Fanchon & Marco, Inc. v. Paramount Pictures

• Decision Date: 11 August 1954
• Docket Number: No. 13308.,13308.
• Citation: 215 F.2d 167
• Parties: FANCHON & MARCO, Inc. v. PARAMOUNT PICTURES, Inc. et al.
• Court: U.S. Court of Appeals — Ninth Circuit

215 F.2d 167 (1954)

FANCHON & MARCO, Inc. v. PARAMOUNT PICTURES, Inc. et al.

No. 13308.

United States Court of Appeals, Ninth Circuit.

August 11, 1954.

MacFarlane, Schaefer & Haun, James H. Arthur, Los Angeles, Cal., Russell Hardy, Washington, D. C., for appellant.

O'Melveny & Myers, Homer I. Mitchell, Newlin, Holley, Tackabury & Johnston, W. B. Carman, Philip F. Westbrook, Jr., Frank R. Johnston, Hudson B. Cox, Los Angeles, Cal., for appellees.

Before ORR, LEMMON and FEE, Circuit Judges.

JAMES ALGER FEE, Circuit Judge.

This is an action under the Anti-Trust Act by a corporation which owns and operates motion picture theatres in Los Angeles and elsewhere against distributors of motion pictures and other theatre owners and operators. It is claimed there is a combination of defendants, who control eighty per cent of the supply and have a monopoly of distribution to refuse discriminatorily to release motion pictures to the Baldwin Theatre, operated by plaintiff on the outskirts of the metropolitan core, on first run day and date with theatres in downtown Los Angeles and to confine that house to a twenty-one day clearance in favor of the first run theatres, denying it a seven day or fourteen day basis. The action is not based on price fixing, but is concerned exclusively with runs and clearances. The Trial Judge found against plaintiff and dismissed the action.

The lengthy record and exhibits introduced have been carefully considered by this Court. Based upon this examination of the record ruled upon by an able and experienced Trial Judge, Hon. Leon Yankwich, who heard the case without a jury and who is well acquainted with the local distribution of motion pictures and operation of theatres in the Los Angeles area, the judgment must be affirmed.

During the course of the trial, the Judge carefully defined the issues of fact. A reading of the record indicates a crystallization of issues as exact as if there had been a definitive pre-trial order. Upon the issues so developed, the Trial Judge ruled seriatim.

The elaborate findings of fact have been reviewed, and there is no one of them which is clearly erroneous. Indeed, on the record, the Court confirms all the findings.

The essence of the findings is that defendants have not contracted, combined or conspired among themselves or with any motion picture producing or distributing companies, with Fox West Coast or with anyone else, in violation of the Act or as charged in the complaint. It is found that, in all determinations and action affecting appellant or the Baldwin Theatre, each distributor acted in accordance with its individual judgment. It is found that, in licensing first runs in the Los Angeles area, each acted individually in accordance with its own judgment, taking into consideration the general economic and business requirements of the distribution of motion pictures and special conditions affecting the particular distributor. It is found that the general pattern of negotiating licenses for exhibition in theatres with clearances to protect first runs is based upon the location of the theatre being considered, whether in more or less competitive municipalities on the perimeter of urban Los Angeles or in urban Los Angeles itself. It is found that the refusal of a first run to the Baldwin and its licensing on a twenty-one day availability was not the result of any concert, combination, conspiracy or agreement on the part of defendants or of any purpose to favor Fox West Coast, but was the result of each distributor for himself determining the business and economic grounds. It is found that, although the result may have been the refusal of a different basis to Baldwin, this was not due to concert of action among defendants.

The appellant sets out in its brief before this Court the ground of appeal as follows:

"Specifications of Error

"The Trial Court erred in finding and concluding, as a matter of fact and of law, that the unanimous refusals of appellees to license pictures to appellant for first run use at the Baldwin Theatre, or for second run use on 7 days availability, or on 14 days availability, were not in pursuance of conspiracy and monopolization, but were the individual acts of appellees."

An examination of the specifications themselves indicates that this statement is representative as to the points raised. The errors specified are general, and there is no indication that the findings are clearly erroneous by virtue of a special situation such as a drive-in theatre.¹

The appeal relates entirely to questions of fact.

The only question of law possibly suggested is the use and effect of the decrees in United States vs. Paramount and allied cases.² The weight and effect thereof were for the trial court. The main complaint³ of appellant is that the Trial Judge did not give the findings and judgments an effect which would result in findings of discrimination against appellant. It is here contended that these decrees were "conclusive" or "almost conclusive." A conclusive presumption is a rule of law. No rule of law required appellees to give Baldwin a preferred position irrespective of conditions at the time of filing of this case. The effect given the judgment by law is extremely limited. The trial court clearly stated the rule of the statute⁴ and gave these decrees and judgments the effect of prima facie evidence in favor of appellant as though it had been a party thereto, but properly found under the evidence as a whole that the presumption was rebutted and that appellees were not at the time conspiring to discriminate against the Baldwin or appellant.

Appellant contends there is no question as to credibility of a judgment as against witnesses. This is true. Nor can there be any contradiction of the effect to be given to the judgment, as that is fixed by statute. On the other hand, the weight of the judgment, if given full legal effect when balanced with changed conditions and present trade practices, may be very slight. For it must be remembered the decrees in above cases related to a combination to fix prices, runs and clearances, whereas all agree the present case is not based upon any claim of price fixing.⁵ The basic Paramount case indeed had its major emphasis upon price...