Capital Films Corp. v. Charles Fries Productions, Inc.

• Decision Date: 15 October 1980
• Docket Number: No. 78-3563,78-3563
• Citation: 628 F.2d 387
• Parties: CAPITAL FILMS CORPORATION et al., Plaintiffs-Appellants, v. CHARLES FRIES PRODUCTIONS, INC. and American Broadcasting Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 387

628 F.2d 387

208 U.S.P.Q. 249

CAPITAL FILMS CORPORATION et al., Plaintiffs-Appellants, v. CHARLES FRIES PRODUCTIONS, INC. and American Broadcasting Company, Defendants-Appellees.

No. 78-3563.

United States Court of Appeals, Fifth Circuit.

Oct. 15, 1980.

Sandy M. Sandoloski, Lawrence E. Ackels, Sr., Lawrence E. Ackels, Jr., Michael W. McManus, Dallas, Tex., for plaintiffs-appellants.

Jenkins & Gilchrist, William D. Sims, Jr., Dallas, Tex., for Charles Fries Productions, Inc. and American Broadcasting Co.

Appeal from the United States District Court for the Northern District of Texas.

Before GOLDBERG, GARZA and REAVLEY, Circuit Judges.

GARZA, Circuit Judge:

I

In 1962 Falcon International Corporation (Falcon) organized for the purpose of producing and distributing motion picture films. In 1964, following the assassination of President Kennedy, Falcon produced a film entitled "The Trial of Lee Harvey Oswald" based upon the legal proceedings which might have occurred had Oswald not been murdered. The film was publicized in cities throughout the nation and advertised in the entertainment sections of several large newspapers including the New York Times and Daily Variety. The world premiere was held on April 22, 1964 at Milwaukee, Wisconsin where some 6,000 persons viewed the film. In the following weeks several thousand others viewed the film. The film was not a commercial success and was indefinitely withdrawn from distribution.

In April, 1976, in the midst of a renewed public interest in the assassination, Falcon learned that Charles Fries Productions (Appellee-Fries), a movie production company, and the American Broadcasting Company (Appellee-ABC) planned on producing and televising a movie by the title of "The Trial of Lee Harvey Oswald". Although the Fries-ABC film presented its story in a somewhat different format than the Falcon film, it basically depicted the murder trial of Lee Harvey Oswald. Falcon contacted ABC and informed it that Falcon had produced a similar movie in 1964, bearing the same exact title and that Falcon intended to re-release the film.

A short time later, Falcon sold the film to Capital Films (Appellant-Capital). Capital undertook to distribute the movie and engaged several test showings of the film. After it became clear that ABC planned on televising its version bearing the same title, Capital filed suit for injunctive relief which was denied. The Fries-ABC film was televised in two parts in September and October of 1977.

II

Capital filed this action in Texas state district court. On July 21, 1977, the case was removed to the United States District Court under 28 U.S.C. § 1441 on the basis of diversity of citizenship under 28 U.S.C. § 1332.

Capital's initial complaint alleged unfair competition in that the title and concepts had been plagarized from its film. On August 26, 1977, Appellees filed their motion for summary judgment in response to the claim of unfair competition. On September 14, 1977, Capital filed its motion and other material in opposition. On September 20-21, 1977, a hearing on the preliminary injunction was held and, as previously mentioned, the request was denied.

On September 5, 1978, after Appellees had filed their motion for summary judgment, Capital filed its second amended complaint which added interference with contractual business relations, misappropriation and implied contract causes of action and alleged additional facts from which these causes of action allegedly arose. The case was carried on the jury docket and set for trial Monday, October 16, 1978. On the Thursday prior to the trial setting, October 12, 1978, a joint pre-trial order was entered defining the issues and scope of the trial. On the next day, Friday the 13th, 1978, without notice to Capital, the District Court granted Appellee's motion for summary judgment.

In a memorandum opinion, the District Court set out what it considered to be the two essential issues of fact of unfair competition which Capital must have created in order to withstand summary judgment. The Court held that (1) the title "The Trial of Lee Harvey Oswald" of the 1964 Falcon film must have acquired a secondary meaning and (2) that the use of the same title in the Fries-ABC movie had the likelihood of confusing the public such that it would watch the Fries-ABC movie believing it to be the 1964 movie. Regarding the first issue, the Court found that Capital has produced sufficient evidence to create a genuine issue of fact of whether the 1964 Falcon film had acquired a secondary meaning. Our review of Capital's summary judgment proof in opposition leads us to the same conclusion.

Regarding the "likelihood of confusion" issue, the Court found that Capital had failed to create a genuine issue of fact as to the likelihood of confusion in the public mind concerning the source of the Fries-ABC movie. Relying exclusively on Kirkland v. National Broadcasting Co. Inc., 425 F.Supp. 1111 (E.D.Pa.1976), aff'd 565 F.2d 152 (3rd Cir. 1977), the Court reasoned that any public confusion would only be "momentary" since a television viewer familiar with and expecting to see the 1964 Falcon movie would quickly realize that the two movies by the same title were not the same. The Court found that a reasonable jury could not "conclude that ABC intended to pass off its movie as Capital's movie". This holding and its underlying legal principles will be discussed below in part IV of this opinion.

The Court also addressed and dismissed Capital's cause of action for interference with advantageous business relations reasoning that such a cause of action was dependent upon success of the unfair competition claim.

In a supplemental order of October 18, 1978, the District Court addressed Capital's misappropriation claim against appellees. Citing Official Airlines Schedule Information Service, Inc. v. Eastern Air Lines, Inc., 333 F.2d 672 (5th Cir. 1964), and by applying the three essential elements for a misappropriation claim, the Court concluded that Capital had failed to establish an issue of fact as to any one of the elements.

III

On appeal, Capital first complains of the propriety of the District Court granting summary judgment. Capital first contends that the procedure under which summary judgment was rendered against it was deficient in that Capital was never given the 10-day notice and hearing required by Rule 56 of the Federal Rules of Civil Procedure. Secondly, Capital contends that its causes of action for interference with contractual business relations, misappropriation and implied contract were not before the District Court for summary judgment purposes, since these three causes of action and the facts under which they arose were pled after Appellee's motion for summary judgment was filed. Lastly, Capital contends that since neither the memorandum opinion or supplemental order deals with its implied contract claim, at least, it stands untouched and should proceed to trial.

A

We first address Capital's complaint of the District Court's grant of summary judgment adverse to Capital's added causes of action absent a motion for summary judgment by either Capital or Appellees concerning those causes of action. The issue for determination is whether a District Court may sua sponte grant a motion for summary judgment. Rule 56 does not specify whether a Court can enter summary judgment on its own, in the absence of any request to do so. However, various Circuit Courts have recently addressed the issue and have reached different conclusions.

One line of cases has taken the moderate approach suggested by some authorities. "So long as the Court is careful to assure that the party against whom the judgment will be entered has sufficient advance notice and an adequate opportunity to demonstrate why summary judgment should not be granted, it is not inappropriate for the Court to act on its own." See Kistner v. Califano, 579 F.2d 1004 (6th Cir. 1978); FLLI Moretti Cereali S. P. A. v. Continental Grain Company, 563 F.2d 563 (2nd Cir. 1977); 10 Wright & Miller, Fed.Practice & Procedure: Civil § 2719 at 454 (1973).

The other trend takes more of a strict construction approach to the procedural safeguards of Rule 56. The first circuit to squarely face the issue was the Eighth Circuit in Twin City Federal Savings & Loan Association v. Transamerica Insurance Company, 491 F.2d 1122 (8th Cir. 1974). The Court reasoned that Rule 56 contemplates that the parties move for summary judgment with a definite requirement of service of the motion, opportunity for presentation of opposition material, and a hearing on the motion. Taking a "strict compliance" approach, the Court concluded that "although a district court may assist through pretrial proceedings in sharpening the issues, a court may not pose the issue and then proceed to decide the same without a motion for summary judgment." 491 F.2d at 1126. Another circuit court has followed this reasoning and held that the express language of paragraphs (a) and (b) of Rule 56 discloses that a motion for summary judgment is to be made by a party and that a district court is not authorized by Rule 56 to sua sponte enter summary judgment. Choudhry v. Jenkins, 559 F.2d 1085 (7th Cir. 1977). See also 6 Moore's Fed.Prac. P 56.10 and P 56.12 (2nd ed. 1976) at 174 and 338-339.

While both trends are based on sound policy considerations and each trend has certain advantages, this Court has also addressed and decided the issue. In Sharlitt v. Gorinstein, 535 F.2d 282 (5th Cir. 1976), the defendants filed a motion for summary judgment on the plaintiff's claim. The motion did not purport to cover the defendant's counterclaim. The district court granted defendant's motion for summary judgment. A month later, feeling that the same issues had been resolved in favor of defendants, the district court sua sponte entered judgment for the defendants on the counterclaim. This court vacated the judgment.

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