We use Optical Character Recognition (OCR) during our scanning and processing workflow to make the content of each page searchable. You can view the automatically generated text below as well as copy and paste individual pieces of text to quote in your own work.
Text recognition is never 100% accurate. Many parts of the scanned page may not be reflected in the OCR text output, including: images, page layout, certain fonts or handwriting.
September 27, 19 41 MOTION PICTURE HERALD 23
HORSE-TRADING DECIDES CLEARANCE NEW YORK CASE ARBITRATOR RULES
Third Appeal Board Decision Upholds Westway Dismissal, Intervention Rules
The Appeal Board of the motion picture arbitration tribunals on Monday, in its third decision, upheld the ruling of Sefton Darr, Washington arbitrator, who dismissed the clearance complaint of the Westway theatre, Baltimore, on June 9th. Mr. Darr's decision in the third Washington case had upheld the right of distributors to protect with clearance the older, better established theatres which produce the largest revenue within a given competitive area.
The three members of the Appeal Board — Van Vechten Veeder, Albert W. Putnam and George W. Alger — in their seven-page opinion devoted four pages to quoting from the findings of fact on which Mr. Darr ruled in favor of the Edgewood, Durkee circuit theatre named in the Westway complaint. The full text of Mr. Darr's decision was printed on page 21 of Motion Picture Herald for June 14th.
"These findings are clear, comprehensive and, being amply supported by evidence, conclusive", the board ruled. They affirmed the original award in full and assessed all costs against Lee W. Homand, operator of the Westway.
The most important precedent seen in the third decision of the "supreme court" of motion picture arbitration was a ruling that intervening theatres must file formal notice of their interest in a complaint before hearings start. Rule I of the Rules of Arbitration provides that any exhibitor or distributor named in a complaint or whose interests are likely to be affected by it may "at any time prior to the commencing of the first hearing" intervene by filing with the clerk of the tribunal a declaration of interest, a submission to the rules of arbitration and a $10 filing fee.
Specifically, the board upheld Mr. Darr's action in excluding from the Westway case the Alpha and Irvington, neighborhood theatres in the same area as the Westway and Edgewood, on the grounds that they had not followed the prescribed method of intervening. An attorney for the theatres appeared at the first Westway hearings, saying the theatres "asked me to intervene", according to the Appeal Board. Mr. Darr granted permission to observe the proceedings, after the attorney said, "Our present attitude is one of listening. Just what active participation we may want to make later I don't know; it will depend on developments".
After the complainant had rested his case and defendant witnesses were called, the counsel for the Alpha and Irvington asked permission to intervene. The arbitrator called attention to Rule I and its provisions but indicated it might be waived on agreement of all parties. The complainant objected and the arbitrator thereupon denied the application to intervene.
"We approve the Arbitrator's disposition of this issue," the Appeal Board wrote, "together with his proper appreciation of the necessary exclusion from his award of any consideration of the clearance between the Alpha and Irvington and the Westway."
The eight points upon which Mr. Darr based his decision, and for which evidence was approved by the Appeal Board, held that the Edgewood was superior to the Westway and entitled to the contested 14 days' clearance by reason of its historical development, higher price scale, size, and superior management and policy; absence of premiums, or other attendance stimulants; larger revenue for distributors; superior location within the competitive area; absence of promises of product by distributors to the Westway before erection; and the need of protection for the larger investment represented by the Edgewood.
Motor Executive, Granting 14Day Reduction to Exhibitor, Stresses "Free Opportunity" and Cites "American Way"
"Horse trading" is the basis for clearance rather than scientific appraisal by distributors of the factors of historical development, potential revenue, price scales, management policy, location and patronage of competitive theatres, according to Paul Fitzpatrick, director of sales development of the motors holding division of General Motors Corporation, who arbitrated New York's 13th complaint.
Mr. Fitzpatrick, the first non-lawyer to write a film arbitration decision, ruled in favor of the clearance complaint of Selig A. Posner, operator of the Playhouse in Raritan, N. J. Scoring the method by which MGM, Warners, 20th Century-Fox, and Paramount granted the Cort theatre, at Somerville, 21 days' clearance over the Raritan house, he cut the margin to seven days. He characterized the present 21 -day clearance as unreasonable, having been "plucked out of a hat and imposed upon Raritan."
The motor executive ruled that protection between theatres, to meet the spirit of the consent decree, must grant a new enterprise the right to "be born, to live, and to prosper, even though it may entail some loss to competitors who hitherto have been free of its competition.'
Threat to "American System"
"A contrary view," he wrote, "would freeze development, limit future opportunity, and strike at the very roots of what we are proud to call the 'American System.' "
The award reduced the availability period for the Raritan, opened in April, from 21 to 7 days as "being adequate and reasonable protection for the Cort theatre and necessary and reasonable for the maintenance of the Raritan Playhouse" which the arbitrartor held to be "a desirable addition to the recreational facilities of the community. One sixth of the costs was assessed against each of the parties.
The arbitrator rejected arguments by the distributors and intervenor that the complainant in signing contracts with 21 day clearance clauses had signified his acceptance of the margin. It was Mr. Posner's right to sign the best contract he could get under the circumstances with the intention of resorting to arbitration Mr. Fitzpatrick said.
"By consenting to the decree," he wrote, "the distributors are bound to recognize that their clearance decisions are, under the decree, always open to review through arbitration proceedings, whether those decisions were made yesterday, a year ago, or at the very inception of the distributor's business.
Describing the method by which the Raritan clearance was determined, according to testimony, Mr. Fitzpatrick said :
"A new theatre was projected. An old theatre objected. 'Horse-trading' ensued. The old theatre said 60 days. Three distributors said 30. One said 28. The promoter of the new theatre protested even more violently. One distributor finally said 21. Within a day or two, another and another distributor said 21 ! A week after the new theatre opened — with 21
day contracts from three major distributors — the fourth says 21 !
He criticized the fact that the distributors' agents failed to show that they had visited the theatres or studied the area involved during the discussions. Distributor testimony that clearance was a saleable factor was self-contradictory the arbitrator wrote, inasmuch as while it was "for sale" it was not for sale to a new competitive theatre. The intervening Cort theatre, he found, had paid nothing and received nothing for favorable clearance, insofar as it was a separable item of the contract.
Historically, after comparison of clearance between the Cort and theatres in Plainficld. Dunellen, Manville, Raritan and nearby towns he found that the 21 day margin over the Raritan was exceptionally high. In respect to admission prices, location, transportation and patronage habits lie noted that there was no schematic gradation of clearance by distributors.
Comparing seating capacity lie found that the Raritan had 416 seats, or 34 per cent of the Cort's 1211. Rentals from the smaller house, to all distributors, averaged $206.78 a week com
(Continued on following page)