Ralph C. Wilson Indus. v. American Broadcasting

• Decision Date: 28 November 1984
• Docket Number: No. C-80-4614 SC.,C-80-4614 SC.
• Citation: 598 F. Supp. 694
• Parties: RALPH C. WILSON INDUSTRIES, INC., v. AMERICAN BROADCASTING COMPANIES, INC., Field Communications Corporation; Miami Valley Broadcasting Corporation; Chronicle Broadcasting Company; Viacom International, Inc.; Tandem Productions, Inc.; Twentieth Century-Fox Film Corporation, et al., Paramount Pictures Corporation; Warner Bros., Inc.; MCA Inc.; Metro-Goldwyn-Mayer, Inc.; United Artists Corporation.
• Court: U.S. District Court — Northern District of California

598 F. Supp. 694

RALPH C. WILSON INDUSTRIES, INC., v. AMERICAN BROADCASTING COMPANIES, INC., Field Communications Corporation; Miami Valley Broadcasting Corporation; Chronicle Broadcasting Company; Viacom International, Inc.; Tandem Productions, Inc.; Twentieth Century-Fox Film Corporation, et al., Paramount Pictures Corporation; Warner Bros., Inc.; MCA Inc.; Metro-Goldwyn-Mayer, Inc.; United Artists Corporation.

No. C-80-4614 SC.

United States District Court, N.D. California.

November 28, 1984.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Craig Corbitt, Furth, Fahrner, Bluemle, Mason & Wong, San Francisco, Cal., for plaintiff.

Cooper, White & Cooper, San Francisco, Cal., for Chronicle Broadcasting Co.

Morrison & Foerster, San Francisco, Cal., for Field Communications.

Sidley & Austin, Washington, D.C., for Field Communications.

Heller, Ehrman, White & McAuliffe, San Francisco, Cal., for supplier defendants, Viacom, 20th Century, Paramount, Warner Bros., M.C.A. Television, Metro-Goldwyn-Mayer, United Artists.

Farella, Braun & Martel, San Francisco, Cal., Dow, Lohnes & Albertson, Washington, D.C., for Miami Valley Broadcasting.

AMENDED ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT CORRECTING TYPOGRAPHICAL ERRORS AT PAGE 29 LINES 10-11

CONTI, District Judge.

This matter is before the court on defendants' motion for summary judgment. The background is as follows.

Plaintiff is the owner of a television station, KICU Channel 36 (jointly referred to as "plaintiff" herein). Defendants Chronicle Broadcasting Co. (KRON Channel 4), Miami Valley Broadcasting Co. (KTVU Channel 2) and Field Communications Corp. (KBHK Channel 44) are television stations located in the San Francisco Bay Area. These three defendants will be referred to as the "station defendants."¹ Defendants Viacom International, Inc., P.I.T.S. Films,² Twentieth Century-Fox Film Corp., Paramount Television Domestic Distribution Inc., Warner Bros. Television Distribution, Inc., M.C.A. Television Ltd., Metro-Goldwyn-Mayer, Inc., and United Artists Television, Inc., are suppliers or distributors of television programs. These defendants will be referred to as the "supplier defendants."

Plaintiff filed this action on December 29, 1980.³ Plaintiff's complaint alleges that defendants have violated the antitrust laws because of various practices they follow concerning the licensing of programs and conspiracies to boycott plaintiff. Plaintiff is pursuing three claims against defendants based upon these alleged practices.⁴ First, plaintiff claims that all defendants have violated the Sherman Act by unreasonably restraining trade. Plaintiff contends that defendants unreasonably restrain trade by licensing programs on an exclusive basis as against plaintiff, by making the licenses unreasonably long and by incorporating, implicitly or explicitly, rights of first refusal into those licenses. Secondly, plaintiff claims that the station defendants have committed a per se violation of the Sherman Act by a horizontal conspiracy to boycott plaintiff. Plaintiff alleges that these three defendants have conspired, through direct communication, to exercise exclusivity of programming against plaintiff. Thirdly, plaintiff claims that defendant Miami Valley Broadcasting Co. has committed a per se violation of the Sherman Act by conspiring with the Independent Television News Association (ITNA) to exclude plaintiff from membership in that organization. These three claims will be developed in more detail below.

This case has been ongoing for almost four years. In 1982, the defendants filed a motion seeking summary judgment. On the state of the record at that time, the court denied that motion. On August 9, 1984, the court held a status conference in order to clarify the issues and facts for trial. At that conference, the court and parties explored whether it would be appropriate to reconsider defendants' motion for summary judgment given the extensive record now before the court. As a consequence of that conference, the station defendants moved to renew their motion for summary judgment, in which they were joined by the supplier defendants. The court granted that motion and set a briefing schedule to permit all parties ample opportunity to brief the legal and factual issues in this case. The court specifically directed plaintiff to present a complete brief of its factual arguments which might preclude summary judgment against it, together with a detailed summary of the specific evidence plaintiff intends to present at trial to support those arguments. After this thorough and voluminous supplemental briefing, defendants' renewed motion for summary judgment is now before the court.

The considerations the court must address in deciding whether summary judgment is appropriate in this case are as follow. Generally, summary judgment is appropriate only when the moving party meets his burden of showing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; see, Adickes v. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); Bank of California, N.A. v. Opie, 663 F.2d 977, 979 (9th Cir.1981); State ex rel. Edwards v. Heimann, 633 F.2d 886, 888 (9th Cir.1980).

Plaintiff contends that this rule should be applied particularly strictly in antitrust cases, making summary judgment less available in such cases than in civil actions generally. Although there is some support for this contention, the better position, advanced by respected antitrust writers and recognized by the courts, is that summary judgment is equally available in antitrust cases.⁵ See, e.g., Lupia v. Stella D'Oro Biscuit Co., 586 F.2d 1163, 1167 (7th Cir.1978), cert. denied, 440 U.S. 982, 99 S.Ct. 1791, 60 L.Ed.2d 242 (1979); Zweig v. Hearst Corp., 521 F.2d 1129, 1135-36 (9th Cir.), cert. denied, 423 U.S. 1025, 96 S.Ct. 469, 46 L.Ed.2d 399 (1975); II P. Areeda & D. Turner, Antitrust Law ¶¶ 316-17 (1978); Schwarzer, Summary Judgment Under the Federal Rules: Defining Genuine Issues of Material Fact, 99 F.R.D. 465 (1984).

The argument that summary judgment should be hesitantly granted in antitrust cases is generally founded upon language used by the Supreme Court in Poller v. Columbia Broadcasting Systems, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). In Poller, the Court stated:

summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot.

Poller, 368 U.S. at 473, 82 S.Ct. at 491. As antitrust writers point out, however, this language must be read in the context of Poller's genuinely disputed factual issues concerning motive and intent and the discovery problems therein, and not as a rule that summary judgment should rarely be granted in antitrust cases. See, e.g., II P. Areeda & D. Turner, Antitrust Law ¶ 316.

In fact, some writers believe that summary judgment is often particularly appropriate in antitrust cases because of the "fearful dimensions" of such cases, and the fact that many suits are motivated by "commercial disappointment" rather than genuine antitrust problems. II P. Areeda & D. Turner, Antitrust Law ¶ 316 at 57-58 (1978); see also J. von Kalinowski, Antitrust Laws & Trade Regulation § 113.02 at 113-5 to 113-7 (1984); c.f., Lupia v. Stella D'Oro, 586 F.2d 1163; Zweig v. Hearst, 521 F.2d 1129. Given the enormous expenditure of time and other resources commonly necessary in antitrust cases, the complexity of the issues and general inexperience of jurors in this area, as well as the need for uniformity and foreseeability in interpretations of the antitrust laws, the court should, rather, be particularly alert to granting summary judgment in appropriate cases. See, e.g., Mutual Fund Investors v. Putnam Management Co., 553 F.2d 620, 622 (9th Cir. 1977); II P. Areeda & D. Turner, Antitrust Law ¶ 316 at 69-70.

The posture of this case is particularly appropriate for a consideration of summary judgment. This case was filed in 1980. Since that time, the parties have conducted extensive discovery and do not contemplate further discovery. Plaintiff has not indicated that it needs further discovery to adequately defend against defendants' motion for summary judgment. As noted above, the court has directed plaintiff to submit detailed briefs setting forth the specific evidence it intends to use to support its claims at trial. In the context of this fully developed record, if the court finds that a directed verdict for defendants would be required even if all plaintiff's proffered evidence were admitted at trial, then the court should not be hesitant to grant summary judgment for defendants at this stage of the proceeding. See, First National Bank v. Cities Service Co., 391 U.S. 253, 274-90, 88 S.Ct. 1575, 1585-1593, 20 L.Ed.2d 569 (1968) holding that, even though plaintiff's evidence showing conspiracy might present a jury question, defendants' evidence to the contrary was so overwhelming that summary judgment was appropriate; see also, II P. Areeda & D. Turner, Antitrust Law ¶ 316 at 61; Schwarzer, Summary Judgment, etc., 99 F.R.D. at 468-70. Applying this standard to the facts and arguments set forth below, the court finds that summary judgment in favor of defendants is appropriate in this case.

A. Rule of Reason Claim

Plaintiff's primary claim against the defendants is that they have unreasonably restrained trade through a vertical contract by their combined practices of licensing television programs on an exclusive basis, making the licenses unreasonably long, and by implicitly or explicitly incorporating rights of first refusal into those licenses. The factual basis for these contentions, referred to herein as plaintiff's "rule of reason" claim, is set forth below. First, however, is a brief summary of the statutory basis of pla...