Loew's Incorporated v. Basson

• Decision Date: 23 July 1942
• Citation: 46 F. Supp. 66
• Parties: LOEW'S INCORPORATED v. BASSON et al.
• Court: U.S. District Court — Southern District of New York

46 F. Supp. 66

LOEW'S INCORPORATED v. BASSON et al.

District Court, S. D. New York.

July 23, 1942.

J. Robert Rubin, of New York City (Samuel D. Cohen, of New York City, of counsel), for plaintiff.

Barshay, Frankel & Rothstein, of New York City (Nathan Frankel and David Sloane, both of New York City, of counsel), for defendants.

GODDARD, District Judge.

Defendant Motion Picture Machine Operators' Union Local 306 moves for an order dismissing the complaint on the grounds that it fails to state a claim upon which relief can be granted, pursuant to Rule 12(b) (6), and that the court has no jurisdiction over the subject matter herein, pursuant to Rule 12(b) (1), and for judgment on the pleadings, pursuant to Rule 12(c) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c.

The complaint alleges that plaintiff produces and manufactures motion pictures in California and sends them, in interstate commerce, all over the United States to branch offices called "exchanges" where exhibitors see them and apply for licenses which become binding contracts, known as license agreements, upon acceptance thereof by plaintiff. At these exchanges, plaintiff maintains a staff of inspectors of film, repair men, and others who see to it that the positive prints of the films are sent to the various exhibitors, and who examine and repair the prints when they are returned by the exhibitors to the exchanges; in New York City, these employees and the men who deliver the films to the exhibitors are members of Local B 51 of the International Alliance of Theatrical Stage Employees and Moving Picture Operators of United States and Canada hereinafter referred to as "IATSE", with whom plaintiff had a contract for a term commencing December 1, 1939 and expiring November 30, 1941, said employees continuing to be employed under the terms and conditions of said contract; that plaintiff could not continue in its business of distributing motion pictures without those employees; plaintiff has a contract with defendant Local 306 of the "IATSE" for a term commencing September 1, 1935 and expiring August 31, 1945, with respect to the projection men employed in the sixty five theatres operated by plaintiff in the five boroughs of New York City; plaintiff also has a contract with defendant Local 306 with respect to the projection men employed at its home office and film exchange, the contract having expired on August 31, 1940; said employees have continued to be employed under its terms; in the event that plaintiff's sixty five theatres should be unable to obtain prints and exhibit motion pictures, plaintiff would lose approximately $400,000 per week; plaintiff and seven other motion picture distributors, Columbia Pictures Corporation, Paramount Pictures, Inc., R. K. O. Radio Pictures, Inc., Twentieth Century-Fox Film Corporation, United Artists Corporation, Universal Pictures Company, Inc., and Warner Bros. Pictures, Inc., collectively distribute a majority of the feature motion pictures of quality in the New York area. Each of these companies maintains an exchange in New York City for the distribution of motion pictures in the same manner as plaintiff does and all exhibitors operating motion picture theatres in the area serviced by the New York exchanges of the plaintiff and the other distributors are dependent upon a steady and constant supply of motion pictures to enable them to continue to operate their theatres; the projectionists employed by each of the other seven distributors in their exchanges and home offices, are also members of defendant Local 306, as are the projection men employed in the theatres operated by said distributors; plaintiff and each of the other seven distributors have entered into agreements with many of the independent exhibitors licensing the exhibition of motion pictures during 1941-42, each such license agreement calling for the delivery of prints from time to time, in accordance with the booking arrangements made between the exhibitors and the exchange, throughout the contract period, and many of these booking arrangements have some time to run; that it would be impossible for the independent exhibitors to remain in business unless plaintiff and the other distributors perform these agreements; plaintiff's revenue derived from the licensing agreements has amounted in the past to over $375,000 per year and if plaintiff were to be prevented from delivering the prints in accordance with its agreements for the 1941-42 season and from entering into new agreements, its loss would exceed $400,000.

The complaint also alleges that in July, 1938 the United States of America commenced a suit in equity against plaintiff and other distributors, alleging various violations of the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1 and 2, which culminated in the entry of a consent decree against them on November 20, 1940, and which provided that the consenting defendants, including this plaintiff, were enjoined from doing certain prohibited acts; section VI of said consent decree provides that no distributor defendant including plaintiff shall refuse to license its pictures for exhibition in an exhibitor's theatre on some run upon terms and conditions fixed by the distributor which are not calculated to defeat the purpose of the section. The only conditions stated in Section VI aforesaid, with respect to the requirement that a distributor shall not so refuse to license its pictures, are that the exhibitor satisfy reasonable minimum standards of theatre operation, that the exhibitor be reputable and responsible, and that the granting of a run on any terms to such exhibitor will not have the effect of reducing the distributor's total film revenue in the competitive area in which such exhibitor's theatre is located; that no other defense is available to a distributor defendant in an arbitration proceeding under the decree for a "some run" award in accordance with the provisions of said decree.

The complaint further alleges that on December 11, 1941, referring to a proposed new contract between plaintiff and Local 306 with respect to the projection men employed at plaintiff's New York exchange and home office, defendant Local 306, by its attorney, wrote plaintiff a letter which stated in part:

"* * * Local 306, is requesting that the collective agreement, to be executed between our respective clients, shall provide, among other satisfactory conditions of employment, such as wages, hours, working conditions, and term of contract, the following clauses in substance:

"I. Employer agrees to supply, rent, lease, sell, deliver, license, distribute or provide films in the City of Greater New York only to such exhibitors as employ and continue to employ solely members of Local 306 as projectionists, and the Employer agrees not to supply, rent, lease, sell, deliver, license, distribute or provide film to any exhibitor in the City of Greater New York not employing members of Local 306.

"2. Members of Local 306 shall not be required, directly or indirectly, to work with, handle or work upon film, which was not or is not to be handled, transported and projected in the City of Greater New York, solely by members of the International Alliance of Theaterical Stage Employes and Moving Picture Machine Operators of the United States and Canada, or its subsidiary locals, or the members of such union as is approved by the International Alliance, and which is recognized by one of the Central Organizations with which Local 306 is affiliated.

"3. * * * Employer further agrees that the agency which delivers the film shall not be re-required to deliver and need not deliver film to any exhibitor within the City of Greater New York who does not employ and continue to employ as projectionists solely members of Local 306.

"4. Employer agrees that film bearing the label of the International Alliance will be supplied for exhibition in the City of Greater New York only to such exhibitors as employ and continue to employ as projectionists solely members of Local 306."

The complaint then alleges that at conferences between representatives of plaintiff and Local 306, plaintiff was told that it must immediately comply with the terms and conditions set forth in the letter of December 11, 1941 or else Local 306 would immediately call out on strike its members who are employed as projectionists in plaintiff's home office and New York film exchange, and upon the request of Local 306, to be made immediately, "IATSE" will call out on strike all the members of Local 306 who are employed as projectionists in plaintiff's sixty five theatres in Greater New York City, all members of Local B 51 employed in plaintiff's New York exchange and all members of any affiliated unions of "IATSE" who are employed in plaintiff's studio at Culver City, California.

Plaintiff alleges that if these threats are carried out, and strikes take place pursuant to such threats, the business of plaintiff in all its branches, i.e. production, distribution, and exhibition of motion pictures, will be seriously and irreparably damaged and injured and will come to a standstill resulting in a loss of many millions of dollars. It is also alleged that the defendant Local 306 and "IATSE" have advised plaintiff that similar demands will be made upon the other seven distributors and strikes will also be called against all of their operations in the event that they fail to comply.

Plaintiff alleges that it has no remedy or relief and will suffer irreparable injury, unless the relief sought herein is granted, and to comply with Local 306's demands would result in plaintiff's interference with the internal management of the business of the independent exhibitors and will require plaintiff to break and violate the license agreement, thereby subjecting it to claims and damage suits; that compliance with Local 306's demands will also result in a violation of the consent decree, referred to, and that...