A federal court in Alexandria has dismissed a suit by a Virginia developer who claimed that two Prince William County couples violated anti-racketeering laws in a dispute over office condominium units in Manassas.

U.S. District Judge Albert V. Bryan Jr. dismissed "with prejudice" a suit brought by Battlefield Builders Inc. of Manassas against Thomas and Sarah Swango, Harry and Susan Horning, and Financial Planning Center of Manassas Inc., Harry Horning's business.

Battlefield was the developer of the Stonewall Square office condominium and sold a unit in the building to the Swangos in December 1981.

"With prejudice" means that Battlefield cannot attempt in the future to resurrect the anti-racketeering suit.

Several months after the Swangos purchased the condo, Battlefield alleged in its suit, it had an opportunity to lease 15 units to International Business Machines Corp., including the one sold to the Swangos. It said it offered to trade the Swangos' unit for a more valuable one and to pay all moving expenses.

According to Battlefield, the Swangos said they would agree to the deal after the negotations between the developer and IBM were completed. But when that time arrived, Battlefield alleged, the Swangos said they would lease -- not sell -- their unit for an added $20,000 and demanded that Battlefield sell another unit to the Hornings for $45,000 below market value.

The developer also claimed that after IBM had moved in, the Swangos and Hornings began a pattern of harassment "for the sole purpose of extorting additional monies."

Judge Bryan originally threw out Battlefield's suit charging the defendants with violating anti-racketeering statutes, on the grounds that the activities complained of did not meet the definition of racketeering, even if they were unlawful.

But in September, the Fourth U.S. Circuit Court of Appeals returned the suit to Bryan to be tried, saying the federal test for racketeering had been met because there were at least two alleged acts of extortion within a 10-year period.

But according to the defendants' lawyer, Brian P. Gettings, Battlefield decided to drop the case rather than go through with a trial on the merits. The Swangos and the Hornings had denied all the charges.

Battlefield's attorneys had no comment. Richard Aurili, legal department manager for Battlefield, also would not comment except to say that the litigation was "extremely sensitive."

Battlefield, which has several office and residential developments in the Prince William area, has had legal difficulties recently. The firm pleaded guilty last month to violations of Prince William County building codes. The county also brought a suit against the firm charging it with maintaining an illegal trash dump on one of its sites.