Petition — BOGLEY, INC. v. UNITED STATES (No. 79-186)
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IN THE
Supreme Court of the Rnited States
OCTOBER TERM. 1978
No #97186
BOGLEY. INC. AND ROBERT W. LEBLING,
Petitioners,
V.
UNITED STATES OF AMERICA,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
RAYMOND W. BERGAN
a4 ROBERT P. WATKINS
\ A WILLIAMS & CONNOLLY
\ Hill Building
839 17th Street, N.W.
Washington, D.C. 20006
(202) 331-5000
Counsel For Petitioners
DI CESARE - PRINTING — Washington, D.C. 20006
49 LW A713
eEO
ne ee ee 4
TABLE OF CONTENTS
Page
AE 2
eter Tiina ash bb eass see eeeseescvess 2
RPE UNMEIO UTED cis cc cc cca wesccccnenccccce 2
CONSTITUTIONAL AND STATUTORY
es cn ccewshasecscccccscecs 3
I EE Sais secs cccctccceccsccces 4
REASONS FOR GRANTING THE WRIT:
I. The Decision Below Conflicts with the
Decisions of Other Courts of Appeals
Concerning the Jury’s Use of Good Character
Tee ecw e keen neccces 14
Il. The Decision Below Conflicts with the
Decisions of Other Courts of Appeals
Concerning the Scope of Section | of the
Sherman Act As It Applies to the Activities of
i Se kiss bub scscecescccces 21
Ill. The Decision Below Raises Significant
Questions Concerning the Application of this
Court’s Holding in United States v. United
EE 27
Ue G ks ey she asesececcccccccess 28
Page
APPENDICES:
op ET EEE EY Oe ee EP a Ee RSS la
BD 335d e ee eee ee eee cee eae 30a
Gn Sa beenha scrubs vod cetacean 45a
ill
TABLE OF AUTHORITIES
Page
Cases:
Black v. United States, 309 F.2d 331
Se EE a ob a eck Sows a eee Kaew eee 15
Bryan v. Stillwater Board of Realtors, 578 F.2d
See CE SPT ak cake cena tree ci edccks 22
Carbo v. United States, 314 F.2d 718 (9th Cir.
Ty AB are Tb etactiety i niin HER IG ag 15
Cotillion Club, Inc. v. Detroit Real Estate Board,
303 F. Supp. 650 (E.D. Mich. 1964) .......... 22
Diversified Brokerage Services, Inc. v. Greater
Des Moines Board of Realtors, 521 F.2d
EEE ER Is ly ka aca sh oe oc ede ee 22
Edgington v. United States, 164 U.S.
Ce es be os ey 14, 19, 20
Gateway Assoc., Inc. v. Essex-Costello, Inc., 380
. Sia. POR C5. TR.. I9 FE) oc vies pew scacees 22
Goldfarb v. Virginia State Bar, 421 U.S. 773
Cae eae EAP ee Ce RRS 21, 23, 26
Income Realty and Mortgage, Inc. v. Denver
Board of Realtors, 578 F.2d 1326
ee eo. oe ee he SCL Ge 22
Knowles v. Tuscaloosa Board of Realty, Inc.,
[1975] Trade Cases (CCH) { 60,501 (N.D.
PS ae nse cence es Oba eas Comeen nee 22
Page
Mannix v. United States, 140 F.2d 250 (4th
Cur. 1966)... cccccen eee 'S,:.47,
Marston v. Ann Arbor Property Managers (Megt.)
Ass'n, 302 F. Supp. 1276 (E.D. Mich. 1969) ... 22
McLain v. Real Estate Board of New Orleans.
583 F.2d 1315 (Sth Cir. 1978), cert. granted,
99 S. Ct. 2159 (1979)
(No. 78-1301) 6i<<5.eee a. 21, 2m 2 ee 2 ae
Michelson v. United States, 335 U.S. 469
(1968) . .... ssh 14, 17, 18, 19, 20
Oertle v. United States, 370 F.2d 719 (10th
Cir. 1966) ...0..0cueus ape 15
Ogelsby and Barclift, Inc. v. Metro MLS, Inc.,
[1976] Trade Cases (CCH) 4 60,064 (E.D.
Va. 1976) .. ... 65056 onan 22
Sapp v. Jacobs, 547 F.2d 1170 (7th Cir.) rev’g
408 F. Supp. 119 GBD. OE OSes 22
United States v. Atlanta Real Estate Board,
[1972] Trade Cases (CCH) 4 73,825 (N.D.
Ga. 1971) J.05. knee cee eee 22
United States v. Bernard, 287 F.2d 715 (7th
Cw. 1961) ...ccnkeeuueue eee 15, 17
United States v. Brown, 353 F.2d 938 (6th
Cir. 1965) ...0000050005 us eee 15
Page
United States v. Donnelly, 179 F.2d 227 (7th
Ee ec con vba pees wane eee’ 15, 20
United States v. Fayette, 388 F.2d 728 (2d Cir.
as Aa eae kk tRNA SHANE Sew Oe ES 15
United States v. Fontenot, 483 F.2d 315 (Sth
ee ta gaa ge keke eg Nee ae et 15
United States v. Klass, 166 F.2d 373 (3rd Cir.
eS ee ere rer eee 15
United States v. Lachman, 469 F.2d 1043 (Ist
Te cea Naas ek we seen ee oes 15
United States v. Lewis, 482 F.2d 632 (D.C.
oka 6 aa baths O04 4 V8 we 15, 17, 20
United States v. Long Island Board of Realtors,
Inc., [1972] Trade Cases (CCH) 4 74,068
PE, ORFED cba ch eva ccevertcseseneccsone 22
United States v. National Ass’n of Real Estate
amen 399 U.S. 465 (ISSO)... ncn ncsccccccess 26
United States v. United States Gypsum Co.,
Ee CUD TED cic ccawercensepesescoraseyes 27
United States v. Wicoff, 187 F.2d 886 (7th Cir.
ce Peet eh eis een eaves esos ever eeee 15
United States v. Yellow Cab Co., 332 U.S. 218
ans o eee et aes e 5a 6b 21, 23, 24, 26
Villaroman v. United States, 184 F.2d 261
SM, BOUE ccc c cca ecescvssseyeescscrsere 15
vi
Page
Constitutional Provisions:
Tk eo Ae ee Oe ae rer re re ree 4
Statutes:
Re. Ft eS Dero rea se eye ere hoe py eer passim
eG aE gain koko eee RLS eee 2
Miscellaneous:
Brief for the United States as Amicus Curiae,
McLain v. Real Estate Board of New
Orleans, 583 F.2d 1315 (Sth Cir. 1978), cert.
granted, 99 S. Ct. 2159 (1979) (No. 78-1501) .....25
Manual on Uniform Jury Instructions in Federal
Criminal Cases: Seventh Circuit Judicial
Conference Committee on Jury Instructions
33 F.R.D. 523 (1963)
IN THE
Supreme Court of the United States
OCTOBER TERM, 1978
No.
BOGLEY, INC. AND ROBERT W. LEBLING,
Petitioners,
@ V.
UNITED STATES OF AMERICA,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
Bogley, Inc. and Robert W. Lebling pray that a writ
of certiorari issue to the United States Court of Appeals
for the Fourth Circuit, to review the judgment of that
court in United States v. Bogley, Inc., No. 78-5014 and
United States v. Robert W. Lebling, No. 78-5019 (April
19, 1979).!
'All of the co-defendants in this case, except Schick & Pepe Realty,
Inc. have petitioned this Court for a writ of certiorari, (John P. Foley,
Jr., et al), No. 78-1737 (May 18, 1979}: (Robert L. Gruen, Inc.), No. 78-
1838 (June &, 1979); (Shannon & Luchs Co.), No. 79-93 (July 19, 1979).
OPINIONS BELOW
The April 19, 1979 opinion of the court ot appeais has
not yet been officially reported, but it is unofficially
reported at [1979] Trade Cases 4 62.577. It is reprinted as
Appendix A. Infra, pp. la-29a.
The district court’s memorandum and order denying
petitioners’ motion to dismiss is not officially reported. but
is unofficially reported at £1977] Trade Cases € 61.678. It
is reprinted as Appendix B. infra, pp. 30a-4Sa.
JURISDICTION
The judgment of the court of appeals was entered on
April 19, 1979. On May 3, 1979, petitioners filed timely
petitions for rehearing and a suggestion for rehearing en
hanc regarding the first question presented below. A poll
was requested and a majority of its members voted to deny
the suggestion for rehearing en banc. On July 5, 1979, the
court entered an order denying Bogley, Inc.’s and Robert
W. Lebling’s petition for rehearing. (App. C, at 45a). This
Court has jurisdiction under 28 U.S.C. § 1254(1).
QUESTIONS PRESENTED
1. Whether the trial court erred in failing to instruct
the jury that evidence of good character, when considered
with all other evidence, may “alone” create a reasonable
doubt of the defendant's guilt.
ek eee "2
2. Whether there is Sherman Act jurisdiction over the
activities of local real estate brokers selling residential
property wholly within a single state. This question is
essentially the same as that pending before the Court in
McLain v. Real Estate Board of New Orleans, 583 F.2d
1315 (Sth Cir. 1978), cert. granted, 99 S. Ct. 2159 (1979)
(No. 78-1501).
3. Whether the trial court’s instructions to the jury on
the degree of criminal intent required for conviction of a
felony under § | of the Sherman Act satisfies the due
process clause of the fifth amendment to the Constitution.
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
IS U.S.C. § I:
Every contract, combination in the form of
trust or otherwise, or conspiracy, in restraint of
trade or commerce among the several States, or
with foreign nations, is declared to be illegal.
Every person who shall make any contract or
engage in any combination or conspiracy hereby
declared to be illegal shall be deemed guilty of a
felony, and, on conviction thereof, shall be
punished by fine not exceeding one million dollars
if a corporation, or, if any other person, one
hundred thousand dollars or by imprisonment not
exceeding three years. or by _ both said
punishments, in the discretion of the court.
U.S. CONST., Art. I, § 8. cl. 3:
[The Congress shall have Power] [t]o
regulate Commerce...among the several
States. ...
STATEMENT OF THE CASE
1. The Proceedings to Date
Petitioners Bogley, Inc., and its president Robert W.
Lebling were charged, along with five other corporations
engaged in the real estate brokerage business and two
individuals associated with real estate firms, with the
criminal offense of engaging in a combination and
conspiracy to fix and maintain real estate commissions in
Montgomery County, Maryland, in violation of Section |
of the Sherman Act, I5 U.S.C. § 1. The indictment was
returned by the grand jury on April 1, 1977. (The
indictment is reprinted as Appendix D, infra, pp. 47a-5S2a.)
Petitioners and their co-defendants moved to dismiss,
citing lack of federal jurisdiction. The district court denied
the motion, a trial by jury was held, and on the second day
of deliberations all defendants were found guilty.
Judgments of conviction and sentences were entered in
November 1977.
On appeal, the Fourth Circuit affirmed the
convictions of each of the nine individual and corporate
defendants. Petitioners herein filed a timely petition for
rehearing and a suggestion for rehearing en banc. On July
5, 1979, the court of appeals entered an order denying the
petition for rehearing; a majority of the judges polled
voted to deny a rehearing en banc. All but one of the co-
defendants whose convictions were affirmed under the
caption United States v. John P. Foley, Jr. have already
petitioned this Court for a writ of certiorari. (John P.
Foley, Jr.. et al.), No. 78-1737 (May 18, 1979): (Robert L.
Gruen Inc.), No. 78-1838 (June 8, 1979): (Shannon &
Luchs Co.), No. 79-93 (July 19, 1979). Defendant Schick &
Pepe Realty, Inc. has moved to stay the Fourth Circuit
mandate pending application to this Court for a writ of
certiorari.
2. The Relevant Evidence
The indictment alleged that, from September 1974 to
the return of the indictment, petitioners and _ their
co-defendants entered into a conspiracy to fix commission
rates at seven percent, one percent over the previously
prevailing rate of six percent. The evidence in the trial
below shows that defendant John P. Foley, Jr. hosted a
dinner at a local country club in Montgomery County,
Maryland on the evening of September 5, 1974. Following
the dinner, Mr. Foley announced to his guests that
business circumstances required his real estate brokerage
firm to raise its commission rate from six to seven percent.
The government’s theory in the trial was that, in a brief
discussion following this announcement, the six indicted
brokerage firms entered into a conspiracy to raise real
estate commissions in Montgomery County.
The evidence linking the petitioners, Bogley, Inc. and
its president, Robert W. Lebling, to the alleged conspiracy
is as follows. Mr. Lebling testified he attended the dinner
at the invitation of Mr. Foley, with no knowledge that
6
Foley would announce changes in his commission policy
to offset increased business costs. J.A. 1V-0801.2 He had
been inactive in Realty Board matters for a number of
years prior to 1974, and attended the dinner because he
thought Foley might need assistance as the young,
incoming president of the Montgomery County Board of
Realtors. J.A. I-O110; J.A. 111-0641; J.A. 1V-0801-0802.
Mr. Lebling was surprised by Foley’s after-dinner
announcement that Jack Foley Inc. had to raise its rates to
seven percent in order to survive. J.A. I1V-0804. When the
topic of commission rates was later discussed, William
Ellis, residential sales manager of Shannon & Luchs Co.,
asked Mr. Lebling what he was going to do. Petitioner
replied he liked the idea of seven percent and “might” raise
Bogley’s rates. J.A. 1I-0131; J.A. IV-0808. Another
government witness, Allyn Rickman, president of
defendant Schick & Pepe Realty, Inc., was sitting across
the table from Mr. Lebling and asked what Lebling was
going to do. Mr. Lebling testified that he told Rickman he
“kind of jiked seven percent.” Rickman recalled Lebling
saying he would raise Bogley’s rates. J.A. 11-0410, 0492.
Mr. Lebling maintained that he did not say he would raise
his rates and that Rickman’s recollection of his response
was mistaken. J.A. 1V-0808. Both government witnesses
denied that petitioner had entered into any agreement,
commitment or understanding with anyone at the dinner
to raise commission rates. J.A. 1-0223, 0224, 0230; J.A. II-
0493.
Three weeks later, on September 27, 1974, the Bogley
?“J.A. ____™ citations are to the parts of the trial record included
in the Joint Appendix filed with the Fourth Circuit on June 1, 1978.
Board of Directors reviewed the company’s financial
statements which showed profits down because of tight
mortgage money in Maryland and costs up due to
substantially increased telephone, utility and advertising
expenses. J.A. II1-0661-0663. The Board discussed
possibie courses to change the poor profit picture and
concluded that raising the commission rate to seven
percent was the only realistic alternative. A qualified
policy was adopted to raise the rate to seven percent, but
not to insist on such a rate if to do so would mean a lost
listing. J.A. 11-0664, 0669. During this financial review,
the Bogley Board of Directors was unaware of the country
club dinner; and the discussion at that dinner played no
part in the Board’s decision to raise commission rates. J.A.
111-0667. Lebling agreed with the recommendation to raise
the rates, but did not urge or push the directors to do so.
J.A. 111-0666. 0671. After the Board’s discussion Lebling
stated:
[w]e will try for seven; don’t lose a listing over
that. If someone wants six, you give it to them at
six. J.A. I11-0665, 0670.
The record indicates that Bogley, Inc. began soliciting
seven percent commissions on October I, 1974. J.A.
V-0959. Many of the Bogley listings obtained after
October |, however, were below the seven percent rate.
The government charts showing the movement of
commission rates for each of the defendant companies
from October 1974 to December 1975 demonstrate that
seven percent listings constituted a majority of the Bogley
listings in only three months, December 1974, January
1975 and March 1975. J.A. V-1055-1060. Gov't. Exh. No.
44.
A comparison of Government Exhibit 44 with
Government Exhibits 45 through 49 (J.A. V-1055-1066)
shows that Bogley’s actions after the country club dinner
were markedly different from those of the other
defendants:
e Government Exhibit 45 shows the majority of
Colquitt-Carruthers’ listings at seven percent in every
month trom October 1974 through December 1975.
e Government Exhibit 46 shows the majority of Jack
Folev Realty’s listings at seven percent in every month
from October 1974 through December 1975.
e Government Exhibit 47 shows the majority of Robert
L. Gruen’s listings at seven percent. from December
1974 through December 1975.
e Government Exhibit 48 shows the majority of Schick
& Pepe’s listings at seven percent from October 1974
through December 1975.
e Government Exhibit 49 shows the majority of
Shannon & Luchs’ listings at seven percent from
March 1975 through December 1975.
Government Exhibits 44 through 49 graphically
demonstrate that Bogley’s commission rates were not
parallel to the other defendants’ rates.
In the spring of 1975, Allyn Rickman chided one of
Bogley’s vice presidents, Robert Dorsey, for continuing to
take six percent listings. Dorsey told him, “we'll run our
company, and you run yours.” J.A. I1-0499. From the time
of the country club dinner on September 5, 1974, to the time
of the trial, petitioner Lebling did not discuss the subject of
commission rates with anyone who had attended the
dinner. J.A. IV-0812.
At trial, petitioner Lebling staunchly denied he had
entered into any agreement at the September 5 dinner. J.A.
1V-0813. He persisted in that denial up to the time of
sentencing, a time at which a false denial could not have
been expected to stand him in good stead:
I am 53 vears old, and to me, for those 53
years, the most important aspect of my life has
been built on a cornerstone of integrity, honesty
and reputation.
| would not testify to an untruth in a court of
law for anything in the world—-and I testified to
my innocence. | do agree that I attended the
dinner, | had no discussion before or after with
any member of the group that is involved in this
courtroom.
| again profess my innocence.
If | had been guilty of a crime, as I say, you
don’t know me, but I would not have hidden
behind a not guilty plea. J.A. 1V-0943-0944.
10
Mr. Lebling buttressed his denial with evidence of his
reputation for honesty and fair dealing gathered over thirty
years in the real estate business in Montgomery County. A
succession of distinguished citizens uniformly testified to
the petitioner’s good character and unblemished reputation
for truthfulness, honesty and integrity. These eight
outstanding witnesses included the senior officers of two
banks (J.A. III-0705, 0707; J.A. IV-0760-0762); two
Marvland State Court Judges (J.A. IV-0777-0780,
0781-0782); a Maryland State Senator (J.A. 1V-0784-
(785); a United States Commissioner for Maryland (J.A.
1V-0789-0791); a former United States Congressman (J.A.
1V-0792-0794); and a United States District Court Judge
(J.A. 1V-0787-0789).
3. The Jury Instructions
Relying on the evidence of good character introduced
on his behalf at trial, petitioner requested that the trial court
issue the traditional character evidence instruction:
The circumstances may be such that evidence of
good character may alone create a reasonable
doubt of the defendant’s guilt, since you may
determine it improbable that a person of good
character would commit the crime charged.
(Emphasis added.) J.A. 1-0069, (Lebling
Proposed Instruction No. 17).
The court refused to include the word “alone” and gave the
following instruction:
The circumstances may be such that evidence of
good character creates a reasonable doubt of the
TE
11
defendant’s guilt, since you may determine and
believe that it is improbable that a person of good
character committed the crime charged. J.A. I1V-
0919.
Appropriate objections were noted to the court’s failure to
render the traditional “alone” instruction. J.A. 1V-0921.
The Fourth Circuit affirmed the trial court on appeal,
holding that character evidence alone was “not so highly
probative that it must always be singled out as potentially
exculpatory standing ‘alone.’” Slip op. at 30.
On the question of intent, the trial court instructed the
jury that “[i]n order to prove the conspiracy charged in the
indictment, the proof need not show that the Defendants
acted willfully or with specific intent or bad purpose either
to disobey or disregard the law.” Tr. 2281.3 With respect
to the individual defendants, it further instructed that “{i]t
would make no difference that the defendants did not
believe they were violating the law, or that they did not
intend to commit the violation.” Tr. 2300. Petitioners
objected to these instructions and to the court’s failure to
include a charge requiring that specific intent be shown for
conviction. Tr. 2316, 2317-2319, 2322-2323. Three
proposed instructions on specific intent, modeled on
standard specific intent instructions used by federal courts,
were tendered on petitioners’ behalf. Tr. 2315-2317, J.A.
1V-0921-0923.
wie i ” citations refer to unprinted portions of the trial
transcript.
12
4. The Stated Basis for Sherman Act Jurisdiction
After denying defendants’ pretrial motion to dismiss
for lack of jurisdiction, the substantive interstate commerce
issue was submitted to the jury which found against the
defendants. The district court’s instruction on interstate
commerce began with the observation that “the term
‘interstate’ includes the movement of goods or money or
documents or people across state lines” (Tr. 2286) and the
following general prescription:
You may find that the restraint allegedly
occurred in interstate commerce if you are
satisfied beyond a reasonable doubt that to a
significant extent, the brokerage services afforded
and provided by the Defendants, whose price,
[sic] commission rate is alleged to be fixed, were
themselves performed in interstate commerce, or
that, while those services were performed entirely
within the State of Maryland, they had a
substantial effect on interstate commerce. /d.
The court then read to the jury four paragraphs of the
indictment in which the grand jury charged that (1) “a
substantial number” of persons who avail themselves of
defendants’ services are moving into or out of the State of
Maryland, (2) “several of the defendant... corporations
belong to nationwide referral services.” (3) defendants
advertise their listings of residential real estate in
“newspapers located outside of the State of Maryland”
with the purpose and effect of attracting buyers from
outside the State and (4) a “substantial amount of the
funds” used to finance defendants’ sales of homes in
13
Maryland, some of which are guaranteed under federal
programs, move into Maryland from other states. Tr.
2287-2290. The substantive portion of the court's
instruction on interstate commerce then concluded with
the following charge (Tr. 2291), to which defendants
excepted (Tr. 2318-2319, 2322; J.A. 1V-924-925, 927):
I charge you that if you should find from the
evidence or find that the evidence establishes
each of the allegations that I have just read to
you beyond a reasonable doubt, then the
requirement of showing interstate commerce has
been satisfied.
| further instruct you that should you
conclude that the evidence does not establish all
of these allegations, again which I have just read
to you, but that it does establish some of them
beyond a reasonable doubt, then it is a question
of fact for you to decide whether a substantial
effect on interstate commerce has been proven.
having in mind that the concept of interstate
commerce is not a technical one, but a practical
one to be judged by you on the basis of all of the
evidence you have heard concerning the nature of
the brokerage services of the Defendants and
how they carried on their respective businesses.
The court of appeals assumed the “correctness” of
these instructions, slip op. at 5, and limited its holding to
the question whether the evidence was sufficient to
“support the implicit jury finding on this issue.” /d. As to
this question, the court concluded that the evidence
14
“adequately supported the jury's finding of a sufficient
nexus between the brokers’ activities and interstate
commerce. and of a substantial effect of the restraint
charged upon that commerce.” /d. at 12.
REASONS FOR GRANTING THE WRIT
1. The Decision Below Conflicts with the
Decisions of Other Courts of Appeals
Concerning the Jury's Use of Good Character
Evidence
This petition frames precisely an important issue of
federal criminal! !aw. The question presented is whether a
federal defendant is entitled to the traditional jury
instruction that proof of good character “alone” can create
a reasonable doubt of guilt. See, e.g., Manual on Uniform
Jury Instructions in Federal Criminal Cases: Seventh
Circuit Judicial Conference Committee on Jury
Instructions. 33 F.R.D. 523, 583 (1963). This fundamental
principle of defense, first enunciated by this Court in
Edgington v. United States, 164 U.S. 361, 366 (1896), was
reaffirmed in Michelson v. United States, 335 U.S. 469,
476 (1948). where the court stated:
[good character] testimony alone, in some
circumstances, may be enough to raise a
reasonable doubt of guilt and...in the federal
courts a jury in a proper case should be so
instructed. (Emphasis added).
While Michelson’s import is clear, the opinion failed
FT RIE ME PRA TO
15
to define those “circumstances” in which the “alone”
charge must be given. In the attempt to construe that
decision, an irreconcilable conflict has developed among
the circuit courts of appeals. The circuit courts disagree
as to whether the “alone” instruction is ever mandatory
and, if so, under what circumstances it must be tendered.
The District of Columbia and the Seventh Circuits
consider the instruction essential whenever evidence of
good character is introduced. United States v. Lewis, 482
F.2d 632, 637 (D.C. Cir. 1973); United States vy.
Donnelly, 179 F.2d 227, 233 (7th Cir. 1950): see also
United States v. Bernard, 287 F.2d 715, 723 (7th Cir.
1961) (approving the “alone” instruction). The failure to
give the “alone” charge under such circumstances
constitutes reversible error. Villaroman v. United States.
184 F.2d 261, 263 (D.C. Cir. 1950); United States v.
Wicoff, 187 F.2d 886, 890 (7th Cir. 1951); United States
v. Donnelly, supra. The Tenth Circuit requires the
instruction whenever good character is the only defense
raised, and possibly in other circumstances. See, e.g.,
Oertle v. United States, 370 F.2d 719, 726-27 (10th Cir.
1966). The other circuits do not require the inclusion of
the word “alone,” absent special circumstances. See, e.g.,
United States v. Fontenot, 483 F.2d 315, 323 (Sth Cir.
1973); United States v. Lachman, 469 F.2d 1043, 1046 &
n.3 (Ist Cir. 1972); United States v. Favette, 388 F.2d
728. 737 (2d Cir. 1968): United States v. Brown, 353 F.2d
938, 939-40 (6th Cir. 1965); Carbo v. United States, 314
F.2d 718, 746-47 (9th Cir. 1963); Black v. United States.
309 F.2d 331, 343-44 (8th Cir. 1962); United States v.
Klass, 166 F.2d 373, 378-80 (3d Cir. 1948); Mannix v.
United States, 140 F.2d 250, 253 (4th Cir. 1944),
16
Whether proof of good character a/one constitutes a
complete defense is crucial to every criminal defendant,
particularly in the burgeoning area of “white collar” crime,
where character evidence often plays a critical role. The
split of authority in the circuit courts highlights the
importance of this issue. Yet, the trial court in this case
belittled petitioner’s objection to the exclusion of the word
“alone” on grounds that the defense was quibbling over the
omission of one word. J.A. 1V-0921. The opinion of the
court of appeais also suggests that the word “alone” is not
to be considered significant to the instruction:
We need not hold that an ‘alone’ instruction
could in no circumstances be a matter of right to
find it not required in this case. Here defendants
did not rely on character evidence alone for their
defense. The instructions properly allowed the
jury to consider it along with other evidence, and
clearly did not suggest that the jury might not
find in the character evidence ‘alone’ a basis for
reasonable doubt. Slip op. at 30.
But quite the contrary is true. Leaving out the word
“alone” obscures from the jury the fact that good character
evidence, in and of itself. may generate a reasonable doubt
of the defendant’s guilt. When dealing with the criminal
law and a man’s iiberty, ambiguous and imprecise
instructions are inexcusable. A jury must fully
comprehend the letter of the law before it can reasonably
be expected to apply it accurately. The omission of the
word “alone” from a jury charge significantly weakens the
strength of the good character defense. The District of
Columbia and Seventh Circuit Courts of Appeals
ee |
17
unequivocally agree. See, United States v. Lewis, supra;
United States v. Bernard, supra.
The evidence of good character was critically
important in the instant case. The cornerstones of the
petitioner’s defense were his consistent denial that he had
entered into any agreement to raise real estate commission
rates and his unimpeached reputation for truthfulness,
honesty and fair dealing gathered over thirty years in the
real estate business. The defense presented an array of
distinguished citizens who testified, without reserve, to the
petitioner's unblemished reputation for truthfulness,
honesty and integrity in the community. These included
the senior officers of two banks; two Maryland State
Court Judges: a United States Commissioner for
Maryland; a Maryland State Senator; a former United
States Congressman; and a United States District Court
Judge. In the circumstances of this case, where questions
of intent and motivation were so critical and where all
substantive witnesses, including those called by the
government, testified that the petitioner had not entered
intO an agreement to raise commission rates, petitioner’s
character and reputation for truthfulness, honesty and
integrity were of the utmost importance.
Nevertheless, the Fourth Circuit Court of Appeals
concluded that this was not the “proper case” envisioned
by this Court in Michelson, when it stated that good
character “alone” may raise a reasonable doubt “in a
proper case.” Michelson v. United States, 335 U.S. 469,
476 (1948). Denying that Michelson “foreclosed” its
course, the court of appeals instead followed a thirty-five
year old Fourth Circuit decision, Mannix v. United States,
18
140 F.2d 250 (4th Cir. 1944), which predates this Court's
decision in Michelson. Slip op. at 30. In Mannix, the
Fourth Circuit refused to give the good character “alone”
instruction on grounds that
to have given the charge as requested would have
unduly stressed the evidence of good reputation
and held it as a feature of the case standing alone
and not to be considered in conjunction with
other matters. /d. at 253.
This Court expressly repudiated such reasoning in
Michelson. The central point of that decision was that
evidence of good reputation, “standing alone”, could raise
a reasonable doubt, regardless of the other matters raised
at trial. Michelson, supra, 335 U.S. at 476. Moreover, the
Mannix court’s second ground for refusing the above
instruction, that the jury would fail to consider the
evidence of good reputation “in conjunction with other
matters,” was not a problem in this case. Both the
instruction proposed by petitioner and the actual
instruction rendered by the trial court charged the jury to
consider the good character evidence “along with all the
other evidence in the case.” J.A. 1-0069, Tr. 2301 (Lebling
Proposed Instruction No. !7).
The court of appeals distinguished Michelson on
grounds that the petitioner did not rely on character -
evidence alone for his defense. The court stated:
We need not hold that an “alone” instruction
could in no circumstances be a matter of right to
find it not required in this case. Here defendants
19
did not rely on character evidence alone for their
defense. Slip op. at 30.
But, petitioner’s reliance on additional exculpatory
evidence is immaterial to the question of how much weight
should attach to evidence of good character. The fact that
a defendant denies his guilt and presents evidence in
support of that denial does not diminish the probative
value of his reputation for truthfulness and integrity
which, in and of itself, may raise a reasonable doubt. The
opposite is true. Evidence of truthfulness and integrity
indeed gives greater weight to the veracity of the accused’s
denial of guilt. The denial, bolstered by evidence of
truthfulness, is but a single defense.
Moreover, the principle advanced by this Court in
Michelson and Edgington, supra, is rendered meaningless
if the inclusion. of the word “alone” in the trial court’s
charge is mandatory only in those instances where
evidence of good character is the sole defense. In such
circumstances, the word “alone” would be entirely
unnecessary, as good character would be the only possible
defense evidence available to the jury to raise a reasonable
doubt. To give the “alone” instruction only in those
instances where good character is the sole defense unjustly
and unnecessarily penalizes the defendant with additional
evidence on his side. Neither fairness, reason, nor
precedent lend sustenance to such a rule.
The granting of this writ will afford this Court an
opportunity to clarify its holding in Michelson and to
bring long-needed uniformity to this area of the law. Had
the instant petitioner been tried before a jury in either the
District of Columbia Circuit or the Seventh Circuit, instead
of the Fourth, he would certainly have been entitled to the
Michelson instruction. For example, nearly identical
circumstances came before the Seventh Circuit in United
States v. Donnelly, 179 F.2d 227 (7th Cir. 1950), where
“five highly respectable witnesses” testified to a robbery
defendant's reputation for “truth, veracity and as a law
abiding citizen.” /d. at 233. As in the instant case, the
defense relied principally upon the accused’s denial of
participation and his good reputation in the community to
raise a reasonable doubt of guilt. Under the authority of
Michelson and Edgington, the Seventh Circuit ruled that it
was reversible error for the trial judge to have refused the
instruction requested by the defendant that “character
evidence may in itself be sufficient to create in the minds
of the jury a reasonable doubt as to the guilt of the
defendant” (Emphasis added.) /d.; see also, United States
v. Lewis, 482 F.2d 632. 637 (D.C. Cir. 1973). This
petitioner is entitled to no less.
Despite the conflict among the circuits on this issue, it
is unlikely that the precise factual circumstances and
decisional posture presented by this case will come before
this Court again in such well-defined form. In light of the
contradictory interpretations of this Court’s holdings in
Michelson and Edgington, the irreconcilable conflict
among the circuit courts of appeals, the significant impact
of the trial court’s instruction on the jury’s determination
of the petitioners’ fate, as well as the overall importance
of this issue to federal criminal defendants nationwide,
the question presented warrants review by this Court.
DR OA Ae i Ee Gr ot 4 4%
OG RC ht aes i bh: Rat ae re toe
Il. The Decision Below Conflicts With the
Decisions of Other Courts of Appeals
Concerning the Scope of Section 1 of the
Sherman Act As It Applies to the Activities of
Real Estate Brokers
Petitioners adopt the reasons set forth in the
petitioners’ application for a writ of certiorari No. 78-1737
(pp. 6-13), supplemented as follows.
This petition raises the important question whether
Congress’ power under Section | of the Sherman Act
extends to the activities of local realtors of residential
property. The rulings of the courts of appeals are in
conflict on this issue. This Court has already granted
certiorari in a case similar to that presented today. McLain
v. Real Estate Board of New Orleans, 583 F.2d 1315 (Sth
Cir. 1978), cert. granted, 99 S. Ct. 2159 (1979) (No.
78-1501).
For almost a decade, judicial controversy concerning
the scope of federal jurisdiction under the Sherman Act
has centered on the relationship of real estate brokerage
activities to interstate commerce. Despite this Court’s
articulation of a test of interstate commerce in United
States v. Yellow Cab Co., 332 U.S. 218 (1947), which was
reconstrued in Goldfarb v. Virginia State Bar, 421 U.S.
773 (1975), the question whether local real estate
transactions are subject to the Sherman Act continues to
perplex and divide the federal courts. The conflict
concerning the existence of subject matter jurisdiction is
ae
reflected in the following division of antitrust cases, all of
which involved the activities of realtors:
(1) Jurisdiction found: Sapp v. Jacobs, 547 F.2d 1170
(7th Cir.), rev'g 408 F. Supp. 119 (S.D. Ill. 1977); Ogelshy
and Barclift, Inc. v. Metro MLS, Inc., [1976] Trade Cases
(CCH) 4 61.064 (E.D. Va. 1976); Knowles v. Tuscaloosa
Board of Realty, Inc., [1975] Trade Cases(CCH) 4% 60,501
(N.D. Ala. 1975); Gateway Assoc., Inc. v. Essex-Costello,
Inc., 380 F. Supp. 1089 (N.D. Ill. 1974); United States v.
Long Island Board of Realtors, Inc., [1972] Trade Cases
(CCH) 4 74,068 (E.D.N.Y. 1972); United States v. Atlanta
Real Estate Board, [1972] Trade Cases (CCH) 4 73,825
(N.D. Ga. 1971).
(2) Jurisdiction denied: McLain v. Real Estate Board
of New Orleans, 583 F.2d 1315 (Sth Cir. 1978), cert.
granted, 99 S. Ct. 2159 (1979): Income Realty and
Mortgage, Inc. v. Denver Board of Realtors, 578 F.2d
1326 (10th Cir. 1978); Brvan vy. Stillwater Board of
Realtors, 578 F.2d 1319 (10th Cir. 1977); Diversified
Brokerage Services, Inc. v. Greater Des Moines Board of
Realtors, 521 F.2d 1343 (8th Cir. 1975); Cotillion Club,
Inc. v. Detroit Real Estate Board, 303 F. Supp. 850 (E.D.
Mich. 1964); Marston vy. Ann Arbor Property Managers
(Met.) Ass'n, 302 F. Supp. 1276 (E.D. Mich. 1969).
The court of appeals declined to undertake “detailed
efforts to reconcile the disparate results in particular real
estate brokerage cases” because it found them to be in
“hopeless disarray.” Slip op. at 7. The court opined that
“the guiding legal principles must be sought at a more
general level than any keyed to the particular nature of
the real estate brokerage business.” /d.
————Oeeee
23
Petitioners respectfully suggest that this Court
undertake the task which the court below avoided. A
“reconciliation” of the disparate results of these particular
cases is desperately needed. Moreover, a pronouncement
of “guiding legal principles” which can be keyed to the
particular nature of the real estate brokerage business is
essential to bring harmony to this area of the law. The
problem is recurrent. The past history of conflicting
precedent indicates that the question of jurisdiction will
not be resolved by future decisions in the courts of appeals.
Yet, as the court below recognized, the existence of a
sufficient relationship to interstate commerce is “both a
critical jurisdictional fact and an element of the
substantive offense charged under 15 U.S.C. § 1.” Slip op.
at 5, n. 2. Until the question of jurisdiction is resolved, the
administration of the antitrust laws will continue to be
uncertain, inconsistent and unfair.
The questions presented by the instant case are
particularly pertinent in light of the Court’s recent grant of
certiorari in McLain v. Real Estate Board of New Orleans,
583 F.2d 1315 (Sth Cir. 1978), cert. granted, 99 S. Ct.
2159 (1979) (No. 78-1501). In McLain, the Fifth Circuit
rejected the proposition that the application of the
Goldfarb test compelled a finding that local real estate
brokers’ functions were an “integral” or “necessary” link in
the interstate aspects of real estate transactions. /d. at
1321-22. Distinguishing Goldfarb, the Fifth Circuit
concluded that the brokerage function occupied no more
than an “incidental role” in the overall real estate
transaction and, therefore, was beyond the reach of the
Sherman Act under the authority of United States v.
Yellow Cab Co., 332 U.S. 218 (1947). /d. at 1322. Without
24
discussing Yellow Cab, the Fourth Circuit concluded just
the opposite; that petitioner’s brokerage activities, closely
analogous to those considered in McLain. were an
“integral,” indeed “dominant” factor in the interstate
aspects of real estate sales. Slip op. at 12.
The circuits are squarely in conflict on this issue.
There is ¢ -agreement as to the existence of any nexus
between the brokerage function and the interstate aspects
of real estate sales. There is discord as to the proper test of
interstate commerce to apply to brokerage activities. Even
where the same legal analysis is applied, conflicting
evaluations of nearly identical facts result in diametrically
opposed judgments as to the existence of an interstate
commerce nexus. For example, the court of appeals in the
instant case held that the defendant real estate brokers
played an “integral part” in attracting interstate funding
. and mortgage loan guarantees. Slip op. at 12. The court of
appeals in McLain disagreed. It affirmed the district
court’s finding that, while attracting such funding, brokers
“occupy no more than an incidental, informational role” in
these interstate financing transactions. McLain, supra, 583
F.2d at 1322. Such contradictory findings typify the
discord which has marked decisions on this question for
almost a decade.
The granting of this writ will enable this Court more
fully and fairly to resolve the analogous issues it will
confront when it reviews the Fifth Circuit’s decision in
McLain, supra. Like the McLain case. the instant case
presents the question as a question of law that is clearly
defined by the record below. The indictment precisely sets
forth the facts upon which the district court ruled that
25
federal jurisdiction attached. Tr. 2291; App. D, at 52a.
Moreover, the slightly different fact situation and analysis
presented by the case at bar, when juxtaxposed with that
of McLain, will help focus inquiry on those factors
essential to a broad resolution of this vexing issue.
The importance of contrasting these two cases was
recognized by the Fifth Circuit when it decided McLain,
supra. In finding a lack of federal jurisdiction over the
activities of real estate brokers in New Orleans, the court
of appeals, citing the instant case, hypothesized that
additional allegations that the defendants “advertised in
interstate newspapers” or “sold realty to a substantial
number of purchasers situated out-of-state” might bring
the defendants within the bounds of the Sherman Act.
McLain, supra, 583 F.2d at 1319. The Fifth Circuit
declined to express any view on this matter. /d. But
factors such as these do recur time and again in the
antitrust cases involving realtors and ought to be before
this Court when it renders a decision in McLain.
If there is anything distinguishing the instant case
from that before the Court in McLain, it is the fact that
Montgomery County, Maryland, is proximate to several
states. That particular realtors do business near a state
border, however, should not affect the determination
whether local realtors’ activities are subject to the Sherman
Act.4 As the Fifth Circuit concluded in McLain, the sale of
4 In its amicus curiae brief in support of the petition in McLain, the
United States has similarly argued that, if interstate commerce is
involved in the real estate brokerage business, then Congress possesses a
commerce power over the entire industry and not just over regional
segments of that industry. See Brief for the United States as Amicus
Curiae at 5. McLain v. Real Estate Board of New Orleans, 583 F.2d
1315 (Sth Cir. 1978), cert. granted, 99 S. Ct. 2159 (1979) (No. 78-1501).
26
residential realty is “entirely local in character.” McLain,
supra, 583 F.2d at 1319. “Real property.” the court stated,
“is itself the quintessential local product.” /d. This is true
whether the region considered lies near the confluence of
several states like Montgomery County, Maryland;
Kansas City. Missouri: Cincinnati, Ohio; El Paso, Texas:
or New York City; or is centrally located like Des Moines,
lowa, or Anchorage. Alaska. For example. in United
States v. National Ass'n of Real Estate Boards, 339 U.S.
485. 492 (1950). Mr. Justice Douglas, speaking tor a
unanimous Court. noted specifically that no interstate
cominerce was involved in the alleged fixing of real estate
commissions by about 250 realtors operating within the
District of Columbia, While no specific factual findings
were made, common sense advises that the existence of
interstate advertising and out-of-state financing in that
case could hardly have differed from that relied upon by
the court below to support its finding of federal
jurisdiction in the instant case. Real estate brokers nation-
wide utilize the facilities of multi-state listing services to
attract out-of-state buyers. Financing for brokered
purchases commonly comes from out-of-state. The
significance of factors such as these to the determination
whether real estate brokerage is subject to the Sherman
Act must be decided. both in order to settle the conflict in
the courts and to ensure the fair and uniform
administration of the antitrust laws.
In summary, conflicting constructions of this Court’s
decisions in Goldfarb and Yellow Cab indicate the need
for a final determination whether there is_ federal
jurisdiction over real estate brokers whose sales are totally
within the boundaries of one state. Petitioners urge this
27
Court to grant the writ sought to settle this difficult
question once and for all.
III. The Decision Below’ Raises Significant
Questions Concerning the Application of This
Court’s Holding in United States v. United
States Gypsum Co.
Petitioners adopt the reasons set forth in the
petitioners’ application for a writ of certiorari No. 78-1737
(pp. 13-18) as supplemented by petitioners in No. 78-1838
(pp. 5-8).
28
CONCLUSION
For all of the above reasons, petitioners respectfully
request that a writ of certiorari should issue to review the
judgment and opinion of the United States Court of
Appeals for the Fourth Circuit.
Respectfully submitted,
RAYMOND W. BERGAN
ROBERT P. WATKINS
WILLIAMS & CONNOLLY
Hill Building
839 17th Street, N.W.
Washington, D.C. 20006
(202) 331-5000
Counsel For Petitioners
August, 1979
APPENDIX A
APPENDIX A
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 78-5013
Unirep States or America, Appellee,
versus
Joun P. Fouey, Jr., AND
Jack Fo.ey Reatry, Inc., Appellants.
No. 78-5014
Unitep States or America, Appellee,
versus
Boauey, Inc., Appellant.
No. 7&-5015
Unitep States or America, Appellee,
versus
CoLquitt-CaRRuTHERS, INc.,
AND JOHN T. CarruTHeErs, JR., Appellants.
No. 78-5016
Unitep States or America, Appellee,
versus
Rosert L. Gruen, Inc., Appellant.
No. 78-5017
Unitep States or America, Appellee,
versus
Scuick & Pepe Reatry, Inc., Appellant.
No. 78-5018
Unitep States oF America, dA ppellee,
versus |
SuHannon & Lucus Co., Appellant.
No. 78-5019
Unitep States oF America, Appellee,
versus
Rosert W. Lesuine, Appellant.
Appeal from the United States District Court for the District of
Maryland. at Baltimore. C. Stanley Blair, District Judge.
Argued October 5, 1978. Decided April 19, 1979
Before Winter, Circuit Judge, Cowen *, Senior Judge and
Puiuips, Circuit Judge.
Richard A. Hibey (Robert J. McManus, Surrey, Karaski
and Morse; William W. Cahill, Jr., Weinberg and Green on
brief) for Appellants Colquitt-Carruthers, Inc. and John T.
Carruthers, Jr.; James P. Mercurio (Salvatore A. Romano,
Lewis E. Leibowitz, Arent, Fox, Kintner, Plotkin & Kahn
on brief) for Appellant Shannon & Luchs Company; John
Henry Lewin, Jr. (James K. Archibald, Venable, Baetjer
and Howard on brief) for Appellants Jack Foley Realty,
Ine. and John P. Foley, Jr.; Raymond W. Bergan (Robert
P. Watkins, Williams and Connolly on brief) for Appellants
Bogley, Inc. and Robert W. Lebling; William O. Bittman
(George R. Clark, Pierson, Ball and Dowd on brief) for
Appellant Robert L. Gruen, Inc.; Catherine G. O’Sullivan,
Department of Justice (John H. Shenefield, Assistant At-
torney General, Robert B. Nicholson, Charles S. Stark, Gary
* Honorable Wilson Cowen, Senior Judge, United States Court
of Claims, sitting by designation.
3a
L. Halling, Department of Justice on brief) for United
States of America.
Puiuuirs, Circuit Judge:
Six corporate and three individual defendants appeal
their felony convictions for conspiracy to fix real estate
commissions in Montgomery County, Maryland in violation
of § 1 of the Sherman Act, 15 U.S.C. § 1. Finding no error,
we affirm.
During the critical period in question all the defendants
were realtors engaged as competitors in the business of
‘‘reselling’’ houses. When a person desired to sell his
house in Montgomery County he listed it with a realtor,
provided he did not decide to attempt to sell it directly.
The listing provided that when the house was sold a fixed
percentage of the sales price would be paid as a commission
to the realtor. This commission was divided among the
firms involved in the sale, a portion going to the firm that
obtained the listing, another portion to the firm that pro-
duced the buyer. To facilitate the operation of this shared
commission arrangement, each of the defendants belonged
to the Montgomery County Board of Realtors, a trade
association that operated a multiple listing service. In the
ease of almost all houses listed with a member realtor,
the member sent a card to the listing service containing
a picture of the house and certain pertinent information,
including the commission. Thus all member realtors had
available a fairly comprehensive list of houses on the
market in the county.
During the summer of 1974, and for some time before,
the prevailing commission rate in Montgomery County
was six percent of the sales price. A few houses were listed
at seven percent, but additional services were apparently
provided for the higher rate. At this time the real estate
brokerage business in the county was in difficult straits.
4a
While the number of houses listed with brokers for resale
had continued to rise as it had for several previous years,
the number of sales had fallen, mortgage funds were in
short supply and increasing costs of stationery, telephone
service, advertising and gasoline had reduced the profit
margin.
On September 5, 1974, defendant John Foley, the presi-
dent of defendant Jack Foley Realty, Inc., hosted a dinner
party at the Congressional Country Club in Bethesda,
Maryland. The guests were nine of the leading realtors
in Montgomery County, including each of the three indi-
vidual defendants and one representative of each of the
corporate defendants in this appeal.’ Following the meal,
Foley arose and, after making some other remarks, an-
nounced that his firm was raising its commission rate from
six percent to seven percent. A discussion about the rate
change ensued. Within the following months each of the
corporate defendants substantially adopted a seven percent
commission rate.
A United States grand jury for the district of Maryland
indicted the nine defendants on April 1, 1977. Following a
number of preliminary motions, the only one of which is
of interest to this appeal being the denial of a motion to
dismiss for lack of subject matter jurisdiction, a nine day
jury trial was held in September 1977 before Judge Stanley
Blair. All defendants were found guilty and this appeal
ensued.
Several issues are presented by the appeals. Part I of
the opinion addresses the contention that the district court
1 Defendant Colquitt-Carruthers, Inc. was represented by de-
fendant John T. Carruthers, Jr.; defendant Shannon & Luchs Co.
was represented by William Ellis; defendant Schick & Pepe
Realty, Inc. was represented by Allyn Rickman; defendant Bog-
ley, Inc. was represented by defendant Robert W. Lebling; and
defendant Robert L. Gruen, Inc. was represented by Robert L.
Gruen.
Sa
lacked subject matter jurisdiction because of an insufficient
nexus between defendants’ conduct and interstate com-
merce. Part II evaluates the sufficiency of the evidence
that a conspiracy was formed and that each defendant
participated in it. Part III deals with several objections
to the jury instructions. Finally, Part IV discusses a
number of evidentiary issues. Additional facts will be de-
veloped as pertinent to the several issues.
I. INTERSTATE COMMERCE
The defendants contend that their activities were not
proven to be sufficiently related to interstate commerce
to support their convictions under 15 U.S.C. § 1. Our review
is to determine whether, within applicable principles of
law, the evidence was sufficient, when viewed in the light
most favorable to the Government, United States v. Sher-
man, 421 F.2d 198, 199 (4th Cir. 1970) (per curiam), to
support the jury’s finding on this issue.’
? A sufficient relationship to interstate commerce is both a criti-
cal jurisdictional fact and an element of the substantive offense
charged under 15 U.S.C. § 1. Facts sufficient for the one are suf-
ficient for the other, and vice-versa. Existence of the jurisdic-
tional fact may be attacked independently, or in conjunction with
the defense on the merits. Cf. McLain v. Real Estate Board of
New Orleans, 583 F.2d 1315, 1323-24 (5th Cir. 1978) (discussing
comparable procedures in civil actions). In this case, all the de-
fendants but Schick & Pepe Realty, Inc. made a jurisdictional
attack by pre-trial motion to dismiss the indictments under Fed.
R. Crim. P. 12. The district court denied this motion, assessing
the facts as charged in the indictments. When the case then pro-
ceeded to trial, the substantive interstate commerce issue was sub-
mitted to the jury and found against the defendants. Defendants’
attack is therefore upon the jury’s finding on this issue as it
was necessarily subsumed within the general verdict of guilty.
No challenge having been made to the district court’s instruction
on the issue, we assume its correctness. The only remaining basis
for challenge is therefore to the sufficiency of the evidence to sup-
port the implicit jury finding on this issue, and it is this we re-
6a
We start with the applicable legal principles. Jurisdic-
tional reach of the statute is coterminous with Congress’
power to regulate interstate commerce. Gulf Ou Corp. v.
Copp Paving Co., 419 U.S. 186, 194 (1974); United States
v. South-Eastern Underwriters Association, 322 U.S. 533,
558 & n.46 (1944); Greenville Publishing Co. v. Dady Re-
flector, Inc., 496 F.2d 391, 395 (4th Cir. 1974). Where con-
spiracy is charged, it must be shown that it has a sufficient
nexus with interstate commerce, but this does not require
proof that each charged defendant’s activities had the
requisite effect. E.g., United States v. Wilshire Ou Co.,
427 F.2d 969, 974 (10th Cir. 1970). The existence of a
sufficient nexus is to be determined on a practical rather
than theoretical basis. E.g., Swift & Co. v. United States,
196 U.S. 375, 398 (1905). This means that the determination
involves not only raw fact finding but evaluation of the
facts by the trier of fact. Accordingly, the results in par-
ticular cases are likely to have turned, quite appropriately,
on their peculiar facts rather than on legal standards gen-
erally applicable to particular categories of business, pro-
fessional, or trade activities. Thus, the cases that have
considered the relationship of particular real estate broker-
age activities to commerce are in hopeless disarray so far
as their raw results are concerned. See McLain v. Real
Estate Board of New Orleans, Inc., 583 F.2d 1315, 1319-20
(5th Cir. 1978) (collecting cases). This means that the
guiding legal principles must be sought at a more general
level than any keyed to the particular nature of the real
estate brokerage business, and that detailed efforts to re-
concile the disparate results in particular real estate bro-
kerage cases are likely to be bootless.
view. Because there is no sugegstion of variance between indict-
ment and proof, review of the sufficiency of the evidence on the
substantive issue necessarily reviews the sufficiency of the facts
as found to support the court’s jurisdiction. The jury’s findings
on the evidence thus in effect supersede the district court’s juris-
dictional finding on raw factual averments in the indictments.
7a
The traditional mode of analysis seeks the requisite
nexus along one or both of two general lines of inquiry
unrelated in terms to particular categories of commercial
activities. One inquires whether the activities alleged to
be under illegal restraint lie directly in the flow of inter-
state commerce; the other, whether though intrastate in
nature, they nevertheless have so great an impact on inter-
state commerce that they substantially affect it. See, e.g.,
Greenville Publishing Co. v. Daily Reflector, Inc., 496 F.2d
at 395 (articulating and discussing the two tests). Ob-
viously these are not bright line, mutually exclusive tests
and it is quite possible to analyze a particular pattern of
activities without express reliance upon either.’ Each, after
all, strives for answers to the more general question,
whether the activities under alleged restraint have a sufhi-
cient nexus with interstate commerce. Particular activities
may fall within both patterns. Activities directly in the
flow of interstate commerce need have but minimal impact
upon the commerce to ‘‘affect’’ it, since by definition they
are a very part of the stream. See, e.g., Swift € Co. v.
United States, 196 U.S. at 398-99. Activities not in the
flow of interstate commerce, i.c., intrastate in basic nature,
may only be found to affect interstate commerce if their
impact upon it is substantial. Compare, c.g., Mandeville
Island Farms, Inc. v. American Crystal Sugar Co., 334
U.S. 219 (1948) (substantial), with, e.g., Apex Hosiery Co.
*It may be questioned whether, in any event, these two ‘‘tests’’
will withstand logical scrutiny as discretely different frameworks
for close legal analysis. Courts quite frequently conduct searching
interstate commerce relationship analyses without express reliance
upon them. See, e.g., Goldfarb v. Virginia State Bar, 421 U.S.
773 (1975). Significantly on the point, while both sides and the
district judge in this case assumed that Goldfarb was a ‘‘local
but affecting’’ case, a distifguished constitutional scholar in a
recent analysis assumed without elaboration that it was an ‘‘in-
commerce’’ type. Strong, Court vs. Constitution: Disparate Dis-
tortions of the Indirect Limitations in the American Constitutional
Framework, 54 N.C.L. Rev. 125, 137-40 (1976).
Sa
v. Leader, 310 U.S. 469 (1940) (unsubstantial). Under
either test and in all events, the impact must be upon an
identifiable stream of ‘‘commerce,’’ and not simply upon
a particular business that may be engaged in interstate
commerce. See McLain v. Real Estate Board of New Or-
leans, 583 F.2d at 1318-19.
In Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975),
on facts closely analogous in many respects to those pre-
sented in the instant case, the Supreme Court articulated
a test of interstate commerce relationship in which these
two traditional tests may be thought to have coalesced,
though neither was drawn upon in express terms. Because
both sides on this appeal and the district judge in his
rulings below perceived—as we do—the critical relevance
of Goldfarb to this case, the test there stated bears em-
phasis here before the evidence is analyzed. In finding a
sufficient nexus between the title search activities of certain
Virginia lawyers and an identifiable stream of interstate
real estate financing transactions, the Goldfarb Court
stated the test simply as ‘‘whether as a matter of law or
practical necessity [the] services [were] an integral part
of an interstate transaction.’’ Jd. at 785. Certain critical
aspects of the context in wnich the lawyers were observing
a minimum fee schedule for their services were emphasized
by the Court. There were that lending institutions routinely
required title insurance as an incident to making mortgage
loans in the Virginia County in question; that this in turn
required title examinations; that state regulatory authority
required that this service be performed only by licensed
lawyers; that the lawyers thus favored were observing a
minimum fee schedule promulgated by their professional
association; and that a considerable volume of the loans
involved were funded by out-of-state lending institutions,
insured by out-of-state insurance companies, and guaran-
teed by out-of-state federal agencies. From this combina-
tion of factors, the Court concluded that the title examina-
Qa
tion service for which fixed fees were being charged was
‘‘an integral part of an interstate transaction,’’ and that
‘*[gjiven the substantial volume of commerce involved,
and the inseparability of this particular legal service from
the interstate aspects of real estate transactions .. . inter-
state commerce has been substantially affected. Jd. at 785
(footnote omitted).
In this case, as in Goldfarb, the evidence was quite suffi-
cient to permit the trier of fact to determine that the acti-
vities in question, here those of real estate brokers, were
as a matter of practical necessity an integral part of an
identifiable stream of interstate real estate transactions.
The charged conspirators here were shown to be engaged
in a business that consisted essentially of bringing together
prospective buyers and sellers of residences in Montgomery
County, Maryland, and then facilitating in various ways
the consummation of resulting sale-purchase agreements
between sellers and buyers. Montgomery County is a sub-
urban area contiguous to the District of Columbia, and
the brokers in question consciously and understandably
capitalized upon the highly transient nature of this par-
ticular real estate market. A quite considerable volume of
the total of brokered sales in which they participated in-
volved purchasers coming into the state and sellers leaving
the state.‘ Extensive advertising of the brokerage services
* Distinguishing this case factually from those wherein real
estate brokerage activities were not shown to have involved any
considerable volume of out-of-state buyers and sellers. E.g., Di-
versified Brokerage Services, Inc. v. Greater Des Moines Board
of Realtors, 521 F.2d 1343, 1346 (8th Cir. 1975). While it may
generally be correct to say that ‘‘the mere movement of indi-
viduals from one state to another in order to utilize particular
services does not transform those services into interstate services
within the meaning of the Sherman Act,’’ id., that hardly de-
scribes the factual situation presented here. A more apposite prin-
ciple for the facts of this case is the congressional determination up-
10a
was placed by various ones of the defendants in out-of-state
media, including military and civil service personnel jour-
nals.* Some of the brokers participated in national ‘‘relo-
eation’’ services * and extensively used interstate channels
of communications ‘ in developing and servicing the out-of-
state clientele. A considerable amount of the financing for
brokered purchases came from out-of-state lending insti-
tutions and substantial numbers of the purchase loan
mortgages were guaranteed by federal agencies headquar-
tered in the District of Columbia.* While the charged
brokers did not participate directly in the interstate lending
and loan guarantee transactions incident to their brokered
sales, they clearly held out as part of their brokerage serv-
held in Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241
(1969) that even ‘‘local’’ businesses that provide services to sub-
stantial numbers of persons traveling across state lines may affect
interstate commerce. Here, as the analysis in the body of our
opinion shows, there was much more of an interstate character
to defendants’ activities than merely awaiting passively the chance
descent of out-of-state customers and then providing these with
purely ‘‘local’’ services.
* This included advertising in Washington, D. C. newspapers and
radio stations (App. 111, 998, 1003), the Foreign Service Journal,
and the Army, Navy, Air Force Times (App. 1020-21). At least
one defendant advertised its use of a ‘‘Military Transfer Depart-
ment’’ and a ‘‘Corporate Referral Department’’ which enabled
it to identify potential buyers and sellers among military and
business transferees (App. 1042-43) ; offered to military personnel
a ‘‘Free Relocation Kit’’ (App. 187-88) ; and invited collect tele-
phone calls from prospective home purchasers coming into the
Washington, D.C. area (App. 1039).
* Incident to which they paid commissions directly to out-of-
state brokers who found purchasers for their listings, and received
commissions directly from out-of-state brokers to whom they re-
ferred clients. (App. 998-99, 1004, 1014, 1020).
* See American Power & Light Co. v. 8.E.C., 329 U.S. 90, 98-99
(1946) ; North Am. Co. v. 8.E.C., 327 U.S. 686, 694-95 (1946).
® App. 970-95, 997-99, 1003-04, 1019-23, 1062.
lla
ices their ability to facilitate these.* The overall picture
that emerges is one of a substantial stream of interstate
commerce in which these brokers’ activities were not only
an ‘‘integral part,’’ but in practical effect the dominant
factor in first creating a substantial interstate market by
utilizing interstate advertising and referral services, and
then drawing in interstate funding and loan guarantees for
the resulting purchase money mortgages. While there are
of course differences between the lawyers’ activities in
Goldfarb and the brokers’ in the instant case, most suggest
a more, not less, substantial impact on interstate commerce
for the brokers’ activities than for the lawyers’. Defend-
ants emphasize that the brokers’ services here were not
undergirded by legal compulsion as were those of the law-
yers’ in Goldfarb. While that is true, the practical necessity
for utilizing a local broker’s services, particularly for
out-of-state purchasers and sellers was substantially equal
on the evidence presented, hence quite as integral and
‘finseparable’’ a part in the final analysis. And on the
other hand, while the lawyers in Goldfarb took no specific
part in ereating the critical interstate market of specific
buyers and sellers necessary to generate their fees, the
brokers in the instant case played a dominant part in creat-
ing the specific interstate market that ultimately provided
their commissions.
The impact of the charged restraint on the brokerage
services demonstrably had a substantial effect on interstate
commerce. Since the conspiracy as charged raised the price
of the critical service of bringing together the home sellers
and buyers, this affected the need for financing ‘‘as a matter
of practical economics.’’ Hospital Building Co. v. Trustees
of Rex Hostal, 425 U.S. 738, 745 (1976) ; see id. at 744-47.
Similarly, increased prices resulting from increased broker-
*One advertised that potential purchasers should consult a
broker because he could ‘‘guide in getting a loan,’’ and will ‘‘be
able to negotiate the best available financing.’’ (App. 1046).
age commissions must, as a matter of practical economics,
confront every purchaser wishing to buy a Montgomery
County residence. Therefore, as in Goldfarb, the numerous
out-of-state purchasers of these residences could not as a
practical matter escape the effect of these commissions.
Whether analyzed as being in the flow of interstate
commerce, as local but substantially affecting interstate
commerce, or as being by practical necessity an ‘‘integral
part’’ of identifiable interstate transactions, the evidence
here adequately supported the jury's finding of a sufficient
nexus between the brokers’ activities and interstate com-
merce, and of a substantial effect of the restraint charged
upon that commerce.
Il. Conspiracy anp ParticipaATION
Defendants next contend that there was insufficient evi-
dence, though considered in the light most favorable to
the government. to allow a jury to find the existence of a
conspiracy and the participation of each defendant in it
beyond a reasonable doubt. Their related contention that
guilt beyond a reasonable doubt can only exist if all other
reasonable hypotheses are negated has been rejected. United
States v. Bobo, 477 F.2d 974, 989 (4th Cir. 1973). A final
suggestion that our review on this point be more stringent
because this is a felony, rather than a misdemeanor, prose-
cution is also without merit. Neither the classification of
the offense nor the extent of the possible punishment in
any way affects the question whether there was sufficient
evidence of each element of an offense. Our review of the
evidence leads to the conclusion that under applicable
standards of review the evidence was sufficient to sustain
the jury findings on these issues.
A. The Evidence of Conspiracy
Proof of a § 1 conspiracy need not be direct. ‘‘ Acceptance
by competitors of an invitation to participate in a plan,
13a
the necessary consequence of which, if carried out, is a
restraint of commerce, is sufficient to establish an unlawful
conspiracy under the Sherman Act, where each competitor
knew that cooperation was essential to successful operation
of the plan.’’ 3 P. Areeda & D. Turner, Antitrust Law:
An Analysis of Antitrust Principles and Their Application
@84la, at 361-62 (1978). While such evidence does not
compel a finding of conspiracy, Theatre Enterprises, Inc.
v. Paramount Film Distributing Corp., 346 U.S. 537 (1994),
it does permit such a finding, Interstate Circuit, Inc. v.
United States, 306 U.S. 208 (1939); Esco Corp. v. United
States, 340 F.2d 1000, 1007 (9th Cir. 1965). Within this
principle, we find ample evidence to permit the finding of
a conspiracy involving each of the defendants.
In the months preceding the September 5 dinner, several
of the defendants were contemplating a change in com-
mission rate, but were concededly afraid to undertake such
a move for fear that they would be unable successfully to
compete with firms still at six percent. Schick & Pepe had
previously attempted to go to a seven percent rate and
had failed because of competition. It was in this general
climate of concern about competitive constraints that Foley
called the meeting of September 5. At the dinner Foley
rose, made some prefatory remarks and then stated that
his firm was in dire financial condition. Saying that he did
not care what the others did, he then announced that his
firm was changing its commission rate from six percent to
seven percent. Testimony as to what was said by various
persons in the ensuing discussion is greatly in conflict, but
there was evidence from which the jury could find that
each of the individual defendants and a representative of
each corporate defendant not represented by one of the
individual defendants expressed an intention or gave the
impression that his firm would adopt a similar change. The
discussion also included reference to the earlier unsuccess-
ful effort by Schick & Pepe to adopt a seven percent policy,
Ida
from which the jury could conclude that defendants knew
that their cooperation was essential. Evidence presented in
the form of detailed charts with explanation by an econo-
mist qualified as expert witness showed that in the months
following each defendant did in fact begin to take substan-
tial numbers of seven percent listings. Moreover, the jury
heard testimony of a number of instances in which members
of the conspiracy sought after the September 5 dinner to
hold their fellows to the ‘‘agreement.’’ Details of these
events will be developed more fully in the following dis-
cussion of the connection of each defendant to the con-
spiracy.
B. Connection of Each Defendant to the Conspiracy
(1) Jack Foley Realty, Inc. and John P. Foley, Jr.
Jack Foley hosted the September 5 dinner, inviting in
addition to a few realtors who were close personal friends,
those he regarded as the most active members of his pro-
fession. He had previously announced the commission
change to his staff and on September 15 muiled a notice
concerning it to all local realtors. By early October, Foley,
Inc. had thirty percent of its listings at the higher rate;
by December, the figure was in excess of seventy percent
and remained in that neighborhood throughout 1975.
Allyn Rickman, vice president of Schick & Pepe and a
guest at the September 5 dinner, testified that after Schick
& Pepe took some six percent listings, Foley called him
and told him that was a ‘‘mistake’’ because if they all did
not hold the line none of them could get seven percent.
Before the policy change, Foley’s firm had accepted a
house at a six percent listing. When the listing was renewed
after the policy change, still at six percent, Foley, Ince.
sent a card to the listing service which was in turn dis-
tributed to all the local realtors. A listing card was then
received anonymously in the mail by Foley with a question
1Sa
mark on it. When the house was again relisted, the contract
and the listing with the service were both at seven percent.
John O’Keefe, a vice president at Foley, Inc., however,
wrote a Ictter to a homeowner/seller informing him that
Foley would reimburse him for the extra one percent.’
The letter contained the following explanation:
‘*The reason I don’t want [the listing] to go through
showing 6% is our Firm was one of the leading Firms
in changing from 6% to 7% and with Mr. Foley being
the President of the Board of Realtors, I just don’t
want any unjust criticism of him or our Company for
taking your listing at less than 7%.’’
(2) Colquitt-Carruthers, Inc. and
John T. Carruthers, Jr.
John T. Carruthers of Colquitt-Carruthers, Inc. attended
the dinner. The testimony conflicts on whether he said he
was already at seven percent, or whether he was going to
go to seven percent. His accountant testified that a policy
change occurred between Scptember 10 and September 24.
Effective September 24, all listings other than at seven
percent had to be accompanied by explanation; after No-
vember 1, they would not be accepted at less than seven
percent. By October 1974, Colquitt-Carruthers had sixty
percent of its listings at the new rate and through the end
of 1975 the figure was generally in excess of eighty percent.
There was testimony that Carruthers made several at-
tempts to ensure the cooperation of other firms. William
Ellis, vice president of Shannon & Luchs Co., a firm that
delayed implementation of the seven percent policy, testi-
fied that Carruthers called him on three occasions. Around
January 1, 1975, Carruthers called and asked about Ellis’
‘*considerations.’’ Ellis replied ‘‘You know I can’t make
10 Foley and Foley, Inc. Inc. object tc the admissibility of that
letter. See Part IV infra.
l6a
the decision.’’ Carruthers then offered to call the man who
could make the decision. Later in January, Carruthers
again called, this time explicitly asking about the change.
Upon being told that Shannon & Luchs had adopted a
seven percent policy, but had set no date for its implemen-
tation, Carruthers ‘‘threatened’’ Ellis with the loss of his
job. In April when Shannon & Luchs’ Gaithersburg, Mary-
land office took some six percent listings, Carruthers again
ealled Ellis to complain.
Allyn Rickman, vice-president of Schick & Pepe Realty,
Inc., also testified that Carruthers called him to complain
about some six percent listings that Schick & Pepe had
accepted."' He quoted Carruthers as saying ‘‘if we do not
stay at seven percent, then it would be a slide back and
. no one could get seven percent, because the compe-
tition would hurt us.’’ There was also testimony that Car-
ruthers complained to Robert Dorsey, a vice president at
Bogley, Inc., about that firm having taken more six than
seven percent listings.
(3) Bogley, Inc. and Robert W. Lebling
Robert Lebling, the president and seventy percent owner
of Bogley, Inc., attended the September 5 dinner. The testi-
mony is in conflict whether he said he would go to a seven
percent rate, or that he would do so if it were to his ad-
vantage. On September 27, Bogley, Inc. adopted a policy
of seeking seven percent but not losing any listings over
the attempt. At least one version of the meeting at which
that decision was made places the initiative for the pro-
posal with Lebling. Bogley, Inc. had no seven percent list-
ings from June through September 1974, but nearly fifty
percent of the listings in October and November 1974 were
™ Carruthers and Colquitt-Carruthers contend this testimony
should not have been allowed. See Part IV infra where we con-
clude that there was no error in its admission.
17a
at the higher rate and in December seventy percent were
at the new rate. The percentage of seven percent listings
fluctuated between forty and sixty-five percent until April,
then settled at around thirty percent. Since the agreement
itself, not its performance, is the crime of conspiracy,
United States v. Trenton Potteries Co., 273 U.S. 392, 402
(1927); Plymouth Dealers’ Association v. United States,
279 F.2d 128, 132 (9th Cir. 1960), the partial non-perform-
ance of Bogley does not preclude a finding that it joined
the conspiracy.
(4) Schick & Pepe Realty, Inc.
Allyn Rickman, vice president of Schick & Pepe Realty,
attended the dinner. He testified that he stated at that
time that his firm would adopt a seven percent policy. On
October 4, 1975, it did adopt such a policy and by November
had well over eighty percent of its listings at the higher
rate. Rickman testified that but for the dinner the firm
would not have changed its policy. In August, the firm
had considered such a change, but decided against it because
of fear that it would be unable to compete for listings.
There was also evidence that Rickman complained to Rob-
ert Dorsey, vice president of Bogley, Inc., about Bogley’s
failure to take only seven percent listings.
(5) Shannon & Luchs Co.
Shannon & Luchs did not officially adopt a seven percent
policy until January 1975. At the dinner, its vice president,
William Ellis, stated that they should not be discussing
a rate increase and said that his firm was always the first
to be investigated when something like this happened as
it was the county’s largest. He also stated that Shannon
& Luchs would probably go to seven percent at a later
date; Allyn Rickman remembered a possible mention of
the first of the year. On September 9, Ellis told his mana-
18a
gers not to turn down any seven percent listings they had
an opportunity to get. In fact, the percentage of seven
listings taken by Shannon & Luchs crept toward thirty
percent by January 1975. Early in January, John T. Car-
ruthers called Ellis and asked about his ‘‘considerations.”’
Ellis told him that he, Ellis, did not make those decisions
and Carruthers then offered to telephone the man who
did; Ellis replied that he did not need help. On January
15, at Ellis’ suggestion, Shannon & Luchs adopted a policy
of taking seven percent listings unless some other rate
were beneficial to the firm or otherwise appropriate. Al-
though the new policy was not implemented until March 1,
by that time forty percent of Shannon & Luchs’ listings
were at seven percent. By early April, the figure was about
sixty-five percent and throughout 1975 it stood between
eighty and ninety. In response to a comment from Car-
ruthers in April, Ellis acknowledged that he had a ‘‘prob-
lem’’ in his Gaithersburg, Maryland office in implementing
the policy. Shannon & Luchs did not adopt a seven percent
policy for its offices in northern Virginia because of the
threat of competition.
(6) Robert L. Gruen, Inc.
Robert Gruen attended the Congressional Country Club
dinner. While Allyn Rickman’s testimony is in conflict as
to Gruen’s statements at that dinner, on more than one
occasion he testified that Gruen said he was going to go to
seven percent. Louise Lewis, a Gruen sales agent, testified
that the Gruen policy as early as June 1974 was at least
to seek seven percent listings, but acknowledged that she
sought no seven percent listings before September.
Gruen had one listing at seven percent out of a total of
seven in August 1974 and none in September, but took
three of eleven at the higher rate in October. By early
1975, the firm consistently had eighty percent or more of
its listings at seven percent.
19a
Gruen makes much of the fact that it had seven listings
at seven percent from March to August 1974 and also had
seven such listings from September to December. Put in
percentages, however, that apparent continuity evaporates:
the March to August figure represents only ten percent of
Gruen’s listings; there were no seven percent listings in
September; and from October to December, Gruen had
thirty-five percent at a seven percent commission. These
figures are sufficient to allow the jury, in connection with
Rickman’s testimony, to conclude that Gruen also adopted
a higher commission rate following the September 5 dinner
and that that adoption was part of the alleged conspiracy.
C. Conclusion
We conclude that this evidence, here merely summarized
and highlighted from a much more detailed body of proof
adduced by the Government, was sufficient to permit the
jury to find as it did against each of the defendants on the
conspiracy issue. Defendants of course offered explanatory
and exculpatory evidence, and on this appeal urge that the
proper inferences to be drawn from all the evidence relieve
their actions of criminal implications. Among these argu-
ments is the interesting one that only by graceless refusals
to accept Foley’s invitation to dinner or by equally grace-
less withdrawals from it once its purpose was revealed
could they have avoided the factual inferences required to
implicate them in the conspiracy, and that to sustain their
convictions will impose intolerable burdens on businessmen
confronted with like dilemmas. This, with other arguments
about the proper inferences to be drawn from the evidence,
was undoubtedly presented to the jury by able counsel for
the defendants. A properly composed jury of defendants’
peers rejected this factual argument as well as others in
reaching its verdict of guilty. That to sustain the jury
finding on this issue may have the inhibitory effect on the
conduct of others that is urged by defendants does not
20a
speak to the force of the evidence supporting the jury’s
finding in this case.
III. Jury Instruction
Defendants complain that the court failed to instruct
the jury that it had to find that defendants acted with
specific intent before it could find them guilty beyond a
reasonable doubt. While this contention is none too plainly
developed, it apparently comes to the suggestion that to
be convicted of a felony violation of § 1 they had to con-
spire with the specific intent to accomplish a restraint of
trade.”
Section 1 had traditionally been interpreted to define
a strict liability offense, e.g., United States v. Patten, 226
U.S. 525, 543 (1913), until in June 1978, the Supreme Court
held that a criminal conspiracy prosecution under § 1 must
include proof that the defendants acted with knowledge
that their conduct would affect prices. United States v.
United States Gypsum Co., 98 S. Ct. 2864, 2877 (1978).
Gypsum involved a misdemeanor case, the indictment hav-
ing been brought prior to the effective date of the 1974
amendment making $1 a felony provision. From this, de-
fendants contend that the scienter requirement imposed
in Gypsum is not necessarily as stringent as that required
for the now felony offense."*
12 Some defendants may contend for an even more specific in-
tent: to denigrate or mock the law in the sense apparently of
intending specifically to violate the Sherman Act. Because we find
even the less stringent requirement without support, we do not
address this one.
13 Gypsum also involved a rule of reason offense rather than a
per se violation of § 1 such as the price fixing here alleged. While
the Court’s analysis is in part dependent on the relative lack of
notice provided by rule of reason offenses, the rule announced is
framed in terms of all § 1 criminal prosecutions.
2la
While certain conduct may not be made criminal without
including as an element of the offense © certain degree of
scienter, we do not beleive the 1974 amendment of the
Sherman Act, Antitrust Procedures and Penalties Act,
Pub. L. No. 93-528, § 3, 88 Stat. 1706, 1708 (1974), mandates
that specific intent in the sense apparently suggested by
defendants be made an element of a §1 conspiracy. Al-
though in most cases particular scienter requirements seem
to be based simply on statutory construction, see Morris-
sette v. United States, 342 U.S. 246 (1952), there are un-
doubtedly due process restrictions on the legislature’s
power to define certain conduct as criminal absent particu-
lar scienter requirements. E.g., Lambert v. California, 355
U.S. 225, 228 (1957); Holdridge v. United States, 282 F.2d
302 (8th Cir. 1960) (Blackmun, J.). We think neither the
amended statute nor the Constitution require the specific
intent apparently contended for by defendants here.
In increasing the penalties for violating § 1 and redefining
the offense as a felony, Congress did not intend to change
the elements of the offense. F.g., 120 Cong. Rec. 36340
(1974); sce United States#. Continental Group, Inc., 456
F. Supp. 704, 717 (Bs a. 1978); Untted States v. Noll
Manufacturing Co., 1977-2 Trade Cas. § 61,712 (N.D. Cal.
1977). Hence, we consider the Gypsum rule, so far as statu-
tory interpretation is concerned, still to apply to §1
offenses.
Neither do we find merit in the argument thac consti-
tutional considerations require proof of ‘‘specific intent’’
in the sense urged by defendants. While intent of the
specificity apparently urged by defendants may be consti-
tutionally mandated with respect to offenses impinging
highly protected realms of conduct such as speech, see
Smith v. California, 361 U.S. 147, 154 (1959) (reserving
question), in the area of commercial regulation due process
does not require rnore at the outside than that a defendant
shall have acted with knowledge of the anticipated conse-
quences of his action. Gypsum, 98 S. Ct. at 2878.
22a
We thus find no error in Judge Blair’s instructions in
which he told the jury in substance that it must find beyond
a reasonable doubt that defendants must have known that
their agreement, if effectuated, would have an effect on
prices; that they knowingly joined a conspiracy whose
purpose was to fix prices; and that in joining they intended
to further that purpose.
Defendant Shannon & Luchs also complain of the fol-
lowing instruction, asserting that it required too little
connection with the conspiracy :
‘‘'The requirement that the evidence show beyond a
reasonable doubt that the Defendants knowingly par-
ticipated in the unlawful plan with the intent to further
or advance some object or purpose of the conspiracy]
is satisfied if the evidence shows beyond a reasonable
doubt a knowing assistance of any kind in effectuating
the objective of the conspiracy.’’
Without deciding whether this particular portion of the
charge required too little connection, we conclude that the
charge as a whole did require a sufficient involvement by
each defendant. For example, within paragraphs of the
allegedly deficient instruction, the following was charged:
‘‘4 Defendant may be found guilty of a conspiracy
only if the Defendant understood that he had joined
the single overall conspiracy that is charged. If any
Defendant was not a party to that overall agreement
or conspiracy, you must find that Defendant not guilty
even if he participated in isolated or subsidiary actions
or events which aided the ends of the conspiracy.”’
Robert Lebling, Bogley, Inc., John T. Carruthers and
Colquitt-Carruthers, Inc. complain that the court failed
to instruct that proof of good character alone can create
reasonable doubt. Judge Blair gave substantially the charge
requested, but refused to include the word ‘‘alone.’’ De-
23a
fendants rely on Michelson v. United States, 335 U.S. 469
(1948), for the proposition that this refusal was error.
Michelson, an opinion dealing with the admissibility of
character evidence, does include dictum that in a proper
ease a defendant who puts on substantial evidence of good
character is entitled to an instruction that such evidence
alone may create reasonable doubt, id. at 476, but the Cir-
cuits have split on whether such an instruction must be
given. Two circuits hold that the word ‘‘alone’’ must be
included. United States v. Lewis, 482 F.2d 632, 637 (D.C.
Cir. 1973); United States v. Donnelly, 179 F.2d 227, 233
(7th Cir. 1950). The Tenth Circuit holds that ‘‘alone’’
must be included if good character is the only defense
raised and perhaps in other circumstances, Qertle v. United
States, 370 F.2d 719, 726-27 (10th Cir. 1966), but does not
require it in all cases, Swingle v. United States, 389 F.2d
220, 222 (10th Cir. 1968) ; see United States v. Tijerina, 407
F.2d 349, 356 (10th Cir. 1969) (semble). The other circuits
do not require that the word be included in the charge, at
least where good character is not the onlv defense. United
States v. Fontenot, 483 F.2d 315, 323 (5th Cir. 1973) ; United
States v. Lachman, 469 F.2d 1043, 1046 & n.3 (1st Cir.
1972); United States v. Fayette, 388 F.2d 728, 737 (2d Cir.
1968); United States v. Brown, 353 F.2d 938, 939-40 (6th
Cir. 1965); Carbo v. United States, 314 F.2d 718, 746-47
(9th Cir. 1963); Black v. United States, 309 F.2d 331, 343-
44 (8th Cir. 1962); see United States v. Klass, 166 F.2d
373, 378-80 (3d Cir. 1948). In 1944 this Circuit held that
the word ‘‘alone’’ need not be included in a charge. Mannix
v. Umited States, 140 F.2d 250, 253-54 (4th Cir. 1944).
In Michelson, the Supreme Court relied on the case of
Edgington v. United States, 164 U.S. 361, 366 (1896). That
case disapproved an instruction to the effect that character
evidence should be considered only if the other evidence
created doubt. It did not hold that character evidence is
so highly probative that it must always be singled out as
24a
potentially exculpatory standing ‘‘alone.’’ Carbo v. Umted
States, 314 F.2d at 746. We believe the better view, which
we think not foreclosed by Michelson, continues to be that
expressed by this court in Mannix and followed by a ma-
jority of the circuits. We need not hold that an ‘‘alone’’
instruction could in no circumstances be a matter of right
to find it not required in this case. Here defendants did
not rely on character evidence alone for their defense. The
instructions properly allowed the jury to consider it along
with other evidence, and clearly did not suggest that the
jury might not find in the character evidence ‘‘alone’’ a
basis for reasonable doubt.
IV. Evipentiary Issues
Defendants John Foley and Jack Foley Realty, Inc.
assert that the district court erred in admitting into evi-
dence a letter written from a Foley vice president, John
O’Keefe, to a homeowner whose house had been relisted
at seven percent."*
During the grand jury investigation some of the records
of Foley, Inc. were subpoenaed. While this letter was
covered by the subpoena it was not produced. Shortly before
trial, an attorney in a civil suit involving the same con-
spiracy called the United States Attorney and told him
about the letter. The government asked the attorney for
a copy of the letter, but since it was subject to a protective
order in the civil suit, the attorney asked that the govern-
ment obtain the letter directly from defendants. The letter
was then so obtained. In ruling on the objection to the
admission of the letter, Judge Blair assumed that it had
been obtained in violation of the protective order. We make
the same assumption.
The government is not precluded from introducing im-
properly obtained evidence so long as it did not participate
4 See text accompanying note 4 supra.
25a
in the impropriety. Burdeau v. McDowell, 256 U.S. 465, 476
(1921); United States v. Francoeur, 547 F.2d 891, 893 (5th
Cir. 1977).** Judge Blair found that the government had
not participated in the assumed violation of the protective
order; that finding is not clearly erroneous.
Defendants seek to analogize the protective order to 47
U.S.C. § 605, a provision of the Federal Communications
Act which they assert has been interpreted to prohibit the
admission of communications seized in violation of its terms
even absent government complicity. Assuming that defend-
ants’ construction were correct, a proposition which we do
not accept save for the purposes of argument, see Bubis v.
United States, 384 F.2d 643 (9th Cir. 1967) (allowing ad-
mission of communication seized in violation of § 605),
we reject the analogy. Section 605 was obviously intended
to further broader policies than is a protective order of
the type here involved. No suggestion is made that the
government has engaged in impermissible discovery, that
defendants’ privilege against self-incrimination has been
violated * or that the admission of the letter occasioned
prejudicial publicity. The letter was subject to a subpoena
and should have been produced during the grand jury in-
vestigation. To allow its admission in a situation where
the government did not act improperly would not frustrate
any valid policy.
** This rule has developed in cases involving alleged constitu-
tional improprieties so it may be said to be predicted on a lack
of state action. On the other hand, the notion that the mere fact
of impropriety should preclude admissibility has not been accepted.
See Burdeau v. McDowell, 256 U.S. at 476-77 (Brandeis, J., dis-
senting). If impropriety of a constitutional dimension does not
preclude admissibility about Government complicity, a more string-
ent rule in a non-constitutional setting would be inappropriate.
1° The letter was: neither the personal property of nor in the
possession of Mr. Foley; Foley, Inc. has no privilege against self
incrimination. United States v. White, 322 U.S. 694, 698-99 (1944).
26a
Defendants object to the admission of a series of charts,
designated Government Exhibits Numbers 39 through 51.
Numbers 39 through 50 summarized the number of listings
filed by each realtor with the multiple listing service and
portrayed the percentage of those listings which were at
the higher, seven percent commission rate. These charts
were compiled by a Justice Department economist from
data obtained from the multiple listing service. Defendants
were apprised that the government intended to use a com-
pilation of such data well before trial and the documents
were available for inspection at the Justice Department
throughout May and June 1977. Defendants complain, how-
ever, that the charts themselves were not made available
until the weekend before trial.
Fed. R. Evid. 10¥6 provides: ‘‘The contents of volumi-
nous writings .. . which cannot conveniently be examined
in court may be presented in the form of a chart, summary
or caleulation. The originals, or duplicates, shall be made
available for examination or copying, or both, by other
parties at reasonable time and place.’’ The data upon which
these charts were based came from defendants own listing
service, the documents were made available to defendants
at the Justice Department well before trial and the charts
themselves were provided the weekend before trial. Defend-
ants complain that the charts should have been made avail-
able longer in advance of trial, relying on the last sentence
of Rule 1006. That sentence refers to make available the
original documents, not the charts themselves. 5 J. Wein-
stein & M. Berger, Weinstein’s Evidence 7 1006[04] at
1006-8 (1975). The charts themselves are not misleading
and we cannot say Judge Blair abused his discretion in
allowing their admission.
Government Exhibit No. 51 summarized the percentage
of houses sold by each defendant which were purchased
with loans guaranteed by the Veterans Administration or
the Federal Housing Administration. Defendant Foley and
27a
his firm complain that the base data for this chart was
never made available to them. The chart was compiled
from data contained in machine-readable ‘‘diskettes’’ pro-
vided by the multiple listing service. The diskettes were
not made available to defendants, but a computer print-out
of the information they contained was and the diskettes
themselves only contained data that was provided to de-
fendants themselves by their multiple listing service in the
normal course of business. The computer print-outs qualify
as duplicates of the diskettes within the meaning of Rule
1006. Fed. R. Evid. 1001(4). In any event, defendants con-
ceded that substantial out-of-state funds were used to
purchase houses they brokered. Thus, the admission of the
chart, if erroneous, would seem to be harmless error.
Father Henry O’Meara testified to a number of versions
of a conversation he had with John T. Carruthers concern-
ing Robert Lebling’s reluctance to take seven percent list-
ings. Carruthers and Colquitt-Carruthers, Inc. contend that
the trial court erred in failing to strike the testimony,
apparently on the ground that the potential for confusion,
due to the inconsistencies in the several versions as to what
actually was said, outweighed any relevance the testimony
had. The decision to strike testimony on grounds of lack of
relevance is committed to the district judge. We cannot
say he abused that discretion in this instance.
The same two defendants also object to the trial court’s
allowing Allyn Rickman to refresh his recollection concern-
ing a conversation he had with Carruthers with a transcript
of his previous grand jury testimony.’ We cannot say
that Judge Blair abused his discretion in concluding that
Rickman’s memory was exhausted, that the grand jury
transcript would be helpful in refreshing it or that it was
in fact refreshed.
” See text accompanying note 5 supra.
Finally, Robert L. Gruen, Inc. complains that the gov-
ernment interfered with its cross-examination of Rickman
by withholding discoverable information. Gruen was pro-
vided with the information that Rickman had told the
government that he could not recall Robert Gruen saying
at the dinner that his firm would go to seven percent. Gruen
was not given the notes taken by a government attorney
of the interview nor was it told that Rickman had said that
he had the impression from the dinner that Gruen would
go to seven percent. When Rickman testified that Gruen
had said his firm would go to seven percent, Gruen at-
tempted to impeach him with the prior inconsistent state-
ment. Rickman stated that he could not recall having made
the statement to the government. Gruen then sought pro-
duction of the interview notes, but the government refused
to allow the statement that Rickman could not recall Gruen
saying he would go to seven percent to be used unless the
statement that Rickman had the impression Gruen would
go to seven percent was also admitted. In the end, the
jury was apprised of both statements.
The interview notes were not verbatim nor had they
been approved by Rickman. Thus they were not discover-
able under the Jencks Act, 18 U.S.C. § 3500. Without reach-
ing the question whether the failure to make a full dis-
closure of Rickman’s statements violated the principle of
Brady v. Maryland, 373 U.S. 83 (1963), we conclude that
under the circumstances any error in this regard was
harmless beyond a reasonable doubt. In the trial court’s
final working out of the awkwardness, the jury was apprised
of the possibility that Rickman had given different versions
of his recollection on the critical point. The essential im-
peachment purpose was thus served, and defendant’s hurt
is thus reduced essentially to tactical discomfiture of limited
duration and impact. While even this could have been
avoided by a more fully forthcoming disclosure by the
Government, we cannot find in it error requiring reversal
of these convictions.
29a
Having carefully considered the record, the briefs and
the oral arguments of all the parties we conclude that no
reversible error has been made in the trial of this difficult
and complicated case. The convictions of the nine defend-
ants therefore are affirmed.
AFFIRMED.
APPENDIX B
30a
APPENDIX B
U.S. DISTRICT COURT, DISTRICT OF MARYLAND.
CRIMINAL NO. B-77-0185. paTED JULY 29, 1977.
(1 61,678] Unrrep Srates v. Jack Fouey, Inc., et at.
Memorandum and Order
Buair, D. J.: In this criminal antitrust case, the govern-
ment alleges that six real estate companies and three indi-
viduals conspired to fix, raise and maintain commission
rates for sales of residential property located in Montgom-
ery County, Maryland at seven percent in violation of sec-
tion 1 of the Sherman Act. 15 U.S.C. §1. All defendants,
except for Schick & Pepe Realty, Inc., have moved to dis-
miss the indictment for lack of jurisdiction.
I.
Analysis begins with the proposition that jurisdiction
under the Sherman Act is coterminous with the constitu-
tional power of Congress to regulate commerce. United
States v. South-Eastern Underwriters Ass’n [1944-1945
Trave Cases {[ 57,253], 322 U.S. 533, 558-59 (1944); see
United States v. American Bldg. Maintenance Indus. [1975-
1 Trane Cases { 60,365], 422 U.S. 271, 278 (1975) ; Gulf Oil
Corp. v. Copp Paving Co. [1974-2 Trape Cases { 75,402],
419 U.S. 186, 194-95 (1974). In both civil and criminal ac-
tions under section 1 of the Sherman Act, it is a jurisdic-
tional prerequisite that the acts constituting the violation
be ‘‘in restraint of trade or commerce among the several
States.’’' When determining whether conduct is within the
The Supreme Court in United States v. National Ass’n of Real
Estate Bds. [1950-1951 Trape Cases { 62,621], 339 U. S. 485
(1950), settled any question as to whether real estate brokerage
is trade within the meaning of the Sherman Act. Refusing to
exempt the real estate business from the coverage of the Act, the
Court held that ‘‘[t]he competitive standards which the Act
3la
ambit of the Sherman Act, courts have extended jurisdic-
tion to include not only transactions in the stream of inter-
state commerce, but also to intrastate transactions which
substantially affect interstate commerce. Hospital Bidg. Co.
v. Rex Hospital Trustees [1976-1 Trave Cases {| 60,885], 425
U.S. 738, 743-46 (1976); United States v. Employing Plas-
terers Ass’n {1954 Trapeg Cases {| 67,692], 347 U.S. 186, 188-
89 (1954); United States v. Women’s Sportswear Mfrs.
Ass’n [1948-1949 Trape Cases {] 62,390], 336 U.S. 460, 464
(1949) ; Mandeville Island Farms, Inc. v. American Crystal
Sugar Co. [1948-1949 Trape Cases {| 62,251], 334 U.S. 219,
235-36 (1948); United States v. South-Eastern Under-
writers Ass’n [1944-1945 Trape Cases { 57,253], 322 U.S.
533, 546-47 (1944). Whether or not activity is within the
flow of interstate commerce or substantially affects inter-
state commerce is determined on a case by case evaluation
of the relevant economic factors rather than by the ‘‘appli-
cation of abstract or mechanistic formulae.’’ Mandeville
Island Farms, Inc. v. American Crystal Sugar Co. [1948-
1949 Trape Cases {] 62-251], 334 U.S. 219, 232-33 (1948) ;
United States v. South-Eastern Underwriters Ass’n [1944-
1945 Trape Cases 9 57,253], 322 U.S. 533, 546-47 (1944);
Doctors, Inc. v. Blue Cross [1973-2 Trapg Cases { 74,847],
490 F. 2d 48, 51 (3d Cir. 1973); Rasmussen v. American
Dairy Ass’n {1973-1 Trave Casgs {| 74,313], 472 F. 2d 517,
523 (9th Cir. 1973). As a result, a court in each instance
must employ the applicable precedents as guideposts to be
used in judging the variables unique to each economic set-
ting. Doctors, Inc. v. Blue Cross [1973-2 Trape Cases
1 74,847], 490 F. 2d at 51; Rasmussen v. American Datry
sought to preserve in the field of trade and commerce seem 4&8
relevant to the brokerage business as to other branches of com-
mercial activity.’’ 3389 U. S. at 492. Although National Ass’n of
Real Estate Bds. is distinguishable from this case because it was
brought under section 3 rather than section 1, the Court noted
that ‘‘{n]o reason of policy has been advanced for reading § 3 of
the Act less literally than its terms suggest.’’ Id.
32a
Ass’n [1973-1 Trave Cases { 74,313], 472 F. 2d at 526-27;
see also United States v. Finis P. Ernest, Inc. [1975-1 Trapz
Cases {] 60,135], 509 F. 2d 1256, 1258 (7th Cir. 1975).
Recognizing that jurisdiction exists if either the ‘‘in com-
merce’’ or the ‘‘affecting commerce’’ prong is satisfied;
Burke v. Ford [1967 Trapve Cases {| 72,299], 389 U.S. 320,
321 (1967) (per curiam), defendants argue that sales of
real estate in Montgomery County, Maryland are not within
the flow of interstate commerce and that the indictment?
* The indictment charges that the defendants’ activities, as they
relate to the trade or commerce among the state’s requirement of
section 1, are as follows:
“*5. The activities of defendant corporations, as hereinafter
described, are within the flow of interstate commerce’ and have
an effect on that commerce.
‘*6. For a commission or fee, real estate brokerage firms such as
defendant corporations render the service of bringing together
buyers and sellers of residential real estate and of negotiating and
arranging the prices and terms of residential real estate sales in
Montgomery County. Thousands of parcels of residential real
estate are listed with and sold through Montgomery County brok-
erage firms each year. In the period January 1974 through Octo-
ber 1975, defendant corporations handled sales of residential real
estate in Montgomery County totaling more than $350 million.
‘“*7. Because of the transient nature of a significant portion of
the population of the Metropolitan Washington, D. C. area, of
which Montgomery County is a part, a substantial number of the
persons using the services of defendant corporations in connection
with residential real estate sales are persons moving into Mont-
gomery County from places outside the State of Maryland and
persons moving from Montgomery County to places outside the
State of Maryland. Many Montgomery County brokers, including
several of the defendant corporations, belong to nationwide re-
ferral services through which they receive and transmit to brokers
in other parts of the county referrals of buyers and sellers of
residential real estate.
**8. As part of their service, defendant corporations advertise
their listings of residential real estate located in Montgomery
County in newspapers located outside the State of Maryland and
whose circulations cover other states and the District of Co-
33a
fails to allege facts sufficient to show that sales of real es-
tate have a substantial effect on interstate commerce. The
allegations in the indictment for purpose of the motion to
dismiss are presumed to be true. United States v. Frankfort
Distilleries, Inc. | 1944-1945 Trave Cases J 57,338], 324 U-S.
293, 296 (1945).
The authorities are inconclusive on the question of
whether an alleged conspiracy by real estate brokers to fix
commission rates is within the flow of interstate commerce.
The Supreme Court did not consider the issue in the only
Sherman Act case to reach the Court involving the real es-
tate business. United States v. National Ass’n of Real Es-
tate Bds. [1950-1951 Trave Cases 9 62,621], 339 U.S. 485
(1950), was a case brought under section 3 of the Sherman
Act which is applicable only to restraints of trade in the
District of Columbia and the Court did not face an inter-
state commerce question. 339 U.S. at 492. One court has
suggested that National Ass’n of Real Estate Bds. supports
the defendants’ position that real estate brokers are not
within the stream of interstate commerce. Hill v. Art Rice
Realty Co. [1974-2 Trave Cases {| 75,364], 66 F. R. D. 449,
454 (N. D. Ala. 1974), aff’d, 511 F. 2d 1400 (5th Cir. 1975).
Defendants rely upon Marston v. Ann Arbor Property Man-
agers (Management) Ass’n |1969 Trapve Cases { 72,862},
302 F. Supp. 1276 (E. D. Mich. 1969), aff’d [1970 Trape
lumbia. Such advertising is intended to and does attract buyers
from outside the State of Maryland.
‘*9. As an additional part of their service, defendant corpora-
tions often assist their clients in securing financing necessary for
the purchase of residential real estate in Montgomery County. A
substantial amount of the funds used in financing residential sales
handled by defendant corporations moves into the State of Mary-
land in interstate commerce from other states. In addition, sub-
stantial amounts of such funds are guaranteed under programs of
the Veterans Administration and the Department of Housing and
Urban Development, both of which are agencies of the federal
government headquartered in the District of Columbia.’’
34a
Cases {| 73,082], 422 F. 2d 836 (6th Cir. 1970), and Cotillion
Club v. Detroit Real Estate Bd. [1969 Trave Cases {| 72,894],
303 F. Supp. 850 (E. D. Mich. 1964), in support of their
position. Marston was a private Sherman Act suit in which
the defendants were alleged to have fixed apartment rental
rates and controlled the supply of new apartments in the
Ann Arbor housing market. 302 F. Supp. at 1279. The court
found that neither the construction of apartments with ma-
terial received through interstate shipments nor the fact
that out-of-state students would be among the tenants of
the apartments operated to transform wholly local com-
merce into interstate commerce sufficient to satisfy the first
prong of the test for the Sherman Act jurisdiction. 302
F. Supp. at 1279-80. Finding that the interstate activity
had only an incidental effect on interstate commerce, the
court dismissed the complaint for lack of jurisdiction. 302
F. Supp. at 1280. The Marston court relied in part on Cotil-
lion Club, Inc. v. Detroit Real Estate Bd., supra, where the
plaintiffs alleged that defendants conspired to exclude
blacks from membership and prevent blacks from purchas-
ing lomes in designated neighborhoods in the Detroit area.
The court found that the ‘‘in commerce” prong was not
satisfied stating:
It is clear from the complaint in this case that the
restraints alleged relate only to the purchase and sale
of real estate in the Detroit Metropolitan Area. It is
competition for the purchase and sale of this real estate
which is assertedly injured by the alleged restraints.
This is local commerce and the competition allegedly
restrained and interfered with is local in nature.
303 F. Supp. at 854. The court also found that the activity
was purely intrastate with only incidental impact on inter-
state commerce and dismissed the Sherman Act claims. 303
F. Supp. at 855-56. See also Gateway Associates, Inc. v.
Essex Costello, Inc. [1974-2 Trapr Cases J 75,231], 380 F.
Supp. 1089, 1093-94 (N. D. Ill. 1974).
35a
In Mazur v. Behrens, [1974-1] Trapve Recunation Re-
ports (CCH) § 75,070 (N. D. Ill. 1972), however, the court,
without citation to either Marston or Cotillion, found that
the defendant real estate brokers and two of their associa-
tions were engaged in interstate commerce based, in part,
on a showing that some of the defendants represented out-
of-state sellers and buyers in forty percent of their trans-
actions and the defendants advertised and solicited buyers
outside of Illinois. Compare Indictment $7 and 8, footnote
2 supra. The court did not consider the second prong of the
test because ‘‘the defendants are clearly engaged in inter-
state commerce.’’ [1974-1] Trane Recvuiation Reports at
96,788. The court in United States v. Atlanta Real Estate
d.. [1972] Trape Recutation Reports (CCH) {73,825
(N. D. Ga. 1971), denied a motion to dismiss for lack of
jurisdiction in a private Sherman Act case because the
jurisdictional facts were intertwined with the facts which
went to the merits. The court distinguished both Marston
and Cotillion, the former on the ground that it involved stu-
dents seeking relief as tenants and the latter because there
was no indication that it was as factually complex as the
case before the court. [1972] Trape RecuLation Reports at
91,482. See also Oglesby ¢ Barcliff, Inc. v. Metro MLS, Inc.,
[1976-2] Trape Recutation Reports (CCH) { 61,064 at
69,796-97 (E. D. Va. 1976); United States v. Metro MLS,
Inc., [1974-2] Trape Recutation Reports (CCH) { 75,311
at 97,998-99 (E. D. Va. 1973). The court need not decide
whether defendants’ activities are ‘‘within the flow of inter-
state commerce,’’ because the discussion will show that
even if the activities are assumed to be wholly intrastate,
they nevertheless have a substantial effect on interstate
commerce and therefore are within the scope of Sherman
Act jurisdiction. See Mortensen v. First Federal Savings ¢
Loan Assn (1977-1 Trave Cases § 61,259], 549 F. 2d 884, 896
(3d Cir. 1977); Evans v. S. S. Kresge Co. [1976-2 Trapve
Cases {] 61,148], 544 F. 2d 1184, 1188 & n. 16 (3d Cir. 1976).
36a
Whether or not defendants’ alleged restraint of the Mont-
gomery County, Maryland real estate business, which is
assumed to be wholly intrastate, substantially affects inter-
state commerce requires the exercise of a practical eco-
nomic judgment because, as the Third Circuit has noted, the
‘affecting commerce test’’ is not a test 2 ill but is only a
guide to the solution to the problem: © _ Doctors, Inc. v.
Blue Cross [1973-2 Trape Cases {] 74-847], 490 F. 2d 48, 51
(3d Cir. 1973). Acknowledging the answer in each case is
one of degree which necessarily yields imprecise results,
the Ninth Circuit has stated:
There is no bright line dividing cases in which the
effect upon interstate commerce is sufficient to permit
Congress to prohibit particular anticompetitive ac-
tivity under the commerce clause from those cases in
which it is not sufficient. In this area perhaps more
than in most, each case must turn on its own facts.
Rasmussen v. American Dairy Ass’n [1973-1 Trape Cases
| 74,313], 472 F. 2d 517, 526 (9th Cir.), cert. denied, 412
U. S. 950 (1973); see Evans v. 8. S. Kresge Co. [1976-2
Trave Cases { 61,148], 544 F. 2d 1184, 1188 (3d Cir. 1976).
Although both the government and defendants rely on
Goldfarb v. Virginia State Bar [1975-1 Trape Cases
/ 60,355], 421 U. S. 773 (1975), they have diametrically
opposed positions on the result which the opinion portends.
The government asserts that Goldfarb is so factually simi-
lar to this case that it is conclusive on the jurisdictional
issue. Defendants, on the other hand, argue that Goldfarb
is factually distinguisha’le and, seizing upon language in
the opinion, assert that Goldfarb requires dismissal because
the real estate activities involved are not necessary, essen-
tial or inseparable components of any interstate transac-
tions. See Goldfarb v. Virginia State Bar [1975-1 Trapg
Cases {] 60,355], 421 U. S. at 783-86. The thrust of defend-
ants’ argument is that before jurisdiction can exist the
court must find that the intrastate activities not only sub-
37a
stantially affect interstate commerce but that they are also
integral parts of general interstate transactions. The test
suggested by defendants is not a radical or fundamental
departure from prior court decisions, rather it is a re-
statement, couched in Goldfarb’s positive language, of the
well settled proposition that mere incidental, inconsequen-
tial, remote or fortuitous effects on interstate commerce
are insufficient to sustain jurisdiction under the Sherman
Act. See e. g., Sun Valley Disposal Co. v. Silver State
Disposal Co. {1970 Trape Cases § 73,009], 420 F. 2d 341,
343 (9th Cir. 1969); Lieberthal v. North Country Lanes,
Inc. [1964 Trape Cases § 71,108], 332 F. 2d 269, 272 (2d
Cir. 1964); Page v. Work [1961 Trapve Cases { 69,956], 290
F. 2d 323 (9th Cir. 1961).
In their effort to show that their activities have only an
insubstantial effect on interstate commerce, defendants iso-
late each of those activities which allegedly contributes to
the effect on interstate commerce.
The indictment alleges that during the period January
1974 through October 1975 the defendant corporations sold
real estate valued in excess of $350 million to a substantial
number of persons who moved to Montgomery County
from locations outside of Maryland. The indictment also
alleges that some of the defendants utilize and belong to
nationwide referral services in connection with the sale of
residential property. Defendants rely on Marston v. Ann
Arbor Property Managers (Management) Ass’n [1969
Trave Cases {§ 72,862], 302 F. Supp. 1276 (E. D. Mich.
1969), and Diversified Brokerage Services, Inc. v. Greater
Des Moines Board of Realtors [1975-2 Trapeze Cases
7 60,443], 521 F. 2d 1343 (8th Cir. 1975), in support of their
argument that the interstate movement of buyers into
Montgomery County is not affected by the alleged con-
spiracy. Neither case involved allegations so similar to
those in the indictment to require dismissal. The charges
in the indictment differ significantly from Marston where
38a
a limited number of out-of-state college students were the
persons in interstate transit. In Diversified Brokerage,
plaintiffs attempted to establish jurisdiction only under
the ‘‘in commerce’’ theory and when the evidence failed
to support jurisdiction, the district court dismissed the
complaint. The Kighth Circuit affirmed but carefully cir-
cumscribed its holding, stating:
We emphasize the limited nature of our holding.
Services affecting real estate, such as brokerage serv-
ices, may, depending upon the evidence presented,
either constitute interstate activities or have no nexus
with interstate commerce and thus be beyond the reach
of the Sherman Act. ... In the instant case, plaintiffs
presented extremely limited evidence and failed to show
any interstate character to these real estate transac-
tions. Additionally, plaintiffs chose not to attempt to
show that the intrastate activities of defendants placed
any substantial burden on interstate commerce.
521 F. 2d at 1347 (citation omitted). Rather than the five
out-of-state purchasers found in Diversified Brokerage, the
indictment alleges that a substantial number of the persons
purchasing real estate sold by the defendants were from
outside of Maryland. Further, the indictment alleges that
defendants advertise their listings in newspapers with in-
terstate circulation in order to attract those buyers. Cf.
Diversified Brokerage [1975-2 Trape Cases { 60,443], 521
F’. 2d at 1346-47.
The indictment alleges that the defendant corporations
assist their clients in securing substantial amounts of
financing from private governmental institutions located
outside of Maryland. Defendants posit that defendants’
financing related activities should be viewed as services
which only incidentally happen to cross state lines, having
insubstantial effect on interstate commerce. In support of
their position, defendants cite Cotillion Club, Inc. v. Detroit
39a
Real Estate Bd. {1969 Trav Cases {| 72,894], 303 F. Supp.
850 (E. D. Mich. 1964), where the court found that trans-
mittal of documents related to financing to federal agencies
was an incidental activity crossing state lines which did not
support jurisdiction under the ‘‘affecting commerce”’
theory. The Cotillion Club allegations are distinguishable
from those in the indictment. First, the documents in Co-
tillion Club were alleged to have been sent not by the de-
fendant real estate associations but by the individual real
estate brokers, brokers such as those indicted here. Second,
this indictment alleges that the defendants’ activities are
substantial in relation to the value of the real estate. Final-
ly, ail of the allegations in the indictment relate specifically
to the defendants and not to some other group or associa-
tion. Cf. Cotillion Club [1969 Trape Cases § 72,894], 303
F. Supp. at 853. If the only nexus between defendants’ real
estate business and interstate commerce were the filing of
financing documents, then the answer to the question before
the court might be different.
This, however, is simply not the case. The defendants,
six corporations and three individuals, are alleged to have
engaged in a conspiracy to fix and maintain real estate
commissions between September 1974 and April 1977. The
six corporations allegedly sold real estate valued in the
millions of dollars during a twenty-two month period in
Montgomery County, one of the suburban Maryland coun-
ties contiguous with Washington, D. C. The indictment
alleges that a substantial number of the purchasers were
persons moving in or out of Montgomery County, persons
who may have learned of the defendants’ services either
through advertisements the defendants placed in news-
papers with interstate circulation or because of their mem-
bership in nationwide referral services. The indictment
further alleges that a component of the defendants’ services
is assisting purchasers in securing financing from govern-
mental and private institutions located outside of Maryland.
40a
Standing alone, it may be that no single part of the
defendants’ real estate business has a sufficient nexus to
cause their activities to fall under the Sherman Act. The
court, however, does not look at each of those components
of defendants’ services as separate and discrete entities,
divorced from the context in which those activities occur.
Rather, the court must analyze the totality of the activities,
in relation to the violations charged, to determine whether’
in the aggregate those activities have a substantial effect
on interstate commerce. This is not a case in which two real
estate brokers in a small rural community, who advertise
only in a local newspaper, who do not belong to any na-
tional or regional listing services, and who leave arrange-
ment of financing to lending institutions are charged with
fixing commission rates. As alleged, the defendants are
instead companies and businessmen who conduct multi-
million dollar operations, who are located in a large ex-
panding metropolitan area and whose services are used by
buyers and sellers moving into and out of Maryland, who
assist in arranging financing of residential properties sold
with governmental and lending agencies outside of Mary-
land, who attract purchasers through the use of multistate
referral services, and who advertise their brokerage busi-
ness interstate. From these allegations, the court concludes
that the indictment adequately charges that the defendants’
activities have a substantial effect on interstate commerce
and that the motions to dismiss for lack of jurisdiction”
should be denied.°
* Defendants have cited McLain v. Real Estate Bd. of New
Orleans, Inc. [1977-1] TrapE REGULATION Reports (CCH) § 61,486
(E. D. La. 1977), appeal docketed, No. 77-2423 (5th Cir. June
24, 1977), in support of their contention that the court is without
jurisdiction to try this action. As noted before, each case involving
Sherman Act jurisdiction turns on its own peculiar facts and
McLain is, therefore, one example of a district court’s exercise
of its economic judgment. To the extent, however, that McLain is
factually indistinguishable from the allegations here, this court
feels that an overly restrictive jurisdictional standard was used
4la
If.
Defendant Robert L. Gruen, Ine. [Gruen] has moved to
dismiss the indictment on three additional grounds. Gruen
argues (1) that section 1 of the Sherman Act, 15 U.S.C. $1,
as a felony statute, is unconstitutionally vague on its face
and as applied to it; (2) that section 1 violates the due proc-
ess clause of the fifth amendment by imposing felony pen-
alties without requiring that specific intent be an element
of the offense: and (3) that the indictment itself is imper-
missibly vague in violation of its rights under the fifth and
sixth amendments and Federal Rule of Criminal Procedure
7(e)(1).
Gruen argues that the amendments to section 1, which
increase the penalties for violations of the Sherman Act,
require the court to judge the statute by stricter standards
than previously. Citing Winters v. New York, 333 US. 507,
515 (1948), where the Court stated:
The standards of certainty in statutes punishing for
offenses is higher than in those depending primarily
upon civil sanction for enforcement. The crime “must
be defined with appropriate definiteness.” (citation
omitted).
Gruen contends that the language of section 1 does not pro-
vide adequate notice of the conduct which it prohibits and
is thereupon unconstitutionally vague. The restraint of
trade defendants are alleged to have engaged in its price-
by the district court. See Mims v. Kemp [1975-1 TRADE ‘UASES
{| 60,334], No. 74-1379 (4th Cir., filed May 12, 1975); A. Cherney
Disposal Co. v. Chicago & Suburban Refuse Disposal Ass’n [1973-
1 Trape Cases {| 74,582], 484 F. 2d 751, 758 (7th Cir. 1973), cert.
denied, 414 U. S. 931 (1974). Cf. Gateway Associates, Inc. v.
Essez-Costello, Inc. [1974-2 Traps Cases {| 75,231], 380 F. Supp.
1089, 1092-94 (N. D. Ill. 1974).
42a
fixing, which has long been held to be a per se * violation of
the Sherman Act. United States v. Socony-Vacuum Oil Co.,
[1940-1943 Trapr Casxs J] 96,031], 310 U.S. 150, 210 (1940) ;
Northern Pac. Ry. Co. v. United States [1958 Trane Cases
68,961], 356 U.S. 1, 5 (1958). The Court in Winters v. New
York, 333 U.S. 507, 515 (1948), stated that “(mJen of com-
mon intelligence cannot be required to guess at the meaning
of the enactment.” The Court’s qualification of that state-
ment is particularly appropriate to this case:
Connally v. General Construction Co., 269 U.S. 385,
391-92 [1926]: But it will be enough for present pur-
poses to say generally that the decision of the court up-
holding statutes as sufficiently certain, rested upon the
conclusion that they employed words or phrases, hav-
ing a technical of other special meaning, well enough
known to enable those within their reach to correctly
apply them, .. . or a well-settled common law meaning,
notwithstanding an element of degree in the definition
as to which estimates might differ, .. . or, as broadly
stated by Mr. Chief Justice White in United States v.
Cohen Grocery Co., 255 U.S. 81, 92, that, for reasons
found to result either from the text of the statutes in-
volved or the "jects with which they dealt, a stand-
ard of some sort was afforded.
333 U.S. at 515 n.4; see Parker v. Levy, 417 U.S. 733, 754
(1972). The Court in United States v. National Dairy Corp.
(1963 Trape Cases {| 70,666], 372 U.S. 29 (1963), discussed
the void for vagueness doctrine in the context of an indict-
ment brought under the Robinson-Patman Act:
*See United States v. Topco Associates, Inc. [1972 TrapE Cases
f 73,904], 405 U. S. 596 (1972), where the Court stated:
*“Without the per se rules, businessmen would be left with little
to aid them in predicting in any particular case what courts will
find to be legal and illegal under the Sherman Act.’’ 405 U.S. at
609-10 n. 10.
43a
Void for vagueness simply means that criminal re-
sponsibility should not attach where one could not rea-
sonably understand that his contemplated conduct is
proscribed. . . . In determining the sufficiency of the
notice a statute must of necessity be examined in the
light of the conduct with which a defendant is charged.
372 U.S. at 32-33 (citations omitted). Nash v. United States,
229 U.S. 373 (1913), upheld the constitutionality of the
Sherman Act, as a misdemeanor, in the face of a void for
vagueness challenge. 229 U.S. at 377-78. The illegality of
price-fixing has remained unchanged since Nash and the
mere increase in the criminal penalties does not cause a
formerly constitutional statute to become unconstitutional.
Gruen next argues that the increased penalties carry an
additional requirement—that the indictment charge that
the defendants acted with specific intent. The Supreme
Court in United States v. Patten, 226 U.S. 525 (1913). held:
[T]hat there was no allegation of a specific intent to
restrain such trade or commerce does not make against
this conclusion, for, as is shown by prior decisions of
this court, the conspirators must be held to have in-
tended the necessary and direct consequences of their
acts, and cannot be heard to say the contrary. In other
words, by purposely engaging in a conspiracy which
necessarily and directly produces the result which the
statute is designed to prevent, they are, in legal con-
templation, chargeable with intending that result.
226 U.S. at 543; Anderson v. Shipowner’s Ass’n, 272 U.S.
359, 363 (1926). The congressional determination to increase
the magnitude of the penalties for antitrust offenses was a
recognition that the then current penalties were no longer
commensurate with the severity of the offense. H. Rep. No.
93-1463, 93d Cong., 2d Sess., reprinted in [1974] U.S. Code
Cong. & Ad. News, 9535, 9540. Congress, however, did not
44a
amend section 1 of the Sherman Act to require specific in-
tent and this decision was well within its legislative pre-
rogative. The Constitution does not mandate a different
result and the court finds that section 1 of the Sherman
Act, as amended, does not violate defendants’ due process
rights.
Gruen’s final argument is that the indictment fails to de-
lineate with specificity the precise charges against the de-
fendants, violating the fifth and sixth amendments and Fed-
eral Rule of Criminal Procedure 7(c)(1). Read as a whole,
it is clear that the indictment states facts sufficient to con-
stitute an offense. The allegation of a combination in re-
straint of trade suffices to state the offense ({ 10-11); the
involvement of the defendants in that offense is sufficiently
stated ({/ 12); and the jurisdictional element adequately al-
leged (see Section I supra). United States v. Container
Corp. [1969 Trane Casss {| 72,675], 393 U.S. 333, 335 ( 1969) ;
United States v. Socony-Vacuum Oil Co. [1940-1943 Trapx
Cases 7 56,031], 310 U.S. 150, 221-25 (1940). The sufficiency
of the indictment is not to be confused with the possible
need for a bill of particulars. See Frankfort Distilleries v.
United States [1944-1945 Trape Cases 957,286], 144 F.2d
824, 831 (10th Cir. 1944), rev’d on other grounds [1944-1945
Trave Cases { 57,338], 324 U.S. 293 (1945).
Accordingly, it is this 29th day of July, 1977, Ordered
that defendants’ motions to dismiss be, and the same here-
by are, Denied.
APPENDIX C
45a
APPENDIX C
(Filed July 5, 1979) —
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
NO. 78-5014
UNITED STATES OF AMERICA
Appellee,
versus
BOGLEY, INC.
Appellant.
NO. 78-5019
UNITED STATES OF AMERICA ,
Appellee,
versus
ROBERT W. LEBLING,
Appellant.
ORDER
Upon consideration of the appellant’s motion for a
petition for rehearing and suggestion for rehearing en banc
and the government’s response to the motion, by counsel,
IT IS ORDERED that the petition for rehearing is
46a
denied. A poll was requested and a majority of its members
voted to deny the suggestion for rehearing en banc.
Entered at the direction of Judge Phillips for a panel
consisting of Judge Winter, Judge Cowen (Senior Judge,
U.S. Court of Claims), and Judge Phillips.
FOR THE COURT,
s William K. Slate. Il
Clerk
APPENDIX D
47a
APPENDIX D
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Criminal No.: 77-0185
Untrep States oF AMERICA,
if
Jack Fourey Rearty, Inc.; Boaiey, Inc.; Coreurrtr-Car-
RUTHERS, I[nc.; Ropert L. Gruen, Inc.; Scoick & PEPE
Reaxrty, Inc.; SHannon & Lucus Co.; Joun P. Fouey,
Jr.; Jonn T. CarruTHErs, Jr.; and Ropert W. LEsBLING,
Defendants.
Indictment
Filed 4/1/77
The grand jury charges:
|
DEFINITION
1. As used herein, the term “residential real estate” does
not include new homes sold on behalf of their builders or
developers.
Ii
DEFENDANTS
2. Each of the corporations named below in this para-
graph is hereby indicted and made a defendant herein. Each
of said defendants is incorporated and exists under the
laws of the state listed opposite its name, with its principal
place of business at the place listed. During all or part of
the period of time covered by this indictment, each of said
4dXa
corporations has been engaged in the real estate brokerage
business in Montgomery County, Maryland.
State of Principal Place
Name of Corporation Incorporation of Business
Jack Foley Realty, Inc. Maryland Bethesda, Maryland
Bogley, Ine. Maryland Chevy Chase,
Maryland
Colquitt-Carruthers,Inec. Maryland Bethesda, Maryland
Robert L. Gruen, Ine. Maryland Silver Spring,
Maryland
Schick & Pepe Realty, Inc. Maryland Wheaton, Maryland
Shannon & Luchs Company Delaware Washington, D.C.
3. Each of the individuals named below in this paragraph
is hereby indicted and made a defendant herein. Each of
said defendants, during all or part of the period of time
covered by this indictment, has been associated with the
designated defendant corporation in the capacity indicated.
Name of Defendant Corporation Position
John P. Foley, Jr. Jack Foley Realty, Inc. President
John T. Carruthers, Jr. Colquitt-Carruthers, Inc. President
Robert W. Lebling Bogley, Inc. President
III
CO-CONSPIRATORS
4. Various corporations and individuals not made defen-
dants herein have participated as co-conspirators with the
defendants in the offense alleged herein, and have per-
formed acts and made statements in furtherance thereof.
49a
IV
TRADE AND COMMERCE
5. The activities of defendant corporations, as herein-
after described, are within the flow of interstate commerce
and have an effect on that commerce.
6. For a commission or fee, real estate brokerage firms
such as defendant corporations render the service of bring-
ing together buyers and sellers of residential real estate
and of negotiating and arranging the prices and terms of
residential real estate sales in Montgomery County. Thou-
sands of parcels of residential real estate are listed with
and sold through Montgomery County brokerage firms
each year. In the period January 1974 through October
1975, defendant corporations handled sales of residential
real estate in Montgomery County totaling more than $350
million.
7. Because of the transient nature of a significant por-
tion of the population of the Metropolitan Washington,
D.C. area, of which Montgomery County is a part, a sub-
stantial number of the persons using the services of de-
fendant corporations in connection with residential real
estate sales are persons moving into Montgomery County
from places outside the State of Maryland and persons
moving from Montgomery County to places outside the
State of Maryland. Many Montgomery County brokers,
including several of the defendant corporations, belong to
nation-wide referral services through which they receive
and transmit to brokers in other parts of the country re-
ferrals of buyers and sellers of residential real estate.
8. As part of their service, defendant corporations ad-
vertise their listings of residential real estate located in
Montgomery County in newspapers located outside the
State of Maryland and whose circulations cover other states
and the District of Columbia. Such advertising is intended
50a
to and does attract buyers from outside the State of
Maryland.
9. As an additional part of their services, defendant cor-
porations often assist their clients in securing financing
necessary for the purchase of residential real estate in
Montgomery County. A substantial amount of the funds
used in financing residential sales handled by defendant
corporations moves into the State of Maryland in inter-
state commerce from other states. In addition, substantial
amounts of such funds are guaranteed under programs
of the Veterans Administration and the Department of
Housing and Urban Development, both of which are agen-
cies of the federal government headquartered in the District
of Columbia.
Vv
OFFENSE
10. Beginning in or about the month of September 1974,
and continuing thereafter until the date of the return of
this indictment, the defendants and co-conspirators have
engaged in a continuing combination and conspiracy in
unreasonable restraint of the aforesaid trade and com-
merce, in violation of Section 1 of the Sherman Act, as
amended (15 U.S.C. § 1). j
11. The aforesaid combination and conspiracy has con-
sisted of a continuing agreement, understanding and con-
cert of action among the defendants and co-conspirators,
the substantial terms of which have been to fix, raise and
maintain commission rates for the sale of residential real
estate in Montgomery County.
12. In effectuating the afcresaid combination and con-
spiracy, the defendants and co-conspirators have done those
things which they combined and conspired to do, including,
among other things, the following:
Sla
(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 Montgom-
ery County to 7 percent.
VI
EFFECTS
13. The aforesaid combination and conspiracy has had
the following effects, among others:
(a) commission rates on listings of residential real
estate in Montgomery County have been fixed, raised
and maintained at artificial and non-competitive levels;
(b) price competition among the defendants and co-
conspirators in the sale of their services has been re-
strained; and
(c) sellers of residential real estate in Montgomery
County have been deprived of free and open compe-
tition in the sale of real estate brokerage services.
S2a
VII
JURISDICTION AND VENUE
14. The aforesaid combination and conspiracy has been
carried out in part within the District of Maryland within
the five years preceding the return of this indictment.
A True BILL
Foreman
/3/ Donan I. Baker
Donald I. Baker
Assistant Attorney General
/s/ Wrt.am E. Swope
William E. Swope
/s/ Joun W. Poot, Jr.
John W. Poole, Jr.
Attorneys, Department of
Justice
Jervis S. Finney
United States Attorney
/s/ CHarues S. Stark
Charles S. Stark
/s/ Larry S. GANGNES
Larry S. Gangnes
Attorneys, Department of
Justice
Antitrust Division
Washington, D.C. 20530
Telephone: (202) 739-3200
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