Attorneys for the six Montgomery County realtors whose 1977 conviction on antitrust charges was upheld last week by an appeals court, say they have not yet decided whether to ask the Supreme Court to review their case. However, a Washington lawyer close to the case commented, "They have to; there is too much at stake."
From a business viewpoint, many millions of dollars in area property sale commissions may be on the line. From a legal viewpoint, the fate of similar cases across the country may be affected. The Justice Department, which prosecuted the Maryland six, is said to be awaiting the outcome of this case before bringing others.
The firms and three of their presidents were convicted of criminal conspiracy to raise their commissions on home sales from 6 to 7 percent in violation of price-fixing laws. They were fined a total of $200,00. They appealed on the grounds that there was no conspiracy and that they were not involved in interstate commerce. Last week the 4th Circuit Court of Appeals in Richmond upheld the verdict.
Those convicted were Jack Foley Realty, Inc. and John P. Foley, Jr., Bogley, Inc. and its president Robert W. Lebling, Robert L. Gruen, Inc., Schick & Pepe, Colquitt-Carruthers, Inc. and John T. Carruthhers, Jr., and Shannon & Luchs Co.
If the defendants decide to ask for a review and if the Supreme Court accepts the case, it could drag on for years. But should the court refuse to review it, then the District and Maryland real estate commissions will be in the position of havingg to determine whether to revoke the licenses of six major real estate companies.
A year ago the Maryland commission brought charges against the companies and their three convicted presidents. They were charged under several provisions of the state code involving nonspecific offenses, such as bad faith, dishonesty and crimes of moral turpitude. No action can be brought until the appeals process is exhausted.
At such time, the commission has the power to revoke the licenses without a hearing, should it judge the realtors in violation of the law. However, a hearing will certainly be held, given the importance of the case and objections raised by attorneys representing the realtors.
Although the language in the District code is stronger, essentially the same procedure will be followed.D.C. law states that if the licensee is convicted of certain crimes, "the commission shall revoke forthwith the license." Since conspiracy to fix prices does not figure among the crimes enumerated, the District real estate commission must seek a ruling from the Corporation Counsel on whether it falls into the category of "other like offenses" as specified in the code.
A public hearing will then be held. If the commission decided to revoke their licenses, the realtors could appeal to the D.C. Court of Appeals.
In addition to their criminal trial, the defendants also faced civil actions and the possibility of triple damages being levied against them if found liable. The firms decided to settle out of court and offered to make 5 percent scrip available to injured parties when they next wish to sell their houses. (The amount is one percent under the going 6 percent commission rate and is intended to compensate for their having paid 7 percent before.)
Several former clients objected to being forced to do business again with the convicted realtors. And other realtors objected theat the settlement would "punish" them by throwing more business their way. So it was amended to permit the parties to sell their homes through other brokers. The final settlement is still awaiting approval by the court.