Standard Radio & Television Co. v. Chronicle Pub. Co.

• Decision Date: 29 June 1960
• Citation: 6 Cal.Rptr. 246,182 Cal.App.2d 293
• Parties: STANDARD RADIO AND TELEVISION COMPANY, a corporation, Plaintiff and Appellant, v. CHRONICLE PUBLISHING COMPANY, a corporation, et al., Defendants and Respondents. Civ. 18222.
• Court: California Court of Appeals Court of Appeals

Page 246

6 Cal.Rptr. 246

182 Cal.App.2d 293

STANDARD RADIO AND TELEVISION COMPANY, a corporation, Plaintiff and Appellant, v. CHRONICLE PUBLISHING COMPANY, a corporation, et al., Defendants and Respondents.

Civ. 18222.

District Court of Appeal, First District, Division 2, California.

June 29, 1960.

Hearing Denied Aug. 24, 1960.

Rea, Frasse, Anastasi, Clark & Chapman, Burnett, Burnett & Somers, San Jose, for appellant.

Mitchell, Silberberg & Knupp, Macklin Fleming, Los Angeles, for respondents, Screen Gems, Inc., Associated Artists, Productions, Inc., Lester S. Tobias, Official Films, Inc., Barney Mackall, National Telefilm Associates, Edward M. Gray, Hygo Television Films, Inc., Louis H. Goldstein.

Moses Lasky, Brobeck, Phleger & Harrison, San Francisco, for Westinghouse Broadcasting Co., Inc. (Cal.) and Philip G. Lasky.

Cooper, White & Cooper, San Francisco, for Chronicle Pub. Co., Joseph O. Tobin, Charles Thieriot, E. L. Labadie, Phyllis M. Tucker, Helen M. Cameron, Harold See and Ortega Investment Co.

Loeb & Loeb, Los Angeles and Ruffo & Chadwick, San Jose, for Loew's, Inc., and Maurie Gresham.

Rankin, Oneal, Luckhardt, Center & Hall, San Jose, Beilenson, Meyer, Rosenfeld & Susman, Beverly Hills, for MCA TV, Ltd. and H. P. Long.

STONE, Justice pro tem.

This is an appeal from a judgment entered pursuant to an order sustaining demurrer without leave to amend. Plaintiff is a corporation licensed by the Federal Communications Commission to render television broadcasting service to the San Jose area and it is the only licensed television station in that locality. There are two sets of defendants one is composed of television broadcasters, hereinafter referred to as defendant broadcasters, the other of motion picture film producers and distributors, referred to as defendant distributors. The defendant broadcasters consist of a corporation licensed to operate television station KRON in San Francisco, its officers and directors, and a corporation licensed to operate television station KPIX in San Francisco, its officers and directors. Television station KRON is a member of the National Broadcasting Company chain and station KPIX is affiliated with the Columbia Broadcasting System.

The gist of plaintiff's complaint is that defendant broadcasters have insisted that their contracts with defendant distributors contain an 'exclusivity clause' binding distributors not to sell film to any television station with a transmitter within a sixty-mile radius of the transmitter sites of defendant broadcasters. Since plaintiff's transmitter is located within said sixty-mile radius defendant distributors have refused to sell desirable film to plaintiff even though 'plaintiff is able, ready and willing to pay full and fair price therefor.' This plaintiff alleges has caused injury to its business. It is also alleged that this discrimination deprives the viewing public of desirable pictures on plaintiff's local channel or forces viewers, as an alternative, to endure an inferior 'signal' from defendants' stations. Plaintiff prays that defendants be enjoined from enforcing the exclusivity clause in contracts between defendant broadcasters and defendant distributors and that the exclusivity clause be declared void as contrary to public policy. Plaintiff also prays for damages, actual and punitive. The action was brought pursuant to Business and Professions Code, sections 16700 et. seq. (Calif. Anti-Trust Statute, Codification of the Cartwright Act).

Defendants' principal ground of demurrer is that the complaint presents a federal question and the state courts have no jurisdiction of the subject matter. Defendants also urge that plaintiff has failed to exhaust its administrative remedies. The trial court sustained the demurrer without leave to amend on the ground that a federal question is presented, thus depriving the state court of jurisdiction of the subject matter and for the additional reason that plaintiff has not exhausted available administrative remedies before the Federal Communications Commission. A judgment was entered pursuant to the order sustaining demurrer without leave to amend and this appeal followed.

Federal control of television broad-casting is embodied in the Communications Act of 1934, 48 Stats. 1082, Title 47 U.S.C. A. § 151 et seq., as amended, and we must look to that act and the decisions construing its provisions to determine the scope and extent of such control (Federal Communications Comm. v. Pottsville Broadcasting Co., 309 U.S. 134, 137, 60 S.Ct. 437, 84 L.Ed. 656. The act does not specifically refer to television and Subchapter III of Title 47 U.S.C.A., S.C.A., which subchapter, together with the cases construing it govern in this case, is entitled 'Special Provisions Relating to Radio.' However, the provisions of the act relating to radio include television since section 153(b) of Title 47 entitled 'Definitions' provides:

'(b) 'Radio communication' or 'communication by radio' means the transmission by radio of writing, signs, signals, pictures, and sounds of all kinds, including all instrumentalities, facilities, apparatus, and services (among other things, the receipt, forwarding, and delivery of communications) incidental to such transmission.'

The federal courts have held television to be a form of radio within the meaning of Title 47. In Allen B. Dumont Laboratories v. Carroll, 3 Cir., 184 F.2d 153, at page 155, certiorari denied 340 U.S. 929, 71 S.Ct. 490, 95 L.Ed. 670, the court said: '* * * The Communications Act of 1934 applies to every phase of television. * * *' Relatively speaking, television is of recent development, hence there is a paucity of decisions bearing directly upon the industry and its problems. Therefore, we must look to decisions concerning radio broadcasting, especially those construing U.S.C.A. Title 47, for authority and guidance in considering the scope of federal control of television. Before discussing the extent or the scope of federal control of television from the aspect of constitutional law, it is necessary that we examine the nature of such control. It is not limited to the technical aspects of broadcasting or the transmission of electrical impulses which might interfere with interstate commerce or military signal transmission. The Supreme Court of the United States has made this clear by the following language in National Broadcasting Co. v. United States, 319 U.S. 190, at page 215, 63 S.Ct. 997, at page 1009, 87 L.Ed. 1344:

'The Act itself establishes that the Commission's powers are not limited to the engineering and technical aspects of regulation of radio communication. Yet we are asked to regard the Commission as a kind of traffic officer, policing the wave lengths to prevent stations from interfering with each other. But the Act does not restrict the Commission merely to supervision of the traffic. It puts upon the Commission the burden of determining the composition of that traffic * * *'

Defendants contend that the federal government has completely occupied the field and cite the following excerpt from the Dumont case, supra, 184 F.2d at page 155: '* * * The language employed is so all inclusive as to leave no doubt but that it was the intention of Congress to occupy the television broadcasting field in its entirety * * *' Yet, a reading of the case does not justify the broad interpretation which defendants have given it since the specific holding is that states cannot censor films broadcast by television stations. Federal regulation of television is not unlimited. For example, the Federal Communications Act does not confer federal control over the purely private internal business affairs of a station even though no station can do business unless it is licensed pursuant to the F.C.A. The United States Supreme Court so held in Federal Communications Commission v. Sanders Bros. Radio Station, 309 U.S. 470, at page 475, 60 S.Ct. 693, at page 697, 84 L.Ed. 869, by the following language: 'But the Act does not essay to regulate the business of the licensee. The Commission is given no supervisory control of the programs, of business management or of policy * * *' What, then, determines or defines the extent or scope of the area of federal control of television broadcasting? The principal criterion is contained in the answer to the question 'does it affect the public interest?' This principle or test is stated in the preface to Title 47 U.S.C.A. § 303, which delineates the powers and duties of the Federal Communications Commission. The United States Supreme Court has lent its authority to this standard or test in several opinions which are epitomized by the following excerpt from National Broadcasting Co. v. United States, supra, 319 U.S. at page 216, 63 S.Ct. at page 1009, as follows:

'* * * The touchstone provided by Congress was the 'public interest, convenience, or necessity', a criterion which 'is as concrete as the complicated factors for judgment in such a field of delegated authority permit.' Federal Communications Comm. v. Pottsville Broadcasting Co., 309 U.S. 134, 138, 60 S.Ct. 437, 439, 84 L.Ed. 656. This criterion is not to be interpreted as setting up a standard so indefinite as to confer an unlimited power. Compare N. Y. Cent. Securities Corp. v. United States, 287 U.S. 12, 24, 53 S.Ct. 45, (48), 77 L.Ed. 138. The requirement is to be interpreted by its context,...