Webster Rosewood Corp. v. Schine Chain Theatres, Inc., 139

• Decision Date: 13 February 1959
• Docket Number: Docket 25036.,No. 139,139
• Citation: 263 F.2d 533
• Parties: WEBSTER ROSEWOOD CORPORATION, Appellant, v. SCHINE CHAIN THEATRES, INC., a New York Corporation; Schine Theatrical Co., Inc., a New York Corporation; Schine Circuit, Inc., a New York Corporation; Schine Lexington Corporation, a New York Corporation; and J. Myer Schine, Louis W. Schine, and John A. May; all of Gloversville, New York, Appellees.
• Court: U.S. Court of Appeals — Second Circuit

263 F.2d 533 (1959)

WEBSTER ROSEWOOD CORPORATION, Appellant, v. SCHINE CHAIN THEATRES, INC., a New York Corporation; Schine Theatrical Co., Inc., a New York Corporation; Schine Circuit, Inc., a New York Corporation; Schine Lexington Corporation, a New York Corporation; and J. Myer Schine, Louis W. Schine, and John A. May; all of Gloversville, New York, Appellees.

No. 139, Docket 25036.

United States Court of Appeals Second Circuit.

Argued January 14, 1959.

Decided February 13, 1959.

Francis T. Anderson, Philadelphia, Pa., for appellant, Cormac J. Malloy, Gray, Schaffer & Malloy, Philadelphia, Pa., of counsel.

James O. Moore, Jr., Raichle, Tucker & Moore, Buffalo, N. Y., for appellees, David C. Diefendorf, Buffalo, N. Y., of counsel.

Before HAND, LUMBARD and BURGER, Circuit Judges.

HAND, Circuit Judge.

The plaintiff appeals from a judgment of Judge Foley, dismissing its complaint demanding treble damages for violation of the antitrust laws (§ 15, Title 15 U.S. C.A.). The action was tried to the judge who delivered an elaborate opinion reported in 157 F.Supp. 251, 259, to which we refer as the supplement to what we say. The claim in suit arose from an alleged injury to the plaintiff, the corporate owner of a moving picture house in the City of Rochester, called "The Webster," whose shares were held by one, Max Fogel. The gravamen of the claim was that the defendants between June, 1942, and May, 1950, by virtue of their monopolistic control over moving picture "distributors," succeeded in preventing "The Webster" from receiving "first neighborhood run" of films; and that during this period another theatre, known as the "State" and controlled by the defendants, always got the "first neighborhood run," although "The Webster" was as good, and as well situated as the "State." After extended hearings consisting in large part of the testimony of Fogel himself, the judge made the following findings of fact at the close of his opinion: (1) that the evidence did not disclose any conspiracy to monopolize films between 1942 and 1950, and arbitrarily to deprive the plaintiff of "first neighborhood run." (2) That the evidence rebutted "any presumption or inference" of the continuance during 1942 to 1950 of the conspiracy of which the defendants were found guilty by the Supreme Court in Schine Chain Theatres, Inc. v. United States, 334 U.S. 110, 68 S.Ct. 947, 92 L.Ed. 1245. (3) That the plaintiff had made no demand upon distributors for any first neighborhood run of the films shown at the "State" theatre. (4) That the evidence did not show that "The Webster" "was clearly a better customer * * * than the State and that a different pattern of distribution would have been more to the interests of the distributors and thus allow an inference of conspiracy."

Judge Foley described at length the dealings between Fogel and the defendant J. Myer Schine, beginning shortly after Fogel built "The Webster" in 1927, a year after defendants' "State" theatre was built. The two theatres were six blocks apart and continued either in competition or cooperation until 1933 when Schine abandoned an interest that he had acquired in "The Webster." Fogel kept on alone until the autumn of 1940 when Schine took control and Fogel became his employee. In June, 1942, Fogel reacquired his interest in "The Webster" and the period of alleged injury began. Meanwhile, the United States had brought the action of which we have spoken under the antitrust laws which was finally determined by the Supreme Court on May 3, 1948, and in which the court held that a chain of about 148 motion-picture theatres located in 76 towns and in six states was controlled by the defendants, and had been operated in violation of the antitrust laws. This action had been brought in the District Court for the Western District of New York and in it Judge Knight made the following finding which was affirmed by the Supreme Court:

"All findings made herein with respect to any acts committed by the defendants or any of them, or any course of conduct pursued by them which the Court holds to be in violation of the antitrust laws are limited to acts committed or course of conduct pursued prior to May 19, 1942, plaintiff\'s counsel having stated at the opening of the trial that he would not offer evidence beyond that date."

Judge Foley held that this finding...