Jack P. McGee v. First Federal Savings and Loan Association of Brunswick

First Circuit

Jack P. McGee v. First Federal Savings and Loan Association of Brunswick

761 F.2d 647, 1985 U.S. App. LEXIS 30105

CourtCourt of Appeals for the First Circuit

DecidedMay 28, 1985

Docket84-8923

StatusPublished

Cited by12 cases

This text of 761 F.2d 647 (Jack P. McGee v. First Federal Savings and Loan Association of Brunswick) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Jack P. McGee v. First Federal Savings and Loan Association of Brunswick, 761 F.2d 647, 1985 U.S. App. LEXIS 30105 (1st Cir. 1985).

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Opinion

PER CURIAM:

Plaintiff, Jack P. McGee, a real estate appraiser in Brunswick, Georgia, appeals the dismissal of his antitrust claim that defendant, First Federal Savings & Loan Association of Brunswick, violated antitrust laws by setting up an arrangement whereby First Federal would refer the appraisal required for real estate loans to a wholly owned subsidiary. Alleging the procedure constituted an illegal tying arrangement, plaintiff claimed conspiracy in restraint of trade (15 U.S.C.A. § 1), an attempted monopolization (15 U.S.C.A. § 2), an illegal tying agreement (12 U.S.C.A. § 1972), and a RICO violation (18 U.S.C.A. § 1962). For the reasons set out in the district court’s opinion, we affirm.

Aside from the facts, two legal principles were central to the grant of summary judgment. First, in light of Copperweld Corp. v. Independence Tube Corp., — U.S. -, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984), a parent corporation and its subsidiary are incapable of engaging in the concerted activity required for a violation of section 1 of the Sherman Act, even though a separate corporation is required for independent appraisal purposes.

Second, to support a claim of an illegal tying arrangement, the law requires a showing of two distinct products: a tying product, in the market for which defendant has economic power, and a tied product, which defendant forces on consumers wishing to purchase the tying product. Jefferson Parish Hospital District No. 2 v. Hyde, — U.S. -, -, 104 S.Ct. 1551, 1565, 80 L.Ed.2d 2, 21 (1984). There are not two distinct products involved in the alleged situation. An appraisal is performed for the benefit of the lending institution. It is the “consumer” of the appraisal product. There is no legitimate consumer demand by a borrower to purchase loan-related appraisal services separate from the purchase of the loan itself. Federal regulation requires the lending institution to commission the appraisal. See 12 C.F.R. § 545.32(b)(1) (1984). The appraisal’s cost is simply passed on to the *649 borrower as a business cost. See 24 C.F.R. § 3500.7. Plaintiff failed to demonstrate that the pre-loan appraisal is provided to the borrower as a product separate from the loan itself.

AFFIRMED.

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PER CURIAM:

Plaintiff, Jack P. McGee, a real estate appraiser in Brunswick, Georgia, appeals the dismissal of his antitrust claim that defendant, First Federal Savings & Loan Association of Brunswick, violated antitrust laws by setting up an arrangement whereby First Federal would refer the appraisal required for real estate loans to a wholly owned subsidiary. Alleging the procedure constituted an illegal tying arrangement, plaintiff claimed conspiracy in restraint of trade (15 U.S.C.A. § 1), an attempted monopolization (15 U.S.C.A. § 2), an illegal tying agreement (12 U.S.C.A. § 1972), and a RICO violation (18 U.S.C.A. § 1962). For the reasons set out in the district court’s opinion, we affirm.

Aside from the facts, two legal principles were central to the grant of summary judgment. First, in light of Copperweld Corp. v. Independence Tube Corp., — U.S. -, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984), a parent corporation and its subsidiary are incapable of engaging in the concerted activity required for a violation of section 1 of the Sherman Act, even though a separate corporation is required for independent appraisal purposes.

Second, to support a claim of an illegal tying arrangement, the law requires a showing of two distinct products: a tying product, in the market for which defendant has economic power, and a tied product, which defendant forces on consumers wishing to purchase the tying product. Jefferson Parish Hospital District No. 2 v. Hyde, — U.S. -, -, 104 S.Ct. 1551, 1565, 80 L.Ed.2d 2, 21 (1984). There are not two distinct products involved in the alleged situation. An appraisal is performed for the benefit of the lending institution. It is the “consumer” of the appraisal product. There is no legitimate consumer demand by a borrower to purchase loan-related appraisal services separate from the purchase of the loan itself. Federal regulation requires the lending institution to commission the appraisal. See 12 C.F.R. § 545.32(b)(1) (1984). The appraisal’s cost is simply passed on to the *649 borrower as a business cost. See 24 C.F.R. § 3500.7. Plaintiff failed to demonstrate that the pre-loan appraisal is provided to the borrower as a product separate from the loan itself.

AFFIRMED.

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761 F.2d 647, 1985 U.S. App. LEXIS 30105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jack-p-mcgee-v-first-federal-savings-and-loan-association-of-brunswick-ca1-1985.

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