Before LEVENTHAL, MacKINNON and WILKEY, Circuit Judges.
UNITED STATES COURT OF APPEALS, DISTRICT OF COLUMBIA CIRCUIT
As Amended on Denial of Rehearing 26 July 1978. Certiorari Denied 8 January 1979.
Appeal from the United States District Court for the District of Columbia (D.C. Civil 76-73).
Opinion for the Court filed by Circuit Judge WILKEY.
Concurring opinion filed by Circuit Judge LEVENTHAL.
Concurring statement filed by Circuit Judge MacKINNON.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WILKEY
This private antitrust action challenges, as a violation of Section 1 of the Sherman Act, *fn1 the practice followed by the defendant of requiring borrowers to pay an attorney's fee charge for services rendered to the defendant in connection with each loan. The defendant is a federally-insured mutual savings and loan association, engaged in the business of making loans on residential property. The defendant requires borrowers to pay the attorney's fee charge only if they employ counsel other than the law firm retained by the defendant, and waives the requirement where borrowers use the defendant's law firm for settlement. Plaintiffs are a class of those borrowers who paid the attorney's fee charge as a cost of their loans because they employed their own counsel for legal settlement services. *fn2
Plaintiffs contend that the defendant's loan practice constitutes a Per se illegal tie-in sale of legal services to the sale of credit, and an unlawful restraint of trade on the market for legal settlement services. At the close of plaintiffs' case, the District Court directed a verdict in favor of the defendant on the alleged antitrust violations. Plaintiffs now challenge the District Court's ruling on the ground that their evidence sufficiently made a case for the jury.
In determining whether a directed verdict is appropriate the governing principle is that a directed verdict is proper where, without weighing the credibility of the witnesses, there can be but one reasonable conclusion as to the verdict. *fn3 Under this principle the court is bound to view the evidence in the light most favorable to the plaintiffs, giving them the advantage of every fair and reasonable inference that the evidence may justify. *fn4 Examining the record in the light of this principle, we agree with the District Court that the evidence and permissible inferences therefrom conclusively demonstrate that no tying arrangement or unlawful restraint of trade is presented by the circumstances of this case. We accordingly affirm. I. THE ALLEGED TYING ARRANGEMENT
Before developing the antitrust law on tie-in sales, it is essential to have clearly in mind what services are involved here, and to whom. Of the $100 standard legal fee paid by the defendant lender to its selected counsel and charged as a cost of the loan to the borrower, $35 is for the preparation of a mortgage. Mortgages are the business of the lender; it has a definite interest in the validity of the security instrument and prudently should only accept an instrument prepared or approved by its own counsel. Sixty-five dollars is for examination of the title. In this matter both the lender and the borrower have an interest; a common interest yet in this metropolitan area, where the percentage of the value loaned on homes is substantial, the lender ordinarily will have the greater financial stake in the title, as he initially puts up more of the purchase money. While title insurance is customarily purchased by the borrower (it may be required by the lender), title insurance policies frequently carry exceptions, whose legal effect must be evaluated by both parties to the loan transaction.
The lender has the same right as the borrower to insist on its own counsel. The defendant lender here, after an unsatisfactory period of experience permitting the borrower to select his own counsel from a large group of highly rated lawyers (but not necessarily real estate specialists), whom the lender would then use as well, settled upon the practice of employing only one law firm to protect its interest in all these similar home loan transactions. State law and federal regulations allow the lender to charge the borrower for the legal work done for benefit of the lender as a necessary cost of ...