Admiral Theatre Corp. v. Paramount Film Dist. Corp.

Decision Date21 November 1955
Docket NumberNo. 42-53.,42-53.
Citation140 F. Supp. 686
PartiesADMIRAL THEATRE CORPORATION, a corporation, Plaintiff, v. PARAMOUNT FILM DISTRIBUTING CORPORATION, a corporation, Loew's, Incorporated, a corporation, Warner Bros. Pictures Distributing Corporation, a corporation, and Twentieth Century-Fox Film Corporation, a corporation, Defendants.
CourtU.S. District Court — District of Nebraska

COPYRIGHT MATERIAL OMITTED

Paul F. Good, Monsky, Grodinsky, Good & Cohen, Omaha, Neb., for plaintiff.

Yale C. Holland, Kennedy, Holland, DeLacy & Svoboda, Omaha, Neb., for defendant Paramount.

Seymour L. Smith, Robert L. Smith, Omaha, Neb., for defendants Loew's, Warner Bros. and Twentieth Century-Fox Film Corp.

RIDGE, District Judge.

Plaintiff charges defendants, distributors of motion picture films, with conspiracy to restrain trade in violation of the Sherman and Clayton Acts, 15 U.S. C.A. §§ 1-15, and seeks recovery of treble damages as a consequence thereof.

At the commencement of the alleged conspiracy and throughout the period of its existence, plaintiff exhibited second-run feature motion pictures in its Admiral Theatre in Omaha, Nebraska, "day and date" with certain other theatres, which at all times were admittedly in substantial competition with it. ("Day and date," "availability", "run", "clearance", and other technical terms used herein are spelled out, as are the legal identity of parties, in the stipulation of facts filed herein. To shorten this memorandum, those interested are referred thereto.)

The object of the conspiracy here charged, tersely stated, is: The defendants, and four other distributors of motion pictures, and one Goldberg, not joined as parties herein, concertedly denied and refused plaintiff, after demand therefor, the right to negotiate for the exhibition of feature motion pictures in the Admiral Theatre, on an exclusive second-run basis, with reasonable clearance over other theatres in Omaha, Nebraska, in substantial competition with the Admiral. Had the defendants and others not so conspired, and had plaintiff been successful by individual negotiations with the distributors and induced them to give it the "right" to exhibit feature pictures on exclusive second run, with reasonable clearance, at the Admiral Theatre, plaintiff says it would have been enabled to increase the admission price it charged at the Admiral Theatre over that which it charged while showing second-run features "day and date" with theatres in substantial competition with it, and its theatre attendance would have been increased thirty-five per cent. Thus its claim to actual damages.

Specific acts of alleged discrimination, favoritism and failure to negotiate "theatre-by-theatre" are asserted by plaintiff. As will hereafter more fully appear, such matters are merely relied on by plaintiff as evidence of the existence, and not the ultimate fact of impact, of the conspiracy charged on plaintiff's business of operating the Admiral Theatre. Whether a conspiracy exists as plaintiff contends is, of course, a question of ultimate fact to be established by evidence, but whether the facts bring the defendants' acts within the prohibition of the Sherman Act is a question of law. Gary Theatre v. Columbia Pictures Corp., 7 Cir., 120 F.2d 891, 894.

Defendants have filed motion for summary judgment. At pre-trial conference the parties were ordered to state, and they have cooperatively stated, their respective theories of claim and defense. Certain evidentiary facts have been stipulated. Depositions of the parties, containing admissions of fact, are on file. These proceedings, then, have reached a stage tantamount to that as if opening statements had been made at the trial of this case before a jury, if a jury had been empaneled, and we were called upon to rule as a matter of law whether plaintiff has any claim against the defendants. The instant motion for summary judgment is considered in the above background. In so doing, we give plaintiff every favorable, reasonable inference from the facts pleaded, stipulated, contained in the depositions, and stated at pre-trial conference. Consequently, we assume, as we must, the existence of a combination and conspiracy among the defendants, having as its object a refusal to negotiate as above stated. That is the claim, and only claim, asserted or made by plaintiff for damages to its "business or property" because of the Sherman Act violation here charged.

The Admiral Theatre Corporation, (organized under the laws of Nebraska) is the owner and operator of the Admiral Theatre, a "neighborhood" or "suburban" house, located in about the center of population and transit facilities in Omaha, Nebraska. It has a seating capacity of 972; is very modern and up-to-date in its appointments and equipment; with the Chief Theatre, hereinafter adverted to, it is one of the newest motion picture theatres in that City. The "Admiral" was opened in 1941. At that time there were twenty-four other motion picture theatres in Omaha. The plaintiff's cause of action is particularly addressed to certain theatres owned and operated by R. D. Goldberg Theatres Corporation (hereinafter referred to as Goldberg). At the time the Admiral Theatre began operations the Goldberg corporation owned and operated, in Omaha, Nebraska, among other motion picture theatres, the "Military", "Avenue" and "Dundee" Theatres. Each of said Goldberg theatres is located 1.8, 1.4 and .9 miles, respectively, from plaintiff's Admiral Theatre, and is, according to the plaintiff's admission and theory of action, in substantial competition with the latter. (We shall also assume substantial competition to be an established fact herein, though all the defendants do not specifically admit the existence thereof. However, they do not categorically deny plaintiff's claim to the existence of substantial competition. From the record herein, we do not perceive how there can be any real controverted issue regarding that matter.) All contracts and bookings for motion pictures for the Goldberg theatres are made by one central office under the personal direction and control of Ralph D. Goldberg.

When plaintiff opened the Admiral Theatre it ran into some difficulty in obtaining second-run pictures from the eight major distributors of motion pictures in Omaha. It was able to get some second-run pictures from Fox, and some from Warner Bros. For the most part, it began exhibition with Republic, feature pictures. At that time the Military, Avenue and Dundee were second-run operations in Omaha. In October, 1944, some of the major companies negotiated with Admiral for "day and date" availability with the above three Goldberg theatres. The Admiral then went to a policy of a divided week, exhibiting second-run pictures on Saturdays, Sundays and some other days, and a later run of pictures for the rest of the week. Finally, after repeated demands therefor, plaintiff, in the latter part of 1946, was able to obtain second-run pictures from all the major distributors of motion pictures in Omaha. Some distributors at that time granted plaintiff "day and date" availability with the above three Goldberg theatres and some a later availability, of as much as fourteen days after Goldberg's availability to second-run pictures. However, to obtain second-run feature pictures from Paramount and Metro, plaintiff was required to "split the product" of those companies with Goldberg's Avenue or Dundee Theatre. That is, plaintiff obtained second-run pictures from Paramount, and Metro, which it could only play "day and date" with either the Avenue or the Dundee; while at the same time Goldberg's Military Theatre was afforded an "open" availability and could, and did at times, play the same feature picture "day and date" with the Admiral. More often it played other feature pictures. This, plaintiff charges, permitted Goldberg to receive one-half the product of those two distributors for exhibition in its Military Theatre without any competition in respect thereto from the Admiral Theatre, while at the same time plaintiff's Admiral Theatre was always subject to competition from at least two Goldberg theatres because it was required to "split" the product of Paramount and Metro. It appears, however, that as to the product of Warner Bros. and Fox, plaintiff, at least from and after 1946, was permitted to play the same "day and date" with the Goldberg theatres.

In April, 1947, plaintiff built and opened another motion picture theatre in South Omaha, "The Chief." It is owned by plaintiff, but operated by The Chief Theatre Corporation, and managed by Ralph R. Blank, who is also the managing officer of plaintiff's Admiral Theatre. "The Chief" began operation as a second-run house and continued so until November, 1952. Since that date it has exhibited feature pictures first run.

In early 1948, Goldberg's Dundee Theatre dropped out of second-run operation in Omaha. It went to a policy of "art" and "special interest" pictures. This then was the situation respecting second-run exhibition of motion pictures in Omaha in September, 1948. Five motion picture theatres in downtown Omaha were exhibiting first-run pictures: the Orpheum, Omaha, Paramount, Brandeis and the State; the latter owned and operated by Goldberg. The plaintiff's Admiral and Chief, and Goldberg's Avenue and Military then exhibited second-run pictures forty-five days after first run, with "clearance" over subsequent-run operations. All other Omaha suburban theatres played behind the Admiral, Chief, Avenue and Military, that is to say, third run or later. At that time, plaintiff's Admiral Theatre was playing the product of Warner Bros. and Fox, "day and date" with Goldberg's Avenue and Military Theatres. The product of Paramount and Loew's was then exhibited on a "split of product" policy between said three theatres. Plaintiff's Chief Theatre was exhibiting the product of all distributors on second-run "open" availability.

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