Theatre Enterprises v. Paramount Film Distributing Corp v. 30, No. 19

CourtUnited States Supreme Court
Writing for the CourtCLARK
Citation98 L.Ed. 273,346 U.S. 537,74 S.Ct. 257
Decision Date01 December 1953
Docket NumberNo. 19
PartiesTHEATRE ENTERPRISES, Inc. v. PARAMOUNT FILM DISTRIBUTING CORP. et al. Argues Nov. 30 and

346 U.S. 537
74 S.Ct. 257
98 L.Ed. 273
THEATRE ENTERPRISES, Inc.

v.

PARAMOUNT FILM DISTRIBUTING CORP. et al.

No. 19.
Argues Nov. 30 and Dec. 1, 1953.
Decided Jan. 4, 1954.

Page 538

Messrs. Philip B. Perlman, Holmes Baldridge, Washington, D.C., for petitioner.

Messrs. Bruce Bromley, Ferdinand Pecora, New York City, for respondents.

Mr. Justice CLARK delivered the opinion of the Court.

Petitioner brought this suit for treble damages and an injunction under §§ 4 and 16 of the Clayton Act,1 alleging that respondent motion picture producers and distributors2 had violated the antitrust laws3 by conspiring to restrict 'first-run'4 pictures to downtown Baltimore theatres, thus confining its suburban theatre to subsequent runs and unreasonable 'clearances.'5 After hear-

Page 539

ing the evidence a jury returned a general verdict for respondents. The Court of Appeals for the Fourth Circuit affirmed the judgment based on the verdict. 201 F.2d 306. We granted certiorari. 345 U.S. 963, 73 S.Ct. 948.

Petitioner now urges, as it did in the Court of Appeals, that the trial judge should have directed a verdict in its favor and submitted to the jury only the question of the amount of damages. Alternatively, petitioner claims that the trial judge erred by inadequately instructing the jury as to the scope and effect of the decrees in United States v. Paramount Pictures, Inc., the Government's prior equity suit against respondents.6 We think both contentions are untenable.

The opinion of the Court of Appeals contains a complete summary of the evidence presented to the jury. We need not recite that evidence again. It is sufficient to note that petitioner owns and operates the Crest Theatre, located in a neighborhood shopping district some six miles from the downtown shopping center in Baltimore, Maryland. The Crest, possessing the most modern improvements and appointments, opened on February 26, 1949. Before and after the opening, petitioner, through its president, respeatedly sought to obtain first-run features for the theatre. Petitioner approached each respondent separately, initially requesting exclusive first-runs, later asking for first-runs on a 'day and date' basis.7 But respondents uniformly rebuffed petitioner's efforts and adhered to an established policy of restricting first-runs in Baltimore to the eight downtown theatres. Admittedly there is no direct evidence of illegal agree-

Page 540

ment between the respondents and no conspiracy is charged as to the independent exhibitors in Baltimore, who account for 63% of first-run exhibitions. The various respondents advanced much the same reasons for denying petitioner's offers. Among other reasons they asserted that day and date first-runs are normally granted only to noncompeting theatres. Since the Crest is in 'substantial competition' with the downtown theatres, a day and date arrangment would be economically unfeasible. And even if respondents wished to grant petitioner such a license, no downtown exhibitor would waive his clearance rights over the Crest and agree to a simultaneous showing. As a result, if petitioner were to receive first-runs, the license would have to be an exclusive one. However, an exclusive license would be economically unsound because the Crest is a suburban theatre, located in a small shopping center, and served by limited public transportation facilities; and, with a drawing area of less than one-tenth that of a downtown theatre, it cannot compare with those easily accessible theatres in the power to draw patrons. Hence the downtown theatres offer far greater opportunities for the widespread advertisement and exploitation of newly released features, which is thought necessary to maximize the overall return from subsequent runs as well as first-runs. The respondents, in the light of these conditions, attacked the guaranteed offers of petitioner, one of which occurred during the trial, as not being made in good faith. Respondents Loew's and Warner refused petitioner an exclusive license because they owned the three downtown theatres receiving their first-run product.

The crucial question is whether respondents' conduct toward petitioner stemmed from independent decision or from an agreement, tacit or express. To be sure, business behavior is admissible circumstantial evidence from which the fact finder may infer agreement. Interstate Circuit,

Page 541

Inc. v. United States, 1939, 306 U.S. 208, 59 S.Ct. 467, 83 L.Ed. 610; United States v. Masonite Corp., 1942, 316 U.S. 265, 62 S.Ct. 1070, 86 L.Ed. 1461; United States v. Bausch & Lomb Optical Co., 1944, 321 U.S. 707, 64 S.Ct. 805, 88 L.Ed. 1024; American Tobacco Co. v. United States, 1946, 328 U.S. 781, 66 S.Ct. 1125, 90 L.Ed. 1575; United States v. Paramount Pictures, Inc., 1948, 334 U.S. 131, 68 S.Ct. 915, 92 L.Ed. 1260. But this Court has never held that proof of parallel business behavior conclusively establishes agreement or, phrased differently, that such behavior itself constitutes a Sherman Act offense. Circumstantial evidence of consciously parallel behavior may have made beavy inroads into the traditional judicial attitude toward conspiracy;8 but 'conscious parallelism' has not yet read conspiracy out of the Sherman Act entirely. Realizing this, petitioner attempts to bolster its argument for a directed verdict by urging that the conscious unanimity of action by respondents should be 'measured against the background and findings in the Paramount case.' In other words, since the same respondents had conspired in the Paramount case to impose a uniform system of runs and clearances without adequate explanation to sustain them as reasonable restraints of...

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370 practice notes
  • Knutson v. Daily Review, Inc., No. C-73-1354-CBR.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • September 23, 1974
    ...more than conscious parallelism which by itself does not establish an illegal combination or conspiracy. Theatre Enterprises v. Paramount, 346 U.S. 537, 540-541, 74 S.Ct. 257, 98 L.Ed. 273 (1954); Joseph E. Seagram & Sons, Inc. v. Hawaiian Oke & Liquors, Ltd., 416 F.2d 71, 84-85 (9th Cir. 1......
  • Arista Records LLC v. Does 1-27, No. CV-07-162-B-W.
    • United States
    • U.S. District Court — District of Maine
    • October 29, 2008
    ...an agreement, tacit or express.'" Id. at 1964 (alterations in original) (quoting Theatre Enters., Inc. v. Paramount Film Distrib. Corp., 346 U.S. 537, 540, 74 S.Ct. 257, 98 L.Ed. 273 (1954)). The Court further noted that because the Sherman Act prohibits "`only restraints [of trade] effecte......
  • Ab Iro v. Otex, Inc., Civ. A. No. 77-2114-0.
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • April 18, 1983
    ...It does not, however, compel such a finding. As the Supreme Court said in Theatre Enterprises v. Paramount Film Distributing Corp., 346 U.S. 537, 540-41, 74 S.Ct. 257, 259, 98 L.Ed. 273 To be sure, business behavior is admissible circumstantial evidence from which the fact finder may infer ......
  • United States v. Twentieth Century-Fox Film Corp., No. 14354.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • January 10, 1956
    ...1946, 328 U.S. 781, 809-810, 66 S.Ct. 1125, 90 L.Ed. 1575. 15 Theatre Enterprises, Inc., v. Paramount Film Distributing Corp., 1954, 346 U.S. 537, 540-541, 74 S.Ct. 257, 259, 98 L.Ed. 273. See, Pevely Dairy Co. v. United States, 8 Cir., 1949, 178 F.2d 363, 368-371; Kiefer-Stewart Co. v. Jos......
  • Request a trial to view additional results
360 cases
  • Knutson v. Daily Review, Inc., No. C-73-1354-CBR.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • September 23, 1974
    ...more than conscious parallelism which by itself does not establish an illegal combination or conspiracy. Theatre Enterprises v. Paramount, 346 U.S. 537, 540-541, 74 S.Ct. 257, 98 L.Ed. 273 (1954); Joseph E. Seagram & Sons, Inc. v. Hawaiian Oke & Liquors, Ltd., 416 F.2d 71, 84-85 (9th Cir. 1......
  • Arista Records LLC v. Does 1-27, No. CV-07-162-B-W.
    • United States
    • U.S. District Court — District of Maine
    • October 29, 2008
    ...an agreement, tacit or express.'" Id. at 1964 (alterations in original) (quoting Theatre Enters., Inc. v. Paramount Film Distrib. Corp., 346 U.S. 537, 540, 74 S.Ct. 257, 98 L.Ed. 273 (1954)). The Court further noted that because the Sherman Act prohibits "`only restraints [of trade] effecte......
  • Ab Iro v. Otex, Inc., Civ. A. No. 77-2114-0.
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • April 18, 1983
    ...It does not, however, compel such a finding. As the Supreme Court said in Theatre Enterprises v. Paramount Film Distributing Corp., 346 U.S. 537, 540-41, 74 S.Ct. 257, 259, 98 L.Ed. 273 To be sure, business behavior is admissible circumstantial evidence from which the fact finder may infer ......
  • United States v. Twentieth Century-Fox Film Corp., No. 14354.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • January 10, 1956
    ...1946, 328 U.S. 781, 809-810, 66 S.Ct. 1125, 90 L.Ed. 1575. 15 Theatre Enterprises, Inc., v. Paramount Film Distributing Corp., 1954, 346 U.S. 537, 540-541, 74 S.Ct. 257, 259, 98 L.Ed. 273. See, Pevely Dairy Co. v. United States, 8 Cir., 1949, 178 F.2d 363, 368-371; Kiefer-Stewart Co. v. Jos......
  • Request a trial to view additional results
10 books & journal articles
  • Unfair Methods of Competition under FTC § 5: Beyond the Sherman Act and an Ex Post Model of Enforcement
    • United States
    • Antitrust Bulletin Nbr. 56-4, December 2011
    • December 1, 2011
    ...in the commonlaw discourse of contract, combination, or conspiracy. See, e.g., Theatre Enter.,Inc. v. Paramount Film Distrib. Corp., 346 U.S. 537 (1954).54 Atl. Ref. Co. v. FTC, 381 U.S. 357, 369–71 restraints in their incipiency.”55 These two decisions teach that theCommission need not pro......
  • Economic Expert Evidence
    • United States
    • Antitrust Bulletin Nbr. 61-3, September 2016
    • September 1, 2016
    ...on the hazards of expert testimony that overreaches. With his coauthor Jill24. Theatre Enters., Inc. v. Paramount Film Distrib. Corp., 346 U.S. 537, 541 (1954).25. Search conducted in Lexis federal cases database on Feb. 19, 2016, for ‘‘The Definition of Agreement Under the ShermanAct: Cons......
  • POLITICS, IDENTITY, AND PLEADING DECISIONS ON THE U.S. COURTS OF APPEALS.
    • United States
    • University of Pennsylvania Law Review Vol. 169 Nbr. 8, August 2021
    • August 1, 2021
    ...behavior at a number of points in the trial sequence);" id. at 561 n.7; Theatre Enterprises, Inc. v. Paramount Film Distributing Corp., 346 U.S. 537 (1954); Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752 (1984); Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (39......
  • The Identification and Proof of Horizontal Agreements under the Antitrust Laws
    • United States
    • Antitrust Bulletin Nbr. 38-1, March 1993
    • March 1, 1993
    ...subtle,lessdirectmeansforcommunicatingintentions andexchanging47 See. e.g., Theatre Enters., Inc. v, Paramount Film Distrib. Corp.,346 U.S. 537, 540 (1954) ("business behavior is admissible circumstan-tial evidence from which the fact finder may infer agreement"); UnitedStates v, Paramount ......
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