Harrison's Reports (1933)

204 HARRISON’S REPORTS December 23, 1933 PART 2— GRIEVANCE BOARDS Section One decrees that the Code Authority shall create in each exchange centre a Grievance Board, the composition of which shall be as follows : one national distributor with theatre affiliations, one distributor without theatre affiliations, one affiliated exhibitor, one unaffiliated exhibitor, and one person not connected with the motion picture industry, who shall be appointed by the Code Authority after approval by the Code Administrator, who will represent the Code Administration, and who shall vote only in case the board is deadlocked. No member shall sit in a case wherein he is interested either directly or indirectly. The decisions shall be by (b) majority vote, in writing, and shall be made within fifteen days from the day a protest is filed, and not later than three days after the hearing. (More will be said about the Grievance Boards in the summary of this interpretation. ) Section Seven (a) grants a complainant the right to appeal to the Code Authority not later than five days after the board has rendered its decision, and while the matter is in the hands of the Code Authority the decision of the board shall be (b) stayed. A complainant shall have the right (c) to appear before the Code Authority to present additional evidence. The Code Authority shall render its decision not later than fifteen days after it has heard both parties. Section Eight decrees that no one shall have the right to file a complaint unless he has endorsed the Code within forty-five days after the day the President has signed it (or on or before January ii, 1934), or forty-five days after engaging in the motion picture industry. Section One provides that if the Grievance Board, on complaint of an exhibitor, shall have found an exhibitor to have (a) bought more pictures than he reasonably requires, (b) adopted an unfairly competing operating policy by making unnecessary or too frequent changes of program, (c) has exacted from any distributor, without just cause, an agreement whereby such distributor shall refrain from licensing his pictures to the complaining exhibitor as a condition of buying pictures from him, (d) or committed any other act with the intent of depriving, without just cause, the complaining exhibitor of a sufficient number of films needed for operating his theatre, such Board shall make a (Section Two) prompt determination after a fair and impartial consideration of all the facts presented, summoning the exhibitors directly involved, the distributors who have contracts with the exhibitor complained against, and the exhibitors who have contracts for subsequent runs of pictures contracted for by the two exhibitors involved in the controversy. In such an event, it shall make an award (b) granting such relief as it may deem appropriate. Such Board shall have no power to award damages ( the prerogative of awarding damages belongs to the arbitration board ; otherwise the authority of the two bodies would conflict) but shall make an award, provided the exhibitor in whose favor the award shall be rendered is able and willing fully to carry out and comply with all the terms and conditions determined by such Board, which terms and conditions shall in no event be less favorable to the distributor concerned than those contained in the contracts of the guilty exhibitor, in the distributor’s loss counting whatever rentals such distributor may lose from subsequent-run e.xhibitors as a result of the award. In order to make this part of the Code clearer, let us use an illustration : Suppose Theatre A, a first-run house belonging to a producer circuit, has bought every worthwhile picture and the owner of Theatre B, an independent firstrun house, has complained to the Local Grievance Board that he will be compelled to shut down unless he can get his share of the first-run product, being unable to operate his theatre profitably as a second-run house. Let us assume that there is in that locality Theatre C, an independent second-run house : Suppose Theatre C is willing to follow Theatre A but not Theatre B, being too close to it ; that the distributor receives from Theatre A $300 and from Theatre C $75 : if the Grievance Board should decree that Theatre A must give up, for example, one hundred pictures to Theatre B, then Theatre B must pay $375 for every picture the Grievance Board takes away from Theatre A and is given up by Theatre C on the ground, as said, that Theatre C is unwilling to play second-run such pictures as Theatre B plays ; or, if Theatre C is unwilling to pay $25 for the pictures Theatre B plays, then Theatre B must pay $350 for every picture the Board should take away from Theatre In this manner the distributor is not made to suflFer any loss of revenue. Section Four stipulates that all complaints not specified as coming under the province of the C^e Authority, or of an Arbitration Board, or of a Qearance and Zoning Board in the first instance, must be heard by the Local Grievance Board, and if such Board by a majority vote of its members should decide that a complaint or grievance deserves certification to the Code Authority, it shall make such a certification, and the Code Authority shall consider and determine it. If it should dismiss it, the complainant has the right to appeal to the Code Authority, within the time limit specific in Section Seven. — Five days after the Board had made its decision. Section Five specifies that a Local Grievance Board shall have no right to receive and hear a complaint against any affiliated exhibitor on pictures shown in his theatre if such pictures should be owned by his affiliated company. If you should couple this provision with the provision in Section Four, which specifies that a Grievance Board must hear any and all complaints that are not assigned to the Code Authority, or to the Arbitration Board, or to the Local Clearance and Zoning Board, it becomes clear that a Local Grievance Board must receive, hear, and determine all complaints against an affiliated theatre on all purchased pictures that are distributed by other companies. To make the meaning of these two sections clear, let us use a concrete example: A Local Grievance Board shall have no right to receive, hear, and determine a complaint by an exhibitor against a Loew house on MGM pictures ; but it must receive, hear and determine complaints against such a theatre on pictures distributed by Paramount, First National, Warner Bros., RKO, Universal, United .Artists, or by any other company, big or little, booked by it ; and on the question of overbuying, etc., the fact that it has contracted also for MGM pictures must be taken into consideration. The Board can make it give up pictures but not those produced by its own affiliated company. Accordingly, if the Loew theatre should try to grab every good picture released, a competing exhibitor may file a complaint against it with the Local Grievance Board. That is the way I understand these two provisions ; and that is way they will, I am sure, be interpreted by the Code bodies in practice. If so, then there stands your “Right to Buy” ! {To be continued next u-eck) CAN AN OLD HORSE BE TAUGHT NEW TRICKS? According to Variety the producers are preparing to impose upon the Code Authority the film boards of trade, which are subsidiaries of the Hays organization. It is hardly necessary for me to tell you the history of these boards. Every one of you knows what they are. But lest this editorial be read by some outsider interested in tlie Code proceedings, let me say that the function of the film boards of trade was to “pack” the arbitration boards so that the exhibitor might get little chance to obtain justice. You will understand this clearly when you bear in mind the fact that the secretaries of the film boards of trade were also the secretaries of the arbitration boards. The film boards employed the arbitration boards merely as collection agencies instead of trade tribunals where disputes between buyer and seller could be settled amicably without the expense of court litigation. The rooms where the arbitration boards met were the headquarters of the film boards of trade. It was only after a stiff fight by the Theatre Owners Chamber of Commerce that the meeting place was alternated every month in New York City, using the quarters of Theatre Owners Chamber of Commerce every other month. H.arrison’s Reports serves notice on the producers and distributors that any attempt on their part to use the film boards again will be interpreted by the exhibitors as being an effort to debauch the Clearance and Zoning Boards as well as the Grievance Boards just as they debauched the arbitration boards ; these boards were, as you no doubt remember, declared by the U. S. Supreme Court as having been used by the major producer-distributors illegally. It was decreed that the members of the Hays organization violated the Sherman and the Clayton acts thereby. .4,n attempt to impose the film boards on the Code .Authority will be fought by the exhibitors most bitterly. The producer-distributors must understand that there is a new deal in the motion picture industry and that the old abuses must be abandoned.