Sun Theatre Corp. v. RKO Radio Pictures

Decision Date22 April 1954
Docket Number10952.,No. 10934,10934
Citation213 F.2d 284
CourtU.S. Court of Appeals — Seventh Circuit

Seymour F. Simon, Sheldon O. Collen, Chicago, Ill., for appellant.

David A. Watts, Malcolm A. Chandler, Chicago, Ill., amici curiæ.

Edward R. Johnston, Samuel W. Block, Leon Fieldman, Chicago, Ill., Miles G. Seeley, Bryson P. Burnham, Chicago, Ill., for appellees.

Before MAJOR, Chief Judge, and DUFFY and LINDLEY, Circuit Judges.

LINDLEY, Circuit Judge.

On February 7, 1952, plaintiff, owner and operator of the Wheaton Theatre, Wheaton, Illinois, brought suit against defendants RKO Radio Pictures, Inc., Paramount Pictures, Inc., Paramount Film Distributing Corporation and Balaban & Katz Corporation, hereinafter referred to as defendants or as RKO, the Paramount defendants and B & K respectively, and others, under Section 4 of the Clayton Act, 15 U.S.C.A. § 15, to recover damages for injuries allegedly sustained by reason of defendants' violation of the antitrust laws, 15 U.S. C. § 1 et seq., during the period from April, 1941 to January 1, 1948.

The complaint was in four counts. Counts I and II charged monopolistic practices by defendants in restricting first and subsequent runs1 of motion pictures to certain favored theatres located in Chicago, averred that defendants had conspired to establish a system of unreasonable clearances1 to the injury of plaintiff and prayed for treble damages. To avoid the consequences of our decisions in Hoskins Coal & Dock Co. v. Truax Traer Coal Co., 7 Cir., 191 F.2d 912, certiorari denied 342 U.S. 947, 72 S.Ct. 555, 96 L.Ed. 704, and Schiffman Bros. v. Texas Co., 7 Cir., 196 F.2d 695, that such an action is within the Illinois two year statute of limitations, counts III and IV were alternative in character, praying single damages on account of the same acts complained of in counts I and II. Defendants filed answers pleading, inter alia, the bar of the two year statute of limitations, Ill.Rev.St. (1951) c. 83, § 15.

Thereafter, defendants moved for summary judgment on all counts, averring the statutory bar, and, alternatively, as to counts III and IV, for judgment on the pleadings on the ground that they failed to state a cause of action under the Act. On March 25, 1953, the court entered final judgment in favor of defendants. Thereafter, on April 23, 1953, on plaintiff's motion, the judgments were vacated as to all defendants except B & K, and the motions of defendants RKO and the Paramount defendants continued to permit the introduction in evidence of consent decrees entered against said defendants and certain other documents from the record of United States v. Paramount Pictures, Inc., Equity No. 87-273, pending as to certain parties other than defendants in the District Court for the Southern District of New York when the action at bar was filed. After further hearing and receipt of the documents in evidence, the trial court again granted defendants' motions and entered final judgment in their favor on July 3, 1953.

Errors assigned go to the questions of whether an action for single damages will lie and whether plaintiff's claim is barred by the two year statute. Plaintiff contends, also, that the Hoskins and Schiffman cases were erroneously decided and should be reconsidered.

We turn first to plaintiff's contention that it is entitled to sue for single or actual damages under Section 4 of the Act and thus escape the bar of the two year statute of limitations applicable to actions for treble damages. Our inquiry in this respect, therefore, is whether the remedy afforded by the Act is damages, which may be trebled by way of penalty, or treble damages, with the damage actually sustained being merely the yardstick by which the remedy is to be measured. It is well to note, at the outset, as bearing not only on this issue but on arguments addressed throughout plaintiff's brief to public policy considerations as affecting the question of limitation of actions, the decades of silence by Congress as to limitations as indicative of its intention that a plaintiff, to prevail, must satisfy the requirements of the applicable state statute.

We find no persuasive authority which has considered this question. The court, in Haskell v. Perkins, D.C., 28 F.2d 222, considering itself faced with2 this question, held that an action for treble damages under Section 7 of the Sherman Act did not survive the death of the wrongdoer but permitted the recovery of actual damages. This decision, however, is based on a pure assumption that the Act permitted the recovery of single damages, since the court addressed itself solely to the question of survival of the treble damage action.

We are constrained, then, to treat the question as one of first impression. Whatever plaintiff's rights may be, they exist solely by virtue of the statute, as no right to recover treble damages was known to the common law. Decorative Stone Co. v. Building Trades Council, 2 Cir., 23 F.2d 426, certiorari denied 277 U.S. 594, 48 S.Ct. 530, 72 L.Ed. 1005; Shotkin v. General Electric Co., 10 Cir., 171 F.2d 236. Section 4 provides that any person "injured in his business or property" by any act forbidden "may sue therefor * * * and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee." Our determination as to the remedy afforded thereby must find its basis in the interpretation to be given the quoted language. In solving this question we must resolve all permissible doubts in favor of plaintiff, Bruce's Juices, Inc., v. American Can Co., 330 U.S. 743, 67 S.Ct. 1015, 91 L.Ed. 1219, but we may not, under the guise of interpretation, usurp the powers of the legislature.

Keeping this guiding principle in mind, can we say that the remedy afforded by Section 4 is damages, with a super-added trebling penalty? Unless we can, plaintiff's contention must fail. Plaintiff argues that its remedy is damages; that the extent of the recovery permissible is threefold the damages, and that, in suing for single damages, it is merely foregoing a portion of the recovery. This apparently conforms to the basic assumption by the court which formed the foundation for the decision in the Haskell case. However inviting the prospect of assuming that which we are called upon to decide, we must follow the more difficult course which requires something deeper than a play on words which divorces the remedy from the recovery and, in essence, reduces the issue to that of remittitur.

The statute is explicit; the only remedy provided therein is "threefold the damages" sustained. Giving to this language its plain meaning, we think the only permissible interpretation is that the remedy afforded is treble damages, penal in nature and susceptible therefore to all restrictions surrounding an action of such nature. The remedy has been so treated by this court in Bigelow v. RKO Radio Pictures, Inc., 7 Cir., 150 F.2d 877, reversed on other grounds 327 U.S. 251, 66 S.Ct. 574, 90 L.Ed. 652, wherein the court said, 150 F.2d at page 883: "The amount of this verdict was required by statute to be trebled by the judgment. In this respect neither the jury nor either court had any discretion. The verdict should represent actual damages sustained, and two thirds of the judgment is a penalty which Congress has seen fit to impose * * *." Furthermore, any doubt as to the intention of Congress, and we are of the opinion that the plain language of the Act admits of none, must fade away in the light of the remarks of Senator Hoar, sponsor in the Senate of the Sherman Act which first created a private right of action under the antitrust laws. The Senator submitted Section 7 of the Act to the Senate as a "`section establishing a penalty, threefold damages'." Quoted without citation, 28 F.2d at page 223.

Thus the amount of actual damage is a fact, which, when proved, becomes the yardstick on which the judgment is measured. See also, McKean v. Hillman, 2 N.J.Super. 131, 64 A.2d 899, affirming a judgment holding the treble damage provisions of the Emergency Price Control Act of 1942 to be the exclusive remedy for rent overcharges; Illinois & S. L. R. & Coal Co. v. People, 19 Ill.App. 141. That plaintiff may not alter a remedy which exists solely by virtue of a statute is a principle too well settled to require citation of authority. The remedy is the same regardless of the prayer of a complaint, and plaintiff may not do away with the limitations of the statute on which he relies by his pleading. The single damage counts were properly dismissed.

Plaintiff contends, with support in briefs filed by amici curiae, that we should reconsider our decisions in the Hoskins and Schiffman cases, that an action under Section 4 of the Act is governed by the Illinois two year statute. It is urged that we overlooked the postulate announced in Bell v. Farwell, 176 Ill. 489, 52 N.E. 346, 42 L.R.A. 804, and other cases in Illinois, that, for purposes of the application of Illinois law, the courts of that state accept whatever characterization is placed on a statutory cause of action by the courts of the jurisdiction enacting the statute. Applying this rule, it is said that the courts of Illinois would find, on authority of Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241, the remedy of treble damages provided by the Act to be remedial and, therefore, not governed by the two year statute.

This argument is premised on a misapprehension of what was decided in Hoskins and Schiffman. As we said in the latter, "We pointed out in Hoskins that the real question facing us * * * was not whether the action was one to recover a statutory penalty within the meaning of any federal statute but whether actions such as this are limited to a period of two years under the Illinois statutes, i. e., whether actions to recover treble...

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