Brown v. Western Massachusetts Theatres, Inc.

• Decision Date: 24 April 1961
• Docket Number: No. 5715.,5715.
• Citation: 288 F.2d 302
• Parties: Herbert I. BROWN, Plaintiff, Appellant, v. WESTERN MASSACHUSETTS THEATRES, INC., Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

288 F.2d 302 (1961)

Herbert I. BROWN, Plaintiff, Appellant, v. WESTERN MASSACHUSETTS THEATRES, INC., Defendant, Appellee.

No. 5715.

United States Court of Appeals First Circuit.

March 10, 1961.

Rehearing Denied April 24, 1961.

George S. Ryan, with whom W. Bradley Ryan and Ryan & Ryan, Boston, Mass., were on the brief, for appellant.

Philip M. Cronin, Boston, Mass., with whom Charles E. Gennert, Boston, Mass., Samuel T. Tisdale, Greenfield, Mass., Withington, Cross, Park & McCann, Boston, Mass., and Hesselton & Tisdale, Greenfield, Mass., were on the brief, for appellee.

Before HARTIGAN and ALDRICH, Circuit Judges, and JULIAN, District Judge.

ALDRICH, Circuit Judge.

This is an action under the Sherman and Clayton Acts. 15 U.S.C.A. § 1 et seq. At the close of the plaintiff's case the court ordered a verdict for the defendant. The only question of moment on this appeal is whether the evidence warranted a finding that defendant Western Massachusetts Theatres, Inc., conspired with several other named parties to monopolize and restrain trade in the exhibition of first-run¹ motion pictures in Greenfield, Massachusetts. The plaintiff is the operator of the Victoria, a motion-picture theatre in Greenfield, and defendant owns a chain of such theatres, including one in Greenfield, the Garden. The alleged coconspirators were the M. A. Shea Massachusetts Corp.,² also an owner of a chain of theatres, including the Lawler, the remaining theatre in Greenfield, and nine major motion-picture distributors.³ The gist of the complaint is that the distributors jointly agreed with the exhibitors, Western and Shea, to divide the bulk of their first-run product between the Garden and the Lawler, thus depriving plaintiff of an opportunity to obtain the supply of first-run films needed for effective competition by the Victoria. As is not unusual in a case of this kind, plaintiff attempted to prove his allegations of conspiracy indirectly by inferences he claims can be drawn from certain conduct, rather than by direct proof of conspiratorial activities, joint agreements, or group decisions. We agree with the district court that his evidence fell short of the mark.

The most damaging evidence developed by the plaintiff tended to show that Western had utilized alternative or superseding bidding in competing for certain films. Western denied, and then attempted to explain away, this practice. We have no doubt, however, that a jury could have concluded that competitive bidding by the particular distributors in question was not always what it purported to be, or concluded that, in the instances shown, plaintiff's bids were not considered on an equal footing with defendant's. But the real issue is what legal significance could be attributed to such a finding. To determine this the status of competitive bidding in the motion-picture industry is a necessary background. In United States v. Paramount Pictures, Inc., 1948, 334 U.S. 131, 161-166, 68 S.Ct. 915, the court set aside that part of the district court's decree which required first-run films to be distributed among exhibitors according to a competitive-bidding system. To a large extent the court's holding in this respect was based on its belief that it would often be impossible to evaluate the bids, and equally difficult to determine when a distributor's preference of one exhibitor over another, for reasons not appearing on the face of a bid, was an exercise of valid business judgment and not the result of illegal favoritism. Id., 334 U.S. at page 163, 68 S.Ct. at page 932. Of course this is not to question that competitive bidding is one acceptable method of distributing films for exhibition. But cf. id. 334 U.S. at pages 164-165, 68 S.Ct. at pages 932-933. It does indicate, however, why a departure from competitive bidding does not in itself constitute or prove a violation, and cannot be helpful to the plaintiff unless he can rationally relate it to other conduct by the alleged conspirators.⁴

Stripped to its essence, the remainder of plaintiff's evidence shows merely that plaintiff did not always have the amount and quality of first-run pictures available for exhibition that he would have liked,⁵ or as many as the Lawler and the Garden;⁶ that almost without exception the group of distributors supplying film to the Garden did not supply the Lawler, and vice versa; and that, in varying degrees, some of the distributors refused to consider bids by the plaintiff, or delayed in their willingness to do so. However, there was also undisputed evidence that plaintiff's Victoria, rather than being as desirable as its competitors, cf. Bordonaro Bros. Theatres, Inc. v. Paramount Pictures, Inc., 2 Cir., 1949, 176 F.2d 594, was substantially smaller than either of the other theatres,⁷ and was markedly inferior in quality, at least to the Garden; that its location was probably poorer, and at least no better; and that it had a long history of showing vaudeville and second-run pictures prior to plaintiff's taking over its management. In addition, there was considerable documentary evidence, not challenged or answered, indicating that plaintiff was a difficult, if not unreliable, man with whom to transact business. As a whole the record seems at least as consistent with legitimate business decisions by the distributors in favor of the Garden or the Lawler as with a planned exclusion of plaintiff from the first-run market. Nor is it necessarily significant that the several distributors all tended to prefer plaintiff's competitors, since these same business factors were relevant to each.

Plaintiff makes the customary attempt to rely on the theory of consciously parallel action. But, as the Supreme Court has said, "`Conscious parallelism' has not yet read conspiracy...