The Film Daily (1933)

Thursday, Aug. 24, 1933 —&JK DAILY 19 Clearance and Zoning Board for Each Territory receipts from the exhibition of any motion picture and from so-called midnight shows, if any, upon the conclusion of each such daily exhibition and midnight show, when the license fee therefor is based in whole or in part upon the percentage of the exhibitor's admission receipts. ARTICLE 38. Unauthorized Exhibition. 1. No exhibitor shall directly or indirectly, or by any means whatsoever: (a) Exhibit any motion pictures at any time or place other than on the date or dates and in the places expressly booked and confirmed in writing pursuant to the exhibition license therefor; (b) Use a print of a motion picture at any theater other than that specified in the exhibition license therefor; (c) Use a print of a motion picture at two or more theaters when licensed at only one thereof; (d) Use the print of a motion picture for any purpose whatsoever other than exhibitions duly licensed and booked; or (e) Withhold the prompt return of a print of a motion picture for additional exhibitions at any theater in excess of the time licenced and booked in writing. 2. Any violation of any of the foregoing provisions by any exhibitor in reliance on any promise or assurance express or implied by any salesman, agent or representative of any distributor as an inducement of its sale of film shall be considered a violation by all persons concerned and punishable as such. 3. Nothing herein contained shall be deemed to define an unauthorized showing in any proceeding for alleged infringement of the copyright law. ARTICLE 39. National Control Board. The exhibiting branch of the industry records its view that the National Control Board should be fairly balanced between the several economic divisions of the industry, with voting representatives to be named by the Government. ARTICLE 40. Arbitration. Sec. 1. Method of Arbitration. The arbitration of all disputes between exhibitors and distributors arising under any exhibition contract, if the parties shall agree on arbitration, shall be in accordance with the optional arbitration clause of the so-called Optional Standard License Agreement, a copy of which clause is annexed hereto marked "Schedule A," except as the provisions of such clause may be modified by the provisions of this Code. Sec. 2. Number of Arbitrators. By stipulation of the parties to any dispute growing out of an exhibition contract, or by standing agreement in any territory between local exhibitors' association or associations, on the one hand, and the representatives of the distributors on the other hand, the number of arbitrators to be appointed by each party may be reduced to one, with power in the two thus appointed to appoint an umpire as provided in said optional arbitration clause. SCHEDULE "A". Arbitration Provisions. Optional Arbitration Clause Optional Clause: The following clause is optional with the parties hereto. If it is desired to make such clause a part of this license, the Exhibitor and the duly authorized representative of the distributor shall sign their respective names where indicated immediately following this paragraph, and unless so signed, the said Clause shall be deemed excluded from this license agreement. It is agreed by and between the parties that Clause Twentieth providing for voluntary arbitration of disputes arising thereunder, shall be included as a part of this license. Representative of the Distributor duly authorized to agree to the following Clause Twentieth. Arbitration Exhibitor. The Exhibitor and the Distributor respectively, freely and voluntarily agree that as a condition precedent to the commencement of any action or proceeding in any Court by either of them to determine, enforce or protect the legal right of either hereunder, each shall submit all claims and controversies arising hereunder for determination by arbitration to an Arbitration Board (hereby expressly waiving the oath of the arbitrators) which shall consist of four members, each of whom shall be engaged in the motion picture business, and two of whom to be appointed by the Exhibitor, and the remaining two to be appointed by the Distributor. Upon the written request of the Distributor or the Exhibitor for the arbitration of any dispute or controversy arising hereunder, the party making such request shall name therein two arbitrators stating the business address and business or business connection of each and shall designate therein the date, time and place of the hearing of such controversy. The date of such hearing shall not be earlier than seven (7) days from the date of the sending of such notice, unless it shall be claimed in such notice that irreparable injury will result unless there is a speedy determination of such controversy in which case such hearing may be designated to be held earlier than said seven (7) day period. Within five (5) days after the mailing of such request for arbitration, the party upon whom such request is made shall name two arbitrators in a written notice mailed or delivered to the other party, stating therein the business address and business or business connection of each arbitrator. If either party fails or refuses to name the arbitrators as herein provided or if any arbitrator so named shall fail or refuse to act, or be unable to serve or shall be challenged^ and others are or another arbitrator qualified and then available to act is not then appointed, others or another arbitrator may be appointed by the other party as the case may be. No member of the Arbitration Board shall hear or determine any controversy in which he has an interest direct or indirect, and any member having such interest shall be disqualified to act. If the arbitrators or a majority of them are unable to reach a decision, they then, or a majority of them shall immediately select an umpire who shall not be engaged in the mulion picture business. In such case the hearing before the umpire shall be at such time and place as the umpire shall designate and shall be had before the umpire alone, the arbitrators not to be permitted to attend the hearing before the umpire. If the arbitrators or a majority of them are unable to agree upon the selection of an umpire, the American Arbitration Association shall be requested to make such selection. The Arbitration Board shall have general power to determine such dispute or controversy as shall be submitted, to make findings of fact in respect thereof and to direct specific performance of a contract, and/or that the same has been breached in whole or in part, and/or that damages on such account shall be paid. The Board of Arbitration shall have the power only to give force and effect to the provisions of this license agreement and the rights or obligations of the parties thereunder; provided that if after a full hearing of any controversy submitted for arbitration hereunder, excepting any submission to an umpire designated as hereinabove provided; the arbitrators or a majority of them are of the opinion that because of unusual circumstances arising after the execution of this license agreement and beyond the direct control of the parties hereto disclosed at such hearing, a strict enforcement of the provisions of this license agreement would impose undue hardships upon one of the parties, the arbitrators or a majority of them may recommend in writing to the parties a settlement of such controversy upon such terms and conditions deemed by the arbitrators fair and just. If such settlement is not agreed to by the parties within five (5) days after the receipt of a copy of such recommendation, the controversy shall be deemed withdrawn from the arbitrators and shall be submitted with a written statement of all of the facts adduced at the hearing before the arbitrators, together with all documentary evidence to the National Appeal Board in New York. The -disposition by the National Appeal Board of any such recommendation shall be final and binding upon the parties hereto. The hearing of any such controversy shall be had before the Arbitration Board in the City wherein is situated the exchange of the Distributor from which the Exhibitor is served, unless the parties agree in writing that such hearing be had in some other place. If either party fails or refuses to submit to arbitration any such claim or controversy, the other party may apply to a United State District Court, or to any other Court, including a court of a state in which such hearing would otherwise not be had, for an order to proceed to arbitrate in which case such hearing shall be had in such place as the Court to which such application is made may lawfully direct. The parties hereto further agree to abide by and forthwith comply with any decision or award of the arbitrators, or a majority of them and consent that any such decision or award shall be enforceable in or by any Court of competent jurisdiction pursuant to the law of such jurisdiction now or hereafter in force. If the exhibitor shall fall or refuse to submit to arbitration any such claim or controversy or to abide by and comply with the av/ard of the arbitrators in respect thereto, within seven (7) days, the Distributor may at its option suspend the deliveries of the motion pictures provided for in this and in each other existing license agreement, between the parties hereto and/or terminate this and each such other license agreement ; and upon such termination the aggregate of the license fees of all motion pictures specified in this and any such other license agreement then not exhibited forthwith shall become due and payable by the Exhibitor. If the Distributor shall fail or refuse to submit to arbitration any such claim or contioversy or to abide by and comply with the decision or the award of an Arbitration Board in respect thereto within seven (7) days, the Rxhibitor may at the option of the Exhibitor terminate this and any other existing license agreement between the parties hereto by mailing a notice to such effect to the Distributor within seven (7) days after such failure or refusal ; and the Exhibitor shall have the right and remedies provided in Clause Second (b) for failure to deliver motion pictures. Any such termination by either party shall be without prejudice to any other right or remedy which the party so terminating may have by reason of any breach by the other party to this or any other existing agreement between the parties. Each of the parties hereto, without notice to the other, may apply to any Court having jurisdicion to make this agreement to arbitrate a rule or order of such Court. ARTICLE 41. Fair Clearance and Zoning. Sec. 1. Declaration of Policy. — Clearance which imposes an undue hardship on subsequent run theaters by withholding pictures for unreasonable lengths of time after their showing in prior run houses, or which subjects prior run houses to the unfair competition of subsequent run houses by enabling the latter to play simultaneously with or too soon after the former, or which extends beyond the reasonable boundaries of any given competitive area, is an unfair method of competition. Sec. 2. Establishment of Boards. — To give effect to the foregoing principles there shall be established in each film exchange centre, and in every other city of 150,000 population or over when fifty per cent, or more of the exhibitors located therein desire it, a Clearance and Zoning Board, which shall be an instrumentality of this Code. These Boards shall consist, in each instance, of two representatives of distributors, two representatives of first run theaters and four representatives of subsequent run theaters ; provided, that where due to unusual conditions this would deny fair representation to any of the three enumerated economic divisions, the membership of the Board may be varied to insure fairness. Disputes over representation on such Boards, if they cannot be settled in the zone of city affected shall be certified to the National Control Board for determination. Sec. 3. Jurisdiction. — Promptly after their formation, and not later than thirty days after the approval by the President of this Code, the several Clearance and Zoning Boards to be created hereunder shall proceed forthwith to formulate, publish and prescribe for their respective districts, where need exists therefor, schedules of fair clearance and zoning governing the distribution and exhibition of motion pictures in such districts. Such schedules may classify theaters by zones, or make such reasonable classifications as may be suited to local conditions. The Boards may at any time add to or modify such schedules as to particular theaters provided, however, that no change or modi-' hcation affecting generally any such schedule shall be made except upon the petition of at least SO per cent, of the theaters affected. The jurisdiction of the Clearance and Zoning Boards shall also extend to all other matters committed to such boards by the provisions of this Code, as well as to all competitive practices which affect directly or indirectly the effectiveness of any schedule or action of the board. No action of any kind shall be taken by any such board without affording full hearing to ail parties affected. Sec. 4. Majority Control. — Clearance and Zoning Boards shall function by majority vote; when, however, any such board is evenly divided on any question, it shall be the duty of the board to submit the question to an umpire to be chosen by the board. Appeals from the action of Clearance and Zoning Boards or any such umpire may be had to the National Control Board in the manner prescribed in this Code. Sec. 5. Must be Obeyed. — The schedules prescribed and/or decision made by any Clearance and Zoning Board shall be binding on all distributors and exhibitors in the area affected having knowledge thereof. Any knowing violation of or departure from the terms and/or provisions of any schedule of fair clearance and zoning or any decision which any Clearance and Zoning Board or umpire is authorized to make under this article shall be an unfair method of competition and punishable as such. . Sec. 6. Arbitration of Clearance and Zoning Violations. — In addition to the rights and remedies secured by the National Industry Recovery Act any exhibitors and/or distributor aggrieved by a violation of any of the regulations of a Clearance and Zoning Board shall have the right to have his grievance against the offending party determined by arbitration before a Clearance and Zoning Board whose findings and decision shall be binding upon the parties. In the event that the Clearance and Zoning Board should be evenly divided, an umpire shall be chosen, whose decision shall be binding. If the board fail to agree on an umpire, any person affected may apply to the Federal District Court in the district involved for the appointment of such. In any case there shall be a right of appeal to the National Control Board. ARTICLE 42. The violation of any provision of this Code shall constitute an unfair method of competition and be punishable as such, whether expressly so provided in such provision or not.