JJ THEATRES v. Twentieth Century-Fox Film Corp., 95

• Decision Date: 12 May 1954
• Docket Number: No. 95,Docket 22841.,95
• Citation: 212 F.2d 840
• Parties: J. J. THEATRES, Inc. et al. v. TWENTIETH CENTURY-FOX FILM CORP. et al.
• Court: U.S. Court of Appeals — Second Circuit

212 F.2d 840 (1954)

J. J. THEATRES, Inc. et al. v. TWENTIETH CENTURY-FOX FILM CORP. et al.

No. 95, Docket 22841.

United States Court of Appeals, Second Circuit.

Argued January 5, 1954.

Decided May 12, 1954.

Monroe E. Stein, New York City, for plaintiffs-appellants (Hess, Mela, Segall, Popkin & Guterman, by Lionel S. Popkin and Robert L. Pelz, New York City of counsel).

Dwight, Royall, Harris, Koegel & Caskey, New York City, for defendants-appellees Twentieth Century-Fox Film Corp. and Spyros P. Skouras (Frederick W. R. Pride, Charles F. Young and Barbara A. Scott, New York City, of counsel).

Sherpick, Gilbert, Regan & Davis, New York City, for defendants-appellees Skouras Theatres Corp. and George Skouras (Eugene A. Sherpick, Richard T. Davis and William C. Woodson, New York City, of counsel).

Before CHASE, Chief Judge, CLARK, Circuit Judge, and GIBSON, District Judge.

CHASE, Chief Judge.

The appellants, who are the operators of the Luxor Theatre, a motion picture theatre at 208 East 170th Street in the Bronx, in the Southern District of New York, alleged in their complaint, as amended, a conspiracy by the appellees in violation of the anti-trust statutes, §§ 1, 2, 15 and 26 of Title 15 U.S.C.A., to deprive the appellants of "first-run" pictures for exhibition in their theatre and to restrict them to subsequent runs following unreasonable "clearances"¹ in favor of another theatre in the Bronx called the Park Plaza Theatre. Trial was by jury which returned a verdict for the defendants and this appeal is from the judgment entered thereon. Asserted errors in the charge and in the admission and exclusion of evidence are urged as the grounds for reversal.

The Luxor Theatre was leased by the appellant, J. J. Theatres, Inc., on March 16, 1941, and was operated by that lessor until June 30, 1944, when the appellant Luxor Group, Inc., became its sub-lessee. Since then the sub-lessee has operated it and also some twelve other theatres leased by it in the Bronx.

The appellee, Skouras Theatres Corporation, is the operator of some fifty motion picture theatres in the New York metropolitan area including the Park Plaza Theatre located at the southwest corner of Tremont Avenue and University Avenue in the Bronx, a little over a mile from the Luxor Theatre by one available route and a little over a mile and a half by another. The appellee, Spyrous Skouras, was formerly the president, and until 1948 was a director of Skouras Theatres Corporation and at all times now material has been a large stockholder in it. Since 1942 he has been the president of appellee, Twentieth Century-Fox Film Corporation. He is a brother of appellee, George Skouras, who was president of appellee, Skouras Theatres Corporation from 1935 to 1952 and at all material times has been a director of that corporation, holding a sizable amount of its stock.

Warner Bros. Pictures Distributing Corporation, RKO Radio Pictures, Inc., Universal Film Exchanges, Inc., and Universal Pictures, Inc., which are large producers and distributors of motion pictures were added by an amendment to the complaint in the pre-trial order as co-conspirators but not as defendants and also so named were RKO Theatres, Inc., and Radio-Keith Orpheum Corp., which operated theatres in a chain called the RKO Circuit.

The conspiracy was charged in the complaint to have affected the plaintiffs differently in each of two periods. In the first period, which runs from March 15, 1941 to February 9, 1949, it was alleged that as a result of the conspiracy all the co-conspirators named refused unreasonably to license the appellee's Luxor Theatre to exhibit the feature motion pictures distributed by any of them on what is called a non-exclusive neighborhood first run. During the second period, which runs from February 10, 1949 to February 5, 1952, there was no refusal to license the Luxor Theatre to exhibit any feature pictures on a basis unsatisfactory to the appellants save those distributed by Twentieth Century-Fox. During both periods the distribution of neighborhood first run pictures in the New York area was divided into what was called the Loew split and the RKO split, the former including the pictures distributed by Loew's Columbia, Paramount, United Artist and one-half of Universal's distribution and the first neighborhood run of pictures in this split was only in Loew theatres. The RKO split, which is the one involved in this suit, consisted of the pictures distributed by Twentieth Century-Fox, Warner Bros., RKO, and the other half of Universal's distribution.

The principal contention of the appellants at the trial was that the admitted refusal to license the exhibition of feature motion pictures at the Luxor Theatre on a non-exclusive neighborhood first run basis was an unreasonable restraint of trade because that theatre was not in substantial competition with the Park Plaza Theatre. Considerable evidence was received on the subject of the competitive status of these two theatres and on the whole was such that the jury could justifiably have found either that they were in substantial competition during one or both of the periods involved in this suit or that they were not in either period, but for the purposes of this appeal we must assume that the jury found that they were during both periods. So we find it unnecessary in the present aspect of the case to lengthen this opinion by a recital of the evidence on that subject.

The trial judge well and clearly gave the jury to understand that the burden was on the appellants to prove by at least a preponderance of the evidence that the prior run and clearance in favor of the Park Plaza over the Luxor was unreasonable and charged correctly in this respect as to the other elements which they had so to prove to entitle them to a verdict. He also charged that: "If you find there was substantial competition between the two theatres, then plaintiffs have failed to establish the element that the prior run and clearance in favor of the Park Plaza over the Luxor was unreasonable and your verdict should be for the defendants." He thus made a finding of no such competition a condition precedent to a finding of unreasonable restraint of trade that would support a plaintiffs' verdict.

The appellants took an exception to that part of the charge and to the refusal of requests to charge which they had timely made to the effect that though their principal contention was that the Luxor and the Park Plaza were not in substantial competition a finding that they were was "not necessarily fatal to the plaintiffs' case." And that they could recover if the jury found that the "defendants and the alleged conspirators, or some of them, acted in concert to refuse first neighborhood run films on the RKO split for exhibition at the Luxor Theatre and that the Luxor was a "representative first-run neighborhood theatre" in the area; and that "the defendants and co-conspirators or some of them agreed that none of the distributors of pictures on the RKO split would either license pictures to the Luxor Theatre on a first neighborhood run or negotiate on any terms with the plaintiffs for a first neighborhood run at the Luxor Theatre. * * *"

The judge explained his refusal to charge as requested by saying: "Well, with respect to your revised requests to charge, 33, 34 and 34A, I have advised you that my refusal to charge was based on the fact that the case was brought on the theory that the theatres were not in substantial competition; the basic pleadings were so drawn; the evidence in the case offered by the witnesses on behalf of the plaintiffs indicated that; all the conversations had from 1941 to 1948, and the letters sent in June, 1948, were to the effect that the...