Don George, Inc. v. Paramount Pictures

• Decision Date: 11 October 1956
• Docket Number: Civ. A. No. 3050.
• Citation: 145 F. Supp. 523
• Parties: DON GEORGE, Inc., et al. v. PARAMOUNT PICTURES, Inc., et al.
• Court: U.S. District Court — Western District of Louisiana

145 F. Supp. 523

DON GEORGE, Inc., et al. v. PARAMOUNT PICTURES, Inc., et al.

Civ. A. No. 3050.

United States District Court W. D. Louisiana, Shreveport Division.

October 11, 1956.

LeRoy Smallenberger, Smallenberger, Eatman & Morgan, Joseph H. Jackson, Jackson, Smith, Mayer & Kennedy, Shreveport, La., Keith M. Pyburn, Washington, D. C., for plaintiffs.

W. Scott Wilkinson, John M. Madison, Wilkinson, Lewis, Wilkinson & Madison, Shreveport, La., Gibbons Burke, Chaffe, McCall, Phillips, Burke & Hopkins, New Orleans, La., for defendants.

BENJAMIN C. DAWKINS, Jr., Chief Judge.

We are called upon here to reconsider what was considered, but not decided, by the late Judge Porterie of this Court, on September 18, 1951, at 111 F.Supp. 458, as to defendants' plea of prescription. With all due respect and deference, we find ourselves unable to agree with some of the statements made in that opinion, for the reasons hereinafter noted.

This long-pending action, filed on August 18, 1950, is for treble damages, and attorneys' fees, under the Sherman and Clayton Anti-Trust laws, particularly under 15 U.S.C.A. § 15. For the greater part of the time, the attorneys have occupied themselves inconclusively with companion cases, involving the same issues, in the State Court. See, e. g., Loew's, Incorporated v. Don George, Inc., 227 La. 127, 78 So.2d 534. Briefly, the facts alleged here are as follows:

From May 17, 1942, until January 1, 1947, the Davis Theater, a motion picture house in Bossier City, Louisiana, was owned and operated by George Brothers Theaters, a partnership composed of Don George and Darrell George, Louisiana citizens. On the latter date, Don George, Inc., a Louisiana corporation, purchased all assets of the partnership except its part of the cause of action here sued upon, and operated the theater to the date the suit was filed. Since then, we understand, although it is not of record, the corporation has sold its theater interests, and Don George has died.

The corporation and partners claim damages for the respective terms of their ownership, on the ground that defendants, in dealing with motion picture films,

"* * * have during the period covered by this suit engaged in a conspiracy to restrain and monopolize, and have restrained and monopolized, interstate trade and commerce by the following means:

"I. Price Fixing

A. Vertical

B. Horizontal

"II. Discriminatory and Unreasonable Clearances and Runs

"III. Pooling Agreements and Joint Ownership

"IV. Formula Deals, Master Agreements, and Franchises

"V. Block-Booking

"VI. Discrimination on Contract Provisions

"That this conspiracy was carried on on a national scale, and your plaintiffs were adversely affected and damaged in their business and property by this conspiracy * * *."

Plaintiffs allege that, because of this monopoly, they were forced to deal with defendants in procuring films for exhibition at their theater, and were damaged by defendants' unlawful conduct to the extent of $124,000, being the net loss of profits they would have realized had it not been for these monopolistic practices. Hence, they sue defendants for treble that amount, or $372,000.

Named as defendants are Paramount Pictures, Inc., Paramount Film Distributing Corporation; United Paramount Theatres, Inc.; Paramount Gulf Theatres, Inc.; Saenger-Ehrlich Enterprises, Inc.; Radio-Keith-Orpheum Corporation; RKO Radio Pictures, Inc.; Warner Brothers Pictures, Inc.; Warner Brothers Pictures Distributing Corporation; United Artists Corporation; Columbia Pictures Corporation; and Columbia Pictures of Louisiana, all corporations.

Plaintiffs further allege that all defendants except Saenger-Ehrlich, Inc., and Paramount Gulf Theatres, Inc., were adjudged in violation of the Federal antitrust laws, on a nation-wide scale, in the matter entitled United States v. Paramount Pictures, Inc., Equity No. 87-273 on the docket of the United States District Court for the Southern District of New York, 66 F.Supp. 323; affirmed in part, and reversed in part, 334 U.S. 131, 68 S.Ct. 915, 92 L.Ed. 1260. This adjudication, they claim, is prima facie evidence as to the verity of their allegations in the present action.

Before answering, defendants filed motions to dismiss on the ground that, according to the complaint, plaintiffs' cause of action has prescribed, since it shows that more than one year elapsed from the time the last damage was inflicted and the date upon which the suit was filed. Defendants stand on Arts. 3536 and 3537 of the LSA-Civil Code, relating to tort and damage actions, as being applicable. This is the motion Judge Porterie considered, but did not decide, having referred it to the merits. He thought the question ought to be "for the jury".

For their part, plaintiffs contend that their action is in quasi-contract, not in tort, and prescribes in ten years, not one, under LSA-Civil Code Article 3544. They further contend that, pursuant to Section 5 of the Clayton Act, 15 U.S.C.A. § 16, the running of the Statute of Limitations, or prescription, was suspended during the pendency of the injunction suit brought by the Government in the Southern District of New York against all but two of the defendants here, thus keeping this cause of action alive notwithstanding the lapse of time which might otherwise bar their claims.

We have studied the able briefs and have read all of the authorities cited, as well as others found in our own research. Unlike Judge Porterie, who could not bring himself to decide whether the one-year or ten-year prescription is applicable, we have had no difficulty in concluding, on reason and precedent, that the suit is purely delictual, the alleged damages having been occasioned by conduct which can be classified, under Louisiana law, only as offenses or quasi-offenses, subject to the one-year prescription of Civil Code Articles 3536 and 3537.

In reaching this conclusion, we also differ necessarily with Judge Porterie in our conviction that the task of ascribing proper legal characterization to the claims, and applying the pertinent period of prescription, belongs to the Court, not the jury — as a matter of law and not of fact. While, as he noted (prematurely, because answers had not been filed at that time), there are disputes in the pleadings on the basic facts, we are not concerned with those factual differences at this point. As we conceive our duty, in passing upon the question now presented, we must take as true all of the material allegations of fact contained in, and characterizing, the complaint, without regard to denials or affirmative allegations in defendants' answers. In other words, we now accept, for present purposes, the totality of plaintiffs' factual allegations.

No period of prescription, for bringing treble damage suits, is contained in the Sherman and Clayton Acts. Therefore, the State law on that subject must be followed, Chattanooga Foundry & Pipe Works v. Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241, cf. O'Sullivan v. Felix, 233 U.S. 318, 34 S.Ct. 596, 58 L.Ed. 980; Copp v. Louisville & N. Ry. Co., C.C.E.D.La.1892, 50 F. 164; Loggins v. Steel Const. Co., 5 Cir., 1942, 129 F.2d 118.

Article 3536, in pertinent part, reads as follows:

"Tort, possessory and damage actions. — The following actions are also prescribed by one year:

"That for injurious words, whether verbal or written, and that for damages caused by animals, or resulting from offenses or quasi offenses."

Article 3537, as here applicable, provides:

"Commencement of running of period. —Tort and possessory actions. — The prescription mentioned in the preceding article runs:

* * * * *

"And in the other cases from that day on which the injurious words, disturbance or damage were sustained."

Article 3544 reads as follows:

"Personal actions. — In general, all personal actions, except those before enumerated, are prescribed by ten years."

This is the Article applicable to actions on contracts and those which are quasi ex contractu.

As far back as 1913, in American Tobacco Company v. People's Tobacco Company, 204 F. 58, 60, the Fifth Circuit Court of Appeals approved a jury charge by then District Judge Rufus E. Foster, of the Eastern District of Louisiana (later Chief Judge of the Circuit), which stated, "`It is the law of Louisiana that acts, such as these in violation of the Sherman Act, are prescribed in one year after they occur.'" The appellate Court concluded that "* * * this charge * * * is the correct view of the question of prescription." Plaintiffs argue that the question of whether the one-year period was applicable in that case was unimportant to the position of that plaintiff, and was conceded by its counsel. We have noted, however, that the concession was made by some of the ablest lawyers in Louisiana legal history, who hardly would have done so had they not been convinced that it was correct; and the Court itself agreed.

Again, in 1917, in Caillouet v. American Sugar Refining Company, D.C., 250 F. 639, also a treble damage suit under the Sherman Act, Judge Foster held that such an action was not sui generis, did not arise in quasi-contract, and was ex delicto in its nature. Earlier in the same year, in Bluefields S. S. Company v. United Fruit Company, 243 F. 1, a case which had its origin in Louisiana and in which able counsel from the State participated, the Third Circuit reached the same conclusion. No cases are cited, or have been found, to the contrary.

Early in the Louisiana jurisprudence, its Courts spelled out the essential difference between quasi-contracts and quasi-offenses. In City of New Orleans v. Southern Bank, 1879, 31 La.Ann. 560, Chief Justice Manning, speaking for the Louisiana Supreme Court, said:

"The characteristic therefore of offence or quasi-offence is that the act, from which the obligation arises, is unlawful. The marked distinction then between a quasi-contract, and an offence or quasi-offence, is, that the act which gives rise to a

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