SAMUEL GOLDWYN PRO., INC. v. Fox West Coast Theatres Corp.
| Decision Date | 31 May 1961 |
| Docket Number | No. 29756.,29756. |
| Citation | 194 F. Supp. 507 |
| Parties | SAMUEL GOLDWYN PRODUCTIONS, INC., Plaintiff, v. FOX WEST COAST THEATRES CORPORATION et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Joseph L. Alioto, San Francisco, Cal., George Slaff, Los Angeles, Cal., Maxwell Keith, San Francisco, Cal., for plaintiff.
Arthur B. Dunne, San Francisco, Cal., Frederick W. R. Pride, New York City, Bennett W. Priest, Los Angeles, Cal., for Fox defendants.
This is an action tried by the Court without a jury wherein the plaintiff seeks treble damages under the anti-trust laws, against Fox West Coast Theatres Corporation, et al. The suit was filed on May 16, 1950, and after extensive pretrial discovery proceeded to trial before the late Judge Edward P. Murphy.
Prior to trial Judge Murphy made several vital and significant rulings, particularly granting defendants' motion for partial summary judgment and dismissing all claims which occurred prior to May 16, 1947, on the ground that they were barred by the applicable statute of limitations.1 Also, that the decree in the Paramount case2 was not admissible in the instant proceedings.
The cause proceeded to trial as against Twentieth Century-Fox Film Corporation, National Theatres Corporation, Fox West Coast Theatres Corporation and Fox West Coast Agency Corporation. Plaintiff's original suit had named additional defendants for whom a separate trial was ordered.
The trial was protracted. It commenced on the 10th day of July, 1957, and was concluded on the 14th day of January, 1958. Plaintiff and defendants called twenty-three witnesses. The trial transcript consisted of 6,500 pages, exclusive of voluminous exhibits, involving a mass of economic, statistical and accounting data. At the conclusion the trial court requested the parties to prepare findings of fact and conclusions of law. The findings submitted were very extensive. References to them are made herein.
Before decision, Judge Murphy died. The cause was reassigned.
On November 19, 1959, and thereafter, counsel for the parties appeared on a pretrial conference for the express purpose of acquainting this Court with the ramifications of the litigation, the scope of the evidence adduced before the late Judge Murphy and the question whether the cause would be resubmitted on the record or whether witnesses would be called de novo.
The Court at the conclusion of the hearing requested additional briefing on the question of "causal relationship" and the issue of impact and continued the matter regularly until February, 1960, for argument on the merits, the Court having decided, upon stipulation of counsel, to have the cause resubmitted on the record of testimony theretofore elicited.
After extensive oral argument counsel requested time to file additional briefs and the matter was finally submitted for decision on the merits on the 1st day of September, 1960. This last submission was set aside by the Court for the reason that counsel for defendants submitted a supplemental brief. Thereafter counsel for plaintiff on the 10th day of April, 1961, filed a responsive brief and the cause is now ready for decision.
The erosive effect of the influences of both pretrial, trial and subsequent court engagements has narrowed the issues presently before the Court. The difficulties attendant upon a decision in this case are not concerned with any complexity or novelty in legal application. The underlying principles have been carefully enunciated by our Circuit Court, as well as the Supreme Court of the United States.3
Plaintiff contends that defendants' violations of the Sherman Act, 15 U.S.C.A. § 1 et seq., and the Clayton Act, 15 U.S. C.A. § 12 et seq., through the practices charged, have injured plaintiff in its business of producing and distributing motion pictures by reason of the low rentals plaintiff was compelled to accept in the marketing of the specific pictures involved in this litigation.
Defendants deny that the film rentals negotiated by plaintiff's distributor R. K.O., were less than the product itself deserved in each instance. Defendants assert that the present litigation arises because the seller, after disposing of his product, would now like to re-negotiate on a more profitable basis. They deny a violation of the antitrust laws through conspiracy or monopoly and contend that plaintiff received that to which he was entitled in a competitive market.
Defendants contend that the Goldwyn product had deteriorated and that the pictures were progressively less well received in the market.4 Also, that the law suit was brought through personal pique.
Defendants further contend that the plaintiff had outlets available other than the National Theatres Corporation (hereafter N.T.C.)5 representing approximately 600 theatres situated strategically throughout the United States. Also, that Goldwyn "sold away" to certain of his customers and attempted to put pressure on the defendants.
The plaintiff states that the record is clear, that Goldwyn struggled against the practices of the Fox chain from the middle twenties down to date.
It is to be observed that this is not the case of an obscure, lone exhibitor striving to obtain a product on a competitive basis.6
Samuel Goldwyn, an outstanding producer of motion pictures and a powerful figure in the industry, came to the market in 1947-50 with seven motion pictures. His bargaining agent and distributor was R.K.O.
The pictures ranked among the feature motion pictures shown in the film seasons in which each was respectively released as follows:
Goldwyn Release Rank
Walter Mitty 16
Bishop's Wife 17
Best years (reissue) 33
Song is Born 40
Enchantment 80
Roseanna McCoy 47
Foolish Heart 52
The Question of Liability:
Plaintiff is required to prove restraint and injurious impact.
The conspiracy as outlined by plaintiff was a many faceted one to violate Sections 1 and 2 of the Sherman Act in gaining monopolistic control in the marketing areas wherein defendants owned or operated theatres. Defendants created local pockets of monopoly and joined therein a national buying combine.7
The Joint Alliances and Pools:
The jointly held corporations and enterprises existing between National Theatres Corporation (NTC) and putative competitors were illegal and declared such by the Supreme Court in United States v. Paramount Pictures, 334 U.S. 131, 149, 68 S.Ct. 915, 92 L.Ed. 1260 and ordered divested upon the showing that the other parties were potential competitors.8
Several of these joint arrangements were in existence during the period involved herein, to-wit: 1947 to 1950. The impact upon the Goldwyn organization is manifest.
9
The Supreme Court in the Paramount case remanded the action for consideration by the District Court. Following the remand, the District Court entered an order based on the consent of the United States and Twentieth Century Fox Film Corporation dated December 17, 1948:
10
The final decree of February 8, 1950, prevents the defendants from entering into joint theatre arrangements.11
It is difficult, if not impossible, to delineate herein all of the alliances, agreements regarding division and allocation of product, "gentlemanly understandings," "harmonious working arrangements" and collusive conduct that permeate the vast record before the Court. On the question of restraint and impact it is not unfair to say that the orders and decrees in the Paramount case were barely made and entered when Fox set in motion, through its agents, a series of practices and transactions designed to circumvent and avoid the significant teaching of the Paramount case.
Whether these efforts to continue the monopoly were subtle and refined, or bold is of no particular moment. Suffice, that the testimony is replete with instances of conduct reminiscent of the practices condemned and proscribed by our Supreme Court.
Defendants assert that the joint alliances had no unreasonable effect on any defined market.
The following demonstrates to the contrary and is illustrative of the difficulties attendant upon the plaintiff in disposing of his product in a free, competitive market:
(a) Defendants contend that there was a substantial theatre competition in downtown Los Angeles. There were 13 Fox theatres, 2 R.K.O., 2 Fanchon Marco-Paramount, 4 Warner Bros., and 3 Blumenfeld.
These asserted substantial competitors were still meeting once a week and allocating motion pictures and products down to the date of trial.12
The Lundgren book demonstrates a clear allocation system.13 Examples of splitting products may be found in San Francisco's Mission district; for Seattle, Spokane, Inglewood, etc., similar practices occurred.14
(b) N.T.C. or Fox West Coast did not compete in any city or town within the Naify circuit for many years. Where Fox and Naify operated theatres in the same communities they formed joint ventures or alliances and collusively split products.
Not until after the beginning of the period in this suit was the Fox-Naify combine broken up under the Paramount order...
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Twentieth Century Fox Film Corporation v. Goldwyn
...fees in an amount not then specified were also allowed. These opinions were reported in Samuel Goldwyn Productions, Inc. v. Fox West Coast Theatres Corp., N.D.Cal., 194 F.Supp. 507, 513. Attorneys' fees in the amount of $100,000 were thereafter allowed Findings of fact, conclusions of law a......