Maryland ex rel. Burch v. Jack Foley Realty, Inc.

452 F. Supp. 54, 1978 U.S. Dist. LEXIS 17484
CourtDistrict Court, D. Maryland
DecidedMay 30, 1978
DocketCiv. No. B-77-618
StatusPublished
Cited by1 cases

This text of 452 F. Supp. 54 (Maryland ex rel. Burch v. Jack Foley Realty, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Maryland ex rel. Burch v. Jack Foley Realty, Inc., 452 F. Supp. 54, 1978 U.S. Dist. LEXIS 17484 (D. Md. 1978).

Opinion

MEMORANDUM AND ORDER

BLAIR, District Judge.

This is a civil antitrust action brought by the State of Maryland, in the person of its Attorney General Francis B. Burch, under sections 4C and 16 of the Clayton Act, 15 U.S.C. §§ 15c and 26, as amended by Title III of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub.L. 94-435, 90 Stat. 1394, 15 U.S.C. § 15c et seq. (Sept. 30, 1976). Additionally, a pendent claim is brought under Md.Com.Law Code Ann. § ll-204(a)(l), a part of the Maryland Antitrust Act. Jurisdiction over the federal claim is based upon 28 U.S.C. § 1337. Jurisdiction over the state law claim is based upon this court’s pendent jurisdiction.

Maryland, suing as parens patriae on behalf of natural persons within the State, [56]*56alleges that defendants, six corporate real estate brokers doing business in Montgomery County, Maryland and the presidents of three of those corporations, conspired to fix brokerage commission rates in violation of section 1 of the Sherman Act, 15 U.S.C. § 1. This purported Sherman Act violation is also alleged as a transgression of the parallel provision in the Maryland Antitrust Act, Md.Com.Law Code Ann. § ll-204(a)(l). The operative language of the complaint is identical to that found in an indictment returned against these same defendants on April 1,1977 in United States v. Jack Foley Realty, Inc., et al, Criminal B-77-0185. In both the complaint and the indictment the defendants are alleged to have done the following:

(a) communicated to one another at a meeting and on other occasions the intention to raise commission rates to 7 percent on listings of residential real estate in Montgomery County; and
(b) jointly adopted a policy of increasing commission rates on listings of residential real estate in Montgomery County to 7 percent.

With respect to the federal claim, Maryland requests treble damage relief for injury to the property of persons who sold residential real estate in Montgomery County through the services of the defendants on or after September 30, 1976, the effective date of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 15c et seq. This damage claim is based on the allegation that, as a result of the alleged conspiracy, sellers of residential real estate in Montgomery County paid commission rates higher than those they would have paid but for defendants’ unlawful acts. In addition to damages, Maryland requests declaratory and injunctive relief. This request is made as part of both the federal and state law claims. Presently pending before the court are two unresolved motions: defendants’ motion to dismiss and the joint motion of the State of Maryland and the United States to permit disclosure of grand jury materials to the Attorney General of Maryland. Each of these matters is dealt with separately below.

Motion to Dismiss

Defendants have moved to dismiss the complaint on three separate grounds, two of which are closely related. They argue first that this case is not properly a parens patriae action under either § 4C or § 16 of the Clayton Act because Maryland has not alleged injury to the general economy of the State, but rather has brought this action on behalf of a “small and uniquely affected portion of its population.” Simply stated, this argument is that the State lacks standing to maintain this lawsuit. Secondly, defendants contend that §§ 4C and 16 of the Clayton Act, to the extent they are construed to grant standing to the State to sue on behalf of its citizens, violate the case or controversy provisions of Article III, § 2 of the United States Constitution. Finally, defendants assert that the State has failed to allege facts sufficient to charge defendants with conspiracy to restrain interstate commerce in violation of § 1 of the Sherman Act, thereby depriving this court of the necessary subject matter jurisdiction.

On September 30, 1976, President Ford signed into law the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. §§ 15c et seq., 18a, 1311 et seq. (the Act). Title III of the Act, 15 U.S.C. § 15e et seq., added to the Clayton Act certain provisions allowing state attorneys general to bring parens patriae actions for the recovery of damages on behalf of their states’ natural citizens where those citizens were injured by violations of the Sherman Act. The heart of Title III of the Act is found in the new § 4C(a)(l) of the Clayton Act, 15 U.S.C. § 15c(a)(l), which provides:

Any attorney general of a State may bring a civil action in the name of such State, as parens patriae on behalf of natural persons residing in such State, in any district court of the United States having jurisdiction of the defendant, to secure monetary relief as provided in this section for injury sustained by such natural per[57]*57sons to their property by reason of any violation of [the Sherman Act]. The Court shall exclude from the amount of monetary relief awarded in such action any amount of monetary relief (A) which duplicates amounts which have been awarded for the same injury, or (B) which is properly allocable to (i) natural persons who have excluded their claims pursuant to subsection (b)(2) of this section, and (ii) any business entity.

(Emphasis added). Defendants’ contention that the State may not maintain an action under this section where it has failed to allege injury to its general economy is founded on the historical application of the parens patriae notion to antitrust suits. A brief examination of this history will facilitate an understanding of the issues raised by defendants’ argument.

The developmental background of the parens patriae concept in this country is closely interwoven with cases brought by states under the original jurisdiction of the Supreme Court pursuant to Article III, § 2 of the Constitution. See generally Hawaii v. Standard Oil, 405 U.S. 251, 257-59, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972); Burch v. Goodyear Tire & Rubber Co., 420 F.Supp. 82, 86 (D.Md.1976), aff’d, 554 F.2d 633 (4th Cir. 1977). This original jurisdiction is confined to instances where sovereign or quasi-sovereign interests of the states are at issue, Oklahoma ex rel. Johnson v. Cook, 304 U.S. 387, 393, 58 S.Ct. 954, 82 L.Ed.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In Re Montgomery County Real Estate, Etc.
452 F. Supp. 54 (D. Maryland, 1978)

Cite This Page — Counsel Stack

Bluebook (online)
452 F. Supp. 54, 1978 U.S. Dist. LEXIS 17484, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maryland-ex-rel-burch-v-jack-foley-realty-inc-mdd-1978.