real estate appraiser. Its textbook, The Appraisal of Real Estate, has been universally acknowledged as the basic textbook of the real estate appraisal profession for more than 30 years and this textbook is used by various other organizations of appraisers.

The Institute's periodical, "The Appraisal Journal",

has similarly been recognized as the prime intellectual forum for the testing of current theory and practice and the exploration of new methods and techniques. The students who have attended Institute courses number in the tens of thousands and its professional designations, MAI and RM, have become the hallmark of professional competence in the real estate appraisal profession.

In April, 1976 the Department of Justice of the United States filed a Complaint against the Institute, the Society and two other associations alleging in essence that prior to the effective date of the Fair Housing Act (42 USC 53601 et seq.) the four defendants overtly maintained racially discriminatory standards and practices and instructed their members that dwellings in racially integrated areas have a substantially lower value than similarly situated dwellings in racially homogeneous areas. This Complaint further alleged that since the effective date of the Fair Housing Act the defendants have continued to engage in unlawfully discriminatory practices, not only by promulgating standards and practices which, explicitly and implicitly, have carried forward their pre-Act discriminatory practices but also

by failing to take "adequate affirmative steps" to correct the "continuing effects of their past discriminatory practices".

In its Answer, the Institute vigorously denied all the substantive allegations in the Complaint. In addition, it asserted several affirmative defenses including the protection of the First Amendment to the Constitution, the failure of the Complaint to state a claim upon which relief could be granted because the Fair Housing Act does not apply to the activities of AIREA, and the fact that for several years prior to the filing of the Complaint the Institute had, at the direction of its Governing Council, been taking affirmative steps to cooperate with various governmental agencies, including the Department of Housing and Urban Development of the United States ("HUD"), to assist such agencies in promoting equal opportunity, in housing in the United States.

In the belief that its interests would best be served by a decision on the merits at the earliest possible date, the Institute promptly served upon the Department of Justice a comprehensive set of interrogatories and geared up for what it expected would be complex litigation. The Institute did so with full confidence that it would prevail.

When the Department of Justice ordered HUD to cancel its meetings scheduled prior to the filing of this suit with the Institute dealing with the implementation of their jointly

planned affirmative action program, the Institute felt that such cancellation was contrary to basic principles of justice and equity and contrary to the public interest. The Institute, therefore, wrote to HUD and insisted that HUD resume the meetings implementing such affirmative action program. At first, the Department of Justice objected to the resumption of these discussions but later it said it would not object to resuming the discussions if Justice Department lawyers were present to monitor, the discussions. AIREA did not care if Justice was present and readily accepted this condition.

It is important to note that the reason that the Institute intended to implement an affirmative action program in cooperation with HUD differed radically from the reason that the Department of Justice wished to impose a much more onerous program upon the Institute. In the course of its discussions with the Office of Voluntary Compliance of HUD, representatives of OVC argued that many appraisers active in the market place did not understand the Institute's current theory and practice. As the acknowledged leader of the appraisal profession and the primary source of appraisal education in the United States, the Institute felt that it had an obligation to make certain that it had properly communicated its appraisal standards and techniques to its students and to the profession. To meet this obligation it decided to embark upon its affirmative action program. In other

words, it was professional integrity, not quilt, that led the Institute to embark upon and continue its affirmative action program with BUD.

As a result of the Justice Department's monitoring of, and eventual participation in, the discussions between AIREA and HUD, it became clear to all three parties that the Institute's stated principles of appraising and the contemplated affirmative action program of the Institute were of such a nature as to make the settlement of the litigation both obvious and logical. The parties then negotiated the terms of the Settlement Agreement and Affirmative Action Program, the settlement documents were prepared and the settlement was submitted to and approved by the Institute's Governing Council on March 5, 1977. The settlement documents were then executed by the parties and presented to this Court for its review and approval on April 6, 1977.

Gregory Opelka ("Opelka"), a member of AIREA who is also a member of the Society, has moved to intervene in the pending action and has asked that this Court refuse to sign the Settlement Order. Similarly, the Society has filed a brief stating its opposition to the settlement. The other two defendants in the case, the United States League of Savings

Associations and The Mortgage Bankers Association of America,

have not expressed any objection.

The Institute's position with respect to Opelka's Motion to Intervene is that he is not entitled to intervene as a matter of right under Rule 24 (a) (2) of the Federal Rules of Civil Procedure because the Institute has quite adequately represented his legitimate interests in this matter as a member of AIREA. At the same time, the Institute does not wish to oppose the effort of any of its members to present their views to the Court. Therefore, AIREA does not object to Opelka's alternative request that he be allowed to intervene under Rule 24 (b) (2) on a permissive basis pursuant to the discretion of this Court.

In an

The balance of this Memorandum summarizes the Settlement Agreement and Settlement Order and attempts to deal with the misunderstandings of fact and erroneous propositions of law set forth in the Memorandum filed by Opelka and in the Brief filed by the Society. In this regard, we ask the indulgence of the Court concerning the length of this Memorandum. ordinary case, the attempt of a codefendant and a third party to interfere with the implementation of a rational settlement entered into by the plaintiff and one defendant would not require a lengthy review of the facts. In this case, however, the misunderstandings and questionable legal theories of the objectors