Tivoli Realty v. Paramount Pictures

• Decision Date: 18 October 1948
• Docket Number: Civ. A. No. 1077,1109.
• Citation: 80 F. Supp. 800
• Parties: TIVOLI REALTY, Inc. v. PARAMOUNT PICTURES, Inc. ADELMAN v. PARAMOUNT PICTURES, Inc. et al.
• Court: U.S. District Court — District of Delaware

80 F. Supp. 800

TIVOLI REALTY, Inc. v. PARAMOUNT PICTURES, Inc.

ADELMAN v. PARAMOUNT PICTURES, Inc. et al.

Civ. A. Nos. 1077, 1109.

United States District Court D. Delaware.

October 18, 1948.

COPYRIGHT MATERIAL OMITTED

Clair J. Killoran (of Killoran & Van Brunt) of Wilmington, Del., and Thurman Arnold (of Arnold, Fortas & Porter) of Washington, D. C., for plaintiffs Tivoli Realty, Inc. and another.

Caleb S. Layton (of Richards, Layton & Finger) of Wilmington, Del., and Albert C. Bickford (Simpson Thacher & Bartlett) of New York City, for defendants Interstate Circuit, Inc., and others.

Ayres J. Stockley (of Hastings, Stockley, Walz & Wise) of Wilmington, Del., for defendants Twentieth Century-Fox Film Corporation and others.

Hugh M. Morris and S. Samuel Arsht (of Morris, Steel, Nichols & Arsht), both

of Wilmington, Del., for defendants Universal Pictures Company, Inc., and others.

Clarence A. Southerland (of Southerland, Berl & Potter) of Wilmington, Del., for defendants Loew's Inc., and others.

RODNEY, District Judge.

These two actions are treble damage suits brought under the Sherman Anti-Trust Act and the Clayton Act¹ against several major motion picture producers and distributors, certain of their subsidiaries, and certain theatre operating companies in Texas and New Mexico and in which plaintiffs also seek injunctive relief. The defendants in each suit are identical and the plaintiff in C.A. 1109 is alleged to be the principal stockholder and president of the plaintiff in C.A. 1077.

The defendants in each action have moved under Rule 12(f)² to strike certain allegations in the complaint upon the grounds of immateriality, impertinency and prejudice. Inasmuch as substantially identical questions are raised by the two motions and the parties in both actions are represented by the same counsel, the two actions were consolidated for argument upon the two 12(f) motions.

Generally, each complaint alleges that the several defendants have been and are engaged in a nation-wide conspiracy to restrain trade and commerce in the distribution and exhibition of motion pictures and to monopolize such trade and commerce with the intent and result of injuring plaintiff and the public interest.

In C.A. 1077 the plaintiff complains more specifically of the conspiracy and unlawful course of action among the defendants in the distribution and exhibition of motion pictures in Dallas, Texas, all being a part of the alleged nation-wide conspiracy among the defendants. This alleged conspiracy and unlawful course of action in Dallas is averred to have resulted in illegal discriminations against plaintiff, which built and owns a theatre in Dallas, and in depriving plaintiff of its right to engage in the exhibition of motion pictures in Dallas free of illegal restraints.

In C.A. 1109 substantially the same allegations are made with respect to Houston, Texas and the plaintiff's theatre and business in that city. In C.A. 1109, however, there are additional questions raised by the motion to strike which are not raised in C.A. 1077, and these questions, and the facts giving rise to them, will be hereinafter considered.

Motions to strike are rather strictly considered and have often been denied even when literally within the provisions of Rule 12(f) where there is no showing of prejudicial harm to the moving party. Vernor's Ginger Ale Bottling Corp. v. Hire's Ideal Bottling Co., D. C. Neb. 1948, 8 F.R.D. 240; American Machine and Metals, Inc., v. De Bothezat Impeller Co., Inc., D.C.S.D.N.Y. 1948, 8 F.R.D. 306; Contogeorge v. Spyron, D.C.N.Y. 1946, 7 F.R.D. 223, 229; Klages v. Cohen et al., D.C.N.Y. 1947, 7 F.R.D. 216, 217; see cases cited in 2 Moore's Federal Practice (2d Ed.) p. 2318. Nor have the courts been willing to determine disputed and substantial questions of law or the legal consequences of pleadings upon a motion to strike. Klages v. Cohen et al., supra; O'Reilly v. Curtis Publishing Co., D.C. Mass. 1938, 22 F.Supp. 359, 361; Burke v. Mesta Machine Co., D.C.Pa.1946, 5 F.R.D. 134, 139.

The defendants urge first that there should be stricken from both complaints certain allegations concerning the case of Interstate Circuit, Inc., v. United States, 1938, 306 U.S. 208, 59 S.Ct. 467, 83 L.Ed. 610, and the decree of the lower court entered therein. In C.A. 1077 these allegations are contained in paragraph 51 of the complaint; in C.A. 1109 they are found in paragraphs 20 and 67 of the complaint.

Paragraph 51 of the C.A. 1077 complaint alleges that certain of the defendants by participating in the conspiracy and course of action described in the complaint are in violation of a decree entered in the cited Interstate litigation. I am of the opinion that such paragraph must be stricken for the reason that a violation of a decree entered in some independent action seems immaterial to the suit at bar and could prejudice the defendants if they be compelled to answer such allegations. If the paragraph had merely alleged the entry of the decree against certain of the defendants and set out the conduct enjoined thereby, thus constituting merely the background or historical material of value in the consideration of the present controversy, then the allegation might have been good; but a violation of a decree of another court is not, per se, a relevant issue in this proceeding.

Paragraphs 20 and 67 of the complaint in C.A. 1109 allege, respectively, the entry of a decree against the defendants in favor of the United States with a description of the conduct enjoined thereby and the violation of such decree by certain of the defendants. Paragraph 67, alleging a violation of the decree, must be stricken for the same reason that paragraph 51 of the complaint in C.A. 1077 will be stricken, as above indicated. The latter two paragraphs are substantially identical.

The defendants' motion with respect to paragraph 20 of the complaint in C.A. 1109, however, must be denied. That paragraph merely alleges the entry of the decree and the conduct enjoined thereby. While it may be true that the entry of the decree antedated the establishment of the plaintiff's business (as to which I express no opinion), yet the matter furnishes background material as to the nature, extent and character of the alleged conspiracy. While not concerning a similar action, see Steckel v. Beeghly, D.C. Ohio 1948, 8 F.R. D. 116. This type of action usually requires some background or setting and it would seem that the "short and plain statement" of Rule 8(a)³ is hardly sufficient without some explanatory remarks. See Perrott v. United States Banking Corp., D.C.Del. 1944, 53 F.Supp. 953, 956; 2 Moore's Federal Practice (2d Ed.), p. 2319; Irving Berlin, Inc., v. Anziano, D.C.N.Y. 1944, 4 F.R.D. 33, 34; Camfield Mfg. Co. v. McGraw Elect. Co., D.C.Del. 1947, 70 F.Supp. 477, 481. The Circuit Court of Appeals for this (Third) circuit has well recognized the burden upon a plaintiff in presenting this type of case and the necessity for showing a concert of action among defendants. William Goldman Theatres v. Loew's, Inc., 3 Cir., 1945, 150 F.2d 738, 743. In order to understand fully the nature, character and extent of the action complained of, I think the presence of background or historical matter in these two complaints is not objectionable unless it is prejudicial to the adverse party.

I am of the opinion that the allegations in paragraph 20 of the complaint in C.A. 1109 are not prejudicial to the defendants and need not be stricken. Allowance of a motion to strike is within the discretion of the court under the permissive language of Rule 12(f), Sinkbeil v. Handler, D.C.Neb. 1946, 7 F.R.D. 92, 98, and whether the allegations are immaterial or impertinent is a matter I do not determine at this time since I think they are not prejudicial.

Pleadings in this court are not given to juries and thus are in effect addressed only to the trial judge. If at the trial evidence of the allegations in question is deemed to be immaterial, it may be withheld from the jury, Sinkbeil v. Handler, supra, or if the allegations would be prejudicial before a jury they may likewise be withheld. Sinaiko Bros. Coal & Oil Co. v. Ethyl Gasoline Corp., D.C.N.Y. 1942, 2 F.R.D. 305, 306; see Minneapolis Gasoline & Fuel Co. v. Ethyl Gasoline Corp., D.C. N.Y. 1941, 2 F.R.D. 307.

Moreover, plaintiff may be entitled by Section 5 of the Clayton Act, 15 U.S. C.A. § 16, to treat a final judgment or decree such as the one rendered in the Interstate litigation as prima facie evidence in this action against those defendants here who were defendants in such prior case, and it has been held that in order to plead such a prima facie case the plaintiff must plead the result of the prior litigation. Sinaiko Bros. Coal & Oil Co. v. Ethyl Gasoline Corp., supra.

The recent Supreme Court opinion in Federal Trade Comm'n v. Cement Institute et al., 1948, 333 U.S. 683, 703-706, 68 S.Ct. 793, lays down broad boundaries for the admission of evidence in a somewhat related field, but such case is no direct authority for determining which matters should or should not be stricken from a complaint. An even more recent decision has granted a motion to strike certain historical or background allegations of a complaint even though evidence of the matters stricken might be admissible at trial, Knight v. Baltimore & O. Ry. Co., D.C. N.Y. 1948, 8 F.R.D. 256, 261.

Defendants also move to strike paragraphs 52 and 61 of the complaint in C.A. 1077 and paragraph 77 of the complaint in C.A. 1109. Paragraph 52 alleges that the defendant Paramount has been and is acting in violation of a decree entered by a United States District Court in the case of United States v. Paramount Pictures, D.C.N.Y. 1947, 70 F.Supp. 53, and the latter two paragraphs allege that the producer-distributor defendants have engaged and are engaging in arbitrary, collusive and discriminatory practices described in the Opinion, Findings of Fact, Conclusions of...