Loew's, Inc. v. Cinema Amusements

• Decision Date: 26 February 1954
• Docket Number: No. 4511.,4511.
• Citation: 210 F.2d 86
• Parties: LOEW'S, Inc. et al. v. CINEMA AMUSEMENTS, Inc.
• Court: U.S. Court of Appeals — Tenth Circuit

210 F.2d 86 (1954)

LOEW'S, Inc. et al. v. CINEMA AMUSEMENTS, Inc.

No. 4511.

United States Court of Appeals Tenth Circuit.

January 7, 1954.

Rehearing Denied February 26, 1954.

COPYRIGHT MATERIAL OMITTED

C. Stanley Thompson, New York City (Richard H. Shaw, Denver, Colo., was with him on the brief), for appellant Loew's Incorporated.

James V. Hayes, New York City (Paul J. Quinn, New York City, and Richard H. Shaw, Denver, Colo., were with him on the brief), for appellant RKO Radio Pictures Incorporated.

Frederick W. R. Pride, New York City (Albert J. Gould, Kenneth L. Smith, Denver, Colo., and Charles F. Young, New York City, were with him on the brief), for appellant Twentieth Century-Fox Film Corporation.

Thurman Arnold and Norman Diamond, Washington, D. C. (L. A. Nikoloric, Portland, Or., Byron R. White, Denver, Colo., Arnold, Fortas & Porter, Washington, D. C., and Lewis, Grant & Davis, Denver, Colo., were with them on the brief), for appellee.

Before BRATTON, HUXMAN and MURRAH, Circuit Judges.

BRATTON, Circuit Judge.

Cinema Amusements, Inc., instituted this action against Loew's, Inc., RKO Radio Pictures, Inc., and Twentieth Century-Fox Film Corporation, sometimes hereinafter referred to as Loew's, RKO, and Fox, respectively. The action was brought under sections 1 and 2 of the Sherman Act, as amended, 26 Stat. 209, 50 Stat. 693, and sections 4 and 16 of the Clayton Act, 38 Stat. 730, 15 U.S.C.A. §§ 1, 2, 15 and 26, for injunctive relief and treble damages.

It was charged in the complaint that plaintiff was an independent operator of a motion picture theatre in Denver, Colorado, called the Broadway theatre; that the profitable operation of any motion picture theatre was dependent upon the ability of the operator to obtain films from the supply controlled by the major producers; that each of the defendants was engaged in the business of producing, distributing, and exhibiting motion pictures in interstate commerce in various parts of the United States and in foreign countries; that the defendants, together with Paramount Pictures, Inc., and Warner Brothers Pictures, Inc., comprised and represented substantially all of the major producers, distributors, and exhibitors of desirable feature motion picture films in the United States; and that by virtue of their copyright ownership of films of that kind, such companies directly or indirectly controlled the major source of supply of desirable feature motion pictures available for exhibition in the United States. It was further charged in substance that the defendants, along with other major producers and distributors not named as defendants, combined and conspired to monopolize the exhibition of all desirable motion pictures in the United States; that by various means, the defendants and other major producers acquired ownership or control of the vast majority of motion picture theatres in cities of substantial size in the United States; that through control of the avenues of distribution of films, the defendants and other major producers and distributors sought to perpetuate the respective monopoly positions enjoyed by them; that they combined and conspired by contract, agreement, and arrangement to assure desirable films to affiliated exhibitors upon profitable terms and to give such affiliates a monopoly of desirable runs and priorities of exhibition of films; that in like manner but with opposite effect, the defendants combined and conspired to use their copyright monopolies to prevent independent exhibitors from competing with affiliated exhibitors; and that in order to accomplish that end, the defendants and other major producers and distributors used their joint control of copyrights to exact exorbitant film rentals from independent operators, to deprive independent operators of desirable runs or priorities of exhibition of films, and to force independent operators to transfer control or profits of their theatres to the major producers. And it was further charged in substance that by reason of the combination and conspiracy, and in furtherance of its objectives, plaintiff was prevented from securing desirable first-run films for exhibition in its theatre; that plaintiff had been the victim of discrimination in the distribution of first-run films in favor of competing theatres, most of which were owned or controlled by some of the defendants; that such monopolistic acts and practices on the part of the defendants were steps in the perpetuation of the broad, nationwide conspiracy between and among the defendants whereby they attempted to and did monopolize the exhibition of desirable feature films throughout the United States, relegating independent exhibitors including plaintiff to the inferior position of low or last-run theatres regardless of their ability or willingness to pay comparable or higher film rentals in a free and open competitive market. By answer, the defendants admitted some of the allegations contained in the complaint but expressly denied the charge of combination and conspiracy. The cause was tried to a jury; the jury returned a verdict for plaintiff; the court entered judgment for treble damages; and the defendants appealed.

Loew's and Fox assert that the court improvidently admitted in evidence certain portions of the final decree entered by the United States Court for Southern New York in the case of United States v. Paramount Pictures, Inc., 334 U.S. 131, 68 S.Ct. 915, 92 L. Ed. 1260. The portions of the decree were admitted in evidence as against Loew's and Fox but not as against RKO. It is urged in effect that by the decree the court in New York determined and adjudicated the existence of a combination and conspiracy on an overall national basis; that the decree did not tend to prove the existence of a local combination and conspiracy in Denver; and that therefore the decree was not admissible in evidence in support of the cause of action pleaded in the complaint. Section 5 of the Clayton Act, 38 Stat. 731, 15 U.S.C.A. § 16, provides in presently pertinent part that a final judgment or decree rendered in a criminal prosecution or in a proceeding in equity brought by or on behalf of the United States under the antitrust laws to the effect that a defendant had violated such laws shall be prima facie evidence against such defendant in any suit or proceeding brought by any party against such defendant under such laws as to all matters respecting which the judgment or decree would be an estoppel as between the parties thereto. The statute makes a prior judgment or decree in favor of the United States available to a private litigant as prima facie evidence of all matters in respect to which it would operate as an estoppel between the defendants and the United States. Whether such a judgment or decree is admissible as evidence in an action brought by a private suitor against the parties who were defendants in the earlier action brought by the United States or on its behalf must be determined by reference to the general doctrine of estoppel. Emich Motors Corp. v. General Motors Corp., 340 U.S. 558, 71 S.Ct. 408, 95 L.Ed. 534. In its complaint, plaintiff charged among other things that the monopolistic acts and practices of the defendants in the Denver area were steps in the perpetuation of the broad, nationwide conspiracy between and among the defendants. After other evidence was introduced tending to show a concert of action on the part of the defendants and others to control the motion picture industry in the Denver area with its impact upon the business of plaintiff, the portions of the decree were admitted in evidence. And under the command of the statute, it was available to plaintiff as evidence. Emich Motors Corp. v. General Motors Corp., supra; Twentieth Century-Fox Film Corp. v. Brookside Theatre Corp., 8 Cir., 194 F.2d 846, certiorari denied, 343 U.S. 942, 72 S.Ct. 1035, 96 L.Ed. 1348. It was not conclusive evidence of the alleged conspiracy on which plaintiff's case was predicated, but it was admissible along with other evidence in making out a prima facie case against Loew's and Fox. Theatre Enterprises v. Paramount Film Distributing Corp., 74 S.Ct. 257.

The action of the court in withdrawing from the jury paragraph 17 of the decree entered by the court in New York is challenged. The defendants offered that paragraph in evidence. It provided that nothing contained in the decree should be construed to limit, impair, or restrict in any manner whatsoever the right of each distributor defendant to license the exhibition, or arrange by contract for the exhibition, of any or all of the motion pictures which such distributor may at any time distribute in any theatre in the ownership, lease, management, or operation, or in the proceeds or profits from the management or operation of which it directly or indirectly had a financial interest at the time of the entry of the decree and also at the time of the license. The court admitted the paragraph in evidence but later withdrew it from the jury. At the time of withdrawing it, the court instructed the jury to disregard it entirely, to not draw any inferences or conclusions from it, and as much as possible to erase it from their minds. It is argued that the decree had a direct bearing upon the conduct of the defendants and the propriety thereof; that it was admissible for the purpose of throwing light upon that issue; and that the instruction of the court at the time of the withdrawal of the particular paragraph unquestionably conveyed to the jury the impression that doubt existed in respect to the right of the defendants to license their pictures to theatres in which they had an interest. Whether the defendants had a right to license films which they produced or distributed for exhibition in theatres in which they had an interest was a matter of law to be covered in the instructions of the court. And in its general charge given at the conclusion of the trial, the court...