The film daily year book of motion pictures (1948)

The Decision: Handed down Dec. 31, 1946. (Complete text on following pages.) The Court: Judge Augustus Noble Hand, Chief; Judge Henry \V. Goddard and Judge John Bright. Opposing Counsel: For the Government— Robert L. Wright, chief trial attorney; Phillip Marcus, Horace Morrison, Harold Lasser, John F. Neisley, and Com. Curtis Shears. For the Defendants— John W. Davis, former Justice Joseph M. Proskauer, Whitney North Seymour, John Caskey, J. J. Irving, George C. Leisure, Louis Froehlich and Edward C. Raftery. Appeal: Following filing of briefs by all parties, oral argument on appeals by both the Government and the defendants was heard Feb. 9-11, 1948 before the Supreme Court comprising Chief Justice Fred M. Vinson, and Associate Judges Hugo L. Black, Stanley Forman Reed, Felix Frankfurter, William O. Douglas, Frank Murphy, Wiley B. Rutledge, Jr., and Harold H. Burton. Associate Justice Robert H. Jackson did not sit on the hearing. HIGHLIGHTS OF THE COURT'S DECREE (For full text of the Decree, see page 975) Section One Dismisses the complaint against Screen Gems, Inc. and the former Universal Pictures Co., Inc., which were merged during the action into Universal Corp. (Note: Name of Universal Corp. was changed to Universal Pictures Co., Inc., at the time of the merger.) Dismisses complaint against all defendants based upon their acts as producers. Section Two I Forbids fixing minimum admission prices by distributor defendants. II Forbids a clearance svstem by distributor defendants. Ill Forbids clearance by distributor defendants between theaters not in substantial competition. IV Forbids distributor defendants from granting unreasonable clearance, and places the burden of legal proof of reasonable clearance on the distributors. V Forbids continuance by distributor defendants of existing franchise agreements and from making any franchises in the future. Defines a franchise as a licensing agreement or series of agreements in effect for more than one motion picture season. VI Forbids existing formula deals or master agreements by distributor defendants. VII Forbids the licensing by distributor defendants of a picture when it is conditioned upon the licensing of another picture. Twenty per cent cancellation is allowable for pictures licensed before tradeshowing. Cancellation must be exercised within 10 days after there has been an opportunity to see the picture. VIII Establishes selling practices for distributor defendants. IX Forbids distributor defendants from arbitrarily refusing an exhibitor's demand for a license or run. Section Three I Forbids exhibitor defendants from continuing franchise agreements, formula deals and master agreements. II Forbids exhibitor defendants from continuing pools. Ill Forbids exhibitor defendants from making or continuing to perform agreements that the parties may not acquire other houses in a competitive area where a pool exists without first offering them for pool inclusion. IV Forbids exhibitor defendants from making or continuing leases of houses under which it leases any of its theaters to another defendant or to an indie operating a theater in the same competitive area in return for a split of the profits. V Forbids exhibitor defendants from jointly owning a theater with an indie unless the interest is 95 per cent or not greater than five per cent. Existing relationships which violate this provision 974