William Goldman Theatres v. Loew's, Inc., No. 8639.

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Writing for the CourtPARKER and BIGGS, Circuit , and LEAHY
Citation150 F.2d 738
PartiesWILLIAM GOLDMAN THEATRES, Inc., v. LOEW'S, Inc., et al.
Decision Date02 August 1945
Docket NumberNo. 8639.

150 F.2d 738 (1945)

WILLIAM GOLDMAN THEATRES, Inc.,
v.
LOEW'S, Inc., et al.

No. 8639.

Circuit Court of Appeals, Third Circuit.

Argued February 8, 1945.

Decided August 2, 1945.

Rehearing Denied September 21, 1945.


150 F.2d 739
COPYRIGHT MATERIAL OMITTED
150 F.2d 740
William A. Gray and Robert Dechert, both of Philadelphia, Pa. (Francis T. Anderson and Barnes, Dechert, Price and Smith, all of Philadelphia, Pa., on the brief), for appellant

Robert L. Wright, Sp. Asst. to Atty. Gen. (Elliott H. Moyer, Sp. Asst. to Atty Gen., and Wendell Berge, Asst. Atty. Gen., on the brief), for amicus curiae.

Bernard G. Segal, of Philadelphia Pa., (Wm. A. Schnader, John E. Mulder, and Schnader, Kenworthey, Segal & Lewis, all of Philadelphia, Pa., on the brief), for Loew's et al., distributor appellees.

Joseph M. Proskauer, of New York City, and George Wharton Pepper, of Philadelphia, Pa. (Morris Wolf, of Philadelphia, Pa., and J. Alvin Van Bergh, of New York City, on the brief), for Warner appellees.

Before PARKER and BIGGS, Circuit Judges, and LEAHY, District Judge.

LEAHY, District Judge.

The question we meet is whether plaintiff has supported its charge of illegal monopoly that defendants have violated § 2 of the Sherman Act, 26 Stat. 209, 15 U.S. C.A. § 2,1 in order to support an action for injunctive relief and triple damages under § 4 of the Clayton Act2 38 Stat. 731, 15 U.S.C.A. § 15. Plaintiff relied too on § 1 of the Sherman Act,3 50 Stat. 693, 15 U.S. C.A. § 1; and while this section states an additional offense "the two sections overlap in the sense that a monopoly under § 2 is a species of restraint of trade under § 1."4 There are eleven defendants5 engaged in three phases of the moving picture business: (1) producers, (2) exhibitors, and (3) licensors of pictures to others for exhibition.6

150 F.2d 741
Plaintiff conducts the particular business of operating moving picture theatres in Philadelphia, its environs, and in other parts of Pennsylvania. Defendants did not offer any counter proofs in support of their own case. The district court filed its findings of fact, conclusions of law and opinion (54 F.Supp. 1011) and entered judgment in favor of defendants

After plaintiff completed the presentation of its evidence before the trial court, defendants asked for several days adjournment. At that time counsel for defendants advised the Court below that they had not decided whether or not they would "make a motion to dismiss, whether or not to close without offering any testimony and make a motion for judgment on the record as it then stands."7 Upon the resumption of the trial several days later, plaintiff asked to reopen and adduced additional evidence. The record fails to disclose whether defendants made a formal motion for dismissal. Apparently defendants simply sought judgment on the ground that upon the facts and the law the plaintiff had shown no right to relief.8

Certain primary facts were found by the Court below. There can be no possible disagreement about these findings.9 Warner Brothers, owning Vitagraph, Circuit Management and 99% of Stanley, is a producer and exhibitor of motion pictures in various parts of the United States, including Philadelphia. Since November 9, 1940, Stanley has owned or leased and operated all of the theatres in Philadelphia in which first-class motion pictures have been exhibited on "first-run"10 — that is, at the Stanton, Stanley, Aldine, Earle, Mastbaum, Boyd and Fox Theatres. These theatres were acquired by Warner Brothers between 1919 and 1936. Since 1936 these theatres11 have exhibited first-class features. Concededly, Warner Brothers intend to continue such showings. No such pictures are to be leased to plaintiff. The Court below found that Warner Brothers now have an actual 100% monopoly in the business of exhibiting feature motion pictures on first-run in Philadelphia, because of substantially uniform action by each of the seven defendant distributors. These distributor defendants and Vitagraph control the production and distribution of more than 80% of the feature pictures available for exhibition in the United States.

Plaintiff, having been engaged in the business of exhibiting motion pictures in and about Philadelphia for many years, is completely qualified to operate a first-run motion picture theatre in Philadelphia. In 1940, plaintiff decided to enter the first-run business.12 The Erlanger Theatre, located

150 F.2d 742
at 21st and Market Streets, one city block from Warner Brothers' Mastbaum Theatre, was available for leasing. The Erlanger has a seating capacity of 1859 persons. Its appointments are quite as elegant as any of those of the Warner theatres. As to management, reputation and in all other respects, the Court below found, the Erlanger was suitable for profitable exhibition of first-class feature motion pictures on first-run in competition with the theatres operated by Warner Brothers.13 Plaintiff's 10 year lease of the Erlanger commenced on November 9, 1940, at an annual rental of $12,000. After leasing the Erlanger plaintiff made repeated requests to the distributor defendants to lease feature pictures for first-run exhibition upon offers to pay much higher prices for pictures than the distributors had been receiving from Warner Brothers. Plaintiff was able to offer such prices because of the favorable terms found in its lease. But, distributor defendants refused and still refuse to lease any of such pictures to plaintiff for first-run exhibition

Plaintiff put interrogatories to the defendants in order to ascertain their reason for such uniform exclusion. Fox stated that its arrangement with Warner Brothers gave it "economic advantage." RKO and Loew's stated a similar arrangement was "more advantageous". Paramount said its agreement with Warner Brothers was "desirable," while Columbia put the arrangement on the basis it was "very satisfactory." Prior and during the time plaintiff attempted to obtain pictures for exhibition at the Erlanger, Warner Brothers controlled the Mastbaum Theatre which is, as observed above, located at 20th and Market Streets and one city block from the Erlanger. From 1929 to 1935 the Mastbaum was operated as a combined stage-show and motion picture theatre. It closed on March 3, 1935. Then, on September 4, 1942, Warner Brothers reopened it. Since its reopening, the receipts have amounted to approximately $1,000,000 a year. The Court below found that since September, 1942, it has proved to be one of the most successful of the Warner theatres operating in Philadelphia.14 The Court below then found the distributor defendants had refused to lease pictures to plaintiff at the Erlanger theatre solely because that theatre was not under the control of Warner Brothers; but if it had been a Warner's theatre they would have leased plaintiff the pictures it sought. In addition, the Court below found that each and every distributor, as well as Vitagraph, knew every other distributor was leasing its feature pictures for first-run in Philadelphia to Warner Brothers to the exclusion of plaintiff. In order not to break the continuity of the exposition of the primary facts as found by the Court below, we merely and momentarily make one reference to a portion of the opinion below (54 F.Supp. at page 1015): "Of course, the intent is patent — necessarily inferable from the contracts themselves — to exclude the plaintiff and all others except Warner from the first run business."

The Court below concluded that defendants had not imposed nor intended to impose unreasonable restraint upon interstate commerce, but that the state of control exercised by defendants over their product constituted merely a monopoly in the "ordinary" and "popular" sense, and that such acts of control did not come within the prohibition of the anti-trust laws, because defendants' activities amounted, at best, to a "partial control of a given market."

Admittedly, all three phases of the motion picture business involved in the instant case — production, distribution and exhibition — constitute a part of interstate commerce. Unquestionably, no person can with profit operate a first-run theatre in Philadelphia without access to defendants' product. Defendants urge us to recognize the rule "`long recognized' of a trader engaged in an entirely private business `free to exercise his own independent discretion as to the parties with whom he will deal.'" That doctrine has deep roots in our past....

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79 practice notes
  • 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
    ...v. Masonite Corp., 1942, 316 U.S. 265, 275, 62 S.Ct. 1070, 86 L.Ed. 1461; William Goldman Theatres, Inc. v. Loew's, Inc., 3 Cir., 1945, 150 F.2d 738, 744-745; United States v. U. S. Gypsum Co., 1948, 333 U.S. 364, 392-394, 68 S.Ct. 525, 92 L.Ed. 746; Milgram v. Loew's Inc., 3 Cir., 1951, 19......
  • United States v. Richfield Oil Corp., No. 6896-Y.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • July 2, 1951
    ...v. Griffith, 1948, 334 U.S. 100, 105-107, 68 S.Ct. 941, 92 L.Ed. 1236; William Goldman Theatres, Inc., v. Loew's, Inc., 1945, 3 Cir., 150 F.2d 738, 8 International Salt Company v. United States, 1947, 332 U.S. 392, 398, 68 S.Ct. 12, 16, 92 L.Ed. 20. 9 United States v. Griffith, 1948, 334 U.......
  • Klor's, Inc. v. Broadway-Hale Stores, No. 15380.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • March 28, 1958
    ...Paramount Film Distributing Corp. v. Village Theatre, 10 Cir., 1955, 228 F.2d 271; William Goldman Theatres v. Loew's, Inc., 3 Cir., 1945, 150 F.2d 738; White Bear Theatre Corp. v. State Theatre Corp., 8 Cir., 1942, 129 F.2d 600; Victor Talking Machine Co. v. Kemeny, 3 Cir., 1921, 271 F. Fi......
  • Hecht v. Pro-Football, Inc.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • December 20, 1977
    ...344 U.S. 817, 73 S.Ct. 11, 97 L.Ed. 636 (1952) (relevant market is Providence, R.I.); William Goldman Theatres, Inc. v. Loew's, Inc., 150 F.2d 738 (3d Cir. 1945), cert. denied, 334 U.S. 811, 68 S.Ct. 1016, 92 L.Ed. 1742 (1948) (relevant market is downtown theatre 19 Tr. 2833, 2863. 20 Unite......
  • Request a trial to view additional results
79 cases
  • 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
    ...v. Masonite Corp., 1942, 316 U.S. 265, 275, 62 S.Ct. 1070, 86 L.Ed. 1461; William Goldman Theatres, Inc. v. Loew's, Inc., 3 Cir., 1945, 150 F.2d 738, 744-745; United States v. U. S. Gypsum Co., 1948, 333 U.S. 364, 392-394, 68 S.Ct. 525, 92 L.Ed. 746; Milgram v. Loew's Inc., 3 Cir., 1951, 19......
  • United States v. Richfield Oil Corp., No. 6896-Y.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • July 2, 1951
    ...v. Griffith, 1948, 334 U.S. 100, 105-107, 68 S.Ct. 941, 92 L.Ed. 1236; William Goldman Theatres, Inc., v. Loew's, Inc., 1945, 3 Cir., 150 F.2d 738, 8 International Salt Company v. United States, 1947, 332 U.S. 392, 398, 68 S.Ct. 12, 16, 92 L.Ed. 20. 9 United States v. Griffith, 1948, 334 U.......
  • Klor's, Inc. v. Broadway-Hale Stores, No. 15380.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • March 28, 1958
    ...Paramount Film Distributing Corp. v. Village Theatre, 10 Cir., 1955, 228 F.2d 271; William Goldman Theatres v. Loew's, Inc., 3 Cir., 1945, 150 F.2d 738; White Bear Theatre Corp. v. State Theatre Corp., 8 Cir., 1942, 129 F.2d 600; Victor Talking Machine Co. v. Kemeny, 3 Cir., 1921, 271 F. Fi......
  • Hecht v. Pro-Football, Inc.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • December 20, 1977
    ...344 U.S. 817, 73 S.Ct. 11, 97 L.Ed. 636 (1952) (relevant market is Providence, R.I.); William Goldman Theatres, Inc. v. Loew's, Inc., 150 F.2d 738 (3d Cir. 1945), cert. denied, 334 U.S. 811, 68 S.Ct. 1016, 92 L.Ed. 1742 (1948) (relevant market is downtown theatre 19 Tr. 2833, 2863. 20 Unite......
  • Request a trial to view additional results

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