Beacon Theatres v. Westover

• Decision Date: 19 May 1958
• Docket Number: No. 15614.,15614.
• Citation: 252 F.2d 864
• Parties: BEACON THEATRES, Inc., a corporation, Petitioner, v. The Hon. Harry C. WESTOVER, Judge of the United States District Court of the Southern District of California, Central Division, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

252 F.2d 864 (1958)

BEACON THEATRES, Inc., a corporation, Petitioner, v. The Hon. Harry C. WESTOVER, Judge of the United States District Court of the Southern District of California, Central Division, Respondent.

No. 15614.

United States Court of Appeals Ninth Circuit.

January 7, 1958.

Writ of Certiorari Granted May 19, 1958.

Weller & Corinblit, Los Angeles, Cal., for petitioner.

Frank R. Johnston, Los Angeles, Cal., for respondent.

Before HEALY, POPE and CHAMBERS, Circuit Judges.

Writ of Certiorari Granted May 19, 1958. See 78 S.Ct. 996.

POPE, Circuit Judge.

This is an original application by Beacon Theatres, Inc., seeking a writ of mandamus directed to the respondent Judge requiring him to take action to vacate certain orders made by him which petitioner asserts will operate to deprive petitioner of its right to trial by jury of certain issues presented by the pleadings in a case still pending in the respondent's court.

The petition for the writ and the response disclose that the parties to the pending litigation, Fox West Coast Theatres Corporation, plaintiff, and Beacon Theatres, Inc., defendant, are owners of theatres in or near the City of San Bernardino, California. The plaintiff, here called Fox, a Delaware corporation, owns the "California Theatre". The defendant, here called Beacon, a California corporation, is owner or lessee of the "Bel-Air Drive-In Theatre" situated some 11 miles distant from Fox's theatre. On October 31, 1956, Fox filed in the respondent's court a complaint against Beacon which was entitled "Complaint for Declaratory Relief". The complaint alleged the requisite amount in controversy and both diversity of citizenship of the parties and that the controversy arose under the laws of the United States, (the Sherman and the Clayton Acts, 15 U.S.C.A. §§ 17, 15 note, 12 et seq.). It stated that heretofore the plaintiff had received licenses from the major distributors of motion pictures in the United States, namely, Paramount Pictures, Inc., RKO Radio Pictures, Inc., Warner Brothers Pictures, Inc., Twentieth Century-Fox Film Corporation, Columbia Pictures Corporation, Universal Films Exchanges, Inc., Loew's Incorporated, and United Artists Corporation, whereby Fox had been given the right to first-run exhibition of motion pictures in the "San Bernardino competitive area", with reasonable periods of clearance or protection prior to subsequent run or exhibition in that area. Quoting: "That the right so to negotiate with the Distributors for first-run exhibition of motion pictures in said San Bernardino competitive area and to negotiate for a reasonable period of clearance or priority of run over subsequent exhibitions of the same motion picture in said area are and each of them is a valuable property right of plaintiff and of plaintiff's said California Theatre, the deprivation of which would result in substantial monetary damage and loss to plaintiff." It continues that defendant Beacon had recently constructed a drive-in theatre with a capacity for approximately 1000 automobiles; that the theatre was within the San Bernardino competitive area; and that the average driving time between plaintiff's and defendant's theatres was not more than 20 minutes; that the plaintiff's California Theatre was substantially competitive with defendant's Bel-Air Drive-In Theatre; that there were other theatres in that area substantially competitive with those of plaintiff and defendant and that in consequence any one theatre may validly be granted clearance over all the others within the purview of the opinion and findings of a Special Expediting Court in the case of United States v. Paramount Pictures, Inc., 85 F.Supp. 881, rendered in the United States District Court for the Southern District of New York and entered on February 8, 1950;¹ Paragraphs XI and XII are as follows:

"XI. An actual controversy relating to the legal rights and liabilities of plaintiff and defendant exists and arises out of the following facts: Defendant contends that its theatre is not in substantial competition with plaintiff\'s California Theatre, or with other theatres located in the San Bernardino competitive area, and that it is entitled to exhibit motion pictures distributed by the above named Distributors day and date, that is to say simultaneously, with their first-run exhibition in the San Bernardino competitive area, and that neither the plaintiff nor the other owners and operators of theatres within said area are entitled to negotiate with said Distributors for any clearance over defendant\'s Bel-Air Drive-In Theatre.

"Plaintiff contends that its California Theatre is substantially competitive with defendant\'s Bel-Air Drive-In Theatre on first-run in said area, and that the other said theatres in the San Bernardino area are each of them substantially competitive with each other, to an extent justifying the granting of clearance to one theatre over others within the purview of the opinion and findings of the Special Expediting Court in United States v. Paramount Pictures, Inc., above referred to, and that the granting of clearance by the Distributors would not be within the injunctive provisions against the granting of any clearance to theatres not in substantial competition within the meaning of the consent decrees and final decrees in said action above referred to.

"Plaintiff further contends that it has an equal right with the defendant to negotiate with each Distributor independently for a prior run for plaintiff\'s California Theatre ahead of any other theatre, including defendant\'s Bel-Air Drive-In Theatre, in said competitive area and that there is no obligation on the part of any Distributor in such a case to grant an equal and simultaneous run to defendant\'s said Bel-Air Drive-In Theatre.

"XII. The defendant, in addition to contending that its said Bel-Air Drive-In Theatre is not substantially competitive with any other theatre in the San Bernardino area on first-run exhibition in said area, has threatened plaintiff and has stated to plaintiff in substance and effect that it has threatened the Distributors above mentioned that if plaintiff\'s said California Theatre is granted any clearance over defendant\'s Bel-Air Drive-In Theatre, or is granted a prior run, said action on the part of plaintiff will be deemed by defendant to be an overt act in concert with any distributor who may grant plaintiff such clearance or such priority of run in restraint of trade and a violation of the Sherman Antitrust Act and of the decrees of the Special Expediting Court in United States v. Paramount Pictures, Inc., et al., and that plaintiff will be subjected to an action by said defendant for treble damages under Section 4 of the Clayton Act (Title 15 USC Section 15). That said threats and the duress and coercion upon the Distributors arising out of and resulting from said threats of litigation threaten to and have in fact deprived plaintiff and its said California Theatre of the right to negotiate for motion pictures upon their first-run in the San Bernardino area and to negotiate for clearance over theatres in competition with plaintiff\'s said theatre upon said first-run, including defendant\'s Bel-Air Drive-In Theatre. That plaintiff is without any speedy or adequate remedy at law and will be irreparably harmed unless defendant and its officers, agents and employees, are restrained and enjoined from instituting any action under the anti-trust laws against plaintiff and said Distributors, or any of them, based upon the facts hereinabove alleged during the pendency of this action and until such time as the court shall determine whether or not the plaintiff and defendant have an equal and correlative right to license a prior run with clearance on behalf of their respective theatres."

The prayer was for an adjudication that a grant of clearance between these theatres on first run was reasonable and not a violation of the anti-trust laws; and that the distributors mentioned were entitled to negotiate with Fox and Beacon and other theatre owners equally for prior runs in that competitive area; that pending final decision Beacon be restrained and enjoined from commencing any action under the anti-trust laws against Fox and against the distributors, and that the court grant such further relief, equitable or otherwise, as it deemed proper or necessary in the premises.

Thereafter Beacon filed its "Answer, Counter-Claim and Cross-Claim and Demand for Jury Trial", in which it put in issue the allegations of the complaint.² The counterclaim and cross-claim contained extensive allegations asserting that the plaintiff and certain other owners of local theatres at or near San Bernardino, together with the above mentioned distributors, entered into an agreement, combination or conspiracy in unreasonable restraint of trade in violation of § 1 of the Sherman Act and a continuing combination and conspiracy to monopolize trade and commerce in violation of § 2 of that Act. Beacon asked judgment in its favor on the cause of action asserted in plaintiff's complaint. It prayed for judgment against Fox (and against another local theatre owner which had intervened on the side of Fox) for three-fold damages in the sum of $300,000, and for injunction against continuation of the alleged conspiracy. Jury trial was demanded "with respect to the complaint, answer, counterclaim and cross-claim."

Asserting that defendant Beacon was not entitled to have the issue presented by the complaint tried to a jury, Fox moved to strike the demand for jury trial on the complaint and the answer thereto. The respondent Judge granted the motion and ordered the issues presented by the plaintiff's complaint to be tried to the court without a jury; he also granted the plaintiff's further motion for a separation of the issues raised by the complaint and the answer thereto from the anti-trust issues raised by the defendant's counterclaim and cross-claim,³...