Harrison's Reports (1948)

IN TWO SECTIONS— SECTION ONE Entered as second-class matter January 4, 1921, at the post office at New York, New York, under the act of March 3, 1879. Harrison's Reports Yearly Subscription Rates: 1270 AVENUE OF THE AMERICAS Published Weekly by United States }15.00 (Formerly Sixth Avenue) Harrison's Reports, Inc.. U. S. Insular Possessions. 16.50 v I, on M v Publisher Canada 16.50 Wew York zo> IN. Y. p g HARRISON, Editor Mexico, Cuba, Spain 16.50 A Motion Picture Reviewing Service Great Britain ............ 15.75 Devoted Chiefly to the Interests of the Exhibitors Established July 1, 1919 Australia, New Zealand, India. Europe, Asia .... 17.60 Ug Editorial Poncy. No probiem Too Big for Its Editorial Circle 7-4622 35c a Copy Columns, if It is to Benefit the Exhibitor. A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XXX SATURDAY, MAY 8, 1948 No. 19 THE SUPREME COURT SPEAKS by Abram F. Myers (Editor's Note: As most of you no doubt \now by this time, the judicial axe of the highest court in the land struc\ a devastating blow at monopoly in the motion picture industry on Monday of this wee\, when the Supreme Court handed down decisions on four industry anti-trust suits, namely, the Paramount, Schine, Griffith, and Goldman cases. the attitude of the Court in each of these cases is so unmistakably clear that there can be no room for doubt in any one's mind that the Government has won a sweeping victory in its long fight to restore free enterprise and open competition amongst all branches of the motion picture industry. Of the truly independent leaders that have staunchly carried on the fight against the motion picture trust, none has wor\ed more diligently and tirelessly than Mr. Abram F. Myers, the distinguished General Counsel and Chairman of the Board of Allied States Association of Motion Picture Exhibitors. Ever since he became head of Allied in 1 929, when the organization was formed, Mr. Myers has led and guided the independent exhibitors' effort to put an end to the discriminatory practices of the major companies and their affiliated circuits, and it was largely through his efforts that the Government was induced to start the anti-trust suit against the Big Eight in 1938. As a result of the decision just handed down in this case, as well as the others, the independent exhibitors can now loo\ forward to operating their theatres in an open and untrammeled mar\et, free from producerdistributor control. The Government attorneys who handled the case, particularly Robert L. Wright, deserve great credit for a job well done, but in giving credit let us not forget the marvelous wor\ done by Mr. Myers. Because a court decision frequently leaves uncertainty and doubt in the minds of those whose interests are affected by the ruling, particularly because of conflicting opinions as to what is meant by the Court's legal language, Harrison's Reports is presenting to its readers the complete text of Mr. Myers' analysis of the decision in the belief that his opinions will help them to better understand its meaning and intent.) Monday, May 3, 1948, was a fateful day in the long and somewhat checkered career of the motion picture industry. For on that day the United States Supreme Court rendered decisions in four cases which are of vital importance to the industry and all who are engaged in it. These long-awaited decisions unfortunately do not spell the end of the industry's legal difficulties because they merely set a course for the lower courts to follow in subsequent proceedings looking to the framing and entry of appropriate final decrees. It was hoped that with the complete records before it, the Supreme Court would prescribe in detail the form of final decrees to be entered in the Paramount, Schine and Griffith Cases. But such decrees must be based upon proper findings and it is customary for the trial courts, not the Supreme Court, to make such findings. And since the Supreme Court determined that the findings in the Paramount and Schine Cases were in certain particulars erroneous, incomplete and vague, it followed the tradi' tional procedure of returning the cases to the lower courts for the making of proper findings and the formulation and entry of effective decrees based thereon. In the Griffith case the District Court had dismissed the Government's complaint and its findings were appropriate to such a judgment. But the Supreme Court held that those findings were clearly erroneous and remanded the case for the making of new and correct findings and "the fashioning of a decree which will undo as near as may be the wrongs that were done and prevent their recurrence in the future." The opinions plainly indicate that the Supreme Court felt that the Paramount, Schine and Griffith cases revealed flagrant violations of the Sherman Anti'Trust Act and that its main concern was that legally proper findings be made by the lower courts upon which to enter drastic decrees of divestiture. The Supreme Court upheld virtually all of the lower court's findings of unlawful conduct in the Paramount and Schine cases and in the Griffith case it reversed District Judge Vaught on virtually every point. In the Goldman case the court simply denied the major companies' petition for a review of the money judgment and the injunctions which had been entered against them. There was no opinion but by its action it made final one of the most drastic judgments ever entered in a private action under the antitrust laws and cleared the way for all independent exhibitors who have suffered from the depredations of the motion picture trust to prove and collect treble damages. The Problem of Divestiture The Government contended and many of us hoped the Court would rule that the vertical integration of the production, distribution and exhibition of motion pictures is in itself illegal. Such a ruling would have made unnecessary the further proceedings and would have cleared the way for the prompt entry of a decree of total divestiture. But the majority of the Court was unwilling to make that ruling. Consequently, it was necessary to correct the findings and theories of the lower courts in order to lay a proper foundation for effective relief. The District Court in the Paramount case, it will be recalled, assumed that a finding of monopoly was essential to total divestiture, and it made no such finding. It ordered the joint ownership of theatres by the defendants be terminated and that their theatre pools be dissolved. These provisions (Continued on last page)