Poster Exchange, Inc. v. National Screen Service Corp., Civ. A. No. 7665.

• Decision Date: 19 October 1961
• Docket Number: Civ. A. No. 7665.
• Parties: POSTER EXCHANGE, INC. v. NATIONAL SCREEN SERVICE CORPORATION.
• Court: U.S. District Court — Northern District of Georgia

198 F. Supp. 557

POSTER EXCHANGE, INC. v. NATIONAL SCREEN SERVICE CORPORATION.

Civ. A. No. 7665.

United States District Court N. D. Georgia, Atlanta Division.

October 19, 1961.

Jones, Bird & Howell, Atlanta, Ga., Henican, James & Cleveland, New Orleans, La., for plaintiff.

Gambrell, Harlan, Russell, Moye & Richardson, Atlanta, Ga., Phillips, Nizer, Benjamin, Krim & Ballon, New York City, for defendant.

MORGAN, District Judge.

This cause coming on to be heard on the motion of plaintiff for a preliminary injunction, and on the motion of defendant for a summary judgment, due notice of the respective motions having been given by each movant to opposing counsel, and the Court having considered the pleadings, the evidence adduced, objections to evidence, the arguments of counsel, the proposed findings of fact and conclusions of law submitted by each party, and the Court being fully advised in the premises, it finds as follows:

Findings of Fact

1. The plaintiff herein is a corporation organized and existing under the laws of the State of Georgia with its offices and principal place of doing business in the City of Atlanta, Fulton County, Georgia. The plaintiff corporation has, since its incorporation in 1941, been engaged in the business of renting and selling standard motion picture accessories as hereinafter defined to various and sundry motion picture exhibitors in the Atlanta area and in interstate commerce throughout the states of Alabama, Georgia, Florida, and Tennessee.

2. National Screen Service Corporation (hereinafter called "National Screen") is a Delaware corporation transacting and doing business within the State of Georgia and within the Northern District of Georiga. National Screen has branches located throughout the United States and supplies standard motion picture accessories as hereinafter defined in interstate commerce to motion picture exhibitors in all states in the United States.

3. The term "motion picture advertising accessories" is used in the motion picture industry to describe posters, signs, displays and similar material placed in and around the lobbies of motion picture theatres or on billboards outside the theatre to advertise the current or coming motion picture attractions in the particular theatre.

Certain types of motion picture advertising accessories traditionally have been known in the film industry as "standard accessories". The standard accessories involved in this case are:

(a) 8 × 10 inch "stills" (black and white photographs);

(b) 11 × 14 inch lobby displays;

(c) 22 × 28 inch lobby displays;

(d) 14 × 36 inch insert cards;

(e) one sheet;

(f) three sheets;

(g) six sheets;

(h) twenty-four sheets.

4. At all times material hereto National Screen was engaged among other things in the business of creating, manufacturing and distributing standard motion picture accessories with regard to motion picture films distributed by or through the major American distributors of motion picture films, including such distributors as Paramount Film Distributing Corporation, Twentieth Century Fox Distributing Corporation, United Artists Corporation, Universal Film Exchanges, Inc., Warner Bros. Pictures Distributing Corporation, Loew's, Inc., and Columbia Pictures Corporation. Columbia Pictures Corporation now manufactures and distributes its own standard accessories on pictures distributed by or through it, but standard accessories on Columbia Pictures were formerly created, manufactured and distributed through National Screen.

5. Standard accessories have been in use for many years. Historically the general practice in the industry was that the motion picture companies would design and manufacture the various types of standard accessories and distribute them through the company's branch offices or exchanges. Thus, at the commencement of its business in 1941, motion picture accessories were available to The Poster Exchange, Inc., through the Atlanta exchanges of major motion picture distributors and The Poster Exchange, Inc., dealt directly with the major producers of motion pictures, obtaining the posters and other accessories necessary for its business directly from them.

6. By at least as early as 1947 all the above named major distributors of motion picture films ceased manufacturing or distributing motion picture accessories on films distributed by or through them and each of said distributors separately contracted with National Screen whereby National Screen was given exclusive rights upon a nation-wide basis to manufacture and distribute standard motion picture accessories with regard to motion picture films distributed by or through said major distributors.

7. Because of the exclusive contracts entered into by each of the motion picture distributors with National Screen with the result that motion picture accessories were no longer available through the branch offices or exchanges of the film companies, the plaintiff by at least as early as 1947 was forced to, and did, obtain its requirements of standard motion picture accessories from National Screen.

8. Plaintiff's exhibitor customers exhibit numerous films distributed by or through the major distributors and in connection with the exhibition of such films plaintiff's exhibitor customers require standard accessories manufactured and created for use in connection with the film being shown. No poster renter such as plaintiff can remain in business or meet the requirements of its exhibitor customers without ability to obtain standard motion picture accessories with regard to films distributed by or through the major distributors of motion picture films.

9. Since at least as early as 1947 and continuing thereafter up through the filing of the complaint in this case, i. e., July 17, 1961, standard motion picture accessories on films distributed by all major distributors except Columbia have been available only through National Screen. All standard accessories distributed in the local market with regard to films distributed by or through the major distributors are manufactured and distributed by National Screen. Prior to March 16, 1961, some such standard accessories were distributed by National Screen direct to exhibitors and some to the plaintiff, who in turn competed with National Screen in the distribution of such accessories to motion picture exhibitors.

10. National Screen is and has been for many years the only concern in the continental United States with national distribution facilities for distributing standard motion picture accessories and the only concern which is now in fact receiving licenses from the major distributors of motion pictures to manufacture and distribute standard motion picture accessories with regard to films distributed by or through each of said major distributors. It is clear that National Screen has monopoly power and control both nationally and within the market area over the manufacturing and distribution of standard motion picture accessories with regard to films of the major distributors.

11. Plaintiff prior to May 16, 1961, purchased standard motion picture accessories manufactured by National Screen, and National Screen sold to plaintiff substantial quantities of said accessories.

12. Plaintiff competes with National Screen in the distribution of standard motion picture accessories to exhibitors in the market area and is the sole competitor of National Screen in the market area comprised of cities throughout the states of Alabama, Georgia, Florida, and Tennessee. While National Screen controls the distribution of most standard motion picture accessories in the market area, plaintiff has been successful in building up a substantial poster renter business at the expense of the 100 per cent control which would otherwise be enjoyed by National Screen.

13. Under a consent decree "in the case of United States v. National Screen Service Corporation, et al., a case in which the plaintiff was not a party" National Screen consented to a decree which among other provisions contained the following:

"V

"* * * (B) No producer Defendant shall be required to regard any person as a qualified applicant within the meaning of Subsection (A) of this section unless:

"(1) The applicant can meet and will agree to meet reasonable business standards as to reliability, financial responsibility, ability, production facilities and a national distribution organization and facilities to service, with respect to all feature motion pictures released by the Producer Defendant, all exhibitors desiring such service. Provided, however, that the size of the organization and facilities of National Screen shall not be used as the standards for determining the adequacy of the applicant's qualifications."

14. National Screen's licenses from the major distributors have been nonexclusive since at least as early as 1957 and any qualified applicant as defined by said consent decree has been free to negotiate with the major...