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

• Decision Date: 07 March 1972
• Docket Number: No. 29025.,29025.
• Citation: 456 F.2d 662
• Parties: The POSTER EXCHANGE, INC., Plaintiff-Appellant, v. NATIONAL SCREEN SERVICE CORPORATION et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

456 F.2d 662 (1972)

The POSTER EXCHANGE, INC., Plaintiff-Appellant, v. NATIONAL SCREEN SERVICE CORPORATION et al., Defendants-Appellees.

No. 29025.

United States Court of Appeals, Fifth Circuit.

March 7, 1972.

Glenn B. Hester, Augusta, Ga., Carl E. Sanders, Atlanta, Ga., Francis T. Anderson, Yeadon, Pa., C. Ellis Henican, Jr., New Orleans, La., for plaintiff-appellant.

E. Smythe Gambrell, Robert S. Sams, Atlanta, Ga., Walter S. Beck, New York City, Tench C. Coxe, Atlanta, Ga. (Motion Picture Distributors), for defendants-appellees.

Before JOHN R. BROWN, Chief Judge, and DYER and INGRAHAM, Circuit Judges.

JOHN R. BROWN, Chief Judge:

Assigning Poster VI to this opinion in this endless litigation¹ assures us that there likely will be a Poster VII but hopefully not a Poster VIII. This is but a rerun of the old scenario that National Screen has alone or by combination with movie producers driven Poster out of the business of supplying accessory advertising materials to local movie exhibitors. Like an old black and white soundless serial, some has to be repeated for the new viewer, but mainly one has to rely on exposure to the previous installments for the whole picture. Consequently, this opinion is not produced for one-time viewers. It assumes that to see what this is all about, those concerned must at least look at the rushes from the past. Cf. In re Atlas Sewing Centers, Inc., 5 Cir., 1971, 437 F.2d 607, 609.

That it is not all past, but now very much of the present and the future is the opinion of the Supreme Court in Zenith,² handed down after submission of this case.

The District Court granted summary judgment to six major movie producers. The case still pends below as to National Screen.

The current episode began in 1961, shortly after National Screen had announced that it would no longer make standard accessories available to posterrenter jobbers, among whom was Poster.³

In the 1940's National Screen had received exclusive licenses from the producers to manufacture and distribute these accessories, but to avoid litigation, National Screen had for many years provided these accessories to local poster-renters. But after the victory of National Screen in Lawlor v. National Screen Service Corp., 3 Cir., 1959, 270 F.2d 146, cert. denied, 1960, 362 U.S. 922, 80 S.Ct. 676, 4 L.Ed.2d 742, it decided that it was no longer necessary to supply its own competitors. So on May 16, 1961, National Screen cut off supplies to all of the poster-renters.

Shortly thereafter, Poster filed a private antitrust action⁴ alleging that National Screen was attempting to monopolize the poster distribution business in the Atlanta area. The District Court granted Poster a temporary injunction and denied National Screen's motion for summary judgment. Poster Exchange, Inc. v. National Screen Service Corp., N.D.Ga., 1961, 198 F.Supp. 557. On this appeal (1962) this Court affirmed the denial of summary judgment and sent the case back for trial on the merits. Poster I.

In 1963, shortly before the case was to go to trial, Poster amended its complaint⁵ to include five of the producers as defendants⁶ Poster alleged that the granting of the exclusive licenses and the acquiescence in National Screen's cutoff action of 1961 by the producers made them Sherman Act conspirators. The producers moved for and were granted summary judgment. Poster Exchange, Inc. v. National Screen Service Corp., N.D.Ga., 1963, 35 F.R.D. 558, which we affirmed per curiam⁷ (1965). Poster I.

After the action against the producers had been dismissed, National Screen renewed its motion for summary judgment, which was granted by the District Court but reversed by this Court (1966). Poster III.

The case finally went to trial against National Screen alone and the judgment against National Screen was affirmed by this Court (1970). Poster V.

But as in the New Orleans litigation (Op IV 1316) the earlier adverse ruling in favor of the producers (Poster II) had little deterrent effect. On February 26, 1969, a few days after Poster had recovered against National Screen in the District Court (in 7665), Poster filed this new action against National Screen and the producers.⁸ To this the producers filed for summary judgment on the grounds of (i) statute

of limitations, (ii) res judicata and (iii) collateral estoppel. Summary judgment was granted. Poster Exchange, Inc. v. National Screen Service Corp., N.D.Ga., 1969, 306 F.Supp. 491. It was clearly on (i) statute of limitations.⁹ Although the Judge went on to speak of (ii) res judicata,¹⁰ we do not believe that this was intended to be—or can now be justified on—the reasoning of the Trial Judge. First, Columbia was not a party to No. 7665. Yet it was granted summary judgment. As to it, res judicata was clearly not available. Second, the Judge reasoned that since Poster had recovered triple damages in No. 7665 (Poster V) from a single overt act, res judicata bars this suit since a plaintiff "cannot be heard to say his damages are different when the act complained of is the same." 306 F.Supp. at 494.

What Poster obtained by its judgment against National Screen goes only to the question of possible double recovery. It is in no sense a shield to an alleged fellow tortfeasor-conspirator. And since this litigation is proof that old cases never die nor fade away (cf. Bros Inc. v. W. E. Grace Manufacturing Co., 5 Cir., 1965, 351 F.2d 208, 209), it may be the part of judicial husbandry to discourage needlessly hasty action and unnecessary appeals to sound a word so far as a substantive basis for the holding of res judicata. In this approach, care must be taken to distinguish statute of limitations situations (and precedents) from res judicata—collateral estoppel problems. Op IV 421 F.2d 1317-18. Next, when, as was done here, it is on the pleadings alone, they must be measured against the liberality of Conley.¹¹ This means that only such issues as were disposed of in the 1963 orders as to producers (other than Columbia) bar the antitrust plaintiff from pursuing his claims based on conduct within the Conley reaches of the complaint by one or more or all of the defendants which covers, as we said in Poster IV, "new post-1961 illegal conduct, not merely continuing damages from old, and now insulated conduct, in violation of the antitrust laws." Op IV 1319. "Left open, however, are actions, if any, which may be established by proof covering post-1961 activities (or non-actions) which substantively are violations of the antitrust laws and the resulting damages therefrom." Op IV 1321. In the light of antitrust policies against the grant of immunity for contemporary violations we "hold that significant actions (or non-actions) occurring subsequent to 1961, either alone or in combination with acts which have been completed prior to 1961 except for their consequences, may be the basis for new claims for damages traceable to such significant actions (or non-actions)." Op IV 1318.

Since for res judicata—collateral estoppel purposes the "causes of action" are not the same, it follows that the analysis is that of collateral estoppel. Whatever issues the Court, on examination of the 1963 suit record, finds necessarily to have been resolved—rightly or wrongly—are no longer open to litigation.¹² As to them, the bar is complete quite apart from the statute of limitations.

But the statute of limitations problem is present with respect to (i) pre-1961 conduct (or non-action) not foreclosed by collateral estoppel and (ii) post-1961 conduct occurring more than four years prior to the 1969 suit (No. 12497).

Here Zenith, supra, cuts a big figure. First, whatever expressions we have used from time to time, which might suggest that in antitrust situations there is no such thing as a continuing conspiracy, now must yield their sweeping force. The Supreme Court stated:

"Generally, a cause of action accrues and the statute begins to run when a defendant commits an act which injures a plaintiff\'s business. See, e. g., Suckow Borax Mines Consolidated, Inc. v. Borax Consolidated, Ltd., 185 F.2d 196, 208 (C.A.9 (1950); Bluefields S. S. Co. v. United Fruit Co., 243 F. 1, 20 (C.A.3 1917), appeal dismissed, 248 U.S. 595, 39 S.Ct. 136, 63 L.Ed. 438 (1919); 2361 State Corp. v. Sealy, Inc., 263 F.Supp. 845, 850 (N.D.Ill.1967). This much is plain from the treble damage statute itself. 15 U.S.C. § 15. In the context of a continuing conspiracy to violate the antitrust laws, such as the conspiracy in the instant case, this has usually been understood to mean that each time a plaintiff is injured by an act of the defendants a cause of action accrues to him to recover the damages caused by that act and that, as to those damages, the statute of limitations runs from the commission of the act. See, e. g., Crummer Co. v. DuPont, 223 F.2d 238, 247-248 (C.A.5 (1955); Delta Theaters, Inc. v. Paramount Pictures, Inc. 158 F.Supp. 644, 648 (E.D.La.1958); Momand v. Universal Film Exchange, Inc., 43 F.Supp. 996, 1006 (Mass.1942), aff\'d, 172 F.2d 37, 49 (C.A.1 1948)."

Zenith, supra, 401 U.S. at 338, 91 S.Ct. at 806, 28 L.Ed.2d at 92.

More importantly, what is emphasized, perhaps for the first time, is that for acts which have long since taken place—and which are in no sense repeated in conjunction with new acts (or non-acts)—the act in effect is "revived" as a basis for later damages under a certain circumstance. That circumstance is the inability of the injured victim to earlier prove with requisite certainty the existence and amount of damages. In that circumstance it is a holding that in antitrust cases subsequent damages have not yet "accrued." They do not "accrue" until they can be reasonably established. The moment the victim can prove such subsequent damages, the statute begins to run leaving four more years in which to assert them. The Court spells this out:

"However, each separate cause of action that so accrues entitles a plaintiff to recover not only those damages

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