A final settlement in the Montgomery County realtors civil antitrust case was approved last week by Judge C. Stanley Blair of U.S. District Court in Baltimore. It will allow participating sellers to deal with brokers other than those six firms covicted of fixing prices.
Coupons entitling the bearers to sell their houses through realtors charging 5 percent commission will be sent about six months from now to the 1,893 persons identified thus far in the class-action suit.The case dates to a 1974 country club dinner at which John P. Foley Jr., president of Jack Foley Realty Inc. allegedly asked officials of five other major real estate firms to back him by raising their commissions to 7 per cent from the prevailing 6 percent. The increase netted them $700,000 extra on sales of $350 million during the period mentioned.
Convicted along with Foley were Bogley Inc. and its president, Robert W. Lebling; Colquitt-Carruthers Inc. and its president, John T. Carruthers Jr.; plus Robert L. Gruen Inc., Schick & Pepe Realty Inc. and Shannon & Luchs Co.
The defendants appealed unsuccessfully. Three of the firms have now asked the Supreme Court to review their cases and two others are preparing to do so. The sixth company decided not to do so for economic reasons.
In addition to the $200,000 fine Judge Blair imposed on the firms and their executives, there have been substantial legal expenses. Lawyers for the defendants were awarded $300,000 in the civil case. The costs for the criminal price-fixing case run much higher. One attorney cited a $260,000 fee for a single firm up through the trial but before the appeal process began.
If the expenses are high, so are the stakes. State real estate commissions in the jurisdictions where these firms operate could conceivably decide to take away their licenses to do business if the conviction is upheld.
The settlement approved this week - the defendants decided to settle out of court rather than risk triple damages in a companion civil trial - had originally stipulated that if the parties wished to use the 5 percent scrip they would have to do business again with the companies that cheated them before.
Anyone else who sold a house in the county between Sept. 1, 1974 and April 1, 1977 through one of the six firms at a 7 percent commission who wishes to participate in the settlement should write to: Trustee, Montgomery County Antitrust Litigation, 2300 Arlington Building, Baltimore 21201.