Orson, Inc. v. Miramax Film Corp.

• Decision Date: 09 November 1993
• Docket Number: No. 93-CV-4145.,93-CV-4145.
• Parties: ORSON, INC., Plaintiff, v. MIRAMAX FILM CORP., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

836 F. Supp. 309

ORSON, INC., Plaintiff, v. MIRAMAX FILM CORP., Defendant.

No. 93-CV-4145.

United States District Court, E.D. Pennsylvania.

November 9, 1993.

Niels Korup, Spector, Gadon and Rosen, P.C., Philadelphia, PA, for plaintiff.

Barbara T. Sicalides, Thomas E. Zemaitis, Pepper, Hamilton & Scheetz, Philadelphia, PA, for defendant.

MEMORANDUM AND ORDER

JOYNER, District Judge.

The matter before the Court is plaintiff's application for a preliminary injunction to restore the status quo of the parties during the pendency of litigation. Plaintiff, Orson Inc., trades as the Roxy Screening Rooms, which is a movie theater in central Philadelphia. Defendant Miramax Film Corporation is a film distributor. Prior to the institution of plaintiff's lawsuit, plaintiff had received fourteen releases from Miramax which played at the Roxy Theater over a one and a half year period. Out of these fourteen releases, two of them were for first-runs, whereas the other twelve were for subsequent runs only.¹

On August 2, 1993, plaintiff filed a complaint against defendant alleging that defendant had engaged in a conspiracy to restrain trade in violation of the Sherman Act, 15 U.S.C. § 1 et seq., the Pennsylvania common law against unreasonable restraint of trade, and the Pennsylvania feature motion picture fair business practices law, 73 P.S. § 203-1 et seq. Plaintiff claimed that defendant and another movie theater in Philadelphia called the Ritz have conspired with one another to stifle competition in the market for the exhibition of art films.² Plaintiff essentially claimed that because Miramax has offered the Ritz approximately twenty-two of its films for exclusive first run engagements during a one and a half year period, and because plaintiff has only been able to obtain films from Miramax on a subsequent run basis despite its bids for these same films received by the Ritz, defendant and the Ritz are engaged in a conspiracy.

After plaintiff initiated its lawsuit, defendant refused to license any more films to plaintiff during the pendency of the lawsuit. Plaintiff's amended complaint filed on August 19, 1993 reflected this fact, and defendant admitted this in its answer to the amended complaint filed on September 23, 1993. However, defendant expressly denied that the sole reason for refusing to license one particular film to plaintiff called "Strictly Ballroom" was because of plaintiff's actions in instituting the lawsuit.

In its motion for a preliminary injunction, plaintiff now seeks an order from this Court compelling defendant to do business with plaintiff during the pendency of the lawsuit. Interestingly, although plaintiff admits it has only received almost all subsequent runs from defendant prior to instituting the lawsuit, plaintiff submits a proposed order that, if granted, would compel defendant to release ten films of plaintiff's choice to plaintiff on the same terms as those offered to the Ritz during a twelve month period following the entry of the order. Although plaintiff initially seeks an order to restore the status quo, apparently plaintiff's greed has gotten the better of it, and it now asks the Court to give it something it never had in the first place. Plaintiff's greed notwithstanding, it has failed to prove the essential elements for the grant of a preliminary injunction, and therefore, its request will be denied.

Standard

Preliminary injunctions are an extraordinary remedy, and are discretionary with the trial judge. Skehan v. Board of Trustees of Bloomsburg State College, 353 F.Supp. 542, 542 (M.D.Pa.1973). They will only be granted when plaintiff can demonstrate the requisite elements of the remedy. Frank's GMC Truck Center, Inc. v. G.M.C., 847 F.2d 100, 102 (3rd Cir.1988). Before an injunction will be granted, plaintiff must demonstrate by sufficient evidence: 1) a likelihood of success on the merits, 2) the probability of irreparable harm if the relief is not granted, 3) that granting injunctive relief will not result in even greater harm to the other party and 4) that granting relief will be in the public interest. Id.; Ecri v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3rd Cir.1987). Further, in defining irreparable harm, it is not enough to establish a risk of irreparable harm, rather, there must be a clear showing of immediate irreparable injury. Ecri, 809 F.2d at 226 (citations omitted). Nor is it enough for the harm to be serious or substantial, rather, it must be so peculiar in nature that money cannot compensate for the harm. Id. (citations omitted).

Discussion

In its motion, plaintiff relies almost solely on Bergen Drug Co. v. Parke, Davis & Co., 307 F.2d 725 (3rd Cir.1962) to support its argument that it is entitled to a preliminary injunction. Plaintiff argues that this case falls squarely within the facts of Bergen, therefore a preliminary injunction is warranted.

In Bergen, plaintiff, a wholesaler, had instituted a private antitrust action against defendant, a drug manufacturer. Subsequent to plaintiff's actions, the defendant closed plaintiff's account stating that it no longer wanted to use plaintiff's distribution facilities. The court found that defendant discontinued its business because of the filing of the antitrust action by plaintiff, and further, that defendant conceded that fact.

The court held that while companies have the right to choose whom to do business with, that they "should not be permitted to do so in order to stifle the main action, especially where it is apparent that such conduct will further the monopoly which plaintiff alleges defendant is attempting to bring about and which, if proved, would entitle plaintiff to permanent relief." Id. at 727. The court also added that a preliminary injunction would not be refused simply because the court might decide adversely against plaintiff in the main action. Id.

The court then granted the preliminary injunction based upon the unchallenged facts in the record. The court found the following: first, plaintiff was a full-line, full-service wholesaler, which meant that pharmacies preferred to deal with such wholesalers because all their needs could be met at one time. The court found that many of defendant's products were "indispensable to the operation of a retail pharmacy." Id. at 728. If plaintiff was unable to fill its customers' needs, the court found that its customers would go elsewhere, thereby causing plaintiff a permanent loss of business.

Second, it would be nearly impossible to compute plaintiff's damages for the loss of goodwill it would suffer as the result of being unable to provide its customers with defendant's products. The court found that there was no indication in the record that plaintiff could purchase defendant's products elsewhere under the same terms as it purchased them from defendant. Third, if the preliminary injunction was not granted, plaintiff would not be able to successfully prosecute its antitrust action because it would not be able to secure other wholesalers and retailers as witnesses because they would also fear retaliation by defendant. Fourth, there was no indication to the court that the preliminary injunction would be difficult to administer. Rather, plaintiff prepared its orders by an IBM machine, and the supplies were delivered by common carrier, thus there was little or no personal contact between the parties. Finally, defendant failed to assert that the preliminary injunction would be oppressive in any way. Thus, the court held that under these facts, equity jurisdiction should have been exercised by the district court in this case by granting the preliminary injunction.

Contrary to plaintiff's claim, Bergen is distinguishable from the facts of this case. First, in Bergen it was uncontested that defendant stopped doing business with plaintiff in retaliation for plaintiff's filing of the antitrust action. Here, however, there is no such evidence. There has been no hearing in this matter for the parties to present factual evidence, nor has plaintiff requested one. While defendant admits that it told plaintiff it would not give it any more movies during the pendency of the antitrust litigation, defendant also states in its answer to the amended complaint that the litigation was not the sole reason for refusing to license "Strictly Ballroom" to plaintiff. Thus, any other argument by plaintiff that defendant's acts are in retaliation for the antitrust litigation is purely speculative.

Second, even if defendant's acts were in retaliation for the lawsuit, the facts in this case are not nearly as compelling as those in Bergen to justify the grant of a preliminary injunction. Unlike Bergen, there is no irreparable harm suffered by plaintiff. The movies licensed by Miramax are not indispensable to plaintiff's survival as a business. Indeed, defendant presents evidence which demonstrates that plaintiff has consistently shown movies since plaintiff instituted this lawsuit, with some of them being shown on a first-run basis. Thus, plaintiff is able to obtain movies from other sources, and has in fact been doing so. There is no indication that plaintiff's customers only demand to see Miramax movies, or that other distributors' movies are not an adequate substitution.³ The nature of the product is not the same as the drugs in Bergen which could not be readily obtained elsewhere, and which were vital to plaintiff's business as a full-service wholesaler. On the contrary, it would seem that plaintiff's customers would rather watch other distributors' movies being exhibited at the Roxy on a first-run basis than watch subsequent runs offered by Miramax which have previously been exhibited at the Ritz.

Moreover, the absence of irreparable harm is also evidenced by plaintiff's delay in bringing this motion. Plaintiff knew on August 19, 1993 when it filed its amended complaint that defendant refused to license any more films to plaintiff during the pendency of the antitrust...