Ayers v. Pastime Amusement Company

• Decision Date: 16 April 1968
• Docket Number: Civ. A. No. 6481,6482.
• Citation: 283 F. Supp. 773
• Parties: Lawrence H. AYERS, Plaintiff, v. PASTIME AMUSEMENT COMPANY, Albert Sottile, Consolidated Theatres, Inc., Paramount Film Distributing Corporation, Loew's, Incorporated, Twentieth Century-Fox Film Corporation, Warner Bros. Pictures Distributing Corporation, RKO Teleradio Pictures, Inc., United Artists Corporation, Universal Film Exchanges, Inc., Columbia Pictures Corporation, Defendants. Lawrence H. AYERS and Ruth T. Ayers, Plaintiffs, v. PASTIME AMUSEMENT COMPANY, Albert Sottile, Consolidated Theatres, Inc., Paramount Film Distributing Corporation, Loew's, Incorporated, Twentieth Century-Fox Film Corporation, Warner Bros. Pictures Distributing Corporation, RKO Teleradio Pictures, Inc., United Artists Corporation, Universal Film Exchanges, Inc., Columbia Pictures Corporation, Defendants.
• Court: U.S. District Court — District of South Carolina

283 F. Supp. 773

Lawrence H. AYERS, Plaintiff, v. PASTIME AMUSEMENT COMPANY, Albert Sottile, Consolidated Theatres, Inc., Paramount Film Distributing Corporation, Loew's, Incorporated, Twentieth Century-Fox Film Corporation, Warner Bros. Pictures Distributing Corporation, RKO Teleradio Pictures, Inc., United Artists Corporation, Universal Film Exchanges, Inc., Columbia Pictures Corporation, Defendants.

Lawrence H. AYERS and Ruth T. Ayers, Plaintiffs, v. PASTIME AMUSEMENT COMPANY, Albert Sottile, Consolidated Theatres, Inc., Paramount Film Distributing Corporation, Loew's, Incorporated, Twentieth Century-Fox Film Corporation, Warner Bros. Pictures Distributing Corporation, RKO Teleradio Pictures, Inc., United Artists Corporation, Universal Film Exchanges, Inc., Columbia Pictures Corporation, Defendants.

Civ. A. Nos. 6481, 6482.

United States District Court D. South Carolina, Charleston Division.

April 16, 1968.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Edward K. Pritchard, Pritchard, Myers & Morrison, Charleston, S. C., W. Bradley Ryan, Boston, Mass., for plaintiff.

J. C. Long, Arthur G. Howe, Charleston, S. C., for defendants.

ORDER

SIMONS, District Judge.

Civil Action No. 6481 was commenced by the filing of a complaint on October 9, 1957, by plaintiff Lawrence H. Ayers, operator of the Summerville Theatre, Summerville, South Carolina, and the Holly Hill Drive-In Theatre, Holly Hill, South Carolina, against defendants seeking treble damages for alleged violation by defendants of the anti-trust laws of the United States, namely, the Sherman Anti-Trust Act, Title 15 U.S.C.A. Sections 1, 2 and 7, and the Clayton Act, Title 15 U.S.C.A. Sections 12, 15, 16 and 22. Jurisdiction of this court is provided for in these acts and is not in dispute.

Civil Action No. 6482, a companion action, was also commenced on October 9, 1957 by plaintiffs Lawrence H. Ayers and Ruth T. Ayers, operators of the Four Mile Drive-In Theatre, Charleston, South Carolina, against defendants, alleging violation of the Sherman and Clayton Anti-Trust Acts, supra, and seeking treble damages.

After his death the individual defendant Albert Sottile was voluntarily dismissed from both actions. In 1964 the eight national distributor defendants entered into a compromise settlement with plaintiffs in both actions whereby they collectively paid to plaintiffs a total of $42,500.00 on the basis of covenants not to sue, and were in due course dismissed with prejudice from both actions. In the covenants plaintiffs specifically reserved all claims and causes of action which they had against the remaining defendants in each action.

In January 1968 defendant Consolidated Theatres, Inc., entered into a compromise settlement with plaintiffs on the basis of a covenant not to sue whereby it paid to plaintiffs the sum of $7,000.00 and were dismissed from both actions with prejudice.

Presently the sole remaining defendant is Pastime Amusement Company, and the two actions are now before the court on this defendant's motion to dismiss each action against it upon the ground that the complaints fail to state claims upon which relief can be granted. The motion is supported by affidavits, various exhibits, the depositions in the record, and the pleadings. Upon the hearing of the motion it was stipulated and agreed by counsel for the parties that defendant's motion should be treated as a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure.

The first count of the complaint in each action alleges a conspiracy of national significance to monopolize and restrain interstate commerce and trade in the distribution of motion pictures. At oral argument upon the motion plaintiffs' counsel stated that inasmuch as the eight national distributors had been eliminated as party-defendants, plaintiffs no longer seek to recover under count one of their complaints. It is therefore proper that Pastime's motion for summary judgment be granted as to count one in each complaint without further ado.

In Civil Action No. 6481 plaintiff Lawrence H. Ayers alleged a conspiracy involving defendant Pastime and the dismissed defendants as co-conspirators, which injured plaintiff in the operation of his drive-in theatres in Summerville and Holly Hill, South Carolina. The pertinent portions of count two of his complaint are as follows:

"2. (a) Prior to 1947 the defendants and various other persons and corporations entered into an unlawful combination and conspiracy, other than and different from the national conspiracy alleged in the first count of this complaint, to restrain and to monopolize interstate trade and commerce in motion picture films, particularly the right of the plaintiff and various independent exhibitors operating theatres in and near cities where theatres of the defendant exhibitors were located, to contract for and to exhibit said films within a reasonable time after national release date or territorial release date, without unreasonable or unlawful restrictions against them in favor of the theatres of the defendant exhibitors and in other ways and by other means unlawfully to discriminate against the said independent exhibitors, including the plaintiff, in favor of the defendant exhibitors.

"(b) The purpose and intent of said combination and conspiracy were and are to minimize, suppress and destroy competition in contracting for and exhibiting films in and near the said city of Charleston, and in the said towns of Summerville and Holly Hill and in other cities where theatres of the defendant exhibitors were located; to establish and maintain a uniform structure of runs, clearance and admission prices in and near the said cities; to induce the public to attend the exhibition of films at the theatres of the defendant exhibitors, and to prevent them from attending the theatres of the plaintiff and other independent exhibitors; to cause the theatres of the plaintiff to be operated at a financial loss, and ultimately to force independent exhibitors, including the plaintiff, to retire from business; and to establish and maintain a monopoly in the said defendant exhibitors of the prior right to contract for and to exhibit motion picture films in and near the said cities.

"3. By reason of the aforesaid combination and conspiracy of the defendants, and of their acts and practices in pursuance of it, and of the monopoly and restraint of trade created thereby, the plaintiff has been grievously injured and damaged in his business and property. At all times he has been ready, able and willing to contract in the usual course of interstate commerce for licenses to exhibit motion picture films of the defendant distributors on or shortly after national release date or territorial release date, without unreasonable or unlawful restrictions against him, but the defendant distributors have refused to enter into contracts with him or to permit him to exhibit their films, except upon the condition that they should not be exhibited until the lapse of long periods of time after their exhibition in the theatres of the defendant exhibitors and in other theatres in the said city of Charleston and in the said towns of Summerville and Holly Hill. He has been compelled to pay excessive and unreasonable prices for films of the defendant distributors exhibited by him. He has lost the patronage of the public to a considerable degree and has suffered serious and permanent damage to the goodwill of his business. By reason thereof the plaintiff was unable to continue the operation of said theatres and was compelled to cease operation at the times stated in paragraph 21 of count 1 of this complaint. Since that time he has incurred necessary expenses in connection with the maintenance and ownership of said theatres; and he has lost profits and sustained losses he would not have lost or sustained except for the aforesaid unlawful combination and conspiracy."

Plaintiff demands judgment against defendant in count two of this complaint for one million dollars ($1,000,000) damages, attorneys' fees and costs.

In Civil Action No. 6482 plaintiffs Lawrence H. Ayers and Ruth T. Ayers allege in Count two of their complaint a conspiracy of defendant Pastime and the dismissed defendants as co-conspirators, which injured plaintiffs in the operation of their Four Mile Drive-In Theatre located approximately one and one-half miles from the city of Charleston. The allegations of Count two of plaintiffs' complaint in this action are substantially the same as those quoted hereinabove from Count two of the complaint in Civil Action No. 6481. Plaintiffs seek judgment against defendants for Three Hundred Fifty Thousand Dollars damages, attorneys' fees and costs.

Defendant Pastime duly answered the complaints in each action denying all of the material allegations thereof.

During the ten-year period of the pendency of these actions numerous depositions, exhibits, and affidavits have been filed by the parties, which indeed constitute a voluminous record. Included among depositions on file are the following: Lawrence H. Ayers and Ruth T. Ayers, plaintiffs; H. J. Meyers, vice president and general manager of defendant Pastime; Frank H. Bedenfield, executive vice-president of former defendant Consolidated Theatres, Inc.; Ulmer Eaddy, film buyer of Consolidated Theatres, Inc.; branch managers of the former defendant distributors Paramount Film Distributing Corporation, Warner Bros. Pictures Distributing Corporation, Columbia Pictures Corporation and Loew's, Incorporated. Also on file are affidavits of H. G. Meyer and Frank Bedenfield in support of defendant Pastime's motion for summary judgment. Plaintiffs have also filed counter-affidavits of plaintiff Ruth T. Ayers in opposition to defendant's motion for summary judgment. Also all of Pastime's contracts with distributors in reference to the booking of their film at its theatres have been made available and inspected by plaintiffs' counsel...