Independent Exhibitors Film Bulletin (1945)

Independents1 Case Presented in FRIEND OF COURT" BRIEF Aside from fixing of a definite date (October 8) for the trial of the five major distributor defendants in the Government's antitrust suit, the hearing before Federal Judge Henry W. Goddard on iMarch 5 produced one other noteworthy result. For the first time, independent exhibitors were allowed a voice in the action, this through the filing, and acceptance by the court, of a brief as ftlamicus curia (friend of the court) in behalf of the Conference of Independent Exhibitors on the Consent Decree. The first two sections of the brief, prepared by Abram F. Myers, counsel for the CTE, presents a review of the entire antitrust case from its inception on July 20, 1938, through the original consent decree and all the abortive efforts to effect a new or amended decree since the expiration of the three-year trial period of the original. The introductory paragraph explains the reason for the formation of the CIE: "On January 20, 1944, the consenting defendants — Paramount, Loew's, 20th Century, Warner Bros, and RKO — submitted to the Attorney General their draft of amended and supplef i mental decree. This draft was so unfair to the independent exhibitors and so inadequate from the standpoint of the law, that its publication precipitated a crisis in independent ranks. Representatives of the truly independent exhibitor organizations met in Chicago and formed the Conference of Independent Exhibitors on the Consent Decree." The second section of the brief traces the obstacles that have stymied efforts to draft a satisfactory final or ad interim decree and documents the charge that the defendants have been responsible for the delay in concluding the case. This portion stresses the urgency of the matter from exhibitors' standpoint: "The reasons for a prompt final disposition of the case are most compelling. Further delay will have the effect to make the defendants secure in their monopoly and to immunize them against liability for the unfair and oppressive practices set forth in the Government's petition." Following is the text of the balance of the brief, with the elimination of references to numerous legal precedents: As regards compulsory block booking a majority of reporting theatres asserted that the consenting defendants under the decree "had insisted upon the licensing of unwanted feature pictures as a condition of licensing the features that they particularly desired. While this was to some extent inherent in the five-picture plan embodied in the decree, it was reported that in many cases the defendants actually forced upon the exhibitors all of their groupsof-five as a condition of licensing any. That is to say, if an exhibitor skipped a group or groups of a particular distributor, he was required to take up all, or a "representative number" of the pictures he had passed in order to license a later group. The Government in its brief has shown how the defendants have continued to impose unreasonable clearance despite the consent decree and there is no need for us to dwell on that subject. The Government also has shown the inefHcacy of arbitration as a means of enforcing compliance with the provisions of the decree relating to clearance. We merely wish to add that arbitration is wholly ineffective as an enforcing medium in the matter of abuses growing out of the licensing of pictures — block booking, forcing of shorts, etc. — because of the time element and expense involved. We do feel that mention should be made of the total failure of Section X of the decree which, if it had any purpose at all, was to curb the defendants large and growing monopoly of the preferred runs in the field of exhibition. The limitations and restrictions on that provision make it well-nigh impossible for exhibitors — no matter how just their complaints — to qualify as complainants. The decision of the Appeal Board in Matter of Guest fully justifies this assertion. And in Matter of LuxorBleeker the Board was moved to remark: "It would be a decided under-statement to characterize Sec. X as merely technical. It is in fact involved in statement and confusing in form." The Board's ruling that where there is but slight or one way competition there still must be clearance. . .and its dictum that to grant open booking would violate this principle (Matter of Winkur) leaves in the hands of the defendants, both consenting and non-consenting, tremendous coercive power over the independent exhibitors. Whether a theatre shall be operated on a preferred run or on a subsequent run subject to clearance depends not on the type of theatre or manner in which it is operated but upon who operates it. This is illustrated by Matter of Dipson. There complainant's theatre (the Bailey), when operated by the Shea Circuit, enjoyed the same run (or availability) as a competitive theatre (Kensington) operated by the same circuit. When the independent operator acquired the Bailey, it was given a run subsequent to the Kensington. The Board said: Complainant asks that all clearance be abolished between the Kensington and the Bailey and that the Bailey be restored to the same run and availability as the Kensington. While we are in complete accord with complainant as to the justice of its complaint, nevertheless the limitations of the decree require us to hold that its demand for relief is too broad and cannot wholly be granted. And in Matter of Basil, the Board said: It is clear that under the decree a distributor may even reverse the order of runs of two theatres, to the substantial detriment of the one which formerly enjoyed the prior run, without any remedy being available to the injured theatre unless the case falls within the very limited scope of Section X (citing Matter of Lakeview, Matter of Tracy and Matter of Weldon). (Continued on Page 20) 17 111 TRADE ABUSES HAVE CONTINUED UNABATED SINCE THE FILING OF THE SUIT 1. Abuses between filing of the suit and entry of the consent decree. At the hearing on Bill S. 3735..., Senator Neely inquired of Mr. Arnold whether the Department of Justice had received 'a large number of complaints of abuses growing out of the operation by producer-distributors of motion picture theatres." Mr. Arnold suggested that his assistant, Paul Williams, who had been placed in charge of the investigation in 1936, could supply the details. Mr. Williams stated that he had submitted upwards of 150 such complaints to the defendants in the hope of securing temporary relief for the complainants pending final action in the :ase. The following excerpt from the transcript will indicate the pressing nature of the complaints: Senator Neely. Can you state the nature of these complaints; that is, whether they involved inability to secure adequate supplies of film or proper runs when trying to compete with independent (sic) theatres? Mr. Williams. That is usually the basis of the complaints. Senator Neely. Do you remember Whether these complaints have contained allegations of unreasonable protection or clearance imposed by producer-distributors in favor of their own theatres and against independents? Mr. Williams. Very many of them. That is one of the more common causes of complaint. Senator Neely. Do you recall whether they also included charges of discrimination practiced by producer-distributors in favor of affiliated theatres and against independent theatres in the matter of selective contracts, etc.? Mr. Williams. Oh, yes, sir; there are very many complaints of that nature. Senator Neely. In your opinion, Mr. Arnold, is it desirable from the standpoint of the public interest that theatres be under local operation and control so as to be responsive to community standards and influence? Mr. Arnold. Well, my answer to that would be that it is thoroughly desirable. 2. Abuses since the entry of the consent decree. A proper unction of an amicus curia presentation, submitted by parties who will be affected by the outcome but who are not parties to the suit, is to inform the Court of facts and circumstances which have i bearing on the points at issue. The purpose of the information :endered under this subhead is to impress the Court with the mportance of setting the case for trial on a day certain — during ■he coming spring, if possible. This information is not proof of ultimate facts; it can attain that stature only when it has been MTered by the Government and has been admitted over defendants' Ejections. During the summer of 1943 Allied States Association of Motion picture Exhibitors and Pacific Coast Conference of Independent ineatre Owners, in anticipation of the expiration of the test period under the consent decree, made surveys among their members by means of questionnaires to ascertain whether the decree iad been effective in preventing abuses. The questionnaires used »y the two federations differed in some particulars but the surveys were undertaken for a common purpose and the responses were -o the same effect, namely, that the consent decree not only had lot been effective in curbing oppressive practices but actually had ,iven rise to new abuses. Allied received returns from a total of U54 theatres and the Pacific Coast Conference from an addiional 400. march 19, 1945