort- *
gages in Fairfax County of Twenty-three Million ices at issue in Goldfarb, supra, appears clearly from foot-
Dollars in 1972. The role played by real estate brokers | note 13 to the Supreme Court’s opinion reading as
in Louisiana in financing credit sales is minimal: follows:
“8. Real estate brokers do not obtain and are Bi poate gine 8 pe crates '
not instrumental in obtaining the financing of horns a Riots +g fe Pass
credit sales except in situations in which the ; h aioe hie ot Oty hi 6: aa P
EGS accepts a note secured by a Vendar’s ‘. . any 8 y d tk ae. SL Pe cura
= as part of the purchase price. Essentially, rer it i . sitet Pee Fhe gr % .
and in the overwhelming majority of cases, eld, inter alia, that intrastate taxi trips that
occurred at the start and finish of interstate
rail travel were ‘too unrelated to interstate
commerce to constitute a part thereof within
the meaning of the Sherman Act.’ 332 US, at
230, 91 L Ed 2010, 67 S Ct 1560. The ride to
the railway station, we said, ‘[f]rom the stand-
points of time and continuity . . . may be quite
distinct and separate from the interstate jour-
ney.’ Id., at 232, 91 L. Ed. 2010, 67 S Ct 1560.
Here, on the contrary, the legal services are
coincidental with interstate real estate trans-
actions in terms of time, and more important,
in terms of continuity they are essential. In-
deed, it would be more apt to compare the
legal services here with a taxi trip between
stations to change trains ijn the midst of an
interstate journey. In Yellow Cab we held that
such a trip was a part of the stream of com-
merce. Id., at 228, 229, 91 L Ed 2010, 67 S Ct
1560.” at 583.
the obtaining of financing is handled by the
purchaser directly with the lending institu-
tion.
“9. Real estate brokers are in no way con-
nected with or participate in examination of
titles in connection with the sale of real estate
or financing of such sales.” (affidavits of Max
Derbes, Jr. and Dalton L. Truax, Jr.)
Paraphrasing the district court's opinion in Marston,
supra:
“The actions of defendants are purely local in,
nature, restricted to the Greater New Orleans
Area. Any effect their actions would have on
interstate commerce is remote and inconse-
quential.. . ” :
The prior and separate nature of the services ren-
dered by the defendants herein, in contrast to the serv-
1)
4
34
The critical importance of this distinction becomes
even clearer upon a reading of the entire paragraph
from which the court quotes in its footnote:
“Here we believe that the common under-
standing is that a traveler intending to make
.interstate rail journey begins his interstate
movement when he boards the train at the
station and that his journey ends when he dis-
embarks at the station in the city of destina-
tion. What happens prior or subsequent to that rail
journey, at least in the absence of special arrangement, is
not a constituent part of the interstate movement. The
traveler has complete freedom to arrive at or
leave the station by taxi cab, trolly, bus, sub-
way, elevated train, private automobile, his
own two legs, or various other means of con-
veyance. Taxicab service is thus but one of the
many that may be used. It is contracted for in-
dependently of the railroad journey and may
be utilized whenever the traveler so desires.
From the standpoint of time and continuity,
the taxi cab trip may be quite distinct and sep-
arate from the interstate journey. To the taxi
cab driver, it is just another local fare.” at
2020-21 (Emphasis added.)
Paraphrasing the Supreme Court’s language in Yellow
Cab, supra:
“A title examination is an integral part of an
interstate transaction and is inseparable from
——'s
— ss
35
the interstate aspects of real estate transac-
tions. What happens prior or subsequent to
the title examination, at least in the absence of
some special arrangement, is not a constitu-
ent part of the interstate transaction. The
purchaser has complete freedom to make his
agreement to purchase through a real estate
broker, through a friend or relative cf the
owner, through an attorney at law repre-
senting the owner or directly with the owner
himself, whether a builder or an occupant.
Purchasing through a real estate broker is
thus but one of many means of contracting to
buy real estate. It is contracted for indepen-
dently of financing the purchase where such
financing is necessary and is entirely unre-
lated to such financing. From the standpoints
of time and continuity, the agreement to
purchase is quite distinct and separate from
subsequent financing arrangements.”
That Goldfarb, supra, effected no change in the law as
to the intrastat~ nature of real estate brokerage, but
was decided on its special facts, is clear from the deci-
sion of the Court of Appeals for the Eighth Circuit in
Diversified Brokerage Services, Inc. v. Greater Des Moines Board
of Realtors, 521 F.2d 1343 (8th Cir. 1975). Rejecting the
plaintiff’s contention that Goldfarb was controlling,
the court affirmed dismissal on jurisdictional grounds
of an action for alleged violation of the Sherman Act in
refusing to admit the plaintiffs to membership, The
court pointed out that the plaintiffs
36
“
a ; ate pe effort to present evidence that
endants intrastate activities subs tontially af-
fect interstate commerce and therefore come
within the purview of the Sherman Act even
though they are not interstate in character.”
(authorities cited) (Emphasis applied.) at 1345,
. ee that the only basis for the plaintiffs’ conten-
ion that the defendants were engaged in interstat
commerce within the meaning of the Sherman Act w ;
a few transactions to which out-of-state persons w 7
sire the court cited Yellow Cab’s, supra, holding eine
rtf oe beginning or ending of a railroad journey
Beary 0 ms an integral part of the stream of com-
rit SO as to come within the Sherman Act
and observed that the cases uniformly held that
“
os tie mere movement of individuals from
state to another in order to utilize f artic-
ular services does not transform those serv-
ices into interstate services within the mean-
ing of the Sh ” (citi
pg erman Act.” (citing authorities) at
Th i
sae ca ot that in Goldfarb, supra, the
urt ruled that title examinati
: tions were
in i =
ta tet acc of the interstate transactions and noted
nls oe volume of commerce .involved” (at
and observed that the plairtiffs had made no
such showing. Consequently,
37
“ _ onthis record, the most that is shown by
plaintiffs is some interstate movement of in-
dividuals. That is not enough to establish
jurisdiction in this case.” at 1347.
The “nexus with interstate commerce” which the
court found in the financing of real estate purchases in
Goldfarb, supra, is clearly lacking in defendants’ purely
local activity of bringing sellers and purchasers
together and Goldfarb, supra, furnishes no precedents.
The doctrine that there must be a showing of direct
and substantial effect on interstate commerce was re-
cently affirmed by the Court of Appeals for the Fifth
Circuit in Rosemound Sand and Gravel Co. v. Lambert Sand and
Gravel Co., 469 F.2d 416 (Sth Cir. 1972). Suit had been
brought therein by a gravel producer against three
competitors alleging that they had combined to inter-
fere with an output-requirements agreement which
the plaintiff company had arranged with a large con-
struction company. The District Court had dismissed
the complaint for lack of jurisdiction and the Fifth Cir-
cuit affirmed. The court’s opinion is instructive:
“ |. The complaint contains only the barest
conclusory statements of jurisdiction and
Rosemound has added little to shore up its ini-
tially weak position. The answers to its inter-
rogatories clearly show that the defendants.
S- mine and sell sand and gravel only for
) Louisiana purchasers and that none of the
38
defendants products are shipped out of state
or enter the flow of commerce. The deposi-
tions of Rosemound’s partners establish that
its business never got off the ground to any
commercially recognizable extent. As found
by the trial court, this failure of any party to
have any interstate business disposes of the
Clayton Act and Robinson-Patman Act
claims. (citing authorities) While these intra-
state activities could be found to violate the
Sherman Act if they had a direct and substan-
tial effect on interstate commerce, (citing
authorities) evidence introduced below es-
tablish no such connection.
“If a combination could be shown to have
existed here, its only purpose and effect would
have been to interfere with the intrastate
Louisiana Sand and Gravel business.” at 418-
19. .
CONCLUSION
As appears more fully fror: the foregoing dis-
cussion, there is clear authority for the proposition that
the activities of real estate brokers such as defendants
herein are purely local in nature and not subject to the
Sherman and Clayton Acts. The allegation in
paragraph XIV that defendants assist in securing fi-
nancing and insurance involved with the purchase of
real estate is controverted by the recitals of the affi-
davits of Messrs. Derbes and Triax and, as is more ful-
SARPY
ls} HARRY McCALL, JR.
Harry McCall, Jr.
39
ly set forth hereinabove, financing znd title insurance
are entirely separate from the activities of real esiate
brokers. The conclusory allegations of paragraph XI
that defendants’ activities “are within the flow of inter-
state commerce and have an effect upon that com-
merce” are clearly insufficient to vest jurisdiction.
The complaint should be dismissed for lack of subject
matter jurisdiction.
Respectfully submitted,
CHAFFE, McCALL,
PHILLIPS, TOLER &
(Names of Co-Counsel Omitted)
(Certificate of Service Omitted)
40
DEFENDANTS’ EXHIBIT “A”
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NEW ORLEANS DIVISION
(Number and Title Omitted)
AFFIDAVIT
STATE OF LOUISIANA:
PARISH OF ORLEANS:
BEFORE ME, the undersigned authority, personally
came and appeared MAX DERBES, JR., who, upon first
being duly sworn, did depose and say:
1. I ama resident of the Parish of St. Tammany,
State of Louisiana.
2. I am engaged in the business of a real estate
broker with offices in the Parish of Orleans. I am duly
licensed as a broker by the State of Louisiana since
1954.
3. Iam the first vice president of the Real Estate
Board of New Orleans, Inc. and I have served on the
Board of Directors of said organization for 7 years.
4. Insuch capacities, I have been and am familiar in
considerable depth with the workings of the real estate
market in the State of Louisiana.
_—
41
5. The Broker’s License issued to me by the State of
Louisiana authorizes me to perform the functions of a
real estate broker in that State and no other; all real es-
tate brokers in the State of Louisiana are similarly
licensed.
6. There is no legal or other sort of requirement
that the sale or purchase of real estate within the State
of Louisiana be made through a real estate broker and I
know of my own knowledge that in fact sales have been
and are made without the interposition of real estate
brokers; examples of such sales are direct sales by in-
dividual owners, by builders, by friends or relatives or
through attorneys at law.
7. The essential function of a Louisiana real estate
broker consists of counseling purchasers or sellers of
real estate situated in the State of Louisiana, assisting
them in establishing the price of properties and bring-
ing about agreements to purchase and sell. Brokers
earn their commissions upon procuring a purchaser or
seller, as the case may be, and have essentially com-
pleted their function at that time.
8. Real estate brokers do not obtain and are not in-
strumental in obtaining the financing of credit sales ex-
cept in situations in which the Vendor accepts a note
secured by a Vendor’s Lien as part of the purchase
price. Essentially, and in the overwhelming majority of
cases, the obtaining of financing is handled by the pur-
chaser directly with the lending institution.
42
9. Real estate brokers are in no way connected with
or participate in examination of titles in connection
with the sale of real estate or financing of such sales.
/s| MAX J. DERBES, JR.
MAX DERBES, JR.
(Jurat Omitted)
DEFENDANTS’ EXHIBIT “B”
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NEW ORLEANS DIVISION
(Number and Title Omitted)
AFFIDAVIT
STATE OF LOUISIANA:
PARISH OF ORLEANS:
BEFORE ME, the undersigned authority personally
came arid appeared, DALTON L. TRUAX, JR. who
upon first being duly sworn, did depose and say:
1. lama resident of the Parish of Jefferson, State of
Louisiana.
2. Iam engaged in the business of real estate broker
with offices in the Parishes of Orleans, St. Tammany
43
and Jefferson. I am duly licensed as a broker by the
State of Louisiana since 1960.
3. I am the Secretary of the Real Estate Board of
New Orleans, Inc. and have served on the Board of
Directors of said organization for five (5) years.
4. Insuch capacities I have been and am familiar in
considerable depth with the workings of the real estate
market in the State of Louisiana.
5. The Broker’s License issued to me by the State of
Louisiana authorizes me to perform the functions of a
real estate broker in that State and no other; all real es-
tate brokers in the State of Louisiana are similarly
licensed.
6. There is no legal or other sort of requirement
that the sale or purchase of real estate within the State
of Louisiana be made through a real estate broker and I
know of my own knowledge that in fact sales have been
and are made without the interposition of real estate
brokers; examples of such sales are direct sales by in-
dividual owners, by builders, by friends or relatives or
through attorneys at law.
7. The essential function of a Louisiana real estate
broker consists of counseling purchasers or sellers of
real estate situated in the State of Louisiana, assisting
them in establishing the price of properties and bring-
ing about agreements to purchase and sell. Brokers
44
earn their commissions upon procuring a purchaser or
seller, as the case may be, and have essentially com-
pleted their function at that time.
8. Real estate brokers do not obtain and are not
instrumental in obtaining the financing of credit sales
except in situations in which the Vendor accepts a note
secured by a Vendor’s Lien as part of the purchase
price. Essentially, and in the overwhelming majority of
cases, the obtaining of financing is handled by the pur-
chaser directly with the lending institution.
9. Real estate brokers are in no way connected with
or participate in examination of titles in connection
with the sale of real estate or financing of such sales.
ls} DALTON L. TRUAX, JR.
DALTON L. TRUAX, JR.
(Jurat Omitted)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Mar. 25, 1976
MOTION FOR EXTENSION OF TIME TO
ANSWER DEFENDANTS’ MOTION TO DISMISS
Plaintiffs herein request this Court to grant an ex-
tension of time to answer defendants’ motion to dis-
miss, up through and including April 7, 1976, and to
45
continue the date for hearing this motion from March
31 to April 28, 1976, for the following reasons:
1. Pursuant to instructions from this Court,
counsel for all parties agreed to a pretrial order con-
taining a schedule for the orderly progress of this
cause. This order was filed on January 5, 1976, and was
signed as an order by this Court the same day.
2. Paragraph 1 of the pretrial order required that
any motion by a defendant to quash service or object to
the jurisdiction or venue of this Court be filed on or
before sixty (60) days from January 5, 1976. Plaintiffs’
reply to such motion shall be filed within thirty (30)
days of the service of said motion. Defendants’ reply, if
any, is to be filed twenty (20) days thereafter.
3. Defendants filed a motion to dismiss for lack of
subject matter jurisdiction with this Court on March 5,
1976, and plaintiffs received copies of this motion
through letter dated March 8, 1976. Defendants notic-
ed the motion for March 31, 1976.
4. Pursuant to the agreed timetable, plaintiffs are
entitled to a thirty day time frame within which to rep-
ly after service of the motion or up through and in-
cluding April 7, 1976.
5. Furthermore, pursuant to the pretrial order,
plaintiffs bear the responsibility of noticing said
motions for hearing.
46
6. Defendants, through letter to plaintiffs’ counsel
dated March 23, 1976, have suggested that in order to
comply with the applicable time frames, that their mo-
tion originally noticed for hearing on March 31, 1976,
be rescheduled for either April 28, 1976 or May 26,
1976.
‘ Respectfully submitted,
NELSON, NELSON &
LOMBARD, LTD.
Is/ PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
ORDER
IT IS HEREBY ORDERED that defendants’ motion
to dismiss, which is set for hearing on March 31, 1976,
be reset for April 28, 1976, and that plaintiffs’ reply to
defendants’ motion to dismiss be filed by April 7, 1976.
New Orleans, Louisiana, this 25th day of March,
1976.
ls) EDWARD J. BOYLE, SR.
UNITED STATES DISTRICT
JUDGE
(Certificate of Service Omitted)
47
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Apr. 8, 1976
PLAINTIFFS’ MEMORANDUM IN OPPOSITION
TO DEFENDANTS’ MOTION TO DISMISS
I. Background and Procedural Posture
Plaintiffs, buyers and sellers of residential property
in the greater New Orleans area, have alleged that two
trade associations and their broker members (realtors)
have conspired to fix the price of brokering services of-
fered to prospective buyers and sellers of residential
real property in the greater New Orleans area.
On January 5, 1976, counsel for all parties filed a pro-
posed pretrial order to accommodate the complexity of
this lawsuit and to establish an orderly procedural
timetable. The proposed timetable became an order of
this Honorable Court the same date. (See record,
pretrial order signed by Honorable Edward J. Boyle on
the Sth day of January, 1976.) This order precludes
plaintiffs initiating discovery until all pretrial motions
contemplated in paragraphs 1, 2 and 3 have been
argued and disposed of by ruling. At that point, dis-
covery is permitted only to determine whether this ac-
tion is maintainable as a class action (see order,
paragraph 4, page 3).
48
Plaintiffs have abided by this order and have ini-
tiated no discovery; thus plaintiffs: must rely in large
part on the jurisdictional allegations in their complaint
to support their opposition to defendants’ present mo-
tion to dismiss. Plaintiffs have, however, submitted
several affidavits to support a showing that defen-
dants’ brokering activities, an integral part of the entire
real estate transaction, takes place in interstate com-
merce and substantially affects that commerce (see
complete discussion, infra).
Defendants have jointly moved to dismiss this Sher-
man Act! complaint on the basis that the brokering
services which they dispense, or, in the case of the
defendant boards who supervise, foster, aid, abet and
educate, are neither within the flow of commerce nor
affect interstate commerce.? Defendants substantiate
this posture through two affidavits purporting that
brokering services are wholly discrete from the pa nop-
ly of actions involved in the purchase and sale of
residential real property from beginning to-end.
Plaintiffs offer the following memorandum to refute
this nosition. To briefly summarize at the outset, it is
plaintiffs’ position that a price fix presumes satisfaction
~1 15U.S.C. 1 (1964).
2 Generally speaking, under the antitrust laws, the interstate
commerce element of the offense may be based on the fact that the
acts complained of are within the flow of interstate commerce or
that the activity substantially affects interstate commerce. Las
Vegas Merchant Plumbers Ass'n v. United States, 210 F. 2d 732 (9 Cir.
1954).
«
49
of Sherman Act jurisdictional requirements. Should
the Court find this position insufficient, plaintiffs will
show that defendants’ activities are an integral part of
interstate commerce, that is, that defendants’ broker-
ing services cannot be divorced from the economic con-
tinuum of interstate activities necessary toculminate a
real estate transaction. Not only do defendants service
out-of-state buyers and sellers, but their work re-
quires the use of telephone and mail communication
across state lines. Further, their services include offer-
ing assistance to both procure loans from interstate
lending sources and to obtain title insurance from out-
of-state insurance carriers.
Although the purchase:and sale of realty is localized
to the extent that real property is by nature an im-
movable, the brokerimg activities can and do move in
interstate commerce anc have a substantial effect on
that commerce. But agaist «even if the services include
no more than bringing a buyer ard seller together, this
activity, because it is inextricably bound up with the en-
tire buy/sell transaction, is sufficient to confer juris-
diction.
I]. Factual Summary
Before turning to a full discussion of applicable legal
principles which firmly support’ a showing of subject
matter jurisdiction heve, plaintiffs must reemphasize
and briefly explain each jrisdictional allegation con-
tained in their complaint. Cf course, for purposes of a
\
\
rte es
50
motion to dismiss, well-pleaded material allegations
must be taken as true. See generally, 2A Moore’s
Federal Practice, paragraph 12.08. At this juncture, it
cannot be fairly said that in a factually complex suit
such as this the standard for dismissal has been met —
i.e., that it appears to a certainty that plaintiffs are en-
titled to no relief under any state of facts which could
be proved in support of the claim.
Generally, courts like the Fifth Circuit, see, e.g.,
McBeath v. Interamerican Citizens for Decency Committee, 374
F.2d 359 (5 Cir. 1967), will not permit dismissal for lack
of jurisdiction where the jurisdictional issue is closely
entwined with the substantive one of whether an anti-
trust violation has actually occurred. Given these pro-
cedural precautions, plaintiffs submit that defendants’
motion to dismiss should be viewed with particular
caution.
Paragraph XI of plaintiffs’ complaint alleges gen-
erally thai defendants’ activities are within the flow of
interstate commerce and affect that commerce. This al-
legation is substantiated by more particularized alle-
gations pertaining to the volume of business carried on,
the interstate movement of customers, and finally, the
interstate movement of financing and title insurance
services.
A. Defendants Account For A Substantial
Proportion Of Real Estate Brokering
Services Performed In Connection With
51
The Purchase And Sale Of Real Estate In
Greater New Orleans (Complaint,
r paragraph XII).
Absent discovery, plaintiffs are unable to provide the
Court with the percentage of real estate transactions
which take place through the services of the defendant
realtors. Yet, even at this early juncture, defendants
cannot deny that it is substantia!. For example, for the
fiscal year ending August 31, 1975, defendant Stan
Weber & Associates, Inc. reported residential sales of
$56,340,345.00. The Times-Picayune, Sunday, October
19, 1975, front page classified section. Plaintiffs intend
to prove that the other defendant realty companies
likewise occupy a market position which in no way can
be characterized as “inconsequential”. Although defen-
dants argue that no one is required by state law to use
their services, the fact is that thousands of persons do
turn to the realtor — a professional — to assist in the
now sophisticated and oftentimes complicated buy/sell
transaction.
B. Many Persons Using The Services Of The
Defendants In Connection With The
Purchase And Sale Of Real Estate Are
Persons Moving Into And Out Of The
Greater New Orleans Area.
One of the plaintiffs, Irving Koch, lived out-of-state
at the time that he enlisted a realtor to assist in his
purchase of residential property in the New Orleans
52
area (see attached affidavit of Koch). The brokering |
services rendered not only included actually locating
suitable property, but the realtor utilized assisted Mrs.
Koch with prices, marketing, information and financ-
ing.
Again, at this stage of the litigation, plaintiffs have
not yet determined the actual percentage of transac-
tions within the limitation period of this suit that in-
volve out-of-state buyers and sellers. On information
and belief, plaintiffs submit that this figure is sizeable.
Taking a national statistic, in any one year, nearly 36
million people — about 18% of all those in the United
States — change residences. About 6.6 million move
across state lines. Cited in Austin, Real Estate Boards
and Multiple Listing Systems As Restraints of Trade,
70 Columbia L. Rev. 1325, 1334, footnote 63. And sup-
port exists to show that defendants recognize and
attempt to capitalize on this substantial interstate
movement of persons. For instance, the Times-Picayune
reported on March 28, 1976, section 5, page 19, that
defendant Gertrude Gardner has opened a special
Relocation Center designed to assist companies in re-
locating transferred personnel and to handle paper
work involved in sales. Efforts like this just begin to
demonstrate the importance that realtors play in secur-
ing and/or disposing of residential property for persons
moving into and out of metropolitan New Orleans.
C. Defendants Assist Their Clients In Se-
curing Financing And Insurance In-
volved With The Purchase Of Real Estate
eh ag
53
In The Greater New Orleans Area. Such
Financing And Insurance Are Obtained
From Sources Outside The State Of
Louisiana And Move In Interstate Com-
merce Into The State Of Louisiana
Through The Activities Of The Defen-
dants.
Both the United States Department of Housing and
Urban Development and the Veterans Administration
make substantia! loan guarantees for the purchase of
homes in metropolitan New Orleans (see attached af-
fidavits of Paul Griener, Loan Guaranty Officer for the
VA, and Angel Miranda, Area Economist for HUD). In
1975 alone, VA insured loans for the parishes of Jeffer-
son and Orleans totaled over 55 million dollars. FHA
loan operations for 1973 in Orleans Parish exceeded 6
million dollars. In short, there is no question that sub-
stantial amounts of financing necessary for the
purchase of residential property flow into Louisiana
from out-of-state sources.
Plaintiffs have alleged that realtors assist in pro-
curing funds through interstate lending sources andin
obtaining title insurance from out-of-state insurance
carriers. Defendants have stated that brokers basically
do not engage in either obtaining financing or title in-
surance (see defendants’ affidavits of Max Derbes, Jr.
and Dalton L. Truax, Jr.). But, at this point in the litiga-
54
tion, important facts as yet are undeveloped.3 Once dis-
covery is initiated, amore complete picture of the realm
of brokering services offered through defendants will
be obtained and offered to support both jurisdictional
and substantive Sherman Act requirements.
Finally, it is plaintiffs’ position that given the allega-
tion of a price fix, it is not a prerequisite to Sherman Act
jurisdiction that defendants actually procure financing
or title insurance. It is sufficient to show that defen-
dants’ brokering activities are an integral part of the
entire economic transaction of a real estate purchase
and sale and that their concerted activity disturbs the
interstate flow of persons, financing, and insurance
services necessary to complete the real estate transac-
tion.
3 Despite the fact that opposing affidavits have been submitted
and the Court will be considering some material outside the-plead-
ings, plaintiffs strongly urge that dismissal on the basis of a mo-
tion for summary judgment would be improper. Not only are
material facts in dispute, but other material facts are as yet undis-
covered. “Rule 12(b)(6) requires that before a motion to dismiss
may be treated as one for summary judgment the parties be given
‘reasonable opportunity to present all materials made pertinent to
such by Rule 56’”. 6 Moore’s Federal Practice, paragraph
56.02 [3], pages 56-32. Incidentally, at least one basis for dis-
tinguishing Page v. Work, 290 F. 2d 323 (9 Cir. 1961), a case on
which defendants rely, is on procedural grounds. In Page, the par-
ties in effect consented to a separate trial on the issue of jurisdic-
tion and the court had before it a range of affidavits, oral
testimony and the like. Since discovery here has not yet been ini-
tiated, plaintiffs are unable to offer the Court all pertinent evi-
dence and in no way have consented to “a separate trial on the
issue of jurisdiction”.
55
IIL. Plaintiffs Have Satisfied The Sherman Act Jurisdictional
Requirements.
Sherman Act jurisdiction requires first that the
alleged restraint emanate from a “trade” and second,
that the restrained commerce be “among the several
states”. See, 15 U.S.C. 1 (1964). Defendants have
challenged the second requirement,‘ urging that the
activity in which they engage begins and ends with
bringing together a buyer and seller. In essence, they
argue that their brokering services are-purely local in
nature and have only a remote or inconsequential
effect on interstate commerce. It follows, therefore,
that their activities, even if illegal, cannot be reached by
federal prohibitions. 3
It must be remembered that when Congress exer-
cised its commerce power under the Sherman Acct, it
utilized this power to its fullest extent. See, e.g., United
States v. Frankfort Distilleries, Inc., 324 U.S. 293, 298 (1945).
(“Congress, in passing the Sherman Act, left no area of
its constitutional power unoccupied; it ‘exercised all the
power it possessed’ ”). As such, intrastate activity is
within the scope of federal reguiatory power if that ac-
tivity “exerts a substantial economic effect on inter-
4 Indeed, questioning the first jurisdictional prerequisite would
be near useless. In 1950, the U.S. Supreme Court clearly settled
the issue of whether real estate brokering is a “trade” within the
meaning of Section 1 of the Sherman Act. in United States v. National
Association of Real Estate Boards, 339 U.S. 485 (1950), the court refused
to exempt the real estate industry from Sherman Act coverage on
the basis that it was not a “trade”.
56 ;
state commerce.” Wickard v. Filburn, 317 U.S. 111, 125
(1942). Alternately, if the violative acts occur within
the flow of commerce, Sherman Act jurisdiction is
found as well. See, Las Vegas Merchant Plumbers Ass'n v.
United States, 210 F. 2d 732 (9 Cir. 1954), for an enuncia-
tion of these alternate bases for jurisdiction. These
concepts will be discussed in detail, infra. But before-
hand, plaintiffs address an important issue concerning
jurisdictional requirements where a price fix is alleged.
A. Where A Price Fix Is Alleged, Since Proof
Of Interstate Effects Need Not Be Proved
To Establish The Substantive Offense,
Courts Can Presume Satisfaction Of
Sherman Act Jurisdictional Require-
ments.
The heart of plaintiffs’ complaint alleges that defen-
dants have combined and conspired together to fix,
control, raise and stabilize the price of brokering serv-
ices. (Complaint, paragraph XVI). Stated another way,
the customers who utilize defendants’ services do not
enter a competitive market. Instead, purchasers and
sellers entering the market are confronted with a fixed
brokerage fee, notwithstanding the actual value of the
services performed or the realtor who performs the
service. On information and belief, plaintiffs submit
that in the vast majority of residential transactions, the
brokering fee remains constant.
Because plaintiffs have alleged a price fix con-
spiracy, it is unnecessary for plaintiffs to prove the
ieee
57
degree that the agreement affects interstate com
merce. Under the Sherman Act, a combination formed
for the purpose and with the effect of raising, depress-
ing, or stabilizing the price of a commodity in inter-
state commerce is illegal per se. United States v. Socony-
Vacuum Oil Co., 310 U.S. 150 (1940). Indeed, proof of the
degree or effect that concerted activity has on inter-
state commerce is not a constitutional or jurisdictional
prerequisite to the assertion of federal power. Socony-
Vacuum, supra, at 485, note 59. In other words, the con-
duct itself, that is, the agreement to fix prices, is con-
sidered so harmful that additional proof of effects on
interstate commerce is unnecessary. The adverse com-
petitive effects are conclusively presumed from the
mere existence of the conduct. See also, Burke v. Ford,
389 U.S. 320, 321-322 (1967). (Court presumed per se
violation inevitably affected interstate commerce);
Mandeville Island Farms, Inc. v. American Crystal Sugar Co.,
334 U.S. 219, 240-41 (1948) (inevitable effect of price
fix agreement is to reduce competition).5
5 Although defendants rely on Manion v. Jefferson Board of Realtors,
Civil Action No. 73-2604, for support that real estate brokering is
a purely local activity that has only a remote effect on srnanence.
this case is inapposite here. Before ruling, Judge Gordon was twice
informed that Manion had not alleged price-fixing (see oe
transcript, pp. 10, 12). Therefore, the court was not con ronte
with the legal effect of alleging a per se violation. The Manion _
can also be distinguished on factual grounds. To support a on ic-
tional showing, Manion apparently relied almost exclusive y ona
showing of incidental activities, such as purchasing supp y in
interstate commerce (Manion transcript, p. 25). Plaintiffs =
allege a far more substantial basis for interstate peer §arh isa “
important to note that realtors themselves, the real links in a4
real estate transaction, were not named as defendants. As such,
the court took no consideration of the actual brokering activities
and the part these activities play in interstate commerce.
58
B. Defendants’ Brokering Activities Take
Place In Commerce And Affect Inter-
state Commerce.
Although plaintiffs contend it is not necessary to
prove the interstate effects which defendants’ alleged
price-fixing conspiracy generates, plaintiffs can dem-
onstrate that defendants’ brokering activities take
place in commerce, and are an integral part of that com-
merce.
Plaintiffs wish to stress that brokering services are
an intangible® and as such, it becomes more difficult to
conceptualize the movement of this product across
state lines. It is partly because of this elusiveness of
definition that plaintiffs demonstrate the interstate
nature of the service by describing the specific acts of
contact and communication in which the realtors
engage. The conclusory description of “merely bring-
ing a buyer and seller together” downplays the
numerous contacts, many of which are interstate,
which a realtor initiates and receives in his or her effort
to successfully conclude a buy/sell agreement and thus
earn a commission.
6 There is no problem with the fact that it is “services” that con-
stitute the economic continuum and affects interstate commerce.
See, e.g., Associated Press v. United States, 326 U.S. 1 (1945); United States
v. Southeastern Underwriters Association, 322 U.S. 533, 546 (1944),
Southeastern Underwriters, supra at 539, is also important for the
proposition that activities are in commerce where substantial
quantities of documents, communication and money travel across
state lines. Such activity is generated here by the fact that realtors
service out-of-state buyers and sellers.
Lee ee oe
59
Practically speaking, a buyer cannot#purchase a
house without financing. As described above, millions
of dollars flow from out-of-state to enable willing
buyers to also become able ones. Similarly, a buyer
wants a piece of land free of title defects. So does that
buyer’s bank or other lending institution. Taking the
other side, a seller simply cannot sell without some
guarantee that the purchaser will not later face.a law-
suit by an heir or prior owner. The realtor is in effect
caught in the middle of these demands and/or pre-
requisites to culminating a contract between a buyer
and a seller. Even if the realtor does not participate in
obtaining financing or insurance, which plaintiffs do
not here concede, that realtor is no less an integral and
oftentimes indispensable part of that entire economic
process. It is on this basis that plaintiffs urge that
defendants’ brokering services clearly are intertwined
with interstate commerce — the movement of persons,
the flow of money, the establishment of com-
munications, the struggle for business. A realtor earns
a commission only upon the successful culmination of a
number of transactions, many of which flow in com-
merce. Because the brokering service is thus such an in-
tegral part of the successful culmination of the buy/sell
contract, a price-fixing conspiracy for the costs of
brokering services substantially affects commerce for
Sherman Act purposes.’
7 Cf, Mandeville Island Farms, Inc. v. American Crystal Sugar Company,
344 U.S. 219 (1948). The court in Mandeville Farms set up a single
formula for determining whether commerce was affected within
the meaning of the Sherman Act: the relationship between the
conduct complained of and the economic totality adversely affect-
ed by that conduct. Plaintiffs here request this Court to do the
same.
60
Plaintiffs submit that the activities described above
are sufficient to confer Sherman Act jurisdiction. The
United States Supreme Court’s recent pronounce-
ment in Goldfarb v. Va. State Bar, U.S. , 44
L. Ed. 2d 572 (1975), provides sound precedent for up-
holding subject matter jurisdiction here. Chief Justice
Burger (for a unanimous court) thoroughly answered
the issue of whether the services performed by at-
torneys in examining titles in connection with financ-
ing the purchase of real estate are in interstate com- —
merce or affect commerce. The court relied on district
court findings of fact (see Goldfarb v. Va. State Bar, 355
F. Supp. 491, 494 (E.D. Va. 1973) and noted that a sig-
nificant portion of funds furnished for the purchasing
of homes in Fairfax County comes from without the
State of Virginia and significant amounts of loans on
Fairfax County real estate are guaranteed by the Unit-
ed States Veterans Administration and Department of
Housing & Urban Development, both headquartered
outside Virginia. Goldfarb, 44L. Ed. 2d at 583.8 Further,
the court soundly rejected defendant’s view that the
legal services performed were wholly intrastate and
could not therefore substantially affect commerce.
8 Plaintiffs wish to point out that procedurally speaking the
jurisdictional issue in Goldfarb was apparently reserved until the
parties had ample time for pretrial discovery and a full presenta-
tion of evidence could be made at trial. At this point, plaintiffs are
unable to offer the entire range of evidence, which they can and
will produce after discovery has commenced. However, the alle-
gations in the compiaint, especially paragraph XIV, speak directly
to the large volume of interstate loans and for purposes of this mo-
tion, should be taken as true.
61
“_. the transactions which create the need
for the -particular legal services in question
frerwently are interstate transactions. The
necessary connection between the interstate
transactions and the restraint of trade pro-
vided by the minimum fee schedule is present
because, in a practical sense,? title ex-
aminations are necessary in real estate trans-
actions to assure a lien on a valid title of the
borrower. In financing realty purchases lend-
ers require ‘as a condition of making the loan,
that the title to the property involved be ex-
amined .. .’ Thus a title examination is an in-
tegral part of an interstate transaction.
x*w
“Given the substantial volume of commerce
involved, and the inseparability of this par-
ticular legal service from the interstate
aspects of real estate transactions we con-
clude that interstate commerce has been suf-
ficiently affected. See Montague Co. v.
Lowry, 193 U.S. 38, 45-46 (1904); U.S. vs.
Women’s Sportswear Ass‘n, 336 U.S. 460,
464-465 (1949).”
Goldfarb, 44 L. Ed. 2d. at 583. The basis on which defen-
dants herein seek to distinguish Goldfarb concerns
whether brokering services are sufficiently entwined
9 Thecourt notes here that it is in a practical sense that we must
view an affect on interstate commerce, citing Swift and Co. v. United
States, 196 U.S. 375, 398 (1905) and Mandeville Farms v. American
Crystal Sugar Co., 334 U.S. 219, 233 (1948).
62
with, inter alia, the interstate movement of funds
which are necessary to finance the underlying
purchase and sale transaction.
Plaintiffs strongly believe that pragmatism and the
sophistication of today make impossible the severance
of brokering services which defendants offer from the
interstate aspects of a real estate transaction. For ex-
ample, although-it is true that the use of brokering
services are not required by state law, one cannot ig-
nore the fact that defendants actively solicit participa-
tion in the real estate trans. tion and that a substan-
tial volume of real estate transactions occur through
defendant realty companies.
Furthermore, it must be stressed again that realtors
are acutely concerned with whether a potential buyer is
able to obtain financing. Such financing is esseritial to
the culmination of the sale. Absent financing, the
realtor will earn no brokering commission. In addition,
no commissions are earned without an unencumbered
title, guaranteed by a title search and/or title insurance.
Finally, the substantial movement of persons into and
out of the greater New Orleans area whoare seeking to
either buy or sell residential property creates a healthy
demand for brokering services. Plaintiffs submit that
defendants’ activities in matching buyers who are
ready, willing and able to purchase, with sellers who
have chosen to use professional services to facilitate
the sale of their property, is in the words of the Goldfarb
court, “an integral part of an interstate transaction”.
63
Diversified Brokerage Services, Inc. v. Greater Des Moines
Board of Realtors, 521 F. 2d 1343 (8 Cir. 1975), does not
assist defendants here. The plaintiff in Diversified Broker-
age, seeking admittance to the realty board, charged the
board with a bottleneck boycott or a concerted refusal
to trade. To support a jurisdictional showing, plaintiff
showed that five real estate transactions (from a sam-
ple of 16% of the listings) involved persons residing out
of state. Absolutely no other evidence of interstate ac-
tivity was provided and, on this basis alone, the court
upheld the district court’s dismissal of the complaint.
Three points which adequately distinguish the case
from the instant one must be made.
First, and most importantly, the plaintiffs here do
not rely solely on the interstate movement of persons
to support a jurisdictional showing. Interstate move-
ment of funds for loans and insurance are also present.
This is particularly significant since the Diversified
Brokerage court, though holding that the interstate
movement of persons was not enough to confer subject
matter jurisdiction, added a caveat:
“We emphasize the limited nature of our holding.
Services affecting real estate, such as broker-
age services, may, depending on the evidence, either
constitute interstate activities or have no nex-
us with interstate commerce. (Citing Goldfarb,
95S. Ct. at 2012). In the instant case, plaintiff
presented extremely limited evidence and
failed to show any interstate character to
64
these real estate transactions.” Diversified
Brokerage, supra, at 1347.
Secondly, the court noted that plaintiffs had been
afforded full opportunity for discovery.1° This, of
course, is not the situation here.
Finally, unlike the plaintiff in Diversified Brokerage, who
conceded in district court that the substantive and
jurisdictional issues were not so intertwined as to
preclude a jurisdictional ruling prior to trial on the
merits, plaintiffs here strongly disagree and make no
such concession at this early juncture.
To briefly summarize through a descriptive analogy,
plaintiffs submit that the defendants are the chemists
who mix the substantial interstate and intrastate
elements of a real estate transaction to form the “sale”
compound. The defendants .annot deny that their
catalytic complicity affects the flow of interstate com-
merce.
IV. Summary and Conclusion
Plaintiffs submit that defendants’ motion to dismiss
should be denied based on the following:
10 Suit was filed March 24, 1971, and was dismissed
ilec ; three years
later, after plaintiffs had been accorded a full opportunity . pre-
sent more facts. For a complete procedural explanation, see Diver-
sified Brokerage, supra, at 1347, footnote 3.
65
1. Procedurally speaking, motions to dismiss are
strongly disfavored, particularly in antitrust suits
where the jurisdictional and substantive elements of
proof comingle. Because pretrial discovery has thus far
been precluded pursuant to the pretrial order, plaintiffs
have not yet had a full opportunity to substantiate the
jurisdictional allegations in their complaint. But taken
as true, as they must for purposes of this motion, the
allegations support the requisite jurisdictional re-
quirements.!!
11 Since the Court has before it materials outside the pleadings
(i.e., various affidavits submitted by both plaintiffs and defen-
dants), the motion to dismiss may be converted to one for sum-
mary judgment.
In support of plaintiffs’ position that a summary judgment mo-
tion in this case should be denied, besides the comments in foot-
note 3, supra, plaintiffs offer the following:
“In a summary judgment situation, the court may con-
sider admissions and facts conclusively established but all
reasonable doubts touching the existence of a genuine
issue as to material fact must be resolved against the mo-
vant.” United States v. Farmers Mutual Insurance Ass'n of Kiron,
lowa, 288 F. 2d 560, 562 (8 Cir. 1961).
“The motion for summary judgment may be made by any
party in any type of action. But by its nature summary
judgment is apt to be ill-adapted to cases of a complex
nature or to those that involve constitutional or other
large public issues, which often need the full exploration
of trial. A difficult question of law does not, however,
warrant the denial of a motion for summary judgment,
subject to the following important qualification: that the
material factual issues are not in dispute and furnish an
adequate basis for the application of the proper legal prin-
ciples.” 6 Moore’s Federal Practice, paragraph 56.15 [1.-
O}, p. 56-398.
Plaintiffs submit that where, as here, the case itself is complex, the
depth and range of the brokering services rendered are in dispute,
and the parties have not yet commenced discovery, defendants’
motion should be denied. ;
66
2. Because plaintiffs have alleged a price-fixing
conspiracy, once it is demonstrated that defendants’ ac-
tivities occur in commerce, the adverse effect on inter-
state commerce follows as a matter of law. At least part
of defendants’ brokering activities cross state lines, and
it can be presumed that interstate commerce is affect-
ed thereby.
3. Even viewing defendants’ brokering activities as
wholly intrastate ones, these activities cannot prac-
tically be divorced from the interstate movement of
conventional and government financing, title in-
surance services and the movement of buyers and sell-
ers into the greater New Orleans area. The realtor can-
not earn a commission unless the buyer has financing
and the seller produces marketable title. As such, the
realtor’s services depend on and affect the interstate
flow of both services and people.
Based on the foregoing memorandum, plaintiffs re-
quest this Court to deny defendants’ motion to dismiss.
Respectfully submitted,
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law Corpora-
tion
Is) PATRICIA SAIK
_ Patricia Saik, Trial Attorney
John P. Nelson, Jr.,
Trial Attorney
(Certificate of Service Omitted)
67
STATE OF LOUISIANA
PARISH OF ORLEANS
BE IT KNOWN, that on the 7th day of April, 1976,
before me, Notary, duly commissioned in the Parish of
Orleans and therein residing, personally came and
appeared:
IRVING HIRSCH KOCH
who first being sworn did depose and say:
That he is a resident of the Parish of Orleans, of age,
and married and resides at 4141 State Street Drive,
New Orleans, Louisiana;
That he is a named plaintiff in Civil Action No. 75-
3402 entitled James Jefferson McLain vs. New Orleans
Real Estate Board, et. al.;
4
That prior to moving to New Orleans he and his wife
were residents of Dayton, Ohio;
That he purchased residential real estate in the City
of New Orleans through the assistance and services of
a Realtor member of the New Orleans Real Estate
Board;
That in procuring his residential real estate, his wife,
Susan Goldstein Koch, made several trips to New
Orleans to search for suitable homes prior to moving to
New Orleans in 1979;
68
That on these trips and pursuant thereto a real estate
broker personally or through an authorized agent
assisted her with prices, marketing, information, and
financing.
THUS DONE AND SAID BEFORE ME, Notary, on
the 7th day of April, 1976, in my office in Orleans
Parish before the undersigned competent witnesses
after due reading of the whole. |
Is) IRVING H. KOCH
IRVING HIRSCH KOCH
(Jurat and Witnesses Omitted)
AFFIDAVIT
STATE OF LOUISIANA
PARISH OF ORLEANS
I, PAUL GRIENER, Loan Guaranty Officer for the
Loan Guaranty Division of the Veterans Administra-
tion, which administers all V.A. programs in the State
of Louisiana, do hereby declare that the loan guaranties
for the Parish of Jefferson and the Parish of Orleans,
from 1973 through 1975, as well as a summation of
total loan guaranties from 1945 through December,
1975, are accurately presented in Schedule A which is
attached. These figures are based on our records and |
69
feel that they accurately represent V.A. loan guaran-
ties during the applicable period.
New Orleans, Louisiana, this 2nd day of April, 1976.
ls) PAUL GRIENER
PAUL GRIENER
I have signed Schedule 1 toindicate its authenticity.
ls) PAUL GRIENER
PAUL GRIENER
WITNESSES
ls) IRVING H. KOCH
ls) MARGARET SAUCHON
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned authority, duly com-
missioned and qualified within and for the State and
Parish aforesaid, personally came and appeared IRV-
ING H. KOCH, who being by me first duly sworn, did
depose and say:
That he was a witness, along with Margaret Souchon
to the above and foregoing instrument; that he saw
70
Paul Griener sign the same in his presence and that of
the other witness, and knows of his own knowledge
that the said parties executed said instrument of their
own free will and accord,for the uses, purposes and
benefits therein expressed.
IN WITNESS WHEREOPF, the said appearer has ex-
ecuted this acknowledgment in my presence and in the
presence of the undersigned competent witnesses on
this 2d day of April, 1976.
Is} IRVING H. KOCH
IRVING H. KOCH
WITNESSES:
Is) SHIRLEY LOVE
Is) MATILE B. GOLDBERG
Is) MICHAEL A. DENNER
ernie Me NOTARY PUBLIC
SCHEDULE A
V.A. INSURED LOANS (LOAN GUARANTIES)
APPROX. 1945 - DEC. 1975:
JEFFERSON: 24,706 Homes
$423,813,120.00
ORLEANS: 21,209 Homes
$296,379,717.00
71
1972 — NOT AVAILABLE
1973:
JEFFERSON:
ORLEANS:
1974:
JEFFERSON:
ORLEANS:
1975:
JEFFERSON:
ORLEANS:
COMPUTER STATS FROM:
1066 Homes
$27,157,118.00
807 Homes
$19,132,060.00
978 Homes
$26,804,480.00
710 Homes
$19,128,685.00
1096 Homes
$33,333,820.00
674 Homes
$20,126,700.00
New Orleans Regional Office of V.A.
Loan Guaranty Division
Paul A. Griener
Loan Guaranty Officer
Veterans Administration
April 2, 1976
72
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
MINUTE ENTRY
Filed: Apr. 28, 1976
CAUSE
SHERMAN ACT & CLAYTON ACT
UNLAWFUL CONSPIRACY TO KESTRAIN INTER-
STATE TRADE & COMMERCE IN THE OFFERING
FOR SALE AND SALE OF REAL ESTATE BROKER-
ING SERVICES.
WEDNESDAY, APRIL 28, 1976 10:00 A.M.
(M & O Cont’d 3/25/76)
MOTION OF DEFENDANTS, REAL ESTATE
BOARD OF NEW ORLEANS, INC., ET AL, TO DiS-
MISS.
Motion to be continued on written motion.
DATE OF ENTRY: APR. 28, 1976
73
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Apr. 27, 1976
MOTION AND ORDER
Now into Court through their undersigned counsel
come Defendants herein, and on suggesting to the
Court that the pre-trial order entered by the Court and
approved by counsel for the Plaintiffs and Defendants
on 5 January 1976 provides in Paragraph 1 that any mo-
tion by Defendants to quash service or to object to the -
jurisdiction or venue of this Court shall be filed on or
before sixty days from the date hereof; Plaintifts’ reply
shall be filed within thirty days of service of said mo-
tion; and Defendants; response shall be filed within
twenty days; and on further suggesting to the Court
that Defendants filed a motion to dismiss for lack of
jurisdiction on 5 March 1976; and on further suggest-
ing that on Plaintiffs’ motion, this Court granted an ex-
tension of time to allow Plaintiffs through 7 April 1976
to answer Defendants’ motion to dismiss, which
answer was filed on or about 7 April 1976; and on
further suggesting to the Court that by the seme mo-
tion, Plaintiffs requested and obtained a continuance of
the hearing on said motion to dismiss to 28 April 1976;
and on further suggesting to the Court that under the
schedule set out in the pre-trial order and referred to
hereinabove, Defendants’ reply to Plaintiffs’ answer
would be due on the day of or the day before said hear-
74
ing; and on further suggesting to the Court that the
parties hereto have agreed to a continuance of the
hearing on Defendants’ motior to dismiss to 26 May
1976, and to an amendment of Paragraph 1 of the pvre-
trial order to extend the time within which Defendants
may reply to Plaintiffs’ answer to the motion to dismiss
through 14 May 1976, Defendants move this Honor-
able Court to enter an order amending Paragraph 1 of
the pre-trial order in conformity with the foregoing
and continuing the hearing on Defendants’ motion to
dismiss to 26 May 1976 at 10:00 a.m. or as soon there-
after as counsel may be heard.
CHAFFE, McCALL,
PHILLIPS, TOLER &
SARPY
ls} HARRY McCALL, JR.
Harry McCall, Jr.
1500 First Nat'l Bank of
Commerce Pldg.
New Orleans, La. 70112
(529-3121)
ORDER
IT IS HEREBY ORDERED that Defendants’ motion
to dismiss, which is set for hearing on 28 April 1976, be
reset for 26 May 1976, and that Defendants’ reply to
Plaintiffs’ answer to the motion to dismiss be filed by 14
May 1976.
75
New Orleans, Louisiana, this 28th day of April, 1976.
ls} EDW. J. BOYLE, SR.
UNITED S fATES DISTRICT
JUDGE
‘(Certificate of Service Omitted)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
MINUTE ENTRY
BOYLE, J:
(Filed: May 12, 1976)
IT IS ORDERED BY THE COURT that the follow-
ing motions presently fixed for hearing on Wednesday,
May 26, 1976 at 10:00 A.M. be, agd the same are hereby
continued to Wednesday, June 2, 1976 at 10:00 A.M.
* * -_ *
C.A. 75-3402 — JAMES JEFFERSON McLAIN, ET AL
v. REAL ESTATE BOARD OF NEW ORLEANS, INC.,
ET AL
ATTORNEYS: John P. Nelson, Jr., Esq., and
Ms. Patricia Saik, and
Raymond J. Munna, Esq.
Ms. Cynthia Samuel
76
Arthur L. Ballin, Esq., and
Frank C. Dudenhefer, Esq.
Edward F. Wegmann, Esq., and
F. P. Westenberger, Esq.
Harry S. Redmen, Jr., Esq., and
Rutledge Clement, Jr., Esq.
Leon Sarpy, Esq., and
Gerald Wasserman, Esq.
Charles F. Barbera, Esq.
* * * *
Is} EDW. J. BOYLE, SR.
UNITED STATES DISTRICT |
JUDGE
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: June 2, 1976
MINUTE ENTRY
CAUSE
SHERMAN ACT & CLAYTON ACT
UNLAWFUL CONSPIRACY TO RESTRAIN INTER-
STATE TRADE & COMMERCE IN THE OFFERING
FOR SALE AND SALE OF REAL ESTATE BROKER-
ING SERVICES.
77
WEDNESDAY, JUNE 2, 1976
MOTION OF DEFENDANTS, REAL ESTATE
BOARD OF NEW ORLEANS, INC., ET AL, TO DIS-
MISS.
Argument
Plaintiff has 10 days to submit supplemental
memoranda, with unreported cases, etc. Defendant has
10 days thereafter to respond.
SUBMITTED.
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: June 10, 1976
MOTION FOR EXTENSION OF TIME
Plaintiffs herein respectfully request an extension of
time in which to file a supplemental memorandum in
opposition to defendants’ motion to dismiss based on
the following:
1. OnJune 2, 1976, this Courtheard oral argument
on defendants’ motion to dismiss for lack of subject
matter jurisdiction.
78
2. At the conclusion of the argument, plaintiff was
given ten days in which to file supplemental memoran-
dum.
3. Plaintiffs’ counsel has obtained copies of three
orders in private antitrust cases brought pursuant to
Section 1 of the Sherman Act against real estate boards
and/or realtors wherein the courts denied defendants’
motion to dismiss for lack of jurisdiction. Copies of
these orders are attached hereto.
4. These orders do not contain written reasons for
the decision and plaintiffs’ counsel has requested
through the respective offices of the clerk of court that
copies of the complaint, any amended complaints, and
plaintiffs’ memorandum in opposition to defendants’
motion to dismiss in all three cases be sent to plaintiffs’
counsel.
5. Since the requested pleadings should arrive on or
about the same time plaintiffs’ memorandum is due,
i.e., June 14, 1976, plaintiffs request that the time for
filing the memorandum be extended toJune 18, 1976.
6. Plaintiffs’ counsel has contacted Mr. Harry Mc-
Cali, Jr., lead counsel for defendants, and has been
authorized to state that he has no objection to an exten-
sion of time.
Respectfully submitied,
NELSON, NELSON &
LOMBARD, LTD.
79
A Professional Law Corpora-
tion
is) PATRICIA SAIK
Patricia Saik
ORDER
IT IS ORDERED that the time in which plaintiffs are
to file their supplemental memorandum is hereby ex-
tended from June 14 to June 18, 1976.
Dated: June 10, 1976
ls} EDW. J. BOYLE, SR.
UNITED STATES DISTRICT
JUDGE
(Certificate of Service Omitted)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Aug. 26, 1976
Minute Entry
August 25, 1976
BOYLE, J.
A conference will be held in this case on Friday,
September 3, 1976, at 3:00 P.M.
80 81
Id this day.
John P. Nelson, Jr., Esq. A conference was held this day
Ms. Patricia Saik Present: Ms. Patricia Saik
Arthur L. Ballin, Esq. ! For Plaintiffs
Charles F. Barbera, Esq. Arthur L. Ballin, Esq.
ror Real Estate Board of
Moise W. Dennery, Esq. New Orleans, Inc
Harry McCall, Jr., Esq.
f ’ Rutledge Clement, Jr., Esq.
Roy L. Price, Esq. For Gertrude Gardner, Inc.
Harry S. Redmon, Jr., Esq. Edward F. Wegmann, Esq.
Ms. Cynthia Samuel For Waguespack, Pratt, Inc.
Leon Sarpy, Esq. Charles F. Barbera, Esq.
Edward F. Wegmann, Esq. For Stan Weber and Aésociates, Inc.
Ms. Cynthia Samuel
DATE OF ENTRY: AUG. 26, 1976. » For Sandra, Inc.
Harry McCall, Jr., Esq.
For Isabelle C. McLeod
IN THE UNITED STATES DISTRICT COURT Not Present:
FOR THE EASTERN DISTRICT OF LOUISIANA Roy L. Price, Esq.
For Jefferson Board of
(Number and Title Omitted) Realtors, Inc.
Moise Dennery, Esq.
Filed: Sept. 8, 1976 For Latter & Blum, Inc.
Minute Entry
September 3, 1976
BOYLE, J.
Mr. Ballin declared he would represent Roy L. Price,
Esq., and Mr. McCall that he would represent Moise
Dennery, Esq.
82
Under submission is defendants’ motion to dismiss
for lack of jurisdiction, premised upon the failure of
plaintiffs to satisfy the interstate commerce require-
ment of the antitrust law under which their action
proceeds.
The Court advised counsel that it appears plaintiffs
may satisfy said jurisdictional requirement only by
bringing the facts of this case within the parameters of
the Supreme Court's holding in Goldfarb v. Virginia State
Bar, 421 U.S. 773, 95 S. Ct. 2004, 44 L. Ed. 2d 572
(1975). It is recognized, however, that further dis-
covery is needed on the issue of Goldfarb's applicability
sub judice. More specifically, such discovery should
determine whether, in the first place, there is the re-
quisite interdependence between the brokerage activi-
ty of defendants and the financing and/or insuring of
real estate transactions in the New Orleans area and,
secondly, whether there is a substantial involvement of
interstate commerce in such real estate transactions via
the financing and/or insurance aspects thereof.
The parties shall confer with regard to the procedure
of discovery along these lines. Following such dis-
cussions, another conference will be held in thismatter
at 4:00 P.M. on Wednesday, October 13, 1976.
EJB
Roy L. Price, Esq.
Moise Dennery, Esq.
83
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Dec. 17, 1976
NOTICE OF DEPOSITION
TO: (Names of Counsel Omitted)
PLEASE TAKE NOTICE that at 9:00 a.m. on the
28th day of December, 1976, at the law offices of
Nelson, Nelson & Lombard, Ltd., 344 Camp Street,
Suite 1100, New Orleans, Louisiana, the plaintiffs in
the above entitled action will take the deposition of
MR. MEAHER PATRICK TURNER whose address is
Dept. of Housing & Urban Development, Deputy
Director for Hous. & Mortgage Prod., 1001 Howard
Ave., New Orleans, La. upon oral examination pur-
suant to the Federal Rules of Civil Procedure, before a
Notary Public or some other officer authorized by law
to administer oaths. The oral examination will con-
tinue from day to day until completed. You are invited
to attend and take such part in the examination as shall
be fit and proper.
DATED: December 17, 1976.
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law Corpora-
tion
84
Is} PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
(Certificate of Service Omitted)
- IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Dec. 17, 1976
NOTICE OF DEPOSITION
TO: (Names of Counsel Omitted)
Nees
PLEASE TAKE NOTICE that at 2:00 p.m. on the
27th day of December, 1976, at the law offices of
Nelson, Nelson & Lombard, Ltd., 344 Camp Street,
Suite 1100, New Orleans, Louisiana, the plaintiffs in
the above entitled action will take the deposition of a
corporate officer of GERTRUDE GARDNER, INC.
whose address is 7934 Maple Street, New Orleans,
Louisiana, upon oral examination pursuant to the
Federal Rules of Civil Procedure, before a Notary
Public or some other officer authorized by law to ad-
minister oaths. The oral examination will continue
from day to day until completed. You are invited to at-
85
tend and take such part in the examination as shall be ,
fit and proper.
DATED: December 17, 1976.
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law Corpora-
tion
/s/ PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
(Certificate of Service Omitted)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Dec. 17, 1976
NOTICE OF DEPOSITION
TO: (Names of Counsel Omitted)
PLEASE TAKE NOTICE that at 2:00 p.m. on the
28th day of December, 1976, at the law offices of
86
Nelson, Nelson & Lombard, Ltd., 344 Camp Street,
Suite 1100, New Orleans, Louisiana, the plaintiffs in
the above entitled action will take the deposition of
MR. JAMES MILLS whose address is Lawyers’ Title In-
surance Corporation, 822 Gravier Street, New
Orleans, Louisiana upon oral examination pursuant to
the Federal Rules of Civil Procedure, before a Notary
Public or some other officer authorized by law to ad-
minister oaths. The oral examination will continue
from day to day until completed. You are invited to at-
tend and take such part in the examination as shall be
fit and proper.
DATED: December 17, 1976.
NELSON, NELSON &
, LOMBARD, LTD.
A Professional Law Corpora-
tion
/s/ PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
(Certificate of Service Omitted)
87
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Dec. 17, 1976
NOTICE OF DEPOSITION
TO: (Names of Counsel Omitted)
PLEASE TAKE NOTICE that at 3:00 p.m. on the
28th day of December, 1976, at the law offices of
Nelson, Nelson & Lombard, Ltd., 344 Camp Street,
Suite 1100, New Orleans, Louisiana, the plaintiffs in
the above entitled action will take the deposition of
MR. PAUL GRIENER whose address is Vets. Ad-
ministration, Loan Guaranty Div., 701 Loyola Ave.,
New Orleans, Louisiana upon oral examination pur-
suant to the Federal Rules of Civil Procedure, before a
Notary Public or some other officer authorized by law
to administer oaths. The oral examination will con- ~
tinue from day to day until completed. You are invited
to attend and take such part in the examination as shall
be fit and proper.
DATED: December 17, 1976.
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law Corpora-
tion
88
ls} PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
(Certificate of Service Omitted)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Dec. 17, 1976
NOTICE OF DEPOSITION
TO: (Names of Counsel Omitted)
PLEASE TAKE NOTICE that at 11:00 a.m. on the
28th day of December, 1976, at the law offices of
Nelson, Nelson & Lombard, Ltd., 344 Camp Street,
Suite 1100, New Orleans, Louisiana, the plaintiffs in
the above entitled action will-take the deposition of
MR. ANGEL V. MIRANDA whose address is Dept. of
HUD, Area Economist, 1001 Howard Avenue, New
Orleans, Louisiana upon oral examination pursuant to
the Federal Rules of Civil Procedure, before a Notary
Public or some other officer authorized by law to ad-
minister oaths. The oral examination will continue
from day to day until completed. You are invited to at-
89
tend and take such part in the examination as shall be
fit and proper.
DATED: December 17, 1976.
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law Corpora-
tion
ls|/ PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
(Certificate of Service Omitted)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Dec. 21, 1976
NOTICE OF DEPOSITION
TO: (Names of Counsel Omitted)
Notice is given herewith that pursuant to Rule 30(b)
of.the Federal Rules of Civil Procedure, the deposition
of JULIAN HECKER (of CARRUTH MORTGAGE
_
90
CO.) will be taken on oral examination at the law of-
fices of Nelson, Nelson & Lombard, Ltd., 344 Camp
Street, Suite 1100, New Orleans, Louisiana, on
December 30, 1976, at 11:00 a.m., and at any and all ad-
journments thereof.
The above named individual whose deposition is be-
ing taken is hereby notified to appear for this deposi-
tion and to bring with her:
1,
Copies of all forms presently used for loan
applications.
Any documents showing the names and ad-
dresses of all homesteads, real estate companies,
brokers and realtors with whom your company
is doing business or since October 31, 1971, have
done business with in the past.
Any documents containing the names and ad-
dresses and amounts of residential real estate
loans placed or applied for or sold to the follow-
ing for each year from 1971 through 1975:
Finance companies;
Homesteads;
Mutual savings banks;
Insurance companies;
Other mortgage companies or brokers;
Government or quasi-governmental agen-
cies (including for example, FHA (Federal
Housing Authority), VA (Veterans Ad-
ministration), FNMA _ (Federal National
moana oe
91
Mortgage Association) and GNMA
(Government National Mortgage Associa-
tion)).
Financial statements or other documents show-
ing the volume of:
a. Residential real estate loans carried by
Carruth.
b. Residential real estate loans placed with
others.
c. Residential real estate loans sold to other (in-
cluding governmental agencies).
d. Residential real estate loans carried with title
insurance.
Documents supporting the number, volume and
percentage of total loans placed or carried with
out-of-state lenders or borrowers and out-of-
state sellers or purchasers of residential real
property.
DATED: December 21, 1976.
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law Corpora-
tion
Is} PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
(Certificate of Service Omitted)
92
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT Or LOUISIANA
(Number and Title Omitted)
Filed: Dec. 21, 1976
NOTICE OF DEPOSITION
TO: (Names of Counsel Omitted)
Notice is given herewith that pursuant to Rule 30(b)
of the Federal Rules of Civil Procedure, the deposition
of EDMOND G. MIRANNE of Security Homestead
Association will be taken on oral examination at the law
offices of Nelson, Nelson & Lombard, Ltd., 344 Camp
Street, Suite 1100, New Orleans, Louisiana, on Thurs-
day, January 6, 1977 at 9:30 a.m., and at any and all ad-
journments thereof.
The above named individual whose deposition is be-
ing taken is hereby notified to appear for this deposi-
tion and to bring with him:
1. Copies of all forms used for loan applications.
2. All documents supporting loans guaranteed or
placed with FHA and/or VA assistance,
assurance, or guarantee.
3. Documents showing total volume of VA/FHA
premiums paid for or on behalf of loans carried
10.
93
on books of Security Homestead from October
31, 1971 to 10/31/75, by year.
Settlement sheets for loan closings.
Volume, total number and percentage of loans
with title insurance.
Volume, total number and percentage of loans
with mortgage insurance; name and addresses
of insurance companies.
Any FNMA forms used or adapted or modified
by Security Homestead.
Documents showing name, address of all real
estate brokers, realtors, mortgage brokers, to
whom a commission was paid.
Documents supporting volume, number of
transactions, percentage of loans sold to a third
party — FNMA, GNMA, insurance com-
panies, etc.
Any documents such as composite computer
printouts which relate to number of loans,
dollar volume, and breakdown by loan type.
DATED: December 21, 1976.
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law Corpora-
tion
94
ls| PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
(Certificate of Service Omitted)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Dec. 21, 1976
NOTICE OF DEPOSITION
TO: (Names of Counsel Omitted)
Notice is hereby given that pursuant to Rule 30(b) of
the Federal Rules of Civil Procedure, the deposition of
STAN WEBER of Stan Weber and Associates, Inc.,
Realtors, will be taken on oral examination at the law
offices of Nelson, Nelson & Lombard, Ltd., 344 Camp
Street, Suite 1100, New Orleans, Louisiana, on the
29th day of December, 1976, at 3:30 p.m., and at any
and all adjournments thereof.
The above. named individual whose deposition is be-
ing taken is hereby notified to appear for this deposi-
tion and to bring with him:
95
Copies of agreements with affiliates, for reloca-
tion services, listing services for residential
properties, fee splitting with out of state real
estate brokers, agents, realtors, or other en-
tities, including as “affiliates”, 21st Century,
Inc., Gallery of Homes, etc.
Documents supporting volume of transactions
generated through relocation and/or affiliate
services.
Documents describing the services provided by
Stan Weber to the public.
Samples of documents listing the location,
price, time period and other details of affiliated
listings, and/or relocations, whether listed by
your company or by another realestate entity.
Listing agreements or types of listing
agreements pertaining to-affiliate services.
Documents, and source, including computer
printouts for total number of transactions, the
gross dollar volume of transactions, the type
and size of transactions relating to all activities
of your company.
Any and all forms used by Stan Weber pertain-
ing to buying, selling, financing and insuring
residential real estate transactions.
Copies of ad formats, advertising contracts,
whether in newspapers, trade journals,
magazines, or like pub':cations; and documents
96
97
supporting the cost of advertising, both in- IN THE UNITED STATES DISTRICT COURT
terstate and intrastate, including financial FOR THE EASTERN DISTRICT OF LOUISIANA
statements for the years 1971, 1972, 1973, 1974
and 1975. (Number and Title Omitted)
9. Copies of monthly telephone statements for
1975. Filed: Dec. 21, 1976
10. Documents showing name, address, gross
dollar volume and number of transactions con-
ducted with, by, or through any homestead,
mutual savings bank, commercial bank,
mortgage company, insurance company, and/or
quasi or quasi-governmental agency. J
MOTION FOR TIME TO EXTEND DISCOVERY
NOW INTO COURT come plaintiffs, through
undersigned counsel, and respectfully show the court
as follows:
1. The cut-off date for discovery of information
pertaining to subject matter jurisdiction is
December 31, 1976.
DATED: December 21, 1976.
NELSON, NELSON &
LOMBARD, LTD. 2. Several depositions have been scheduled before
A Professional Law Corpora- December 31, 1976. However, pla’ tiffs have en-
tion | countered difficulty in scheduling depositions
for three or four additional persons before
Is/ PATRICIA SAIK December 31, 1976. These depositions can be
Patricia Saik scheduled in early January, 1977.
John P. Nelson, Jr. 3 3. Plaintiffs request an additional two weeks, that
is, through January 13, 1977, in order to com-
(Certificate of Service Omitted) plete discovery.
4. Plaintiffs have been authorized to state that
defendants do not oppose an extension of time
through January 13, 1977.
98
Respectfully submitted,
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law
Corporation
ls) PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
DATE CF ENTRY: Dec. 23, 1976.
ORDER
Considering the foregoing,
IT IS ORDERED that the cutoff date for discovery of
matters pertaining to subject matter jurisdiction is
hereby extended from December 31, 1976, to January
14, 1977.
Signed at New Orleans, Louisiana, this 22d day of
December, 1976.
ls| EDW. J. BOYLE, SR.
UNITED STATES DISTRICT
JUDGE
(Certificate of Service Omitted)
99
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Ornitted)
~ Filed: Dec. 22, 1976
PLAINTIFFS’ FIRST SET OF
INTERROGATORIES TO DEFENDANTS
TO: (Names of Counsel Omitted)
The plaintiffs request that each defendant, by an of-
ficer or agent thereof, answer under oath, in accord-
ance with Rule 33 of the Federal Rules of Civil Pro-
cedure, the following interrogatories. Please take
notice that a copy of such answers must be served upon
the undersigned within thirty (30) days after the serv-
ice of these interrogatories.
Definitions
1. “Damage period” refers to the period from Oc-
tober 31, 1971 through October 31, 1975.
2. “Residential real property” or “homes” refers to
single residence, duplex, triplex and fourplex.
3. “Identify” means that wherever in these inter-
rogatories you are asked to “identify” a docu-
ment, please designate:
100
(a) Type of document, such as _ letter,
memorandum, report, diary, expense ac-
count, etc.
(b) Information sufficient to enable plaintiffs
to recognize the document such as its date,
names and addresses of originators, title
of the document, number of pages, etc.
Form documents may be identified by the
title of a form.
(c) The present or last known location of the
document with the name and address of
the possessor.
Interrogatories
State the total number of completed sales for
residential real property by defendant for each
of the following years:
(a) 1971
(b) 1972
(c) 1973 °
(d) 1974
(e) 1975
State the gross dollar amount of completed
sales transactions by defendant for residential
real property for each of the following years:
(a) 1971
(b) 1972
(c) 1973
101
(d) 1974
(e) 1975
State for each of the following years, the
number of completed real estate transactions in
which you have participated as a real estate
broker wherein the buyer financed the
purchase with the Federal Housing Ad-
ministration (FHA), Veterans Administration
(VA) or other United States Government
guaranteed financing:
(a) 1971.
(b) 1972
(c) 1973
(d) 1974
(e) 1975
What documents or other information did you
refer to in answering the immediately pre-
ceding interrogatory.
State, for each of the following years, the
number of completed real estate transactions in
which you have participated as a broker
wherein the buyer or seller was a resident of a
state other than Louisiana: (a) 1971; (b) 1972;
(c) 1973; (d) 1974; (e) 1975.
At any time during the damage period, state
whether defendant has ever advertised in any
magazine, newspaper, trade journal, television
102
station, radio station or other media where.
such advertisement is circulated to or received
by people located outside the state of Louisiana.
If the answer to the immediately preceding
interrogatory is in the affirmative, for each
advertisement state:
(a) The name and address of the media utiliz-
ed
(b) The date the advertisement was placed
(c) The exact text of the advertisement.
If at any time since January 1, 1971, defen-
dant operated, participated in or subscribed to
a multiple listing service, national or inter-
national relocation service, inter-city relo-
cation service, or property location or sale serv-
ice of any nature, identify:
(a) The multiple listing service, national or
international relocation service, inter-city
relocation service, photo listing service or
other such service.
(b) The service you provide and the service
which is provided to you.
(c) The geographical area the service or serv-
ices encompass.
(d) Any and all conditions which must be
satisfied in order to be able to use the serv-
ice or services.
(e) Any arrangement as to the brokerage fees
10.
103
or commissions charged for the sale of
residential real property listed through
the service.
(f) Any arrangement as to division of the
brokerage fees or commissions charged
for the sale of real property iisted through
the service.
(g) The exact time period you operated the
service, participated in it, or subscribed to
it.
(h) . The states or countries where your list-
_ings are offered for sale through the serv-
ice; and
(i) The states or countries wherein you can
offer listings to potential buyers through
the service.
Identify all documents you distributed, re-
ceived or have access to in connection with any
multiple listing service, national or inter-
national relocation service, inter-city relocation
service, photo listing service, or other such
service, including but not limited to advertising
materials for the service and listing catalogs.
State the office address (including the city and
state) of each and every office of defendant
wherever located.
11.
12.
13.
14.
104
Describe the entire organizational structure of
each defendant, indicating by way of example,
whether defendant is an affiliate or subsidiary
of any other corporation, partnership or sole
proprietorship and a description of the business
and type of activities of each parent, affiliate or
subsidiary.
State whether defendant will make available to
plaintiffs without a motion to produce copies of
all telephone bills showing all long distance calls
(both intra and interstate) for every month
from October 1971 to October 1975. If the
answer is in the affirmative, please attach this
information to your answers.
State whether defendant will make available to
plaintiffs without a motion to produce, any and
all identification books, directory, or other
system containing the names and addresses of
persons or companies with which a defendant
realty company does business or from which it
might solicit whether directly or through
speculation. If the answer to this interrogatory
is in the affirmative, please attach these
documents to your answers.
State whether defendant will provide without a
motion to produce copies of any brochures or
other solicitations containing information
about services which defendant provides and a
list of the individuals and businesses to whom
15.
16.
17.
105
such brochures were mailed during the damage
period. If the answer to this interrogatory is in
the affirmative, please attach these documents
to your answers.
Give a complete description of the scope and
operation of any placement or location or
relocation services which defendant may pro-
vide.
State the names and addresses of all title in-
surance companies which defendant has con-
tacted during the damage period in conjunc-
tion with any real estate-related transaction or
with whom closings have been effected or who
may have provided title insurance in conjunc-
tion with such closings.
State the names and addresses of all lending in-
stitutions, public or private:
(a) To which defendant has referred
customers during the damage period.
(b) Which defendant may have contacted to
attempt to secure financing for its clients
during the damage period.
(c) Which have participated directly or in-
directly during the damage period with
any sale or purchase of residential real
property in which defendant receivec a
commission or brokerage fee.
7
106
The term “lending institutions” includes but are not
limited to homesteads, mutual savings banks, commer-
cial banks, insurance companies, credit unions, private
individuals, Federal Housing Authority, mortgage
bankers, Veterans Administration, Federal National
Mortgage Association, General National Mortgage
Association and the U.S. Department of Housing & Ur-
ban Development.
18. State whether defendant will provide without a
motion to produce copies of any cor-
respondence between the defendant and
(a) The Veterans Administration
(b) The U.S. Dept. of Housing & Urban
Development
(c) Any out-of-state lending institutions.
If the answer to subpart (a) (b) or (c) is in the affir-
mative, please attach copies of this correspondence to
your answers.
19. For the period from October 31, 1971 through
October 31, 1975, for each sale of residential
real property where a commission was earned,
please state:
(a) The seller’s name and address
(b) The buyer’s name and address
(c) The closing date
(d) Total amount paid for the property
‘\
ee
_—
a
20.
(e)
(f)
(g)
(h)
(i)
(j)
(k)
107
Gross commission paid in dollars and as a
percent of the sales price
The identity of the listing and selling
broker, if different
The commission split, if any
The fee paid to the Real Estate Board of
New Orleans, the Jefferson Board of
Realtors and any other real estate board
The amount of financing foreach transac-
tion
The name and address of the lender
Whether title insurance was obtained and,
if so, the name and address of any surety
or indeminitor of the ‘sanctity or mer-
chantability of title.
Identify the documents referred to in answer-
ing the immediately preceding interrogatory.
Respectfully submitted,
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law
Corporation
Is) PATRICIA SAIK
Patricia Saik .
John P. Nelson, Jr.
108 |
344 Camp Street, Suite 1100
New Orleans, Louisiana
70130
Phone: 523-5893
“>
(Certificate of Service Omitted)
(Mailed December 22, 1976)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Dec. 23, 1976
NOTICE OF DEPOSITION
TO: (Names of Counsel Omitted)
PLEASE TAKE NOTICE that at 2:00 p.m. on the 6th
day of January, 1977, at the law offices of Nelson,
Nelson & Lombard, Ltd., 344 Camp Street, Suite 1100,
New Orleans, Louisiana, the plaintiffs in the above en-
titled action will take the deposition of MAX DERBES,
JR. whose address is Real Estate Bd. of New Orleans,
Inc., 826 Perdido, Nola, upon oral examination pur-
suant to the Federal Rules of Civil Procedure, before a
Notary Public or some other officer authorized by law
to administer oaths. The oral examination will con-
109
tinue from day to day until completed. You are invited
to attend and take such part in the examination as shall
be fit and proper.
DATED: December 23, 1976.
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law
Corporation
» Is! PATRICIA SAIK
Patricia Saik
John P. Nelson, Ir.
(Certificate of Service Omitted)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Dec. 28, 1976
AMENDED NOTICE OF DEPOSITIONS
TO: (Names of Counsel Omitted)
PLEASE TAKE, NOTICE that the depositions of the
following persons previously scheduled by plaintiffs
110
for the following dates and times are hereby re-
scheduled. The depositions to be rescheduled are:
1.
Mr. Patrick Turner, Department of Housing and
Urban Development, originally noticed for
Tuesday, December 28, 1976, at 9:00 a.m.
Angel Miranda, Department of Housing and Ur-
ban Development, originally noticed for Tues-
day, December 28, 1976, at 11:00 a.m.
Mr. James Mills, Lawyers’ Title Insurance Cor-
poration, originally noticed for Tuesday,
December 28, 1976, at 2:00 p.m.
Mr. Paul Griener, Veterans Administration,
originally noticed for Tuesday, December 28,
1976, at 3:00 p.m.
Mr. Alfred T. Posi, Executive Vice President,
Gertrude Gardner, Inc., originally noticed for
Wednesday, December 29, 1976, at 2:00 p.m.
Mr. Star. Weber, Stan Weber & Assoc., origi-
nally noticed for Wednesday, December 29,
1976, at 3:30 p.m.
Mr. Julian Hecker, Carruth Mortgage Company,
originally noticed for Thursday, December 30,
1976, at 11:00 a.m.
Mr. Max Derbes, Real Estate Board of New
Orleans, originally noticed for Thursday,
January 6, 1977, at 2:00 p.m.
111
PLEASE TAKE NOTICE that pursuant to Rule
30(b), Federal Rules of Civil Procedure, plaintiffs will
take the depositions upon oral examination of the
following persons listed below at the respective dates
and times indicated at the law offices of Nelson, Nelson
and Lombard, Ltd., 344 Camp Street, Suite 1100, New
Orleans, Louisiana 70130, before a Notary Public or
some other officer authorized by law to administer
oaths. The oral examination shall continue from day to
day until completed. You are invited to attend and take
such part in the examination as shall be fit and proper.
1.
Mr. Patrick Turner, Department of Housing &
Urban Development, 1001 Howard Avenue,
New Orleans, Louisiana, on Monday, January 3,
1977, at 9:30 a.m.
Mr. Angel Miranda, Department of Housing &
Urban Development, 1001 Howard Avenue,
New Orleans, Louisiana, on Monday, January 3,
1977, at 11:00 a.m.
The above named individuals, viz, Mr. Patrick Turner
and Mr. Angel Miranda whose depositions are to be
taken are hereby notified to appear for the depositions
and bring with them:
(a) Documents or records showing the volume
of HUD loan guarantees for the Parishes of
Jefferson and Orleans, the number of
homes so insured, and any other
breakdowns, compilations or other records
112
regarding HUD’s insurance of residential
real property in Orleans and Jefferson
Parishes for the period from 1970 to the
present.
(b) Any documents describing the services and
programs of the Department of Housing &
Urban Development in connection with
residential real property.
Mr. James Mills, Lawyers’ Title Insurance Com-
pany, 822 Gravier Street, New Orleans,
Louisiana, on Thursday, January 6, 1977, at 2:00
p.m.
Mr. Paul Griener, Veterans Administration,
Loan Guaranty Division, 701 Loyola Avenue,
New Orleans, Louisiana, on Tuesday, January 4,
1977, at 10:00 p.m.
113
(b) Any documents describing the services and
programs of the Veterans Administration
and the Department of Housing & Urban
Development.
5. Mr. Alfred T. Post, Executive Vice President,
Gertrude Gardner, Inc., 7934 Maple Street, New
Orleans, Louisiana, on Monday, January 10,
1977, at 2:00 p.m.
6. Mr. Stan Weber, Stan Weber & Assoc., 3841
Veterans Boulevard, Metairie, La., on Monday,
January 10, 1977, at 10:30 a.m.
The above named individuals, viz, Mr. Alfred T. Post
and Mr. Stan Weber, whose depositions are to be taken,
are hereby notified to appear for their depositions and
bring with them:
(a) Copies of agreements with affiliates, for
The above named individual, viz, Mr. Paul Griener,
whose deposition is to be taken is hereby notified to
appear for this deposition and bring with him:
relocation services, listing services for
residential properties, fee splitting with
(a) Documents or records showing the volume
of VA loan guarantees for the Parishes of
Jefferson and Orleans, the number of
homes so insured, and any other
breakdowns or compilations or other rec-
ords regarding the VA’s insurance of
residential real property in Orleans and
Jefferson Parishes for the period from 1946
to the present.
out-of-state real estate brokers, agents,
realtors, or other entities, including as “af-
filiates”, 21st Century, Inc., Gallery of
Homes, etc.
(b) Documents supporting volume of transac-
tions generated through relocation and/or
affiliate services for 1971, 1972, 1973, 1974
and 1975.
(c) Documents describing the services pro-
vided by your company to the public.
(d)
(e)
(f)
(g)
(h)
(i)
(j)
114
Samples of documents listing the location,
price, time period and other details of af-
filiated listings, and/or relocations, whether
listed by your company or by another real
estate entity.
Listing agreements or types of listing
agreements pertaining to affiliate services.
Documents, and source, including com-
puter printouts, for total number of tran-
sactions, the gross dollar volume of transac-
tions, the type. and size of transactions
relating to all activities of your company.
Any and all forms used by your company
pertaining to buying, selling, financing and
insuring residential real estate transac-
tions.
Copies of ad formats, advertising con-
tracts, whether in newspapers, trade jour-
nals, magazines, or like publications;
documents supporting the cost of adver-
tising, both interstate and intrastate, in-
cluding financial statements for the years
1971, 1972, 1973, 1974, and 1975.
fopies of monthly telephone statements
for 1975.
Documents showing name, address, gross
dollar volume and number of transactions
conducted with, by, or through any
homestead, mutual savings bank, commer-
cial bank, mortgage company, insurance
ew —_———
115
company, quasi or quasi-governmental
agency.
7. Mr. Julian Hecker, Carruth Mortgage Company,
3601 I-10 Service Road, Metairie, Louisiana, on
Friday, January 7, 1977, at 10:00 a.m.
The above named individual, viz, Mr. Julian Hecker,
whose deposition is to be taken, is hereby notified to
appear for his deposition and bring with him:
(a)
(b)
(c)
Copies of all forms presently used for loan
applications.
Any documents showing the names and ad-
dresses of all homesteads, real estate com-
panies, brokers and realtors with whom
Carruth Mortgage is doing business or,
since October 31, 1971, has done business
with in the past.
g
Any documents containing the names and
addresses and amounts of residential real
estate loans placed or applied for or sold to
the following each year from 1971 through
1975:
(1) Finance companies;
(2) Homesteads;
\(3) Mutual savings banks;
(4) Insurance companies;
(5) Other mortgage companies or
brokers;
8.
(d)
(e)
(6)
116
Governmental or quasi-governmental
agencies (including, for example, FHA
(Federal Housing Authority), VA
(Veterans Administration), FNMA
(Federal National Mortgage Assn.) and
GNMA (Government National
Mortgage Assn.)).
Financial statements or other documents
showing the volume of:
(1)
(2)
(3)
(4)
Residential real estate loans carried by
Carruth.
Residential real estate loans placed
with others.
Residential real estate loans sold to
others.
Residential real estate loans carried
with title insurance.
Documents supporting the number,
volume and percentage of total loans placed
or carried with out-of-state lenders or bor-
rowers and.out-of-state sellers or pur-
chasers of residential real property.
Mr. Max Derbes, First Vice President, Real Es-
tate Board of New Orleans, Inc., 826 Perdido
Street, New Orleans, Louisiana, on January 13,
1977, at 2:00 p.m.
S 117
DATED: December 28, 1976.
NELSON, NELSON &
LOMBARD, LTD.
A Professional Law
Corporation
ls) PATRICIA SAIK
Patricia Saik
John P. Nelson, Jr.
(Certificate of Service Omitted)
(Mailed December 28, 1976)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Jan. 11, 1977
OBJECTIONS TO INTERROGATORIES
Defendants, Gertrude Gardner, Inc., Latter & Blum,
Inc., Waguespack Pratt, Inc., Stan Weber & Associates,
Inc., Sandra, Inc. Realty, Isabelle McLeod, Realtors,
Real Estate Board of New Orleans, Inc. and Jefferson
Board of Realtors, Inc., object to “ Plaintiffs’ First Set of
118
Interrogatories to Defendants” served on each of them
on 23 December 1976.
The grounds of this objection are that, pursuant to
Rule 33 of the Federal Rules of Civil Procedure, defen-
dants have 30 days from service of these interroga-
tories, or until 22 January 1977, to file answers or ob-
jections thereto and, since the cutoff date for dis-
covery of matters pertaining to subject matter jurisdic-
tion is 14 January 1977, insofar as they seek informa-
tion pertaining to jurisdiction these interrogatories are
not timely.
Insofar as these interrogatories seek information
pertaining to any aspect of this cause other than subject
matter jurisdiction, further grounds of objection are
that they are and will continue to be premature until
disposition of defendants’ motion to dismiss for want
of subject matter jurisdiction.
Respectfully submitted,
Harry S. Redmon, Jr.
and
Rutledge C. Clement, Jr.
Attorneys for Gertrude
Gardner, Inc.
Moise W. Dennery
and
Edward J. McCloskey
Attorneys for Latter &
Blum, Inc.
119
Edward F. Wegmann
and
Fred P. Westenberger
Attorneys for Waguespack
Pratt, Inc.
Charles F. Barbera
Attorney for Stan Weber &
Associates, Inc.
Ms. Cynthia Samuel
Attorney for Sandra, Inc.
Realty
Harry McCall, Jr., Leon Sarpy
and Gerald Wasserman
Attorneys for Isabelle
. McLeod, Realtors
_ Arthur L. Ballin
and
Frank C. Dudenhefer
Attorneys for Real Estate
Board of New Orleans, Inc.
Roy L. Price
Attorney for Jefferson
Board of Realtors, Inc.
Is| HARRY McCALL, JR.
Harry McCall, Jr.
(Certificate of Service Omitted)
120
Minute Entry
January 14, 1977
BOYLE, J.
(Number and Title Omitted)
Filed: Jan. 18, 1977
A further conference was held this day.
Present: John P. Nelson, Jr., Esq.
Ms. Patricia Saik
For Plaintiffs
Arthur L. Ballin, Esq.
For Real Estate Board of New Orleans
Inc.
Harry S. Redmon, Jr., Esq.
For Gertrude Gardner, Inc.
Edward F. Wegmann, Esq.
For Waguespack, Pratt, Inc.
Ms. Cynthia Samuel
For Sandra, Inc.
Harry McCall, Jr., Esq.
For Isabelle C. McLeod
Moise W. Dennery, Esq.
J. W. Vaudry, Jr., Esq.
For Latter & Blum, Inc.
Roy L. Price, Esq.
For Jefferson Board of Realtors, Inc.
121
Not Present:
Charles F. Barbera, Esq.
For Stan Weber and Associates, Inc. —
Counsel for plaintiffs indicated they may desire ad-
ditional discovery and counsel for: defendants, taking
the position that the delay for completion of discovery
fixed and as extended by the orders of Court had ex-
pired, declared they would object thereto and had
already objected to answering interrogatories pro-
pounded by plaintiffs.
At the request of plaintiffs’ counsel, and without ob-
jection by the defendants, the Court allowed plaintiffs
until February 18, 1977 to submit an additional
memorandum in opposition to defendants’ motion to
dismiss. Counsel for defendants requested and were
granted until March 11, 1977 to reply to plaintiffs’
memorandum.
January 28, 1977
Fee *
Judge Edward Boyie
United States District Judge
500 Camp Street
New Orleans, Louisiana 70130
Att’n: Mr. Jerry Meunier
122
Dear Mr. Meunier:
Concerning our telephone conversation of today, the
Motion to Quash on behalf of Carruth Mortgage Cor-
poration, is now moot. We have satisfied the parties
with the information we were able to furnish.
Si \cerely,
ls} MOISE S. STEEG, JR.
MOISE S. STEEG, JR.
MSSjr/bg
[419] IN THEUNITEDSTATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
(Number and Title Omitted)
Filed: Jan. 20, 1977
Deposition of EXDMONDG. MIRANNE, taken in the
office of Messrs. Miranne & Miranne, Suite 401, 219
Carondelet Street, New Orleans, Louisiana, on Thurs-
day, January 6, 1977.
APPEARANCES: (Omitted)
* * * *
123
EXAMINATION BY MR. NELSON:
[4] Q Mr. Miranne, what is your present job?
A Well, I am President of Security Homestead
Association.
Q And what type of business is Security
Homestead?
A_ Savings and loan.
Q How many branch offices does Security have at
the present time?
A_ Seven.
Q_ And what parishes are they located in?
A St. Bernard, Orleans, Jefferson.
@ Would you briefly tell us, are you of the opinion
that Security is the largest homestead in the state, I
mean volume of business?
A Weare in New Orleans, and we were in the state
until the merger took place in Lake Charles.
Q Mr. Miranne, in connection with this testimony,
I am going to ask you some questions concerning
residential homes, one, two, three or four family units,
and, if possible, the answers could relate to that, to
those units.
[5] Between 1971, let’s say, and the end of 1976, ap-
proximately how many mortgages, the number of
mortgages, did Security make for residential homes?
A For 1976, we made fifteen hundred and fifty-six,
let’s say over fifty-five hundred.
Q So, it would be fifty-five hundred between
January of ’71 —
A Well, approximately, he didn’t give me a break-
down.
124
Q You have some notes in front of you, and those
notes have referred to statistics of 1976?
A_ Right.
Q In 1976, of the total mortgages on residential
homes, by Security Homestead, how many were FHA
and federally program insured?
A Well, you had FHA, seventy-three thousand 3ix
hundred and fifty and a total of five, and VA, one, $47,-
500.00. Now, the amounts of Freddie Mac —
Q Before we get into that, of the fifteen hundred
and fifty-six mortgages, how many were federall in-
sured? . “sy
[6] A _ I haven’t gotten the figures.
Q Do you have any statistics? |
A_ Ihave statistics for 1976 here. You asked for the
five years. I told them to give it to me, andI didn’t get it
yet.
MR. VAUDRY:
What was the figure for FHA?
THE WITNESS:
Seventy-three thousand six hundred fifty.
To give you a breakdown, in the year 1972, we closed
seven hundred and twenty-four loans, twenty-two
million eight hundred fifteen thousand nine hundred
forty-eight, and in 1973, nine hundred forty-six loans,
thirty-one million seven hundred twenty-four thou-
sand two hundred twenty, in 1974, we closed seven
hundred and ninety-eight loans for thirty million sixty-
seven thousand four hundred, and in 1975, we closeda
125
thousand forty loans for forty-two million eight hun-
dred fourteen thousand one hundred seventy-three,
and for 1976, we closed fifteen hundred [7] fifty-six
loans for a total of sixty-two million one hundred
twenty-four thousand five hundred fifty-four and
forty-four cents.
EXAMINATION BY MR. NELSON:
Q. The number of FHA insured loans, this informa-
tion is being secured for you?
A Iwillget it for you for the five years. The five, the
seventy-three thousand six hundred fifty are FHA, and
VA loans, only one, and that would be none in the last
five years, except this one. We have been out of that
business since about ‘48.
Q You have not insured any VA insured loans?
A Except this one last week that we closed.
Q Well, we are going to go on, and then, we will
pick up the number of FHA loans.
A We were not in the FHA/VA market in the last
five years.
(Off. the record)
MR. WEGMANN:
When he speaks as to the amount of loans he made,
FHA loans he made and VA loans he made, we want it
on the [8] record, regardless of the facts and figures or
conjectures or speculations, we want it on the record.
“d
126
EXAMINATION BY MR. NELSON:
Q At this particular moment, you have instructed
one of your employees to secure for you some
statistics.
While we are waiting for those statistics, would you
express an opinion as to how many FHA/VA loans were
made by Security — insured either FHA or VA in the
last five years?
A_ There is no sense in my saying that untill get the
figures.
MR. WEGMANN:
Did you not say a few minutes ago, Mr. Miranne,
that you have been out of the FHA/VA loan business
since 1948, with the exception of this very nominal
number of loans?
THE WITNESS:
In the last five years, we have been out of the
FHA/VA market.
EXAMINATION BY MR. NELSON:
Q Mr. Miranne, during the last five years, were [9]
there any type of federally insured programs at all in
which Security was involved?
A No.
Q So, the sources of the monies that were borrow-
ed were considered what you call conventional financ-
ing?
ee —— sites nities eae
127
A Right.
Q Now, in connection with the funds available for
mortgage loans, insured or otherwise, would you
please describe what, if any funds, come in from out of
the state, and during the course of a year, could you
describe that?
A_ Well, yes, a portfolio for money comes from all
the banks and federal owned banks out of Little Rock.
Q What happens to the notes that various
borrowers sign with Security, let’s say in the last five
years, what does Security do with the notes on the
types of mortgages we are talking about, on residential
property?
A Weclose them and maintain all of the notes in the
vaults, this being a bank building.
[10] Q Are any of the notes ever put up for security
for any money that comes out of the state?
A Only if we sell the paper. We do sell paper for the
Freddie Mac.
Q What is Freddie Mac?
A_ A federal home loan mortgage corporation that
buys paper from us.
Q. That started when? |
A In the last year, the Federal Home Loan
Mortgage Corporation out of Little Rock, for the pur-
pose of purchasing papers or notes for savings and
loans in order to make you fund money for more loans.
Q Actually, with Freddie Mac transactions, how is
it done?
A We close the loan like we do, and we bundle up
the notes and all of the papers and anything else and
128
put them together, and we send them up to Freddie
Mac, and Freddie Mac goes over them, and if they
comply with the regulations, in so faras they bind their
paper, they send up a check.
[11] Q How often is this done?
A_ I dare say, we have only done it within the last
year, only four times. We sold off four million forty-
five thousand three hundred and fifty-six dollars in
secondary market notes that we sold off.
Q_ In what year?
A_ Last year.
Q 1976?
A Part of ’76 and ’75. |
Q Does Security deal with any outside of state
financing institutions outside of the state of Louisiana
or only Little Rotk?
A_ The only one, other than Little Rock, we are try-
ing to culminate a deal to sell paper in Baltimore. We
have to put all the details together right now. This is a
savings and joan in Baltimore, Maryland.
Q Prior to January 1976, between ’71 and ’75, the
end of ’75, was Security borrowing money from any in-
stitutions outside of the state of Louisiana?
A No, other than the Federal Home Loan Bank,
which is our mother bank.
[12] Q Doyou have available the amount of money
that was borrowed from that home loan bank for 1972,
‘73, 74 and ’75?
A_ I will have to get it.
Q You say in ’76, it was only approximately four
million that came in from —
129
A The amount of loans sent to the secondary
market was four million —
Q_ So, the rest of the money that went through the
company in 1976, I assume, came from local banks?
A_ Yes, and the Federal Home Loan Bank.
Q Located where?
A Little Rock, Arkansas.
Q How much money from the Federal Home Loan
Bank from 1972 through 1976?
-A_ I will have to get you the figures. It varies. As you
know, we borrow, pay them off and borrow again. At
the end of a year, we could give you a statement from
the end of the year. We are in, and we are out. We
borrow and we pay them off.
Q Would it be possible for you to give me a per-
centage of the number of notes [13] represented by the
number of mortgages, the number of mortgages that
you testified to, how many of these notes are used to
secure money received from the banks outside of the
state of Louisiana?
A Only one bank, the Federal Home Loan Bank, no
others.
Q Is this information available?
A_ Well, I’m going to try to get what I borrowed, the
money. We are getting beyond the scope with all these
questions, but go ahead, but I have it marked down
here.
Q Have you ever done business with Fannie Mae?
A Sure.
Q On residential homes?
A_ Yes, residential.
a
130
Q When?
A_ I would have to get you the answer there. In the
last five years, it is only been this year that we have
done business with Fannie Mae. I will have to check
that out.
Q When you do business with Fannie Mae, what is
the procedure that you go through, [14] what happens?
A It will be the same procedure as when you do
business with the Federal Home Loan Bank. In other
words, you sell your notes, and well, you bundle up
your notes and meet the requirements of Fannie Mae
and send them a package up. We are just getting into
Fannie Mae. I don’t know if Ican find that answer out.
Q What about Gennie Mae?
A G.M.A. — I don’t think we are in that at all.
Q_ What about insurance companies in the last five
years?
None at all.
Any other type of mortgage brokers?
No.
No other companies?
No.
Now, other than the Federal Home Loan Bank,
you say there is no other transfer of funds that comes
to this company from outside of the state?
A No, unless it be investments by other savings
[15] and loans, sometimes, but usually, that is within
the state savings and loans invested with you, cer-
tificates of deposit and things like that, you know.
Q Are there any investments in any companies at
all with your company from companies that are
domiciled outside of the state of Louisiana?
OF>OFr”OD
131
A_ I wouldn’t know that answer. We have thirty-six
thousand five hundred accounts. I imagine there are
many companies that have investments with us
throughout, outside of the state. Whether they are
lending institutions, I don’t know. We keep no tally that
way. We just throw them in as number of accounts. It is
just a plain savings account. They deposit so many
dollars with us, and we pay them a dividend.
Q_ If you were to find out how many companies
outside of the state of Louisiana have investments in
your business — you could find that out?
A_ I guess, if you gave me about sixty days I [16]
' might be able to.
Q What records would you go to?
A_ I would have to go through everyone of the
thirty-six thousand accounts in order to find that out.
Q_ Do these various companies receive any type of
communication at all during the course of a year from
your company?
A Yes, they would be stockholders in the company.
It is owned by the people.
Q You would have a li-t of addresses?
A_ Yes, for savings accounts.
Q_ If we would go through a list of addresses, we
would get some idea of how many outside accounts
Security has?
A_ If we went through every one, yes.
Q Mr. Miranne, do you have anyone in your com-
pany specifically assigned to take care of federal
programs?
A Only the Freddie Mac program; secondary
market.
132
Q Is this employee, is this employee specifically
assigned that job?
A Heis assigned to that and everything. That is one
of his assignments.
adel Q How many people do you have working on
that
A Actually, in our operation, everybody works on
everything, including myself. In other words, no
matter what program it may be, but he is in charge of
that with Mr. Faia. Mr. Faia would be our man, but he
handles all commercial loans, as far as this department
goes. He has other duties. It is not just a specific job.
(Off the record)
THE WITNESS:
Let me see — in the FHA loans, all in the'last -—
EXAMINATION BY MR. NELSON:
Q Wait a minute, Mr. Miranne. You have now in
your possession some statistics, correct, in connection
with how many loans are secured from federally fund-
ed programs?
A Well, I have the total statistics here. What Iam
trying to say is that you interrupted me, and what Iam
Saying now, in the last five years, we have made no
FHA loans in the last five years. [18] We have made one
VA loan. We have been in the Freddie Mac for ap-
proximately two and one-half years. We started into
the FHA loai.s at the beginning of this year. We have
five, and like I said, one VA.
133
Q_ You said you started in FHA loans beginning in
this year, ‘77?
A ’76. In other words, we were out of it up until
that time, and about the beginning of this year, we
started and did some FHA loans.
Q What date are you talking about?
A January 1976.
Q How many FHA approved loans did you make
during the year?
A Five.
Q What about Freddie Mac, how many loans?
A A hundred and fifteen.
Q Actually, how does the Freddie Mac procedure
work?
A All we do is make a loan, and after we make the
loan, we follow the guidelines and put the package
together, everything they want in there, and we file it
and [19] send it to them, and they go over the appraisal
and go over the surveys and descriptions and notes, and
if everything meets what they require, they buy the
paper from us.
Q Doyou havein your statistics the money volume
of the business with Freddie Mac?
A Yes, it is four million forty-five thousand three
hundred fifty-six dollars and seventy-four cents.
Q Would your statistics, do you have any reference
there to the Federal Home Loan Bank?
A Well, yes, that is a subsidiary of the Home Loan
Bank. In other words, the Freddie Mac, the secondary
market is a subsidiary of the Federal Home Loan Bank.
It is run by them. It is one of their subsidiaries that was
put together to buy paper.
134
Q Other than the four million, we are talking about
no other money that came to this company outside of
the state of Louisiana in 1976?
[20] A Other than the Federal Home Loan Bank.
Q How much money was borrowed through them?
A_ lam going to have that figure.
Q In 1972, ’73, and ’74 and ’75, and we can assume
that this company did not have any mortgages insured
by FHA, is that correct?
A Only five.
Q And those five were in ’76?
A ’76, end of ‘75.
Q And the total number of loans that were in, in
which the Federal Home Loan Bank is concerned, that
information is on its way, is that correct?
A Right. In other words, what I am going to give
you is how much money did we borrow at the end of
‘72, ‘73, 74 and 75. It overlaps. It goes up and down all
during the year. So, consequently, I will give you the
figures at the end of ’72, ’73, ‘74 and ’75, what we
borrowed at the end of the year.
Q As far as out of the state investors are con-
cerned, do you have an opinion as to [21] the percent-
age, number wise volume, the amount?
A_ No opinion, no sir.
Q Doyour records, do you have written records for
any type of recorded memoranda that would show how
many customers come to you for residential loans
without the services of a real estate broker or a realtor?
135
MR. WEGMANN:
Object to the form of the question.
MR. NELSON:
You can answer it.
THE WITNESS:
So I understand the question, you are asking me how
many actual loans come to me?
EXAMINATION BY MR. NELSON:
Q No, sir. My question is, do you keep any written
records or any recorded memoranda showing the
number of customers that come to Security seeking
loans who do not have the service of a real estate broker
or realtor?
A_ No, we do not, and the reason being, when [22]
they bring a loan to us, unless it was a friend that rec-
ommended us or something like that, that they have
called us, we have no need to keep that, because we do
not underwrite our loans on what the real estate agent
does. It is of no importance to us what the real estate
agent thinks.
Q How long have you been connected with Securi-
ty Homestead?
A Since I was twelve years old, and I am fifty-six.
Q When did you graduate from law school?
A ‘48.
Q > Following that, you began working for Security
as a closing attorney?
136
A_I started licking envelopes and dividend checks
when I was twelve, and when I was at Jesuit High, I
worked after school, while I was in Loyola, I worked
and did a little bit of everything. Then, I came back full
time in ‘48.
Q As far as your experience is concerned, what has
been your experience in [23] connection with realty
companies, real estate brokers calling Security or com-
ing to see Security about loans for prospective
customers for themselves?
MR. WEGMANN:
Again, object to the form of the question.
THE WITNESS:
Well, actually, when they have a loan, they all call.
They all solicit rates. On every sale that comes in, the
agent makes their commission when the loan is ap-
proved, according to the real estate agreement. Con-
sequently, you do get a lot of calls quoting rates. They
shop or whatever. This is a daily practice that means
nothing to us. Our loans are based entirely upon the
credit of the person, the appraisal of the property, and,
of course, their credit report that comes in to us, we
’ underwrite ourselves.
EXAMINATION BY MR. NELSON:
Q It has been your experience that real estate
brokers and representatives of the real [24] estate com-
panies do call your company to solicit rates? |
137
A Everybody calls. There are fifty calls a day ask-
ing what is your rate. Everybody calls.
Q What are they talking about when they ask you
what is your rate?
A You get calls from a lot cf savings and loans,
checking our rates out to be competitive. We might call
other savings and loan institutions to see what their
rates are to be competitive. We get calls everyday to
quote today’s rate.
Q What is today’s rate?
A For residential, eight and three-quarters and
eight and a half and one point. It depends on how we
read the file and if the compensating balances are with
us. If a guy has money with us, we give him a better
rate. If he keeps it on six and a half, we balance off ratio
wise. We might give him better than eight and three-
quarters, if he has $60,000.00. It is just based on how
[25] that file is going to read, and what that man wants
to do.
From our experience, to eyeball a customer, we don’t
do anything that we can’t eyeball a customer. When
you are extending credit, you want to talk to a guy and
see how he shapes up, what he does.
Q On occasions, when you eyeball a customer, so
to speak, as you described it, is the real estate agent
with him?
A_ No, they are a good taxi cab to bring him down,
get him and bring him in there and talk with us. Some
sit there, and some don’t. You prefer them not to sit
there, because, frankly, making a loan is none of their
business, the real estate agent. I don’t mean that to be
138
derogatory. It is not the agent’s job. We do the under-
writing and make the loans and approve the loans, not
the agents. I say this, many times, but some of them sit
there, but very few. They will go and sit in the waiting
room while we talk, because you [26] do talk over
private things. It is none of their business what your
own personal financial statement is. That is how we do
it.
Q_ Mr. Miranne, you were asked if you could bring a
copy of the forms used for loan applications and the
form used for the closing, and do you have those?
A_ Yes. (Indicating)
Q I have just been presented two forms which
satisfy the subpoena, and I will mark them for iden-
tification as Miranne-1 and Miranne-2. Miranne-1 is
the application and the residential loan application, and
Miranne-2 is the bill of sale.
MR. WEGMANN:
Could I see those?
This document may be entitled bill of sale, but it cer-
tainly is not a bill of sale or act of sale form.
THE WITNESS:
No, that is just a closing statement that they asked
for. |
MR. WEGMANN:
[27] Would you distinguish that, please?
139
THE WITNESS:
On Exhibit B or 2, this is a bill of sale which we use in
order to show the closing cost, the purchase price,
credits and loan from the association.
Now, when you say bill of sale, we don’t call them
that here, it is, of course, an act of sale. This is just a bill
of sale of the closing cost. The other exhibit is a residen-
tial loan application, and we use this in all commercial
and everything.
©=XAMINATION BY MR. NELSON:
Q Mr. Miranne, in connection with the Miranne
No. 2, the bill of sale, how long has this form been used
by Security?
A Twenty-five years.
Q The items listed on the left hand side, they have
been on this sheet for twenty-five years?
A We have a couple of things — but — yes.
MR. WEGMANN:
We are all attorneys, and we know that is not a bill of
sale. It might [28] be entitled that, but as the witness
just testified, that is nothing but a document evi-
dencing the things involved. I want to keep the record
straight.
MR. NELSON:
That is agreeable. I will refer to it as Miranne No. 2.
140
EXAMINATION BY MR. NELSON:
Q: Inconnection with Miranne No. 2, is there a line,
an item, called agent’s commission, and is that actually
the agent’s commission?
A The amount of money, earnest money, posted by
the purchaser to make the transaction final, in so far as
the agreement to purchase is concerned.
Q The agent referred to is real estate agent?
A_ Yes.
Q_ And whatever agreement he has with his prin-
cipal?
A_ Right, because you have to have that on the
form, because that is maintained by the agent ina non-
interest bearing account, and when we go to the sale,
they have to come in and account for the [29] money
they were holding.
Q On the real estate agent, does he appear at the
act of sale?
A They are holding the commission, yes.
Q Is it not a fact that the agent’s commission is
usually contracted for in terms of a percentage?
A Oh, yes, according to the real estate agreement.
Q As part of the duty of closing these acts and dis-
persing money, it is part of the responsibility of the
man closing the act to be sure that the correct amount
for the agent’s commission is handled, is that correct?
A Correct.
Q Has it been your experience that the agent’s
‘commission is not due until after the loan is nailed
down and closed?
141
MR. WEGMANN:
Object again to the form of the question.
N.R. VAUDRY:
Unless you are talking about a specific transaction, as
calling for [30] speculation of the witness.
THE WITNESS:
Well, according to agreements that I have seen, it
usually stipulates that the agent’s commission is earned
upon the acquisition of the loan, the approval of the
loan. That is what I read.
(Off the record)
EXAMINATION BY MR. NELSON:
Q Some additional figures were brought in to you,
and would you tell us what they are for?
A With regard to money borrowed from the
Federal Home Loan Bank, at the end of each year, from
1972 to 1976. At th
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