Paramount Film Distributing Corp. v. Applebaum

• Decision Date: 20 December 1954
• Docket Number: No. 14634.,14634.
• Citation: 217 F.2d 101
• Parties: PARAMOUNT FILM DISTRIBUTING CORPORATION, et al., v. Joe APPLEBAUM, et al.
• Court: U.S. Court of Appeals — Fifth Circuit

217 F.2d 101 (1954)

PARAMOUNT FILM DISTRIBUTING CORPORATION, et al., v. Joe APPLEBAUM, et al.

No. 14634.

United States Court of Appeals Fifth Circuit.

October 12, 1954.

Rehearing Denied December 20, 1954.

COPYRIGHT MATERIAL OMITTED

Gibbons Burke, New Orleans, La., Earl T. Thomas, Jackson, Miss., Frank E. Everett, Jr., Vicksburg, Miss., and Meyer H. Lavenstein, New York City, W. C. Wells, III, Jackson, Miss., for Twentieth Century-Fox Film Corp., Warner Bros. Pictures Distributing Corp., United Artists Corp., Columbia Pictures Corporation, Republic Pictures Corp., Loew's Incorporated and Universal Film Exchanges, Inc.

Landman Teller, Vicksburg, Miss., Jerome S. Hafter, Greenville, Miss., and Walter P. Armstrong, Jr., Armstrong, McCadden, Allen, Braden & Goodman, Memphis, Tenn., Wynn, Hafter, Lake & Tindall, Greenville, Miss., Teller & Biederharn, Vicksburg, Miss., for appellees.

Before BORAH and RUSSELL, Circuit Judges, and DAWKINS, District Judge.

DAWKINS, District Judge.

Appellants are Columbia Pictures Corporation, Loew's Incorporated, Republic Pictures Corporation, Twentieth Century-Fox Film Corporation, United Artists Corporation, Universal Film Exchanges, Inc., and Warner Brothers Pictures Distributing Corporation, distributors of motion pictures,¹ and Paramount Gulf Theatres, Inc., an exhibitor.² They appeal from a judgment against them in the amount of $450,000 treble damages and $40,000 attorneys' fees.

Appellees Joe Applebaum and Bertram E. Simms, as partners in the ownership and operation of the Center Motion Picture Theatre, sued the corporate appellants along with Clyde G. Darden and W. A. Prewitt, Jr., owners and operators of the Lake Theatre, charging a common conspiracy to monopolize the motion picture business in Greenville, Mississippi, and to restrain trade in the distribution of films, all in alleged violation of the Sherman and Clayton Anti-Trust Acts.³ Specifically, it was alleged, inter alia, that appellees had built an amusement center on the outskirts of Greenville, including the Center Theatre, which they opened February 9, 1947; that at the time three other theatres were operating in Greenville, Paramount and Delta (by Paramount Gulf) and the Lake (by Darden and Prewitt), all of which were in downtown Greenville; that Paramount was the largest but when built Center was larger and more modern than either Delta or Lake; further that all defendants joined immediately in a conspiracy to restrict first-run and second-run films to the exhibitor defendants, to deny them to Center, and to grant unreasonable clearance rights over Center, thereby forcing the latter to close and damaging complainants to the extent of $200,000. They prayed for treble damages of $600,000 and trial by jury.

The case was tried intermittently over a period of approximately seven months, with a record of some 5,996 pages in 21 volumes. Defendants moved for a directed verdict at the end of plaintiffs' case, but the Court reserved ruling until the evidence was completed. Similar motions at the end of the evidence were denied, as were motions for judgment notwithstanding the verdict and in the alternative for a new trial.

A claim against RKO was compromised during the trial for the sum of $10,000 and there was a verdict and judgment for defendants Darden and Prewitt, doing business as Lake Theatre.

Counsel for appellants⁴ state the issues on this appeal as follows:

"First: Whether there was any substantial evidence of a conspiracy by each appellant with each and every other appellant to deprive plaintiffs of motion pictures for first run in Greenville.

"Second: Whether there was any substantial evidence that plaintiffs were injured in their business or property as a direct and proximate result of the aforesaid conspiracy."

The motions for a new trial (on which testimony was taken) (R. 5783, 5941) raised the following additional questions:

"Third: Whether the trial court erred in giving certain instructions and refusing certain instructions requested by the defendants. (All defendants duly objected to the court\'s action.)

"Fourth: Whether the verdict of the jury acquitting the Lake and holding appellants liable necessitates a new trial, not only with respect to Loew\'s, Universal and Columbia, but also with respect to the remaining appellants.

"Fifth: Whether the prejudicial and extraneous influences on, and information acquired by, the jury required that there be a new trial."

For the purposes of this decision, these points may be considered under three general headings: (1) failure to direct a verdict for defendants; (2) erroneous charges generally and undue emphasis in dealing with the special requests of plaintiffs as compared to those of appellants by the trial court; and (3) the overruling of a motion for a new trial, which, in addition to alleging insufficiency of the proof, charged misconduct of the jury, information as to the settlement with RKO and rumors of offers of compromise by the other defendants gotten to it during the trial. These will be taken up in reverse order, since what we have to say about the third will have an important bearing on the other two.

I. The Jury

The trial began on January 30th and ended on September 1st, 1951. It was conducted in an atmosphere undoubtedly friendly to the plaintiffs, as against the non-resident corporations. Most of the latter had been involved as defendants in the well known, nationwide suit by the Government, U. S. v. Paramount Pictures, Inc., tried in the first instance by a statutory three-judge court in 1946, D.C., 66 F.Supp. 323, without a jury, and, on appeal, affirmed on the conspiracy and monopoly counts by the Supreme Court of the United States in 1948, same title, 334 U.S. 131, 68 S.Ct. 915, 92 L.Ed. 1260, in which the defendants therein were found guilty of violating, in many respects, the same statutes, relied on here, particularly sections 1 and 2 of the Sherman Anti-Trust Act.

The framers of the Federal Constitution believed that citizens of states other than that of plaintiffs would have a better chance of fair treatment in the National Courts, where judges are appointed for life or during good behavior, and were therefore presumably as free from partisanship as was humanly possible to make them. These considerations, combined with the control of the judges in the examination as to qualifications of jurors, their power to comment on the evidence and to advise the jury in the charge as to the relationship of the facts and the law, unquestionably create a situation, especially where a highly penal statute, as in this case, is involved, requiring him to exercise a high degree of care and diligence to see that nothing is done that may add the weight of his position to the inescapable advantage of the local citizen, in trying the case before a jury chosen from the community in which the latter lives and to whom he is usually known.

In a protracted trial such as this, with the jurors left free to go and come when not hearing the case, the opportunities to see and evaluate the local litigant as against the large and "soulless" foreign corporation, often produces a favorable attitude toward the complainant, in a damage suit, notwithstanding the honesty and integrity of those performing the important duty of determining the weight of the evidence and the consequent rights of the parties litigant. We who have had long experience with such matters recognize this as one of the weak links in the jury system, although we cherish that system as one of the great pillars in the structure of our free institutions. The ordinary layman, taken from the private walks of life, may have a sincere desire to do justice between his fellow men; but he is usually a complete stranger to the intricacies of legal problems, and every safeguard possible should be observed to see, first, that he allows nothing but the sworn testimony to influence his decision, and second, that no outside considerations are thrown into the balance to divert his attention from the testimony, in making up his mind. He has to be told that he is the sole judge of the weight of the evidence and the credibility of the witnesses, and that he has the high privilege, in event of conflict, to determine which he will accept. In a case of this kind, if the jury finds that the plaintiff is entitled to recover at all, the statute permits the trebling of the amount as a penalty, and to that extent, it partakes of the nature of a criminal charge, for which reason, it would seem, the proof should be stronger than in an ordinary civil action.⁵ Hence, the trial court should impress upon the jury as clearly as possible the meaning of the phrase "preponderance of the evidence."

In view of what has thus been said, it is highly necessary that no outside influence or circumstances should be thrown into the scale to induce a conclusion which otherwise might not be reached. We therefore find it essential to carefully review the record as to the conduct of the jury and such outside matters as could have influenced their verdict, notwithstanding the very thorough consideration which they received at the hands of the lower court. The solution of this question does not require a positive finding that the jury was actually influenced by what took place; but rather involves a determination as to whether or not it was made reasonably certain that they were not. See Mattox v. United States, 146 U.S. 140, 13 S.Ct. 50, 36 L.Ed. 917; McDonald v. Pless, 238 U.S. 264, 35 S.Ct. 783, 59 L.Ed. 1300; Southern Pacific Co. v. Klinge, 10 Cir., 65 F. 2d 85; Bateman v. Donovan, 9 Cir., 131 F.2d 759; Wheaton v. United States, 8 Cir., 133 F.2d 522; Jorgensen v. York Ice & Machinery Corp., 2 Cir., 160 F.2d 432; Liggett & Myers Tobacco Co. v. Imbraguglia, D.C., 73 F.Supp. 909. As stated, the court below reviewed the many incidents complained of, and although being in doubt as to whether the jurors could lawfully be interrogated...