The Film Daily (1930)

THE -cBZHk DAILY Friday, August 22 1 West Coast 'Trust* Indictment is Dismiss Decree Paves the Way for Zoning, Protection, Petti John Says (Continued from Page 1) defendant companies with combining together to violate the Sherman AntiTrust Law, was dismissed and in its place a civil action was filed in the form of a bill of equity to restrain the defendants from entering into any conspiracy for the purpose of: 1. Excluding or attempting to exclude unaffiliated exhibitors from contracting in the course of interstate trade and commerce for motion picture films. 2. Excluding or attempting to exclude unaffiliated exhibitors from exhibiting in competition with affiliated exhibitors. 3. Excluding or attempting to exclude, by acting in concert any exhibitors from exhibiting two or more motion picture feature productions on one program or who may desire to donate gifts or premiums to their patrons in connection with any motion picture performance. 4. From enforcing or attempting to enforce clearance schedules providing for unreasonable and discriminatory protection. The filing of the bill of equity and dismissal of criminal charges against the defendants came as the result of several conferences between government counsel and attorneys for the defense, and the resultant consent decree is significant because it protects the public's interests, establishes a fhart for future guidance for the motion picture industry and at the same time does not disturb the mechanics of the present method of marketing. One of the outstanding features of the decree, of marked import to the film industry, is embodied in paragraph seven in a frank statement on the part of counsel for the government and counsel for the various defendants that the adoption of fair and reasonable zoning and protection plans are legal and not in violation of the Sherman Act. Paragraph seven reads as follows: "That nothing in this decree contained shall be constrained to declare a classifica tion of theaters according to method described in the petition as first, second, third or subsequent runs or runs, theaters, or such other reasonable classification as may hereafter from time to time be in use in the motion picture industry or zoning of such theaters and/or clearance of motion picture films for exhibition purposes as between theaters, including clearances and protection according to runs or price of admission, to be illegal as such or in violation of the act of Congress of July 2, 1890, entitled 'an act to protect trade and commerce,' commonly known as 'Sherman AntiTrust Act," or as prohibiting any defendant from selecting its own customers and bargaining with them in accordance with law. or any affiliated exhibitor from exhibiting at any time its own films in theaters owned or controlled by it." The decree also stamps as legal and proper the right of distributors to select their own customers for the release of their pictures and the right to distribute motion pictures owned by them in their affiliated houses without restriction. The indictment in the criminal action charged Harold B. Franklin and the West Coast Theaters and all the distributor defendants with conspiring to deprive unaffiliated exhibitors of their right and opportunity to purchase and show motion pictures in competition with West Coast Theaters. The contention of the defendants' attorneys throughout the history of this case as set out in the defendants' comprehensive brief is summed up as follows: "West Coast was entitled, in its dealings with each individual producer, to obtain the benefit of its large scale buying power. "Each producer, so long as it did not act in combination with others, was entitled to choose its own customers for films and deal with them on its own terms. "Since the question whether the alleged restraint was unreasonable must be decided by all the relevant circumstances, the mere fact, if it be a fact, that any clearance schedule which defendants adopted might have operated unfairly in a few individual cases does not bring them within the Sherman Act. "That the ind'etment did not charge that the public had been harmed by the conduct of the defendants. This is an important circumstance indicating that the alleged re FORTY EIGHTH STREET WEST of BROADWAY <A£u)Q/orlb^ Resident and Transient 450 OUTSIDE ROOMS Each With Bath and Shower Serving Pantry $3 to $6 PER DAY Special Weekly or Monthly Rates The Best Food in New York D. M. PEPPER MANAGING DIRECTOR straint is not unreasonable. An alleged agreement is not illegal merely because it restrains competition. In determining its reasonableness, and consequently its legality, the fact peculiar to the business, the nature and effect of the alleged restraint, the evil it was designed to correct, and the reasons for adopting the particular remedy are all relevant facts. "The Sherman Act does not prohibit all restraints of interstate trade or commerce, but only those which are undue or unreasonable. It does not forbid or restrain the power to advance or further trade or commerce by all normal and usual methods, whether by agreement or otherwise." In addition to Harold B. Franklin, defendants included West Coast Theaters, Fox Film, Paramount, MG-M, United Artists, Universal, RKO, Pathe, First National, Warner Brothers and Tiffany. The Government was represented in court by assistant United States attorneys Amen and Wall from Washington and Samuel W. McNabb, United States District attorney of Los Angeles. All producing and distributing companies named as party defendants were represented by Hughes, Schurman and Dwight of New York, of which firm Chief Justice Charles Evans Hughes was until recently senior member; Pillsbury, Madison and Sutro, of San Francisco, and by Alfred Wright, Edwin Loet, and others of Los Angeles. The case was scheduled to go to trial last Monday morning. A motion was then made bv Government counsel that a continuance be grant ed until Thursday morning,! permitting the opportunity of) ing at the 'consent decree'. In commenting on the' d\ from the viewpoint of the pictij dustry, C. C. Pettijohn, counsel for the motion pictur ducers and distributors of An Inc., who flew from New Yd attend the conference which bn about the 'consent decree,' sal "Counsel for the various defenda pleased to have reached an under: with the Government and satisfied, of | with the terms of the decree, the the subject matter was splendidly han counsel on both sides. The results 'consent decree' will prove helpful anl ficial to all. It protects the industry as the public and provides a definitl for the industry in its future operatil recognizes the legality and proprif reasonable zoning of theaters and j of protection to various theaters in hibition of motion pictures. "Personally, I am happy because cree settles the question of the right I industry or various groups within i dustry to collectively work out fa] reasonable zoning and protection scf in the various exchange territories, work has already been completed in of the zones and this decree will stil the consummation of the work in ttf ions exchange centers where meetinj scheduled or are now being held." Publicity Firm Makes Ch West Coast Bureau, THE FILM Hollywood — International cists, Ltd., under the manageme Ray Coffin, has been dissolved corporation and Coffin will hen conduct the business under his name at the same address. READY SOON Rin-Tin-Tin 12 Great Chapters A Stellar Cast His First Serial All Talking "THE LONE_DEFENDER" MASCOT PICTURES CORPORATION NAT LEVINE, President 1650 BROADWAY Cable Address New York City LEVPIC, N. Y.