The Exhibitor (1959)

10 MOTION PICTURE EXHIBITOR July 22, 1959 Decade Of Legal Wrangling Nears End Embassy , Goldwyn Suits Involving $10 Million Headed For Showdown In San Francisco Courts BY MARK GIBBONS SAN FRANCISCO — Two of the biggest and most protracted anti-trust suits in the movie industry — both were filed in Federal Court here in 1950— appear to be headed for a showdown next Monday (July 27). They are the Samuel Goldwyn suit against National Theatres and most of its subsidi¬ aries and the Embassy Theatre litigation involving all of the major studios and dis¬ tributors and Fox West Coast Theatres, plus the principal northern California exhibitor chains. Goldwyn, who seeks $2,000,000 in triple damages allowed under Federal monopoly statutes, charges seven of his films made prior to 1950 were “frozen out” by a con¬ spiracy alleged against the National Theatres affiliates. Dan McLean and Lee Dibble, op¬ erators of the downtown 1,400-seat Embassy, are attempting to throw an $8,000,000 book at a vast assortment of defendants by charg¬ ing they were denied first and second-runs as far back as 1938. Both trials, after years of legal jockeying, finally got into Judge Edward P. Murphy’s court last year. Goldwyn’s case was tried first, consumed 43 trial days, and filled 6,000 pages of testimony transcript. Without waiting to digest the evidence and hear closing oral arguments, Judge Murphy next tackled the Embassy case, which lasted 65 trial days and amassed 9,000 pages of testimony. Then last December, a few days before the closing arguments were to be heard in both cases, Judge Murphy died suddenly. He had heard both cases to their virtual conclusion without a jury. Early this year Robert D. Raven, counsel for Embassy, moved for a retrial and this time with a jury. The battery of defense attornies vigorously opposed Raven’s motion, arguing that Raven had waived a jury in the first trial. Raven replied he had done so because he felt Judge Murphy was “pe¬ culiarly competent” to hear the case after having just gone through the Goldwyn suit. The court ruled in Raven’s favor and granted his clients a jury trial for the second goround. Next, Joseph L. Alioto, counsel for GoldwYr', came into court with the same request made by Raven but was denied his petition on the grounds he could not give the same reasons for demanding a jury trial as had Raven. Then Alioto came up with a sug¬ gestion to have the Goldwyn case submitted on the record transcribed in the trial heard by Judge Murphy. This also was opposed by the defense, which later changed its collective minds and agreed to Alioto's prop¬ osition. So next Monday (July 27) Chief District Judge Louis Goodman will assign a judge to read the transcript of the Goldwyn case heard by Judge Murphy last year. Meanwhile, on the same day, Judge Good¬ man will either appoint a judge to start a jury retrial in the Embassy case or name a judge to start reading the transcript of the first trial on the same basis of the Goldwyn case. The latter all depends on the attitude Allied Attacks "Royalties"; Warns Of Exhib Regulation WASHINGTON, D.C. — Allied States Association of Motion Picture Exhibitors last week issued a bulletin attacking Para¬ mount for continuing its “royalty system” in licenses for “The Ten Commandments.” The bulletin also criticizes Samuel Gold¬ wyn for his announced release plans on “Porgy and Bess” and for his continuing to preach “fewer pictures and fewer the¬ atres.” In connection with the Supreme Court’s recent censorship decisions, the bulletin warns that “there is a dangerous proba¬ bility that the states and cities will turn from censoring of films to regulating the¬ atres.” Theatres Included In Wage-Hour Bill WASHINGTON — Theatres and enterprises doing an annual gross of not less than $75,000 will come under the amendments of the Senate Labor Subcommittee’s approved Wage-Hour Act, it was learned last fortnight. During the first year of the amended law’s operation the minimum wage would be $1 an hour with overtime beginning after 46 hours a week; in the second year, the hourly minimum would be $1.10 and overtime be¬ ginning after 44 hours; in the third year, $1.20 an hour, and overtime after 42 hours; and in the fourth year, $1.25 an hour and time and one half pay after 40 hours. Any categories of employment in the mo¬ tion picture industry which already are cov¬ ered by the law would, by another amend¬ ment, have the minimum hourly rate fixed at $1.15 an hour in the first year with over¬ time after 40 hours; and $1.25 an hour, plus the overtime provision after the first year. A. Julian Brylawski, chairman, TOA Legis¬ lative Committee, said he would have to examine the complicated report before com¬ menting on its effect. He indicated, however, that he doubted that the bill would reach the floor of either House for action this year. Dietrich Sues Hughes HOLLYWOOD — Noah Dietrich, Former former Hughes Tool Company executive and long-time business associate of Howard Hughes, last fortnight filed an amended com¬ plaint in Superior Court seeking $2,111,964 on grounds that agreements entered into by Hughes on Sept. 15, 1956, have not been kept. He also asks that the “corporate veil” be lifted from the Hughes Tool Company. of opposing counsel next Monday. Embassy Attorney Raven in the past consistently and flatly has stated his client doesn’t care wheth¬ er the litigation is settled by submitting it on the record or starting all over again with a judge and jury. Opinion seems to differ among the lawyers representing the defense and even Plaintiff Attorney Raven might change his mind come next Monday. But win, lose or draw one factor remains certain. These two marathon suits are headed for a final showdown. Judge Goodman made that point emphatic when he set next Mon¬ day as the deadline for the beginning of the end of two suits involving $10,000,000, which have been dragged out for almost a decade. Cinerama Seeks Okay On Loan Agreements NEW YORK — According to a proxy statement issued last fortnight in connection with a special meeting of Cinerama, Inc., stockholders, scheduled for Aug. 6 in lieu of the annual meeting, approval will be sought for creation of liens in favor of the Pruden¬ tial Insurance Company on substantially all assets now owned or hereafter acquired by Cinerama. Cinerama’s management at that time also will seek approval of a proposal to transfer all of Cinerama’s rights in Cinerama camera, projection and other equipment, and patents and equipment related to a new single lens photographic system to two new whollyowned subsidiaries. Liens in favor of Prudential on the Cine¬ rama assets would be created, and the au¬ thorized capital of Cinerama would be in¬ creased from 3,500,000 shares of one cent per common stock, to 6,000,000 common shares. The moves are in connection with the April 1 loan agreement under which Pru¬ dential would provide up to $9,000,000 in funds, while Robin International, Inc., will invest up to $3,000,000 in the production of four Cinerama pictures. The Prudential loan would be evidenced by three series of secured six per cent prom¬ issory notes. All of the stock of the proposed subsid¬ iaries of Cinerama would be pledged to Prudential as security, along with the liens, and Cinerama’s rights in the four proposed features. Cinerama further would assign to Prudential all patents owned by its Vitarama Corporation subsidiary and would pledge all the Vitarama stock with Prudential. Prudential has indicated it will consider providing up to $3,000,000 additional financing for the acquisition and equipping of Cine¬ rama theatres. Approval of two-thirds of the Cinerama stock is necessary to approve transfer to subsidiaries of assets, and the creation of liens on assets. Objecting stockholders are entitled to receive the appraised value of their shares. Stockholders will further be asked to okay the granting of options to Wentworth D. Fling, executive vice-president, 35,000 shares; L. Byron Cherry, executive vice-president, 50,000 shares; and L. Grant Leenhouts, vicepresident, 15,000 shares. Officers and directors last year received $102,505 in remuneration. Nominees for the Cinerama board are Hazard E. Reeves, president; Fling, Cherry, J. H. Hartley. Nicholas Reisini, Bernard Goodwin, and Marshall A. Jacobs. ACE-MPAA Meeting Soon NEW YORK — Following a meeting of the ACE executive committee last week, it was learned that the next meeting of ACE-MPAA would be held within the next four to six weeks, with the exact date to be determined by the availability of members of the ACE committee and those of the Exhibitor Rela¬ tions Committee of the MPAA. MPAA President Eric Johnston also met with Si Fabian, ACE executive committee chairman, and Sol A. Schwartz, chairman of the ACE distributor relations committee.