The Exhibitor (Nov 1938-May 1939)

38 SPECIAL FEATURES (a) To receive from the distributors, affiliated exhibitors and independent exhibitors, agreements, in proper form, to arbitrate controversies as herein provided and to provide for the safe-keeping thereof; (b) To provide for the creation of a general panel and a neutral panel of persons available and willing to serve as arbitrators; (c) To arrange for a convenient place for the Arbitration Board to sit, preferably at exhibitor headquarters or in one of the exchanges, and without expense; (d) Publish from time to time a list of the distributors and exhibitors in the territory who have agreed to arbitrate controversies arising under this code. (3) Composition of the panels. The general panel shall consist of 20 persons of whom the distributors shall name ten and the exhibitor association, functioning in the particular territory shall name the other ten. In any territory where there are two or more exhibitor associations, each may appoint a panel of ten. The members of the general panel may be affiliated w.th distributor or exhibitor interests, but their connections shall be fully disclosed and they shall be classified according to their affiliations. Major distr.butors and so-called independent distributors, first-run and subsequent-run city exhibitors and small town exhibitors, all shall be represented on the panel. The neutral panel shall consist of from ten to 1 5 members to be proposed by the Joint Committee on Arbitration, subject to ratification by the distributors and the exhibitor association or associations in each territory. These members shall not also be members of the general panel and shall not be in any manner associated with exhibitor or distributor interests, but, so far as possible, they shall have an understanding of the motion picture bus. ness. It shall not be a bar that a particular member, at the time of his selection, has had no previous experience in the business. Vacancies occurring by reason of illness, resignation, disqualification, disability or death, shall be filled in the same manner as is provided for the original appointments. Each party to an arbitration proceeding may designate as his arbitrator or arbitrators any member or members of this panel or anyone else he desires outside of the panel. Each person upon being named a member of either a general or a neutral panel shall subscribe to an oath, in substantially the following form, which shall be filed with the Joint Committee on Arbitration, viz; / having been July appointed a member of the panel of arbitrators for the film delivery territory, solemnly swear that 1 will perform my duties diligently and uprightly and that I will decide the controversies brought before me in accordance with the spirit and intent of the provisions of the Code of Fair Competition involved therein, without fear or favor. If general arbitrators are chosen outside the panel, they too shall take the oath. (4) Proceedings, how initiated. To initiate an arbitration proceeding under this Code, the complainant (having previously signed a general arbitration agreement)1 shall send by registered mail to the respondent or respondents (who must have signed such an agreement), a statement or claim, which shall set forth, in non-technical language, the following; (a) Name and address of the complainant, the name of his exchange or theatre, and the number and date of his agreement to arbitrate. (b) Brief statement of the complaint or claim, giving the date of the contract, if any, involved, and/or the number and title of the Code provision on which the proceeding is based. (c) A demand for arbitration and the name or names of the arbitrators chosen by the complainant. In cases involving a single respondent, the complainant may name either one or two arbitrators, and the respondent can name an equal number. In cases involving more than one respondent, each party shall name only one, as provided in XV. (2). A copy of the statement of claim shall be sent to the Joint Committee on Arbitration for filing. (5) The reply. The respondent or respondents shall reply within six days (exclusive of Sunday) by registered mail, setting forth in simple language any explanation of or defense to the complaint or claim. And if the proceeding is to be contested, the arbitrators chosen by the respondent or respondents shall be named. This reply shall also give the date and number of each respondent's agreement to arbitrate and a copy shall be sent to the Joint Committee. Where there is more than one respondent, joint or separate replies may be tendered. (6) Hearing. The arbitrators, when named, shall designate one of their own number to preside, and the presiding arbitrator shall arrange for a hearing at the earliest convenience of the other arbitrators and the respective parties. Failing to obtain an agreement, the presiding arbitrator will fix a date not later than ten days after the last date on which a reply to the complaint could be filed. At least three days before the hearing any party desiring that a neutral arbitrator (or arbitrators) shall sit during the hearing shall so notify the presiding arbitrator. In the absence of such notification the representative arbitrators may, at their option, hear the case with or without a neutral member or members, calling in an umpire only in case they find themselves evenly divided as to the award to be made. Neutral arbitrators shall be designated from the neutral panel, and not otherwise, by the representative arbitrators and not by the parties. If the representative arbitrators are unable to agree upon the neutral arbitrator or arbitrators to be designated, then they shall be chosen by lot. No arbitrator whether representative or neutral shall be chosen to act as an arbitrator in any dispute in which he has a direct or indirect personal or financial interest. The parties may, however, waive their right to object to any arbitrator on the ground of interest. At the hearings — (a) The parties may represent themselves or be represented by another. (b) Witnesses shall testify under oath. (c) Each party shall have the right to question the witnesses of the other party or parties. (d) The arbitrators may require any party to produce whatever records and documents they may deem necessary. (e) Arbitrators shall be the judges of the relevancy of the testimony or evidence offered, but the technical rules of evidence shall not be applied and the board may inquire into the good faith of any claim or defense offered. (f) Stenographic records of testimony will not be taken unless either or both parties so request and provide funds for the same, in which case the stenographer shall be selected by the Arbitration Board, or, if designated by either or both parties, approved by the Board. (7) Awards. If an award is in favor of an exhibitor complainant under commitments Nos. I. (1) and I. (2) it shall direct that the complainant be allowed to cancel the picture or pictures in question; if such an award is made under commitment No. III. it shall specify the maximum number of pictures that the complainant can absorb and direct that he be allowed to license not to exceed that number of pictures; if under No. IV. (2)1 it shall direct that the complainant be relieved of the requirement of playing the picture in question on preferred time, leaving it to the distributor to follow either of the alternatives provided in the commitment; if under No. V. (1) it shall direct that the complainant be granted a run to be designated by the distributor on terms not substantially disproportionate to those demanded in comparable situations; if under V. (2) it shall direct that the product be not sold away from, but that it be sold to, the complainant; and if under IX. it shall direct that the non-theatrical account be no longer served. In controversies involving clearance or zoning, the award, if in favor of the complainant, shall recite that the clearance in question has been found to be unreasonable and shall prescribe fair and reasonable clearance to be observed by the parties. In proceedings involving the performance by either party of a license agreement, the award shall be for specific performance, or for relief in the nature of an injunction, except when provisions are involved which prescribe monetary damages for breach or failure to perform. In proceedings under commitments Nos. XIII and XIV7 there shall be no award, but the Board shall make a report setting forth the material facts and finding specifically that coercive steps were or were not taken, or that the box office statements were or were not falsified, as the case may be. In all cases in which the decision is in favor of the respondent or respondents, the award shall provide merely that "the complaint is dismissed for lack of merit.” Arbitration Boards shall have no power to award counsel fees or costs in favor of one party as against the other. (8) Costs of arbitration machinery. Upon the filing of a claim the complaining party shall pay to the Joint Committee on Arbitration a filing fee in such amount as that Committee may by general rule establish, bearing in mind the expenses to be met, but which shall not be less than $5.00. These fees are to cover the cost of — (a) Compensation of the neutral arbitrators whenever necessary. (No compensation shall be paid the arbitrators on the general panel.) (b) Expenses incurred upon the initiative of the Arbitration Board. (c) Expenses of the Joint Committee and other administrative expense. (d) Expense of a secretary if one shall be deemed necessary by the Joint Committee. In disputes involving principles affecting all branches of the industry, the Arbitration Board (or the Joint Committee)! may, of its own motion, apportion the costs among all the distributors and the exhibitor associations. (9) Waiving oral hearing. If the parties to any controversy agree in writing to waive oral hearing, the complainant shall first submit his sworn claim, supported by excerpts from books of account and other relevant evidence, together with argument to the Board and to the respondent; the respondent shall then file with the Board and submit to the complainant his sworn statement of defense and argument. Both parties may then submit in writing and under oath such further evidence as they see fit within five days, after which the Board will consider the file and enter an award. XVII. EFFECTIVE DATE This Code of Fair Competition shall become effective with the license agreements for the product to be released during the 1939-1940 season and shall remain in effect thereafter unless or until modified or abrogated with the consent of the national exhibitor groups ratifying the same; provided, however, that the provisions of the Code shall not be deemed to apply to or affect so-called franchise agreements covering products for seasons prior to the 1939-1940 season. 7 If retained. February 22, 1 939