Bal Theatre Corp. v. Paramount Film Distributing Corp.

• Decision Date: 15 June 1962
• Docket Number: No. 34705,35663.,34705
• Citation: 206 F. Supp. 708
• Parties: BAL THEATRE CORPORATION, Plaintiff, v. PARAMOUNT FILM DISTRIBUTING CORP. et al., Defendants. BAL THEATRE CORPORATION, Plaintiff, v. UNITED CALIFORNIA THEATRES, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of California

206 F. Supp. 708

BAL THEATRE CORPORATION, Plaintiff, v. PARAMOUNT FILM DISTRIBUTING CORP. et al., Defendants.

BAL THEATRE CORPORATION, Plaintiff, v. UNITED CALIFORNIA THEATRES, INC., et al., Defendants.

Nos. 34705, 35663.

United States District Court N. D. California, S. D.

June 15, 1962.

COPYRIGHT MATERIAL OMITTED

Joseph L. Alioto, Maxwell Keith, San Francisco, Cal., for plaintiff.

M. Mitchell Bourquin, Michael N. Khourie, San Francisco, Cal., for defendant.

OLIVER J. CARTER, District Judge.

There are pending before the Court in the above-entitled actions motions for judgment notwithstanding the verdicts, or in the alternative for a new trial.

Action #34705 charges a conspiracy to restrain and monopolize trade and commerce in violation of Sections 1 and 2 of the Sherman Anti-Trust Act, 15 U.S. C.A. §§ 1 and 2; and action #35663 charges a conspiracy to restrain trade in violation of Section 1 of the Sherman Anti-Trust Act, 15 U.S.C.A. § 1.

The defendant United California Theatres, Inc., hereinafter referred to as "defendant", or "United California", on behalf of itself and its constituent corporations by merger, Golden State Theatre and Realty Corporation and T & D Jr. Enterprises, Inc., is the moving party. This defendant is a corporation which operates in excess of one hundred theaters in Northern California, including the Ritz and Hayward Theatres in Hayward, the Del Mar Theatre in San Leandro, the Lorenzo Theatre in San Lorenzo, and two drive-in theaters in the same area, all in the so-called East Bay Area adjacent to and south of the City of Oakland in the San Francisco Bay portion of California. The plaintiff operates a single theater, called the Bal Theatre in San Leandro, California. Both plaintiff and defendant, United California, are exhibitors of motion pictures, and the other defendants are so-called distributors of motion pictures.

In action #34705 the complaint charges that defendant, United California, and its constituent corporations, conspired with the named distributor corporations¹ to prevent plaintiff from receiving motion pictures for exhibition at its Bal Theatre on a 14-day availability after downtown Oakland closing, and to deny plaintiff its competitive position on runs and clearances by the defendant distributors fixing plaintiff's availability and granting clearances over plaintiff's theater to United California's theaters, without regard to the relative grossing possibility, location and appointments of the plaintiff's and United California's theaters, and refusing plaintiff licenses to exhibit on a 14-day basis, and by United California's coercive use of its buying power to negotiate and obtain licenses in "open towns" (competitive areas) upon the basis of granting licenses in "closed towns" (where no competition existed).

In action #35663 the complaint charged that the defendant United California, as an exhibitor, and Twentieth Century-Fox Film Corporation, hereinafter referred to as "Fox", as a distributor, conspired to prevent plaintiff from obtaining equipment with which to show cinemascope product before it was shown by United California by the process of fixing of availabilities and the granting of clearance over plaintiff's theater to United California by Fox, and the coercive use of its buying power by United California.

All the distributor defendants have been dismissed from these actions as the result of a covenant not to sue entered into between plaintiff and the distributor defendants, and the exhibitor defendants represented by United California are the only defendants remaining in these cases. The actions were consolidated for trial, and were tried to a jury, which rendered a general verdict for the plaintiff in both actions, in the sum of $153,500 in action #34705, and in the sum of $6,800 in action #35663. These verdicts were trebled, making a judgment of $20,400, plus attorney's fees and costs in action #35663. In action #34705 the amount of $25,000 (the amount previously paid to the plaintiff by the distributor defendants in consideration for the covenant not to sue), and $17,000 (the amount determined by the jury to be the value of certain playing rights granted by the distributor defendants to plaintiff in the covenant not to sue), or a total of $42,000, was deducted from the sum of $460,500 (the trebled verdict), leaving a judgment of $418,500, plus attorney's fees and costs.

The defendant has made motions for judgment notwithstanding the verdicts, or for a new trial. It is the Court's view that these motions must be denied, and that the real issue is presented on defendant's motions for a new trial. As is usual, the defendant attacks the sufficiency of the evidence to sustain the charge of conspiracy, and some of the rulings of the Court on the admissibility of evidence, and the soundness of the instructions given by the Court, and the failure of the Court to give certain instructions requested by defendant. The Court is satisfied that the question of whether there was a conspiracy within the charges set forth in the complaints was a question of fact for the jury, and that there was substantial evidence that the defendant conspired with the distributor defendants to suppress plaintiff's competition. The Court is further satisfied that the rulings on evidence were properly made, and that no error was made in the case which substantially prejudiced the rights of defendant. And, finally, the Court is satisfied that the instructions given on the issues in the case were in accordance with the principles of law set forth in the many reported cases dealing with this kind of anti-trust situation. Therefore, the Court is not going to add to the plethora of literature on the exhibitor-distributor type of motion picture anti-trust case, other than to say that the evidence is sufficient to support the verdicts of the jury, and that there were no errors of law on the admission of evidence, and giving of the instructions, in the general aspects of these cases, nor were the general verdicts of the jury excessive in the light of the evidence, and the principles laid down in the decided cases discussing the measure of damages in movie anti-trust cases.

However, there are three points raised in the various motions for a new trial which require consideration because of their novelty, or because they are directed specifically to the discretion of the trial judge apart from reviewing the verdicts of the jury. These three points are (1) the matter of the claimed inconsistency between the value of the playing rights granted in the covenant not to sue by the distributors to plaintiff as fixed by the jury in response to a special interrogatory and the general verdict in action #34705, and how the benefits received by the plaintiff from the distributor defendants as the result of the covenant not to sue should be set off against the judgments against the defendant United California; (2) the matter of fixing attorney's fees; and (3) the matter of the claimed misconduct of a juror in allegedly concealing material facts upon his voir dire examination.

I

THE CLAIMED INCONSISTENCY BETWEEN THE ANSWER TO THE INTERROGATORY AND THE GENERAL VERDICT IN ACTION 34705, AND THE COMPUTATION OF TREBLE DAMAGES.

The background to this area of the controversy stems from a partial settlement of the actions evidenced by a covenant not to sue entered into between plaintiff and the distributor defendants after the actions had been filed, and after the damage periods in controversy had terminated. The covenant not to sue was entered into on September 17, 1956, and the period of suit in action #34705 was June 15, 1952, to June 15, 1955, and in action #35663 was July 12, 1952, to July 12, 1956.

As a result of the covenant not to sue the distributor defendants paid the plaintiff the sum of $25,000 for the dismissal of both of these actions without prejudice and without costs by the plaintiff against the distributor defendants. As a part of the covenant not to sue and evidenced by letters dated September 17, 1956, from the various distributor defendants to plaintiff, the distributor defendants offered certain playing rights to plaintiff. These playing rights were described in the letters as "* * * the opportunity to bid competitively for licenses of our pictures against the Ritz and Hayward Theatres on their availability. That availability is now 14 days after Oakland first-run closing. Bidding will be subject to all the usual terms and conditions governing our bidding procedure. We reserve the right to permit other theatres to bid for the same availability against the Bal, Ritz and Hayward Theatres, or any of them." At the trial at the request of the defendant, United California, and over the objection of plaintiff, the Court propounded a special interrogatory to the jury to determine the monetary value of the playing rights granted by the distributor defendants to the plaintiff.² In answer to the interrogatory the jury determined the value of the playing rights to be $17,000. After the return of the verdict and the answer to the interrogatory, the defendant moved for a new trial under the provisions of Rule 49(b) of the Federal Rules of Civil Procedure, 28 U.S.C. A. upon the ground of the inconsistency between the answer to the special interrogatory and the general verdict. In this respect defendant's contention is that the general verdict of $153,500 for the period in suit (three years from 1952 to 1955), and the $17,000 value for the playing rights granted on September 17, 1956, although for different periods of time, are evaluations of essentially the same rights, namely, the right of the Bal Theatre to compete on an even basis with the defendant's Ritz and Hayward Theatres for motion picture products of the distributor defendants, and that the disparity in valuation is so great as to create an irreconcilable inconsistency between the verdict and the answer to the interrogatory. Rule...