Paramount Pictures v. United Motion Picture TO, 6565.
Decision Date | 13 December 1937 |
Docket Number | No. 6565.,6565. |
Citation | 93 F.2d 714 |
Parties | PARAMOUNT PICTURES, Inc., v. UNITED MOTION PICTURE THEATRE OWNERS OF EASTERN PENNSYLVANIA, SOUTHERN NEW JERSEY AND DELAWARE, Inc., et al. |
Court | U.S. Court of Appeals — Third Circuit |
William A. Schnader, of Philadelphia, Pa., Morgan S. Kaufman, of Scranton, Pa., and Austin C. Keough, of New York City (William A. Schnader, of Philadelphia, Pa., and Louis Phillips and Irving Cohen, both of New York City, of counsel), for appellant.
Otto Kraus, Jr., and Benjamin M. Golder, both of Philadelphia, Pa., for appellees.
Before BUFFINGTON, DAVIS, and BIGGS, Circuit Judges.
This is an appeal from a decree of the District Court dismissing the appellant's bill of complaint for lack of jurisdiction.
The appellant, a manufacturer and distributor of motion picture films, is a corporation of New York. The appellees are corporations and individuals who own and operate moving picture houses in Eastern Pennsylvania, Southern New Jersey and Delaware. The appellant filed a bill of complaint against the appellees for an injunction charging them with having formed an illegal combination and conspiracy in restraint of trade or commerce among the several states in violation of section 1 of the Sherman Anti-Trust Act, 15 U.S.C.A. § 1, which provides that:
Section 16 of the Clayton Act, 15 U.S. C.A. § 26, provides that: "Any person, firm, corporation, or association shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the anti-trust laws."
Admittedly, what the appellees set out originally to do was a violation of the Sherman Anti-Trust Act, 15 U.S.C.A. § 1 et seq. As appears by the untraversed bill and by affidavits, they combined and conspired: (1) To prevent by coercive means the making of contracts for future distribution of the films produced by the appellant in interstate commerce until it offered better prices and terms; (2) to prevent the exhibiting of the producer's films and their transportation in interstate commerce to fulfill existing contracts until the appellant complied with the demands of the conspirators.
In order to carry out their purpose, the appellees planned to boycott all Paramount pictures as long as might be necessary to compel it to offer better terms for its license agreements for 1937-1938.
On June 25, 1937, one of the appellees, United Motion Picture Theatre Owners of Eastern Pennsylvania, Southern New Jersey and Delaware, Inc., hereinafter called "United," called a meeting at Philadelphia at which it voted to boycott the Paramount Company or to bring about a so-called "strike" against the use of its films. A "War Board" was appointed and a "War Chest" authorized. Eastern Pennsylvania, Southern New Jersey, and Delaware were divided into zones and a zone captain was appointed in each zone whose duty it was to ascertain who in his zone was violating the boycott and report the same to the "strike" headquarters.
The boycott in the territory of the three states mentioned was part of a proposed nation-wide boycott against the Paramount Company. A meeting was held on June 29, 1937, at Washington, D. C., which three individual defendants representing "United" attended. Representatives of exhibitor associations from many parts of the United States were at the meeting. The chairman read a speech charging the Paramount Company with "unfair, indecent and unethical business practices."
He then discussed the question of punishment and said: "There is only one way in which Paramount can be punished — viz. through its pocketbook. * * *" * * *""But the real value of such concerted action on the part of the number of exhibitors would be the effect it would have upon the other major distributors."
He then asked: "Have you, the owners of four thousand theatres, the courage — the guts — to take the action — a `sit-down strike' against Paramount * * *?"
The meeting then "was of the unanimous opinion that this campaign against Paramount shall be declared a `Buyers' Strike', or a `Sit-Down Strike' of exhibitors against Paramount." Thereupon the exhibitors throughout the country were called upon to carry out the plan "as adopted by the present Conference."
The plan in part consisted of the refusal of all exhibitors throughout the United States to show Paramount pictures or to enter into 1937-38 contracts with Paramount during the period of the "strike" unless Paramount's terms were modified.
Mr. J. P. Wood of Columbus, Ohio, was then elected "as the clearing agency of this National Campaign, to whom all exhibitor organizations are to send full data as to the steps they adopt and the procedure which they take during the progress of this `Strike'."
On July 2, 1937, George P. Aarons, one of the defendants, and secretary of "United," who is a lawyer and who it appears was an active agent, sent out a letter to every exhibitor, sales manager, and officer of producing companies and to the trade papers in Eastern Pennsylvania, New Jersey, and Delaware, in which, after denouncing Paramount and calling a mass meeting of exhibitors at the Broadwood Hotel on July 8, 1937, among other things, said: This letter and much other material, if not all, that "United" put out, were sent to other exhibitor organizations "all over the United States" and "also to Canada."
During July, 1937, Aarons continued to send out pamphlets, post cards, and letters not only to exhibitors and exhibitor organizations in New Jersey, Pennsylvania, and Delaware — who were the plaintiff's only possible buyers of its product — but all over the entire United States and "to certain public officials, members of Congress, members of legislatures, to members of the judiciary," persuading exhibitors not to deal with the Paramount Company and threatening them if they did so. Such statements as the following were sent out:
Post cards were sent out on the sides of which was the picture of a truck to be used in picketing. Across one end of the card in front of the truck was the following: "U.M.P.T.O.E. Pa., S.N.J. and Del. 301 N. 13th St., Phila. Pa.
On the side of the truck was a large poster or billboard containing, among other things, an inscription reading in part as follows:
etc.
It is also to be noted as the then present object of the combination, the purpose to stop the interstate commerce of the plaintiff, that the Washington conference's unanimous declaration was: "That all exhibitors throughout the United States refuse to play any Paramount pictures during the month of August, 1937, and for such longer period as the Conference...
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