Harrison's Reports (1950)

Entered as second-class matter January i, 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 M v I on w v Publisher Canada 16.50 INeW York 20> N Y' p. S. HARRISON, Editor Mexico, Cuba, Spain 16.50 A Motion Picture Reviewing Service Great Britain 17.50 Devoted Chiefly to the Interests of the Exhibitors Established July 1 1919 Australia, New Zealand, ' India, Europe Asia .... 17.50 Ug Editorjal Poiicy. No Problem 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. XXXII SATURDAY, DECEMBER 9, 1950 No. 49 NSS ANTI-TRUST SUIT UNPOPULAR WITH INDEPENDENT EXHIBITORS Independent exhibitors throughout the country have received recently a circular from a group calling itself the National Independent Motion Picture Exhibitors Protective Committee, which is soliciting their participation in an anti' trust suit brought against National Screen Service in the U.S. District Court for Eastern Pennsylvania. This "Protective Committee" was formed several weeks ago by a group of Eastern exhibitors, following the filing of the anti-trust suit by Max M. Korr and Leon W. Koer, who operate six theatres in and around Allentown, Pa. The suit, which charges NSS wih monopolistic practices and alleges that agreements between the company and twelve distributors had the effect of fixing a uniform and unreasonably high price to exhibitors for trailers and other advertising accessories, is technically classified as a "class action," which means that other independent exhibitors with addi' tional claims may join the suit as plaintiffs as the case progresses. The circular letter, which urged the exhibitors to join in the action in order to recover damages for themselves, was accompanied by an authorization form which, if signed by the exhibitor, would empower the Committee to institute suit against NSS in the exhibitor's behalf, or intervene for him in any pending litigation or subsequent action. The circular pointed out that the Committee was not soliciting funds, and that the cost of the action would be borne by the Committee itself with no expense assessed against the exhibitor, except that the attorneys handling the case are to receive 40% of the damages recovered, plus an additional fee to be fixed by the court and paid by NSS in the event the exhibitors win the case. Lest this circular influence any exhibitor into thinking that he has nothing to lose and everything to gain by join' ing this suit, HARRISON'S REPORTS wishes to call attention to the fact that exhibitor organizations throughout the country are not in sympathy with the exhibitors who have started this action against NSS, and that they have issued warnings to their members against joining the suit lest they find themselves, not only inconvenienced by required attendance at the trial, but also liable for court costs in the event that NSS wins the case and asks the court for recovery of the expenses entailed in defending the suit. Pete J. Wood, secretary of the Independent Theatre Owners of Ohio, had this to say in part in an organizational bulletin issued this week: "The measure of the damages which it is hoped to re* cover is the difference between the prices paid by the exhibitors for trailers and accessories purchased from National Screen and the reasonable prices which would have prevailed but for the monopoly. "In the event that the case is contested by National Screen to the bitter end (and this, I am told, it will do), each exhibitor joining therein would have to prove his own individual damages. That he could do only by appearing as a witness at the trial and subjecting himself to crossexamination. It is not represented that the Committee will defray the expenses of going to Philadelphia for that purpose, so that intervening exhibitors may be subjected to considerable expense. "Again, it is apparent that National Screen in defending the case will incur heavy expense, much of which will be taxable as costs in case that company wins the case. Such costs will be taxed against the plaintiffs and will have to be paid by them and they can have no protection against such costs unless the 'Protective Committee' is willing to indemnify them and post an adequate indemnity bond. "Aside from being called as a witness and risking liability for costs, it might be said that an exhibitor has nothing to lose and something to gain by intervening in the suit. However, they are asked to put their cases wholly into the hands of these volunteer attorneys with full authority to make any compromise or settlement they see fit. If 3,000 exhibitors should sign the authorizations, and National Screen should cave in and settle for $1,000,000, the attorneys would be assured of a fee of $400,000 and the remaining $600,000 would be distributed among the exhibitors, making $200.00 each. "Thus whenever an offer of compromise reaches a point which will insure a handsome attorneys' fee, there will be a temptation to settle however much the exhibitor's claim may be curtailed. Whatever the outcome, whether there is a recovery following a trial, a compromise or a dismissal of the suits, the rights of the intervening exhibitors will be adjudicated and they cannot later file suits for the additional amounts which they may feel are due them. "Based on a conference with National Allied's General Counsel, A. F. Myers, we cannot recommend that our members authorize this Philadelphia law firm to implicate them in this litigation. Undoubtedly the action will be assailed by preliminary motions testing whether it is legally and ethically sound, and pending the determination of those issues our members can afford to wait and observe. If the case should survive these early tests, it will then be time for exhibitors to decide whether to join in the present proceedings or to join in other actions over which they will have some measure of control. It is not generally regarded as sound policy to commit one's affairs to the uncontrolled discretion of strangers." The Associated Theatre Owners of Indiana, which is headed by Trueman T. Rembusch, who is also president of National Allied, had these words of caution for its members in an organization bulletin dated November 30: ". . . It is not our practice to urge any member one way or another in a matter of this kind but we do feel that we should not encourage any mass action of such a nature from our ATOI members. "The reason for our feeling is that we in Indiana have always been able to take our problems and complaints to NSS officials and get their serious consideration. We cans not forget that men like George Dembow and William Brenner traveled to Indiapanolis and sat around the table and discussed complaints with an ATOI exhibitors' committee. Secondly, we believe that we were met at least half way on those things that most needed attention and that there has been a continuing effort to compromise on the problems that have been brought to NSS since that time. "And last there is the National Screen Service survey that is just being initiated by a committee appointed by National Allied . After the facts are accumulated tin's Allied committee will seek an interview with NSS to try and work (Continued on bac\ page)