Bertha Building Corp. v. National Theatres Corp.

• Decision Date: 28 March 1956
• Docket Number: 12074.,Civ. No. 12073
• Citation: 140 F. Supp. 909
• Parties: BERTHA BUILDING CORPORATION, Plaintiff, v. NATIONAL THEATRES CORPORATION, Defendant. GUMBINER THEATRICAL ENTERPRISES, Inc., Plaintiff, v. NATIONAL THEATRES CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of New York

140 F. Supp. 909

BERTHA BUILDING CORPORATION, Plaintiff, v. NATIONAL THEATRES CORPORATION, Defendant.

GUMBINER THEATRICAL ENTERPRISES, Inc., Plaintiff, v. NATIONAL THEATRES CORPORATION, Defendant.

Civ. Nos. 12073, 12074.

United States District Court E. D. New York.

March 28, 1956.

Corcoran, Kostelanetz & Gladstone, New York City, Boris Kostelanetz, Theodore E. Gladstone, Francis J. Mulderig, New York City, of counsel, for plaintiff.

Dwight, Royall, Harris, Koegel & Caskey, New York City, Frederick W. R. Pride, Charles F. Young, Stanley Godofsky, New York City, of counsel, for defendant.

GALSTON, District Judge.

Pursuant to an order dated June 25, 1954 of Judge Rayfiel, a separate trial on the issue of the statute of limitations was conducted in two actions brought under the Clayton Act, 15 U.S.C.A. § 12 et seq., against the defendant National Theatres Corporation. The actions were tried together. At the time of trial motions were made pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, 28 U.S.C.A., for judgment on the pleadings.

The plaintiffs are California corporations, owning and operating theatres in the City of Los Angeles, California.

The complaints contain substantially identical allegations of conspiracy differing only in order of arrangement of the paragraphs and in the specific details of damage to the particular plaintiff.

It is important to note that in the very first paragraph of the complaint concerning jurisdiction it is alleged:

"* * * the unlawful acts done in pursuance thereof, have been and were conceived, carried out, made effective and performed in part, within this District of the Court and elsewhere in New York and in Los Angeles, California, and throughout all parts of the United States."

Significant allegations are set forth as to the activities of operating subsidiaries of affiliates of the defendant in California. The defendant contends that the compelling inference must be that defendant, within the meaning of the Clayton Act, transacts business and is "found" within the State of California:

"Wherever in this complaint it is alleged that any acts were done by any Theatre Operating Subsidiary of National, plaintiff alleges that all of those acts, were done at the behest and instigation of National and were caused to be done by National pursuant to the unlawful combination and conspiracy of which National was a member, all as will be more completely set forth below.

"Unless otherwise specified, reference to National in this complaint is intended to include National and any theatre operating subsidiary or affiliate thereof as the context requires. * * *"

"National has, at all times mentioned in this complaint and since prior to 1930, controlled certain theatre operating companies which at all times mentioned in this complaint and since prior to 1930 have owned, controlled, leased or operated upwards of five hundred (500) theatres in the states of California, Missouri, Washington, Arizona, Kansas, Illinois, Oregon, Colorado, Utah, New Mexico, Wyoming, Idaho, Montana, Nebraska, Michigan and Wisconsin."

The plaintiffs define their own terms:

"10. Conspirators. The term `Conspirators' whenever used in this complaint is intended to include, but is not necessarily limited to each and any or all of the following: * * * and in addition to them, the defendant National Theatres Corporation, hereinafter referred to as National and the other defendants herein.

"11. Theatre Operating Subsidiaries of the Conspirators. The term, `Theatre Operating Subsidiaries of the Conspirators' is intended to include and designate those subsidiaries and affiliates of each or any or all of the Conspirators hereinbefore designated which own, control, lease, or operate or have any interest in any motion picture theatre or theatres."

With respect to the conspiracy, each complaint alleges:

"Prior to January 1st, 1930, the defendant National, and the other defendants herein and the Major Distributors and certain producing and distributing corporations affiliated with or controlled by or controlling them, entered into an unlawful combination and conspiracy to restrain and to monopolize interstate trade and commerce in motion picture films throughout and in all parts and places of the United States. The members of this unlawful combination and conspiracy have hereinbefore been identified and designated as the conspirators."

Trade practices were put into effect in California pursuant to the alleged conspiracy, which had as their object discrimination against so-called independent exhibitors, including the plaintiffs, to the advantage of the theatre-operating subsidiaries of the conspirators, including the theatre-operating subsidiaries of the defendant National in Los Angeles. Various means of effectuating the discrimination against the plaintiffs in Los Angeles are described, such as block booking, blind buying, uniform runs and clearances, fixing minimum admission prices and entering into joint theatre-operating agreements.

Overt acts of the conspirators in effectuating the conspiracy are charged:

"In pursuance of said combination and conspiracy the said Conspirators, including as aforesaid the defendant herein National, and affiliated corporations engaged in the practices and entered into the agreements and committed the acts herein alleged, all of which, unless otherwise stated, have been continuously and periodically done from the time of the formation of said conspiracy to July 20th, 1938, and subsequent thereto."

Certain practices are then described which are alleged to have been put into effect to favor the theatre-operating subsidiaries of National, and to discriminate against independent exhibitors, including plaintiffs in Los Angeles. For example:

"During all times mentioned in this complaint and since prior to 1930, the Conspirators have excluded independent exhibitors, including the plaintiff, from the business of operating first and/or second run theatres and the business of exhibiting pictures on the first and/or second run in the City of Los Angeles and in other cities of the United States with a population of over 100,000."

In Count Two of each complaint, it is alleged that there was a monopoly and conspiracy to monopolize the exhibition of motion pictures by National and its subsidiaries in certain areas, including specifically the State of California and particularly the City of Los Angeles. Means to effect the alleged monopoly are set forth:

"2. National and National's wholly owned subsidiary, Fox West Coast Theatres, Inc., a California corporation, with principal offices in Los Angeles, California, secured control of approximately Two Hundred and Sixty (260) theatres in the said states of California, Arizona, Nevada and New Mexico, which were organized and grouped into a circuit known as Fox West Coast Theatres, Inc.

* * * * *

"4. National coerced, induced or persuaded or forced the operators of theatres in said states, including the plaintiff, to cease operating their theatres either so that National or its Theatre Operating Subsidiaries could acquire such theatres or have removed the competition which such theatres in the hands of independent operators offered."

It is conceded that the Bertha cause of action accrued July 4, 1935, the Gumbiner December 8, 1931. It is from those dates that computations must be made as to the running of the statute of limitations.

Both actions were commenced in 1951, which is prior to the effective date of the four year federal statute of limitations, Section 4B of the Clayton Act, 69 Stat. 283, 15 U.S.C.A. § 15b, and therefore the applicable statute of limitations is determined by reference to the law of the state in which the action is pending. Chattanooga Foundry & Pipe Works v. Atlanta, 1906, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241; Hoskins Coal & Dry Dock Corp. v. Truax Traer Coal Co., 7 Cir., 1951, 191 F.2d 912, certiorari denied 1952, 342 U.S. 947, 72 S.Ct. 555, 96 L.Ed. 704; Schiffman Bros. v. Texas Co., 7 Cir., 1952, 196 F.2d 695.

A federal court in applying the state statute of limitations applies the entire statute, including the statutory borrowing provisions relating to causes of action accruing in foreign jurisdictions. Winkler-Koch Engineering Co. v. Universal Products Co., D.C.S.D.N.Y. 1947, 79 F.Supp. 1013; Hansen Packing Co. v. Swift & Co., D.C.E.D.N.Y.1939, 27 F.Supp. 364; Seaboard Terminals Corporation v. Standard Oil Co., D.C., 24 F. Supp. 1018, affirmed 2 Cir., 1939, 104 F. 2d 659.

The New York statute, Article II of the Civil Practice Act, 2d Ed. Cahill-Parsons 1955, contains a borrowing clause in Section 13:

"Where a cause of action arises outside of this state, an action cannot be brought in a court of this state to enforce such cause of action after the expiration of the time limited by the laws either of this state or of the state or country where the cause of action arose, for bringing an action upon such cause of action, except that where the cause of action originally accrued in favor of a resident of this state, the time limited by the laws of this state shall apply * * *."

Thus, under Section 13, if a cause of action is barred in the state where it arose, it will also be barred in New York against a non-resident, regardless of whether the period of time allowed by the New York statute of limitations has or has not run. Isenberg v. Ranier, 1st Dept.1911, 145 App.Div. 256, 130 N.Y.S. 27; Kirsch v. Lubin, Sp.Ct.N.Y.Co.1927, 131 Misc. 700, 228 N.Y.S. 94, affirmed 1st Dept.1928, 223 App.Div. 826, 228 N.Y.S. 825, affirmed 1928, 248 N.Y. 645, 162 N.E. 559; see Report of New York Law Revision Commission, N.Y.Legis. Doc.1943, No. 65, pages 142, 164.

The applicable California statute of limitations is three years. California Code of Civil Procedure, § 338, subd. 1.

In consequence, the causes of action alleged in the Bertha case were barred as of July 4, 1938, and the Gumbiner Theatrical case as of December...