Twentieth Century Fox Film Corporation v. Goldwyn

• Decision Date: 12 March 1964
• Docket Number: No. 17725.,17725.
• Citation: 328 F.2d 190
• Parties: TWENTIETH CENTURY FOX FILM CORPORATION, Fox West Coast Theatres Corporation, Fox West Coast Agency Corporation and National Theatres Corporation, Defendant-Appellants, v. Samuel GOLDWYN, Francis Howard Goldwyn, Samuel Goldwyn, Jr., James A. Mulvey and Ben Fish, doing business as Goldwyn Productions, a limited partnership, Plaintiff-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

328 F.2d 190 (1964)

TWENTIETH CENTURY FOX FILM CORPORATION, Fox West Coast Theatres Corporation, Fox West Coast Agency Corporation and National Theatres Corporation, Defendant-Appellants, v. Samuel GOLDWYN, Francis Howard Goldwyn, Samuel Goldwyn, Jr., James A. Mulvey and Ben Fish, doing business as Goldwyn Productions, a limited partnership, Plaintiff-Appellees.

No. 17725.

United States Court of Appeals Ninth Circuit.

January 24, 1964.

Rehearing Denied March 12, 1964.

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Dunne, Bledsoe, Smith, Phelps, Cathcart & Johnson and Arthur B. Dunne, San Francisco, Cal., Royall, Koegel & Rogers and Frederick W. R. Pride, New York City, O'Melveny & Myers and Bennett W. Priest, Los Angeles, Cal., for appellants-appellees.

Joseph L. Alioto, San Francisco, Cal., George Slaff, Los Angeles, Cal., Maxwell Keith, and Matthew P. Mitchell, San Francisco, Cal., for appellees-appellants.

Before POPE, HAMLEY and BROWNING, Circuit Judges.

HAMLEY, Circuit Judge.

This is a suit by a motion picture producer against motion picture exhibitors and their agents to recover damages for, and obtain injunctive relief from, asserted violations of sections 1 and 2 of the Sherman Act.¹ Damages were claimed in the sum of $2,250,000, trebled to $6,750,000. Jurisdiction was asserted under sections 4 and 16 of the Clayton Act.²

The action was commenced on May 16, 1950, by Samuel Goldwyn Productions, Inc.³ Nine corporations and three individuals were named defendants. Five of the corporate defendants and two of the individual defendants were granted a separate trial.⁴ The third individual defendant, Charles P. Skouras, died on October 22, 1954, and the action was discontinued as to him.

The four defendants remaining in the case for this trial are the so-called "Fox defendants": Twentieth Century Fox Film Corporation (Twentieth Century Fox), National Theatres Corporation (National), Fox West Coast Theatres Corporation (Fox West Coast) and Fox West Coast Agency Corporation (Fox West Coast Agency).

Twentieth Century Fox, the parent corporation in this group,⁵ is an integrated producer, distributor and exhibitor of motion pictures. National, in addition to its control of Fox West Coast, operates motion picture theatres in the middle and far western states through other subsidiary operating corporations. Fox West Coast is engaged in the management and control of theatres in California, Arizona, Montana and Nevada. Fox West Coast Agency is in the business of buying and booking motion picture films for those theatres which are operated directly or indirectly by Fox West Coast.⁶ Motion picture theatres operated or controlled by Twentieth Century Fox, National and Fox West Coast comprise the "Fox Circuit."

It was alleged in the complaint that, beginning in 1925 and continuing to the date the action was commenced, defendants and others acting in concert with them unlawfully entered into contracts, combinations and conspiracies to monopolize and restrain trade in the interstate licensing and exhibition of motion pictures, and that they did monopolize and restrain, and attempted to monopolize and restrain such trade. It was alleged, more particularly, that the asserted contracts, combinations and conspiracies dealt with the six kinds of undertakings set out in the margin.⁷ The specific objectives of the asserted contracts, combinations and conspiracies, it was alleged, were to: (a) establish, increase, maintain and perpetuate a monopolistic buying power of motion picture theatres, (b) negotiate for the film licenses on a collective basis, and (c) depreciate film rental paid to producers.

With regard to twenty-eight motion pictures produced by the plaintiff or its predecessor in interest during the period of the asserted contracts, combinations and conspiracies, it was alleged, the violations complained of depreciated the value of the pictures, lessened the fees paid under the licenses, and substantially injured and impaired the good will attaching to the producing company and to the picture.

The answer filed by the Fox defendants consisted of a general denial as to the critical allegations of the complaint, together with eight affirmative defenses including defenses relying on the one-and three-year California statutes of limitations, laches, and the principle of pari delicto. Discovery and other pretrial proceedings, interspersed with long periods of inaction insofar as the record reveals, consumed the period from November, 1950 to June, 1956.

On July 12, 1956, the Fox defendants moved for partial summary judgment dismissing plaintiff's claims which had accrued prior to May 16, 1947 on the ground that such claims were barred by the three-year California statute of limitations.⁸ This motion was argued before The Honorable Edward P. Murphy, to whom the case had been assigned. On October 3, 1956, Judge Murphy entered an order granting defendants' motion for a partial summary judgment dismissing all claims which accrued prior to May 16, 1947. Samuel Goldwyn Productions, Inc. v. Fox West Coast Theatres Corp., N.D.Cal., 146 F.Supp. 905.⁹

The case was tried before Judge Murphy, without a jury, beginning on July 10, 1957 and continuing intermittently until January 14, 1958, when both sides rested. On December 13, 1958, before the cause was argued or submitted, Judge Murphy died. On July 28, 1959, the cause was reassigned to The Honorable George B. Harris for all further proceedings. Pursuant to stipulation, the cause was submitted to Judge Harris for decision on the record before Judge Murphy. The date of final submission was April 10, 1961.

On May 4, 1961, Judge Harris filed his memorandum opinion holding the Fox defendants liable to plaintiff for the injuries caused by what the court found to be defendants' violations of the antitrust laws between May 16, 1947 and May 16, 1950. On May 31, 1961, Judge Harris filed his supplemental opinion holding that plaintiff was entitled to actual damages in the sum of $100,000, to be trebled to $300,000. Attorneys' 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 plaintiff.

Findings of fact, conclusions of law and a judgment were entered on September 20, 1961. In the findings of fact the court described how Twentieth Century Fox had acquired its interest in theatres,¹⁰ and depicted in detail the extent of the theatre holdings which evolved.¹¹ Other theatre groups were described.¹² The procedures were explained under which the licensing of all film used in the Fox Circuit was centralized in National's Los Angeles office.¹³ Also described were the methods instituted by National under which it controlled price and playing time for films.¹⁴

In the findings of fact the ways in which National restrained trade and eliminated competition are then detailed at great length. Three principal methods by which this was accomplished are described. The first of these was through the joint operation or ownership of theatres with other exhibitors. The second method had to do with activities by National, through its subsidiaries, in excluding actual and potential competition. The third method related to the agreements entered into by the Fox Circuit with competitive exhibitors not to compete in the licensing of films, but to split or divide the product.

Following a description of these methods by which National restrained trade and eliminated competition, there are findings dealing specifically with the way in which National used its circuit buying power in the licensing of plaintiff's seven pictures which were marketed during 1947 to 1950. These pictures, the titles of which will be abbreviated elsewhere in the opinion, were: THE SECRET LIFE OF WALTER MITTY, THE BISHOP'S WIFE, THE BEST YEARS OF OUR LIVES (regular release), A SONG IS BORN, ENCHANTMENT, ROSEANNA McCOY and MY FOOLISH HEART. The final twenty-seven paragraphs of the findings deal with the question of damages.

On the basis of the findings of fact the district court entered conclusions of law setting out twelve different ways in which defendants had violated the Sherman Act. According to these conclusions of law, the objective of the described interests, relationships, arrangements and activities was the elimination of competition in the exhibition of motion pictures. This objective was accomplished by concentrating buying power in National, eliminating competitive bidding, dividing and allocating products, granting the right of first refusal and first right to negotiate for film licensing, fixing clearance schedules, and by various other means.

Judgment was entered in accordance with the findings and conclusions and in keeping with the opinion which the court had rendered. The Fox defendants appealed and plaintiff cross appealed.¹⁵

On their appeals, defendants argue five points: (1) the district court erred in holding that plaintiff had been damaged by any violations of the Sherman Act; (2) no liability was proved as to Twentieth Century Fox; (3) the court erroneously applied the three-year California statute of limitations because the one-year statute should have been applied; (4) the court awarded excessive attorneys' fees; and (5) the court erroneously allowed certain items of cost.

On the cross appeal, plaintiff argues three points: (1) the court erred in limiting plaintiff, as to defendants Twentieth Century Fox and National, to claims arising on and after May 16, 1947; (2) the court erred in excluding from the evidence the findings of fact, conclusions of law, judgments and decrees in the Paramount case, and (3) the finding of fact that plaintiff's actual damages for the period from May 16, 1947 to May 16, 1950, is clearly erroneous because such damages greatly exceeded that...