Poster Exchange, Inc. v. National Screen Service Corp.

• Citation: 306 F. Supp. 491
• Decision Date: 25 July 1969
• Docket Number: Civ. A. No. 12497.
• Parties: The POSTER EXCHANGE, INC. v. NATIONAL SCREEN SERVICE CORPORATION, Columbia Pictures Corporation, Loew's Incorporated, Metro Goldwyn Mayer, Inc., Paramount Film Distributing Corporation, Twentieth Century Fox Film Corporation, United Artists Corporation, Warner Bros. Pictures Distributing Corporation.
• Court: U.S. District Court — Northern District of Georgia

306 F. Supp. 491

The POSTER EXCHANGE, INC. v. NATIONAL SCREEN SERVICE CORPORATION, Columbia Pictures Corporation, Loew's Incorporated, Metro Goldwyn Mayer, Inc., Paramount Film Distributing Corporation, Twentieth Century Fox Film Corporation, United Artists Corporation, Warner Bros. Pictures Distributing Corporation.

Civ. A. No. 12497.

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

July 25, 1969.

Sanders, Hester, Holley, Ashmore & Boozer, Augusta, Ga., Francis T. Anderson, Yeadon, Pa., Henican, James & Cleveland, New Orleans, La., for plaintiff.

Phillips, Nizer, Benjamin, Krim & Ballon, New York City, for defendants.

ORDER

ALBERT J. HENDERSON, Jr., District Judge.

Plaintiff Poster Exchange, which rents standard accessories to moving picture theatres, alleged that defendant National Screen and the other defendants, distributors of motion pictures (hereinafter known as distributors), had conspired together to violate the antitrust laws, specifically §§ 1 and 2 of the Sherman Act. This conspiracy had resulted in a cessation of standard accessory materials to plaintiff from National Screen, upon which plaintiff relied for its supplies. The distributors moved for summary judgment, alleging (1) that the statute of limitations, 15 U.S.C. § 15b, had run from the time of the accrual of plaintiff's cause of action and (2) that plaintiff's suit was barred by either res judicata or collateral estoppel because of a damages award in a previous suit in this court, No. 7665. 198 F.Supp. 557. Poster Exchange countered that the violation was a "continuing conspiracy", and that, as a result, the statute of limitations did not bar the suit. By the same reasoning, it alleged that it was bringing this suit under a new cause or causes of action, and that the doctrines of res judicata and collateral estoppel, therefore, could not apply. Because the court finds that the theory of "continuing conspiracy" is not the law in the Fifth Circuit, the distributors' motion for summary judgment must be granted.

As they are pertinent, the facts are these. National Screen is a national company which distributes advertising material for motion pictures, known as standard and specialty accessories, for all of the defendant motion picture distributors. It has an office in each of the major motion picture exchange areas, including Atlanta. Poster Exchange is a local "poster renter", dealing in the Atlanta area in standard accessories, such as posters and other items used to advertise motion pictures. It rents these items to local motion picture theatres. In 1961, National Screen announced to Poster Exchange that it would no longer supply Poster Exchange with standard accessories, as it had been doing up to that time. Poster Exchange filed a suit, No. 7665 in this court, alleging a violation of the anti-trust laws, and obtained a preliminary injunction against National Screen, with the effect that National Screen was ordered to continue furnishing it with the standard accessories. For reasons not pertinent here, the case was not brought to trial before March, 1963, and, on March 1, 1963, Judge Lewis Morgan withdrew the preliminary injunction. At that time, National Screen ceased furnishing standard accessories to Poster Exchange. Since then, Poster Exchange's business in the Atlanta area has withered, to the extent that it now consists of a "telephone service", by which it supplies customers with selections from Poster Exchange's limited stock from New Orleans, which is the location of another similar company operated by the principals of Poster Exchange. No additional acts in perpetration of the alleged violation of the anti-trust laws are alleged, other than the 1963 cessation of supplies.

For a more complete treatment of the facts, see the decision in Poster Exchange, Inc. v. National Screen Service Corp., 198 F.Supp. 557 (N.D.Ga. 1961), aff'd sub nom. National Screen Service Corp. v. Poster Exchange, Inc., 305 F.2d 647 (5th Cir. 1962).

The only issue which the court will explore is whether this suit is barred by the four year statute of limitations, 15 U.S.C. § 15b. In other words, does a "continuous conspiracy" create a new cause of action each day, so that plaintiff can never be barred by the statute of limitations?

A succinct statement of the law on this issue is found in 2 CCH Trade Regulation Reporter, ¶ 9141:

Causes of action based on an unlawful conspiracy have been the major source of accrual issues or problems. The fact that a conspiracy is of a continuing nature does not prevent the accrual of a cause of action for damages, which have been sustained. In other words, a cause of action based on a conspiracy may accrue, although the conspiracy continues. Furthermore, the fact that a victim of a conspiracy continues to suffer damage does not prevent the accrual of a cause of action. Generally, damages which are attributable to overt acts occurring within the period of the statute of limitations are recoverable. In a continuing conspiracy causing continuing damages without further overt acts, the statute begins to run from the time that the act which caused the damage occurred. (citations omitted) (emphasis added).

This is substantially the rule in the Fifth Circuit. See Crummer Co. v. DuPont, 223 F.2d 238, 247 (5th Cir. 1955); Norman Tobacco and Candy Co. v. Gillette Safety Razor Co., 295 F.2d 362 (5th Cir. 1961); Laitram Corp. v. Deepsouth Packing Co., 279 F.Supp. 883, 888-889 (E.D.La.1968).

Applying the rule to the facts of this case, it is seen that only one overt act is complained of, to-wit, the 1963 refusal to furnish further supplies. Nowhere does plaintiff state that another overt act, within the period of the statute of limitations, was perpetrated. Instead, plaintiff contents itself with the assertion that the continuing conspiracy and continuing damages suffered...