Certificate of Service for (Printed) Brief for the United States as Amicus Curiae Supporting Appellants

    United States Court of  Appeals
FOR THE SIXTH CIRCUIT

No. 17,113

MERCER BRATCHER, ET AL.,
Plaintiff s-Appellants,

vs.
THE AKRON AREA BOARD OF REALTORS, ET AL., 

Defendants-Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE 
NORTHERN DISTRICT OF OHIO, EASTERN DIVISION

BRIEF FOR THE DEFENDANTS-APPELLEES

FIRST NATIONAL BANK OF AKRON AND  
HERBERICH-HALL-HARTER, INC.

B ro u se , M cD o w e l l , M a y , B ierce  &  W o r t m a n  
C. B l a k e  M cD o w e l l , J r .
K a r l  S. H a y  
F r a n k  H. H a r v e y , Jr.

500 First National Tower 
Akron, Ohio 44308

Attorneys for First National Bank of 
Akron and Herberich-Hall-Harter, Inc.

E. L. M endenhall, Inc., 926 Cherry Street, Kansas City, Mo. 64106, HArrison 1-8080



c o u n t e r -s t a t e m e n t  o f  q u e s t io n s  in v o l v e d

I. Does the Complaint of the Plaintiffs-Appellants 
allege facts constituting a restraint of trade or commerce 
among the several States prohibited by the Sherman Act 
and granting the Federal District Court jurisdiction of the 
subject matter?

The District Court answered, “No” .

These Defendants-Appellees contend that the answer 
was correctly “ No” .

II. Does the Complaint of the Plaintiffs-Appellants 
allege facts which would entitle them to injunctive relief 
under the Clayton Act?

The District Court did not answer this question.

These Defendants-Appellees contend the answer should 
be “No” .



INDEX

Counter Statement of Questions Involved .............—.Flyleaf
Counter Statement of Facts ..................-........................... 1

Argument—

I. Does the Complaint of the Plaintiffs-Appellants 
allege facts constituting a restraint of trade 
or commerce among the several states pro­
hibited by the Sherman Act and granting the 
Federal District Court jurisdiction of the sub­
ject m atter?............................................................... 4
a. No direct restraint upon the flow of com­

merce ........................... ..... ...................................  6
b. No substantial effect on interstate commerce 10

II. Does the Complaint of the Plaintiffs-Appellants 
allege facts which would entitle them to injunc­
tive relief under the Clayton Act? .... .......... .......  16
a. The plaintiffs-appellants are not entitled to

injunctive relief for the reason that they al­
lege no threatened loss or damage..................  16

b. The plaintiffs-appellants are not entitled to
injunctive relief for the reason they allege 
no damage or injury to their business or 
property ...... ..... ................................................... 19

Relief ................................................ ........  ..................... - 21
T ab le  of  C ase s

Centanni v. T. Smith & Son, Inc., 216 F. Supp. 330 
(1963) .............................. '...............................................  20

Conference of Studio Union v. Loews, Inc., 193 F.2d 
51 (9th Cir.), cert. den. see 42 U.S. 919......................  20

Connecticut Telephone and Electric v. Automotive 
Electric Co., 14 F.2d 957 .....  ................... .................... 19



II Index

Continental Securities v. Michigan Central Real Estate 
Company, 16 F.2d 379 .................................................. ....

Elizabeth Hospital v. Richardson, 269 F.2d 167, cert, 
den. 361 U.S, 884, 80 S. Ct. 155, 4 L. Ed. 2d 120 .......9,

Fedderson Motors v. Ward, 180 F.2d 519 (1950) ....12-13,
Gomberg v. Midvale Co., 157 F. Supp. 132 (1955) .......
Hovjard v. Local 74, 118 F. Supp. 387 (1954) ...............
Hutchinson v. American Oil Co., 221 F. Supp. 728 (1963) 
Klor’s Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207
Las Vegas Merchants Plumbers Assn. v. U.S., 210 F.2d 

732 (9th Cir.) ............................ ................................ . 4-5.
Lawson v. Woodmere, Inc., 217 F.2d 148 (4th Cir.) ....7,
Lieberthal v. North Country Lanes, Inc., 332 F.2d 269 

(2d Cir. 1964) ....... ................................ ................
Mandeville Is. Farm v. American C. S. Company, 334 

U.S. 219, 92 L. Ed. 1328 ..........................................10, 11,
Page v. Work, 290 F.2d 323 (1961) .............................. 7-8,
Paine Lumber Company v. Neal, 244 U.S. 495, 61 L. Ed. 

1256 .................................................................................. 16,
Revere Camera Company v. Eastman Kodak Co., 81 F. 

Supp. 325 .........................................................
Ring v. Spina, 84 F. Supp. 403 ..........................................
Roseland v. Phister Mfg. Co., 125 F.2d 419....... ...............
Rossi v. McClosky & Co., 149 F. Supp. 638 (1957) .......
Sears, Roebuck v. Blade, 110 F. Supp. 96 ..........................
Spears Free Clinic v. Cleere, 197 F.2d 125........ .......... ... 8,
Tivoli Realty, Inc., v. Paramount Pictures, Inc., 80 F. 

Supp. 800 ............... ..........................
U. S. v. Employing Lathers Association, 347 U.S. 198 ...
U. S. v. Employing Plasterers Association, 347 U.S. 186
U. S. v. Frankfort Distilleries, 324 U.S. 293, 297, 89 L. 

Ed. 955 and 65 S. Ct. 661 ..........................

17

14
,16
20
13
20
12

13
14

14

14
14

19

19
19
20
20
13
14

20
20
20

11



Index h i

U. S. v. Oregon Medical Society, 343 U.S. 326, 72 S. Ct.
690, 96 L. Ed. 978 (1952) ........................................ ...... 9

U. S. v. Starlight Drive-In Theaters, 204 F.2d 419 (7th 
Cir.) ........... ......................................................................... 7

17. S. v. Yellow Cab Company, 332 U.S. 218, 67 S. Ct. 
1560, 91 L. Ed. 2010........................... ........................... 12, 15

Weston Theaters v. Warner Bros., 41 F. Supp. 757 ....... 17

O th er  A u t h o r it ie s

Clayton Act, Section 16 (15 U.S.C., Sec. 26) ................... 16
3 Moore’s Federal Practice, p. 3456 ..................................  18
Rule 23-a(3), Federal Rules of Civil Procedure........... 17
Sherman Anti-Trust Act, Section 1 (15 U.S.C., Sec. 1) 4



United States  Court of Appeals
FOR THE SIXTH CIRCUIT

No. 17,113

MERCER BRATCHER, ET AL.,
Plaintiffs-Appellants,

vs.
THE AKRON AREA BOARD OF REALTORS, ET AL., 

Defendants-Appellees,

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE 
NORTHERN DISTRICT OF OHIO, EASTERN DIVISION

BRIEF FOR THE DEFENDANTS-APPELLEES

FIRST NATIONAL BANK OF AKRON AND  
HERBERICH-HALL-HARTER, INC.

COUNTER-STATEMENT OF FACTS

This cause comes before this court on the complaint 
of the plaintiffs (JA 3a) as amended (JA 19a), the mo­
tions to dismiss of the defendants (JA 20a and 21a), and 
the order of dismissal of District Judge Gerard E.



2

Kalbfleisch (JA 23a). The plaintiffs claim jurisdiction be 
with the Federal District Court upon the basis of the Sher­
man Act (15 U.S.C., Sec. 1) and claim relief under the 
Clayton Act, Section 16 (15 U.S.C., Sec. 26). The action 
is brought as a class action based on Rule 23 (a) 3 of the Fed­
eral Rules of Civil Procedure.

The plaintiffs, according to the complaint, are made up 
of a number of negro and white persons and negro brokers, 
each of whom is alleged to have suffered discrimination 
in the sale, purchase or rental of housing in the Akron 
area.

The conspiracy of the defendants is alleged to be a 
combination with its purpose and objective of preventing 
“Negro persons from owning real property in parts of the 
Akron area occupied solely and primarily by white per­
sons” . The complaint further alleges that the trade or 
commerce involved is the trade and commerce of supply­
ing of materials, supplies, machinery, financing and in­
surance for buildings in the Akron area. Plaintiffs allege 
that the alleged conspiracy has certain effects and it has 
“damaged the plaintiffs” in the following manners (JA 
15a):

“A. The interstate commerce in building materials, 
supplies, and machines is affected and restrained be­
cause Negroes who ordinarily would be customers for 
such building materials, supplies, and machines, in­
cluding components of new prefabricated homes, are 
barred from becoming customers of this interstate com­
merce.



3

“B. The interstate commerce in mortgage financing 
and insurance is affected and restricted because Ne­
groes who would be customers for such mortgages and 
insurance are barred from buying the houses they 
would mortgage and insure, and hence are barred from 
becoming customers of this interstate commerce.

“C. Negro real estate brokers have been denied bene­
fits of membership on the Board, thereby restraining 
the sale and rental of real property by such real es­
tate brokers.

“D. Negro persons from without the State of Ohio 
have been discouraged from moving to the Akron area 
because they have been unable to buy or rent prop­
erty within the Akron area.

“ E. Negro persons have been limited in their access 
to houses and apartments within the control of de­
fendants and co-conspirators.

“F. Negro persons have been limited to housing fac­
ilities in specified neighborhoods in the Akron area.

“ G. Negro persons have been forced to pay more 
money than white persons for equivalent housing.

“H. White persons who own homes or apartment 
buildings have been deprived of access to the market 
of Negro prospective purchasers and renters and the 
opportunity to sell or rent real property more quickly 
and profitably.”



4

ARGUMENT

I. Does the complaint of the plaintiffs allege facts 
constituting a restraint of trade or commerce among the 
several states prohibited by the Sherman Act and granting 
the Federal District Court jurisdiction of the subject matter?

The District Court answered, “No” .

These Defendants-Appellees contend that the answer 
was correctly “No”.

The Sherman Anti-Trust Act, Section 1 (15 U.S.C., Sec. 
1), provides in pertinent part as follows:

“Every contract, combination in the form of trust or
otherwise, or conspiracy, in restraint of trade or com­
merce among the several States, or with foreign nations,
is declared to be illegal.”

The sine qua non of any case involving the Sherman 
Anti-Trust Act is restraint upon interstate commerce. It 
is the contention of these defendants that the restraint upon 
interstate commerce has not been alleged in the complaint.

Judicial interpretation has developed two distinct ap­
proaches to the question of whether such a restraint is 
alleged as would bring a cause of action within the re­
quirements of the Sherman Anti-Trust Act. The plaintiffs 
must allege such facts as will either show a direct restraint 
upon the “ flow of commerce” or a restraint which “ sub­
sequently affects interstate commerce” even though the 
restraint itself be local in nature.

The two types of restraint of interstate commerce are 
well set forth in a footnote in Las Vegas Merchants Plumb­
ers Association v. U. S., 210 F.2d 732 (9th Cir.) at 739- 
740:



5

“ 3. The word ‘affect’ is used in two diferent situa­
tions under the anti-trust laws. A case under the anti­
trust laws, so far as the interstate commerce element 
is concerned may rest on one or both of two theories:

(1) That the acts complained of, occurred within 
the flow of interstate commerce. This is generally 
referred to as the ‘in commerce’ theory.

(2) That the acts complained of, occurred wholly 
on the state or local level, in intrastate commerce, 
but subsequently affected interstate commerce.

Under both of these theories, the transactions com­
plained of must affect or have an effect on interstate 
commerce or the requirements of the statute are not 
satisfied. Under the ‘in commerce’ theory, the ulti­
mate effect on interstate commerce is the impact on 
that commerce under a qualitative and not a quantita­
tive test. If there is price fixing or division of the market 
involved, there are violations per se, as a matter of 
law. Where there is involved no price fixing or di­
vision of the market, the effect of the transactions 
complained of may be a question of law or a mixed 
question of law and fact.

Turning to the second alternative, where acts wholly 
within intrastate commerce substantially affect inter­
state commerce, these intrastate acts may occur be­
fore goods enter the flow of commerce, or after they 
leave the flow of commerce. Here we have a question 
of fact as to whether the wholly intrastate acts sub­
stantially affect the flow of commerce.”



6

a. No Direct Restraint upon the Flow of Commerce

The plaintiffs-appellants allege no facts which would 
come within the theory that the flow of commerce is being 
directly restrained by the defendants-appellees’ alleged con­
spiracy. There are no facts set forth in the entire com­
plaint which show such a direct restraint. Paragraph VI 
(JA 16) entitled “The Nature of Trade and Commerce In­
volved” , in summary, simply alleges that persons buying 
or selling homes in the Akron area move in and out of, 
or to and from the Akron area. Paragraph D says only 
that negroes are “ discouraged” from moving to the Akron 
area. It is further alleged that the homes which the plain­
tiffs-appellants wish to buy, sell or rent are constructed of 
materials which flow in commerce and the mortgages and 
insurance obtained or purchased in connection with the 
ownership or possession of real estate likewise involves 
interstate commerce. However, the acts which the de­
fendants-appellees are alleged to have committed involve 
an alleged conspiracy between local persons and a re­
straint upon local trade and local commerce. The defend­
ants are alleged to represent owners and lessors of real 
property transferred in the “Akron area” (Paragraph 
III-B ); the “Akron area” is defined in the complaint as 
the City of Akron, Ohio, and all other parts of Summit 
County (Paragraph V -l) ;  the alleged conspiracy or com­
bination of the defendants as set forth in the Complaint 
involves only the purchase, sale or rental of real estate in 
the Akron area (Paragraph VI-C) and each of the sev­
eral acts complained of which purportedly set the basis 
for the plaintiffs’ grievances involve only the purchase,



7

sale or rental of property located in the Akron area (Para­
graph VI-D). In other words, the alleged combination is 
between local enterprises to restrain purchase, sale or 
rental of local real estate.

In the case of Lawson v. Woodmere, Inc., 217 F.2d 148 
(4th Cir,), it was held that a restraint by reason of a 
combination between a local cemetery and a burial vault 
company is not a restraint of interstate commerce simply 
because the vault company imported materials to manu­
facture vaults, or simply because some of the metal vaults 
sold by the vault company to the cemetery were originally 
manufactured in another state and brought into the state 
where they were sold at some prior time.

Likewise, the case of 17. S. v. Starlight Drive-In 
Theaters, 204 F.2d 419 (7th Cir.), involved a restraint of 
trade to fix admission prices of the local theaters. In find­
ing that the restraint was not such as would be a re­
straint in violation of the federal anti-trust laws, the Court 
said at page 22:

“Neither this case, nor any other case, however, sup­
ports the theory advanced here that local activities are 
illegal simply because they concern articles which 
have been previously moved in interstate commerce. 
Nor do they hold that a price fixing agreement be­
tween local retailers dealing in a product produced 
in another state is illegal in absence of a specific show­
ing of the effect on interstate commerce.”

The Court which rendered a decision in the case of 
Page v. Work, 290 F.2d 323 (9th Cir.), cert. den. 7 L. Ed. 
2d 96, stated at page 330:



8

“The test of jurisdiction is not that the acts com­
plained of affect a business engaged in interstate com­
merce, but that the conduct complained of affects the 
interstate commerce of such business.”

In the Page case, the Court found that although the 
defendants themselves were in interstate commerce (which 
is not the fact in the case at bar) the restraints related 
only to local activity.

Another case, Spears Free Clinic v. Cleere, 197 F.2d 
125 (1st Cir.), was in many respects very similar to the 
case at bar. There it was alleged that the Denver medical 
society and others conspired and combined to allocate the 
business of the healing arts, including chiropractic, with­
in the state of Colorado with the effect of discriminating 
against the plaintiff, a chiropractic type hospital. What 
the Court said in that case is especially applicable here:

“The practice of the healing arts in Colorado, in­
cluding chiropractic, is wholly local in character. The 
alleged conspiracy and the acts alleged to have been 
done in furtherance thereof had for their purpose and 
object the monopolization and restraint of purely local 
activities. No price fixing or price maintenance for 
professional or other services was involved. There 
was no intent to injure, obstruct or strain interstate 
or foreign commerce. The mere fact that a fortuitous 
and incidental effect of such conspiracy and acts may 
be to reduce the number of persons who will come 
from other states and countries to the Spears Hospital 
for chiropractic treatments does not create such a re­
lation between interstate and foreign commerce and 
such local activities as to make them a part of such 
commerce.” (emphasis added).



9

*  *  ❖

. . or the lessening of the number of persons 
who travel in interstate commerce, resulting from a 
conspiracy to restrain or monopolize a wholly local 
activity, is ordinarily an incidental, indirect and re­
mote obstruction to such commerce.”  (emphasis 
added).
See also U. S. v. Oregon Medical Society, 343 U.S. 326, 

72 S. Ct. 690, 96 L. Ed. 978 (1952), involving intrastate 
activities of doctor-sponsored organizations. The case of 
Elizabeth Hospital v. Richardson, 269 F.2d 167, cert. den. 
361 U.S. 884, 80 S. Ct. 155, 4 L. Ed. 2d 120, is also pertinent. 
The plaintiff claimed damages for the reason that the 
local medical society refused to admit a doctor to member­
ship. The alleged interstate commerce was a treatment 
by the plaintiff hospital of patients who crossed state lines 
to obtain such treatment. The Court pointed out that the 
activities there involved were essentially local and the 
crossing of state lines by patients was merely incidental. 
At page 170 the Court said:

“If the converse were true, every country store 
that obtains its goods from or serves customers resid­
ing outside the state would be selling in interstate 
commerce. Uniformly, the Courts have held to the 
contrary.”

The only claim by the plaintiffs-appellants of a re­
straint upon the flow of commerce is the allegation that 
the alleged conspiracy has blocked the efforts by Negroes 
outside of Ohio from buying or renting property in Ohio. 
(Plaintiffs-Appellants’ Brief page 9). In actuality the al­
legation in the Complaint is that “ Negro persons from



10

without the State of Ohio have been discouraged from 
moving to the Akron area because they have been unable 
to buy or rent property within the Akron area” .

The cases cited above have clearly held that local 
activity or restraint which simply reduces the number of 
persons crossing the state lines to acquire goods or serv­
ices is not sufficient to bring the local activity into 
interstate commerce. The plaintiffs-appellants, however, 
claim that the mere “discouragement” of Negroes from be­
coming residents of Akron, Ohio, brings the admitted local 
activity into interstate commerce. (We must presume 
that the inducement for Negroes to come to Akron, Ohio, 
is something more than the mere desire to reside in Akron, 
Ohio.)

It is submitted therefore that the Complaint alleges 
no direct restraints on the flow of interstate commerce.

It is further submitted that the allegations in the 
Complaint which merely allege restraints upon local ac­
tivities by local businesses cannot be construed in any 
way as a direct restraint upon the flow of interstate 
commerce.

b. No Substantial Effect on Interstate Commerce

The meaning of the term “ restraint of trade or com­
merce” under the federal anti-trust laws was probably 
most liberally construed in the case of Mandeville Is. 
Farm v. American C. S. Company, 334 U.S. 219, 92 L. 
Ed. 1328. This case finally set at rest the concept that 
only direct restraints upon the flow of commerce were 
in violation of the federal anti-trust law. The court said



11

that, in addition, the restraints which “substantially affect 
interstate commerce” are also prohibited by the federal 
anti-trust laws. The court there pointed out that, indeed, 
whether a restraint occurs in interstate or intrastate ac­
tivities “the total economic process is now merely a pre­
liminary step, except for those situations in which no as­
pect of, or substantial effect upon, interstate commerce 
can be found in the sum of the facts presented.” Page 234 
(emphasis added).

The italicized portion of the foregoing quotation is 
the significant portion for the purpose of this case for it 
emphasizes the necessity of showing a substantial effect 
upon interstate commerce before a restraint may be con­
sidered as a violation of the anti-trust laws. For, indeed, 
any economic activity, no matter how local, may have 
some effect upon interstate commerce, but the issue is, 
as set forth by the Supreme Court, “ Is such effect sub­
stantial?” The Supreme Court cited in its footnote, as 
further clarification of the meaning of the term “ substantial 
effect” , the case of U. S. v. Frankfort Distilleries, 324 U.S. 
293, 297, 89 L. Ed. 955 and 65 S. Ct. 661:

“It is true that the Court has on occasion deter­
mined that local conduct could be insulated from the 
operation of the anti-trust laws on the basis of the 
purely local aims of a combination, insofar as those 
aims were not motivated by the purpose of restrain­
ing commerce, and where the means used to achieve 
the purpose did not directly touch on the interstate 
commerce.”

The limitations, therefore, on the doctrine that a re­
straint may be in violation of the federal anti-trust laws



12

though the restraint be local and merely have an indirect 
effect on interstate commerce are well recognized. In 
the case of U. S. v. Yellow Cab Company, 332 U.S. 218, 
67 S. Ct. 1560, 91 L. Ed. 2010, the Court emphasizes that 
the restraint must be an “unreasonable” restraint and 
that the term “unreasonable” means at least an “ap­
preciable” restraint.

Plaintiffs, on page 8 of their brief, quote and distin­
guish United States v. Yellow Cab Co., 332 U.S. 218, to 
the effect that the amount of interstate trade affected by 
a conspiracy is immaterial in determining whether a viola­
tion of the Sherman Act has occurred. However, plain­
tiffs fail to note that the Court says in the very same 
paragraph that the effect must be “appreciable” . More­
over, as plaintiffs concede, the quotation is in the context 
of an “in commerce” restraint, i.e. the restraint there in­
volved is a restraint directly upon the flow of interstate 
commerce. Likewise, the case of Klor’s Inc. v. Broadway- 
Hale Stores, Inc., 359 U.S. 207, cited by plaintiffs (page 10 
of Plaintiffs’ Brief) involves a restraint directly upon the 
flow of interstate commerce. It is submitted that, con­
trary to the assertions in plaintiffs’ brief, the law is quite 
clear that where there are only local activities involved 
there must be a “substantial” effect upon interstate com­
merce.

The lower courts have had many occasions to deter­
mine in factual situations whether a restraint affects in­
terstate commerce to such an extent as to constitute a 
violation of the Sherman Anti-Trust Act. The case of 
Fedderson Motors v. Ward, 180 F.2d 519 (1950), contains 
the following language:



13

. . but only those contracts or combinations are 
within its (The Sherman Anti-Trust Act) scope 
which by reason of intent, tendency or the inherent 
nature of the contemplated acts prejudices the public 
interest by unduly restraining or obstructing the 
course of interstate commerce . . .  it is essential that 
the complaint allege a violation of the Act in the form 
of undue restrictions or obstructions of interstate 
commerce. . . . An appreciable part of such commerce 
must be the subject of the monopoly, restraint or 
conspiracy.”

See also Sears, Roebuck v. Blade, 110 F. Supp. 96. The 
case of Las Vegas Merchants Plumbers Association v. U. S., 
supra, makes a strong point of the fact that for a local 
restraint to come within the prohibited restraints set forth 
in the Sherman Anti-Trust Act, there must be a “sub­
stantial” effect on interstate commerce.

The case of Howard v. Local 74, 118 F. Supp. 387 (1954), 
involved a combination which, in effect, created a monop­
oly of the lathing contract business within a local area. 
The court said the following, which is just as appropriate 
in the case at bar:

“The Sherman Act was not intended by Congress 
to interfere with local affairs, even though they might 
be unfair and malicious and economically unsound. 
This indictment is brought specifically and is limited 
to and deals only with the Sherman Act. It is purely 
conjectural whether the practice with which the de­
fendants are charged may remotely and indirectly 
affect the flow of commerce. It might be that it has 
reduced the number of buildings that are built in three 
counties in Illinois; it might be it has driven building



14

and industry elsewhere; but that is not alleged in the 
indictment.

“ There is no allegation showing these defendants 
intended to burden interstate commerce by this alleged 
conspiracy. There is no allegation of fact that it does 
so burden interstate commerce.”

In the Lawson v. Woodmere, Inc. case and the 17. S. 
v. Starlight Drive-In case, both cited supra, and both of 
which were decided subsequent to the Mandeville deci­
sion, the Courts found that the local activities in restraint 
of trade had no substantial effect on interstate commerce. 
In the latter case the Mandeville decision was specifically 
discussed and the Court pointed out that activities cannot 
be illegal simply because they involve a restraint on ar­
ticles which were previously in interstate commerce (See 
supra). See also Page v. Work, 290 F.2d 323 (1961) and 
Lieberthal v. North Country Lanes, Inc., 332 F.2d 269 (2nd 
Cir.) (1964).

Similarly, the Court is referred to the case of Spears 
Free Clinic v. Cleere, 197 F.2d 125, which is discussed above 
(see excerpts at pages 8 and 9 above). This case em­
phasized the fact that there was no intent upon the part 
of the local combination or conspirators to injure, obstruct 
or restrain interstate commerce and that the effect of the 
reduction of the number of persons coming across state 
lines to obtain services which were allegedly restrained 
was merely a fortuitous, incidental effect of the alleged 
conspiracy.

See also the case of Elizabeth Hospital v. Richardson, 
cited above, where the Court holds that the mere travel of



patients across state lines to obtain medical treatment is 
incidental and does not alter the alleged quality of the al­
leged restraint.

The complaint in this case makes no real allegation 
of any element that is necessary to show such a restraint of 
trade in commerce as to affect interstate commerce in the 
manner and to the extent required to create jurisdiction 
under the federal anti-trust laws. The alleged intent and 
purpose of the combination and conspiracy is not to fix 
prices, not to divide territory, not to apportion customers 
and not in any way to restrain or refrain from competing 
with each other. The crux of the petition rather is an 
allegation of combination to restrain the sale of real estate 
to and the purchase or rental of real estate by Negro persons 
in the Akron area. The alleged effects of the combination 
are clearly indirect and incidental, rather than direct or sub­
stantial. It is claimed in the Complaint that the sale of 
building materials, machines and supplies and the lending 
of mortgage money and sale of insurance all will be af­
fected. This effect, however, is at best speculative, and 
remote from the alleged conspiracy resulting from the al­
leged combination in the Akron area. As stated in U. S. v. 
Starlight Drive-In, supra, never has any case gone so far 
as to hold a restraint illegal under federal anti-trust laws 
simply because it involves articles that previously moved 
in interstate commerce. It is further claimed in the Com­
plaint that Negroes have been discouraged from moving in­
to the Akron area and that they have been forced to pay 
more money for housing in the Akron area by reason of 
the alleged combination.



16

Again, this cannot be considered a direct restraint, a 
substantial restraint or an appreciable restraint. As stated 
in Fedderson Motors v. Ward, supra, “The Complaint must 
allege facts from which it can be determined as a matter 
of law that by reason of intent, tendency or inherent nature 
of the contemplated acts the conspiracy was reasonably 
calculated to prejudice the public interest by unduly re­
stricting the free flow of interstate commerce.”

The Sherman Act was enacted to prevent restraints 
of interstate commerce. This Complaint makes no allega­
tion of any direct restraints, and its allegations of the effect 
on interstate commerce are indirect, incidental and far 
beyond the intent or reasonably contemplated effects of the 
alleged conspiracy.

II. Does the Complaint of the Plaintiffs-Appellants 
allege facts which would entitle them to injunctive relief 
under the Clayton Act?

The District Court did not answer this question.

These Defendants-Appellees contend the answer should 
be “No”.

a. The Plaintiffs-Appellants Allege No Threatened 
Loss or Damage.

Prior to the enactment of Section 16 of the Clayton 
Act, no private action for injunctive relief was permissible 
under the Sherman Anti-Trust Act. See Paine Lumber 
Company v. Neal, 244 U.S. 495, 61 L. Ed. 1256. By amend­
ing the Clayton Act, Congress did not in any sense put 
private persons in the shoes of the Attorney General. It 
simply provided that injunctive relief may be obtained by 
“any person . . . against ‘threatened loss or damage’ by 
reason of violation of the anti-trust laws” .



17

In the case of Weston Theaters v. Warner Bros., 41 
F. Supp. 757, it was stated:

“In connection with the equitable action authorized 
by Section 16 of the Clayton Act, it is well established 
that the only relevant issue is whether a plaintiff is 
threatened with loss or damage by the acts of the De­
fendant. The Plaintiff is entitled only to preventative 
relief against acts threatening loss or damage to him­
self and dissolution of a consummated transaction is not 
within the intendment of the section providing a 
private remedy. Such relief is reserved to the govern­
ment alone.”

See also Continental Securities v. Michigan Central 
Real Estate Company, 16 F.2d 379.

It is submitted that the plaintiffs’ action is simply an 
action brought by a group of individuals in behalf of the 
general public and that those who are plaintiffs in this 
cause have not been and are not being threatened by any 
loss or damage by reason of the alleged conspiracy. The 
plaintiffs’ petition is not restricted to Negroes, it is not re­
stricted to Caucasians, it is not restricted to brokers, it is 
not restricted to any class, except those who are interested 
in the so-called common question of law and fact and 
whether there is, in fact, a combination or conspiracy by 
the real estate brokers in the Akron area and whether it is 
a violation of the federal anti-trust laws.

Rule 23-a(3) of the Federal Rules of Civil Procedure 
under which the plaintiffs claim a right to bring a class 
action is simply a permissive joinder rule. In the com­
plaint, the plaintiffs claim to have several grievances all



18

involving the common question of law and fact, but each 
plaintiff has alleged and claims that the combination or 
conspiracy does, in fact, exist at the present time and that 
he has been injured by reason of this conspiracy at some 
past date. In other words, the plaintiffs claim that they 
have already been the victims of the alleged conspiracy. 
The class, therefore, appears to be those people who have 
been, in the past, victims of the alleged conspiracy. If, 
indeed, the class does consist of such persons, then the 
plaintiffs are not entitled to relief under Section 16 of the 
Clayton Act for the reason that there is no “threatened 
loss or damage” . If the class on the other hand is larger 
and consists of all persons who have been or shall be or 
could be injured, or suffer loss or damage by reason of the 
alleged combination or conspiracy, then the class becomes 
so large to, in effect, include the public as a whole.

It is of interest to note that the effect of a judgment 
under Rule 23-a(3) is binding on no one except those who 
are parties to the suit, either originally or as intervenors. 
See 3 Moore’s Federal Practices, page 3456. Of what ef­
fect, therefore, would the relief prayed for in the case at 
bar be for the plaintiffs? The plaintiffs do not allege any 
threatened acts which would cause them loss or damage. 
The alleged acts of which the plaintiffs complain are ac­
complished facts. The injunctive relief would not prevent 
the alleged conspiracy from continuing as to the other 
Negroes wishing to buy real estate, or Caucasians wishing 
to sell real estate. The relief the plaintiffs are really after 
is action which can only be obtained by the Attorney Gen­
eral of the United States.



19

See also Connecticut Telephone and Electric v. Auto­
motive Electric Co., 14 F.2d 957.

b. The Plaintiffs-Appellants Allege No Damage or 
Injury to Their Business or Property.

In the case of Ring v. Spina, 84 F. Supp. 403, the court 
said:

“Plaintiff is entitled to injunctive relief which 
would protect him against prospective damage. Such 
damage arises when there is damage or interference 
with rights or privileges he now enjoys, not merely 
as a member of the general public, but, as one en­
gaging in the commerce which is being restrained. . . . 
The United States is the proper party to protect the 
interests of the general public under the anti-trust 
laws.”

and in the case of Revere Camera Company v. Eastman 
Kodak Co., 81 F. Supp. 325, the Court said at page 331:

“The anti-trust laws were enacted to prevent 
injury to the public as well as injury to individuals, 
but nowhere is the individual authorized to bring suit 
on behalf of the public for public injury. The Attor­
ney General alone is authorized by statute to bring 
such suit.”

Prior to enactment of the Section 16 of the Clayton 
Act, no private action for injunctive relief was permissible 
under the Sherman Anti-Trust Act, see Paine Lumber 
Company v. Neal, 244 U.S, 495, 61 L. Ed. 1256.

The foregoing cases further illustrate that which is 
argued above, namely that the plaintiffs are not acting in 
behalf of themselves but rather on behalf of the public



20

in general. These uses also illustrate that the plaintiffs 
must allege a threatened injury to their business or prop­
erty and in order to do so they must be engaged in the busi­
ness or commerce being restrained. The cases upon which 
plaintiffs rely so heavily point up this point. Both United 
States v. Employing Plasterers Assn., 347 U.S. 186, and 
United States v. Employing Lathers Association, 347 
U.S. 198, illustrate that the plaintiffs must be in commerce 
themselves before they can claim injury in a private action. 
Cases such as Tivoli Realty, Inc. v. Paramount Pictures, 
Inc., 80 F. Supp. 800, Revere Camera Co. v. Eastman 
Kodak Co., supra, and Hutchinson v. American Oil Co., 
221 F. Supp. 728 (1963), each have dealt with the question 
of the relief to which a private litigant is entitled and, 
accordingly, have held that a threatened or actual injury 
to the plaintiff’s business or property is required before he 
is entitled to relief. In the instant case, as stated above, 
there are no threatened injuries and the alleged past 
injuries were not injuries for which plaintiffs may claim 
relief since none of the plaintiffs is or was engaged in the 
commerce allegedly being restrained. See Roseland v. 
Phister Mfg. Co., 125 F.2d 419. The commerce which is 
allegedly being restrained is not a business in which plain­
tiffs are directly or indirectly engaged. Not being so 
engaged in commerce, plaintiffs are not entitled to any relief. 
Conference of Studio Union v. Loews, Inc., 193 F.2d 51 
(9th Cir.), cert. den. see 42 U.S. 919; Centanni v. T. Smith 
& Son, Inc., 216 F. Supp. 330 (1963); Rossi v. McClosky 
& Co., 149 F. Supp. 638 (1957); Gomberg v. Midvale Co., 
157 F. Supp. 132 (1955).



21

Plaintiffs cite several cases at page 14 of their brief 
in an effort to claim that a conspiracy may have a non­
commercial purpose and still be a violation of the Sherman 
Act. However, plaintiffs fail to point out that, regardless 
of the commercial or non-commercial purpose of the 
conspiracy, in each of those cases involving a private 
complaint, the complainant is in the commerce which he 
complains is being restrained and his own business is being 
injured. The cases appear to be uniform in permitting only 
private litigants who are in the commerce being restrained 
to bring actions to enforce the Sherman Act.

RELIEF

The decision of the Federal District Court should be 
affirmed.

Respectfully submitted,

B r o u s e , M cD o w e l l , M a y , B ie rce  &  W o r t m a n  

C. B l a k e  M cD o w e l l , J r .

K a r l  S. H a y  

F r a n k  H . H a r v e y , J r ,

500 First National Tower 
Akron, Ohio 44308

Attorneys for Defendants-Appellees First 
National Bank of Akron and Herberich- 
Hall-Herter, Inc.