United States v. Paramount Pictures

Decision Date11 June 1946
Citation66 F. Supp. 323
PartiesUNITED STATES v. PARAMOUNT PICTURES, Inc., et al.
CourtU.S. District Court — Southern District of New York

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Wendell Berge, Asst. Atty. Gen., Robert L. Wright, Philip Marcus, Elliott H. Moyer, and John R. Niesley, Sp. Assts. to the Atty. Gen., Frank W. Gaines, Jr., of Washington, D.C., Gerald A. Herrick, of Falconer, N. Y., Robert B. Hummel, of Washington, D. C., Harold Lasser, of Newark, N. J., Kenneth R. Lindsay, of Washington, D. C., James M. McGrath, of San Francisco, Cal., Horace T. Morrison, of San Francisco, Cal., and Fred A. Weller, of Los Angeles, Cal., for the United States.

Simpson Thacher & Bartlett, of New York City (Whitney North Seymour, Louis Phillips, Albert C. Bickford, and Armand F. MacManus, all of New York City, of counsel), for Paramount defendants.

Davis, Polk, Wardwell, Sunderland & Kiendl and J. Robert Rubin, all of New York City (John W. Davis, J. Robert Rubin, C. Stanley Thompson, Benjamin Melniker, and S. Hazard Gillespie, Jr., all of New York City, of counsel), for defendant Loew's, Inc.

George S. Leisure, Ralstone R. Irvine, Granville Whittlesey, Jr., and Gordon E. Youngman, all of New York City (Roy W. McDonald and Donovan Leisure Newton & Lumbard, all of New York City, of counsel), for Radio-Keith-Orpheum Corporation, RKO Radio Pictures, Inc., Keith-Albee-Orpheum Corporation, RKO Proctor Corporation and RKO Midwest Corporation.

Joseph M. Proskauer and Robert W. Perkins, both of New York City (J. Alvin Van Bergh, both of New York City, and Howard Levinson, of counsel), for the Warner defendants.

Dwight, Harris, Koegel & Caskey, of New York City (John Fletcher Caskey and Frederick W. R. Pride, both of New York City, of counsel), for defendants Twentieth Century-Fox Film Corporation and National Theatres Corporation.

Schwartz & Frohlich, of New York City (Louis D. Frohlich, Arthur H. Schwartz, Irving Moross, and Max H. Rose, all of New York City, of counsel), for defendant Columbia.

Charles D. Prutzman, of New York City, for the Universal defendants.

O'Brien, Driscoll & Raftery, of New York City (Edward C. Raftery, Arthur F. Driscoll, Chas. D. Prutzman, George A. Raftery, and Adolph Schimel, all of New York City, of counsel), for defendant United Artists Corporation.

Before AUGUSTUS N. HAND, Circuit Judge, and GODDARD and BRIGHT, District Judges.

AUGUSTUS N. HAND, Circuit Judge.

The United States brought suit under Section 4 of the Act of Congress of July 2, 1890, 15 U.S.C.A. ž 4, entitled "An act to protect trade and commerce against unlawful restraints and monopolies", commonly known as the Sherman Act, in order to prevent alleged violations by the defendants of Section 1 and 2 of that Act, 15 U.S.C.A. žž 1, 2.

The following is a general description of the defendants:

1. (a) Paramount Pictures, Inc., is a corporation organized and existing under the laws of the State of New York, with its principal place of business at 1501 Broadway, New York, New York, and is engaged in the business of producing, distributing, and exhibiting motion pictures, either directly or through subsidiary or associated companies, in various parts of the United States and in foreign countries.

(b) Paramount Film Distributing Corporation, a wholly owned subsidiary of Paramount Pictures, Inc., is a corporation organized and existing under the laws of the State of Delaware, with a place of business at 1501 Broadway, New York, New York, and is engaged in the distribution branch of the industry.

2. Loew's, Incorporated, is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 1540 Broadway, New York, New York, and is engaged in the business of producing, distributing, and exhibiting motion pictures, either directly or through subsidiary or associated companies, in various parts of the United States and in foreign countries.

3. (a) Radio-Keith-Orpheum Corporation is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 1270 Sixth Avenue, New York, New York, and is engaged in the business of producing, distributing, and exhibiting motion pictures, either directly or through subsidiary or associated corporations, in various parts of the United States and in foreign countries.

(b) RKO Radio Pictures, Inc., a wholly owned subsidiary of Radio-Keith-Orpheum Corporation, is a corporation organized and existing under the laws of the State of Delaware, with a place of business at 1270 Sixth Avenue, New York, New York, and is engaged in the production and distribution branch of the industry.

(c) Keith-Albee-Orpheum Corporation is a corporation organized and existing under the laws of the State of Delaware, with a place of business at 1270 Sixth Avenue, New York, New York, and is engaged in the business of exhibiting motion pictures. Approximately 99% of its common stock and 33% of its preferred stock are held by Radio-Keith-Orpheum Corporation.

(d) RKO Proctor Corporation, a wholly owned subsidiary of Radio-Keith-Orpheum Corporation, is a corporation organized and existing under the laws of the State of New York, with a place of business at 1270 Sixth Avenue, New York, New York, and is engaged in the business of exhibiting motion pictures.

(e) RKO Midwest Corporation, a wholly owned subsidiary of Radio-Keith-Orpheum Corporation, is a corporation organized and existing under the laws of the State of Ohio, with a place of business at 1270 Sixth Avenue, New York, New York, and is engaged in the business of exhibiting motion pictures.

4. (a) Warner Bros. Pictures, Inc., is a corporation organized and existing under the laws of the State of Delaware, having its principal place of business at 321 West 44th Street, New York, New York, and is engaged in the business of producing, distributing, and exhibiting motion pictures, either directly or through subsidiary or associated companies, in various parts of the United States and in foreign countries.

(b) Vitagraph, Inc., a wholly owned subsidiary of Warner Bros. Pictures, Inc., is a corporation organized and existing under the laws of the State of New York, with a place of business at 321 West 44th Street, New York, New York, and is engaged in the business of distributing motion pictures.

(c) Warner Bros. Circuit Management Corporation, a wholly owned subsidiary of Warner Bros. Pictures, Inc., is a corporation organized and existing under the laws of the State of New York, with a place of business at 321 West 44th Street, New York, New York, and, among other things, acts as booking agent for the exhibition interests of the said Warner Bros. Pictures, Inc.

5. (a) Twentieth Century-Fox Film Corporation is a corporation organized and existing under the laws of the State of New York, having its principal place of business at 444 West 56th Street, New York, New York, and is engaged in the business of producing, distributing, and exhibiting motion pictures, either directly or through subsidiary or associated companies, in various parts of the United States and in foreign countries.

(b) National Theatres Corporation is owned and controlled by Twentieth Century-Fox Film Corporation, and is a corporation organized and existing under the laws of the State of Delaware, with a place of business at 2854 Hudson Boulevard, Jersey City, New Jersey, and is a holding company for the theatre interests of the said Twentieth Century-Fox Film Corporation.

6. (a) Columbia Pictures Corporation is a corporation organized and existing under the laws of the State of New York, with its principal place of business at 729 Seventh Avenue, New York, New York, and is engaged in the business of producing and distributing motion pictures, either directly or through subsidiary or associated companies, in various parts of the United States and in foreign countries.

(b) Screen Gems, Inc., a wholly owned subsidiary of Columbia Pictures Corporation, is a corporation organized and existing under the laws of the State of California, with a place of business at 700 Santa Monica Boulevard, Hollywood, California, and is engaged in the business of producing motion pictures.

(c) Columbia Pictures of Louisiana, Inc., a wholly owned subsidiary of Columbia Pictures Corporation, is a corporation organized and existing under the laws of the State of Louisiana, with a place of business at 150 South Liberty Street, New Orleans, Louisiana, and is engaged in the business of distributing motion pictures.

7. (a) Universal Corporation is a corporation organized and existing under the laws of the State of Delaware with its principal place of business at 1250 Sixth Avenue, New York, New York, and is engaged in the business of producing and distributing motion pictures, either directly or through subsidiary or associated corporations, in various parts of the United States and in foreign countries.

(b) Universal Pictures Company, Inc., a subsidiary controlled by Universal Corporation, is a corporation organized and existing under the laws of the State of Delaware, with a place of business at 1250 Sixth Avenue, New York, New York, and is engaged in the business of producing motion pictures.

(c) Universal Film Exchanges, Inc., a wholly owned subsidiary of Universal Pictures Company, Inc., is a corporation organized and existing under the laws of the State of Delaware, with a place of business at 1250 Sixth Avenue, New York, New York, and is engaged in the business of distributing motion pictures.

(d) Big U Film Exchange, Inc., a wholly owned subsidiary of Universal Corporation and Universal Pictures Company, Inc., is a corporation organized and existing under the laws of the State of New York, with a place of business at 1250 Sixth Avenue, New York, New York, and is engaged in the business of distributing motion pictures.

8. United Artists Corporation is a corporation organized and existing under...

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