Baldwin v. Loew's Incorporated

• Decision Date: 16 January 1963
• Docket Number: No. 13810.,13810.
• Citation: 312 F.2d 387
• Parties: Ross J. BALDWIN and Dorothy E. Baldwin, Plaintiffs-Appellants, v. LOEW'S INCORPORATED, a Delaware corporation, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

312 F.2d 387 (1963)

Ross J. BALDWIN and Dorothy E. Baldwin, Plaintiffs-Appellants, v. LOEW'S INCORPORATED, a Delaware corporation, et al., Defendants-Appellees.

No. 13810.

United States Court of Appeals Seventh Circuit.

January 16, 1963.

Victor M. Harding, Whyte, Hirschboeck, Minahan, Harding & Harland, Milwaukee, Wis., for plaintiffs-appellants.

Steven E. Keane, David E. Beckwith, Foley, Sammond & Lardner, Milwaukee, Wis., for appellees, Loew's Inc., Paramount Film Distributing Corp., RKO Radio Pictures, Inc., Columbia Pictures Corp., Warner Bros. Pictures Distributing Corp., Warner Bros. Circuit Management Corp., Warner Bros. Theatres, Inc., Twentieth Century-Fox Film Corp., United Artists Corp. and Universal Pictures Corp. Lester S. Clemons, William K. McKibbage, Quarles, Herriott & Clemons, Milwaukee, Wis., for appellees, Fox Wisconsin Theatres, Inc. and Fox Amusement Corp.

Before SCHNACKENBERG, KNOCH and SWYGERT, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

Ross J. Baldwin and Dorothy E. Baldwin, plaintiffs, have appealed from an order of the district court dismissing their civil action against Loew's Incorporated, a Delaware corporation, Paramount Film Distributing Corporation, a Delaware corporation, RKO Radio Pictures, Inc., a Delaware corporation, Columbia Pictures Corporation, a New York corporation, Warner Bros. Pictures Distributing Corporation, a New York corporation, Warner Bros. Circuit Management Corp.,¹ Warner Bros. Theatres, Inc., a New York corporation, Twentieth Century-Fox Film Corporation, a New York corporation, Fox-Wisconsin Amusement Corporation, a Delaware corporation, Fox-Wisconsin Theatres, Inc., a Delaware corporation, United Artists Corporation, a Delaware corporation, and Universal Pictures Corporation, a Delaware corporation.

Plaintiffs' complaint, filed June 26, 1953, and an amended and supplemental complaint presented for filing on June 10, 1957 and actually filed pursuant to leave of court on April 2, 1962, made allegations of facts which were considered by the court in disposing of defendants' motion for summary judgment. The following statement contains those facts.

a. Plaintiffs are and have been since 1931 the owners of the Tosa Theatre, a motion picture theatre in the city of Wauwatosa, Wisconsin. Defendants include all of the major motion picture film distributors in the United States, and at the time this action was commenced they controlled 90% of the production and distribution of motion picture films in the United States.

b. In 1931 the Tosa Theatre was the best equipped neighborhood theatre in the Milwaukee area. Plaintiffs then sought from defendants the first playing availability of pictures after they played in the downtown Milwaukee theatres, but the request was refused until a film had played in the Uptown Theatre, an older neighborhood Milwaukee theatre, located over 2 miles from plaintiffs' theatre. The Uptown was then owned or operated by one of the defendants. Plaintiffs' theatre was arbitrarily placed by defendants in the same zone as the Uptown Theatre, and, under the rigid zoning and clearance system of film release maintained by defendants in the Milwaukee area, plaintiffs were precluded from playing motion pictures until the picture had first played the Uptown Theatre.

c. This situation prevailed until 1934 when the Times Theatre was opened in the western outskirts of the city of Milwaukee, in a building which had been remodelled from a garage and was far inferior as a theatre to the Tosa Theatre. Because the operator of the Times Theatre was a circuit operator of a number of other theatres, he was able to secure from defendants a playing position ahead of the Tosa Theatre.

d. About 1938 one of the defendants took over the operation of the Times Theatre, at which time the playing position thereof was advanced, to the further detriment of the Tosa Theatre.

e. Plaintiffs made repeated demands on defendants for a better playing position for the Tosa Theatre, but in vain. The Tosa Theatre, under plaintiffs' operation, was compelled by defendants to play pictures only under unreasonable and discriminatory terms of clearance and availability.

f. The reason plaintiffs were unable to obtain motion picture film, except under unreasonable and discriminatory terms, was because defendants were engaged in a continuing conspiracy in the licensing of film, in order to favor their own operated circuits of theatres and the circuits of theatres of others and to suppress the competition of independent theatre operators.²

g. As a result of the conspiracy among defendants, plaintiffs were unable to operate the Tosa Theatre on a profitable basis, and in 1940 were forced to lease the theatre to a large circuit operator, on terms far inferior to what plaintiffs would have obtained but for defendants' unlawful conspiracy in restraint of trade. In 1945, plaintiffs made a further lease of the theatre to the same circuit operator at similarly inferior terms, which lease was for a five-year term, with successive options granted to the lessee to renew at five-year intervals until 1965. Because of the continuing conspiracy of defendants, which has granted to circuit theatre operators more favorable terms and privileges, in the releasing of motion picture film, than are available to independent theatre operators, the lessee has been induced to exercise his option to renew the lease at the end of each successive five-year period.

h. The offerings of such favorable privileges to plaintiffs' lessee not available to independent operators, at the times when the lessee exercised the option to renew the lease (which recurred as recently as December 31, 1955),³ constituted overt acts by defendants which injured plaintiffs by prolonging the term of the lease during which they received inferior rentals and lease terms.

According to their brief, plaintiffs' cause of action, arising under section 4 of the Clayton Act, is based on matters complained of in the Paramount case, supra, and found by the Court in that case to exist and to be in violation of the antitrust laws.

1. Defendants, by their separate answers having pleaded the two-year statute of limitations of the state of Wisconsin, Section 330.21(1) Wis.Stats. 1951 and Section 330.19(4) Wis.Stats. 1951, plaintiffs moved the court, pursuant to 28 U.S.C.A. Rule 42(b), for a separate trial on that issue, which was granted.

On motions of defendants for summary judgment, pursuant to 28 U.S.C.A. Rule 56, filed January 31, 1957 and May 21, 1957, the court held inter alia that, assuming the relevant averments of the amended and supplemental complaint to be true, § 330.21(1) Wis.Stats. barred plaintiffs' claims. There was no issue of fact presented by the motions before the court. In Grengs v. Twentieth Century Fox Film Corp., 7 Cir., 232 F.2d 325, 329 (1956), we considered that act and construed it as requiring an action on a statute penalty to be brought within two years after its accrual and we held that the act's two-year limitation applied to an antitrust cause of action such as that asserted by plaintiffs here. We adhere to our holding in Grengs.

2. In an apparent attempt to conform with Grengs, plaintiffs filed their amended and supplemental complaint within two years after an event upon which they now rest their cause of action. Accordingly they now argue:

"The lessee of the Tosa Theatre was the operator of a circuit of theatres who received privileges and terms from the defendant distributors not available to the plaintiffs and other independent theatre operators. By reason of the continuing conspiracy of the defendants which resulted in this illegal discrimination, the lessee of the Tosa Theatre was induced to exercise his option to renew. The granting by the defendants of these privileges and favorable terms to the lessee, at the time that the lessee exercised his option to renew, constituted overt acts by the defendants pursuant to the illegal conspiracy charged here and in the government\'s case in United States v. Paramount." (Italics supplied.)

However in their amended and supplemental complaint, after describing the alleged unlawful practices, they say:

"The foregoing described practices of the defendants forced plaintiffs to lease the Tosa Theatre to the operator of a circuit of theatres under lease terms inferior to the terms which would be available but for said practices of the defendants. By favoring the lessee of plaintiffs\' Tosa Theatre in the lessee\'s operation of the theatre with motion picture film on terms sought by but denied to the plaintiffs, the defendants have prolonged the unfavorable lease of the Tosa Theatre and have caused the said lease to be renewed at successive five year intervals, the most recent being December 31, 1955."

Where one has been injured by a civil conspiracy a statute of limitations begins to run at the time that injury is inflicted. In ...