McLendon v. Loew's, Inc., Civ. No. 2703.

• Decision Date: 10 March 1948
• Docket Number: Civ. No. 2703.
• Citation: 76 F. Supp. 390
• Parties: McLENDON et al. v. LOEW'S, Inc., et al.
• Court: U.S. District Court — Northern District of Texas

76 F. Supp. 390

McLENDON et al. v. LOEW'S, Inc., et al.

Civ. No. 2703.

District Court, N. D. Texas, Dallas Division.

March 10, 1948.

Clark, Coon, Holt & Fisher, of Dallas, Tex., and Thomas C. McConnell and Norman Korfist, both of Chicago, Ill., for plaintiffs.

Joe Worsham, of Dallas, Tex., for Interstate Circuit, Inc.

George S. Wright, of Dallas, Tex., for all other defendants except Robb & Rowley.

L. M. Rice, of Dallas, Tex., for Robb & Rowley.

ATWELL, District Judge.

The suit complexioned by the restraint sought under the Anti-Trust Acts, and for $1,200,000 damages, was filed on September 15, 1947.

The damages claimed grow out of a sale by the plaintiffs, B. R. McLendon, at all times acting for all of the plaintiffs alleged to have been forced, of the Beverly Hills theater to defendants, Robb & Rowley, and to the alleged discrimination that the Beverly Hills theater suffered while operated by the plaintiffs, as well as discriminations suffered by the Casa Linda theater, still owned by the plaintiffs. That such discriminations in both instances were the result of a conspiracy between the defendants in violation of the Trust statutes. Sherman Anti-Trust Act, 15 U.S.C.A. § 1 et seq., and Secs. 1, 4 and 16, Clayton Act, 15 U.S. C.A. §§ 12, 15, 26, 44, in its original and amended form.

The testimony discloses that prior to the plaintiff's coming to Dallas a few years previous, both Robb & Rowley and the Interstate had been exhibitors of moving pictures in metropolitan Dallas. That area consisted of what is commonly designated as the Oak Cliff portion, which is west of the Trinity River, and that portion considerably larger, which is composed of a number of suburban districts as well as the downtown section, and included such suburbs as Highland Park, University Park, Lakewood and others.

Metropolitan Dallas has sixty-five theaters. In that part of Dallas east of the Trinity, Interstate, as well as other owners, not necessary to mention, operate, of which Interstate has approximately nineteen theaters. In the part west of the Trinity known as Oak Cliff, Robb & Rowley have six theaters, and there are others unnecessary to mention.

When the plaintiff came to Dallas he was learned in the picture business, was a successful trader, and had been a lawyer for some twenty-seven years. He chose sites for two theaters, one in a very sparsely settled location east of the Trinity, and a similar sparsely settled portion west of the Trinity. The first he named the Casa Linda, and the second, the Beverly Hills.

After the erection and opening of each and enjoying the income therefrom he solicited the sale of the Beverly Hills to Robb & Rowley, and after such profitable sale he solicited the sale of the Casa Linda to the Interstate. In the presentment of his reasons for each of such solicitations there was no complaint of either business or restriction, and, in truth, his profit on the Beverly Hills sale was approximately what he thought he was entitled to.

His string of theaters outside of the two suburban Dallas theaters, is known as the Tri-state. He operates or has operated theaters in Texas, outside of Dallas, Louisiana, Oklahoma and Arkansas.

Among the reasons assigned for the sales of Beverly Hills and Casa Linda was an alleged indebtedness to Dallas banks, and that his son, one of the plaintiffs, needed a large sum of money to go into the radio business.

Prior to the filing of this suit, he had been furnished pictures by certain distributors on what is called "test runs," which means a division of profit between the distributor and the exhibitor. The distributors did not think that he had properly accounted for the proceeds from such pictures and that they had not gotten their appropriate part and they insisted upon an inspection of records and verification of the amounts that he had paid to them. This, he resisted, and, since they still persisted, he filed this suit.

During the taking of testimony, the words, "clearance," "availability," and "admission price," were the crucial points. Great volumes of exhibits were garnered, as were also voluminous depositions and a large record of oral testimony, charts, summaries, etc., so that the hearing of the cause occupied an entire week, including some rather extended sessions and one night session, all calling for deep and careful consideration.

Such consideration includes the thought that the moving picture, as it comes to the public, is short-lived. It consists of a string of small pictures which are so ingeniusly connected and operated as to have a fascinating continuity and are thrown upon a screen with...