Motion Picture Herald (Mar-Apr 1947)

"Assignment of Errors" agrees with the appended list except that the company has more detailed objections to partial divestiture and partnership arrangements and is the only company to protest the order for single sales and competitive bidding. Paramount, too, is the only company not protesting the court's order prohibiting the making or continuance of pooling agreements. TEXT OF APPEAL ERRORS Following is the text of the 39 points listed by Tiuentieth Century-Fox, Warners, RKO and Loew's in their Assignment of Errors on which the appeal filed Wednesday is based: hanger Would Jail Violators, Berge Says No Washington Bureau An argument over the pros and cons of jailing industry violators of the Sherman anti-trust law developed at a recent hearing in Washington before the Civil Service Committee between Chairman William Langer and Wendell Berge, recently resigned as head of the Department of Justice anti-trust division. How many of the guilty bigwigs caught violating trust laws have been put in jail, asked Mr. Langer. "None." replied Mr. Berge. "None in the last generation, I guess." Mr. Langer, who plans a bill calling for theatre divorcement, said the Attorney General's office had blocked passage of such a bill since 1941. Now, he indicated, he was in favor of jailing industry leaders guilty of violating anti-trust laws. But Mr. Berge was not in favor of such a remedy. Said he : "I think you have got to go further than just punishment. I think you have got in this movie situation, and many other situations, a fundamental wrong in the structure of the industry that has to be remedied. . . . We have got this suit pending in New York where we are trying to tackle the problem on the whole national scale and get divestiture of the motion pictures houses from the control of the big fellows." Here Mr. Langer interjected the idea that jail sentences might be effective. Mr. Berge answered by stating that while he did not like to be in the position of defending the motion picture industry he did not know "any rational way" of assessing "moral guilt on a few fellows and put them in jail to atone for the economic wrong of the whole industry." Dues of National Allied To Rise by One-Third Stanley D. Kane, executive director of North Central Allied, reporting in Minneapolis this week on his attendance at the Allied States board meeting and the election in Washington last month, disclosed that the national organization's board approved, in principle, an increase of onethird in dues to be paid annually by regional units. ASSIGNMENTS OF ERRORS AND PRAYERS FOR REVERSAL Loew's Incorporated, Radio-Keith-Orpheum Corporation, RKO Radio Pictures, Inc., KeithAlbee-Orpheum Corporation, RKO Proctor Corporation, RKO Midwest Corporation, Twentieth Century-Fox Film Corporation, National Theatres Corporation, Warner Bros. Pictures, Inc., Warner Bros. Pictures Distributing Corporation (sued herein as Vitagraph, Inc.), and Warner Bros. Circuit Management Corporation, defendants in the above entitled cause, in connection with their several petitions for appeals to the Supreme Court of the United States, hereby severally assign error to the Findings of Fact, Conclusions of Law, Judgment, Final Order and Decree of the United States District Court for the Southern District of New York entered on December 31, 1946, and to the Order of said District Court entered on February 11, 1947, and say that there is manifest error in the entry of such Judgment, Final Order and Decree, and in the proceedings in this cause prior to, concurrent with, and subsequent to the entry thereof, committed by the said District Court to the prejudice of each of the said defendants severally, in the following several particulars, to wit: "I The Court erred in Section II, Paragraph 1 of the Decree in enjoining the distributor-defendants, and each of them, as follows : "1. From granting any license in which minimum prices for admission to a theatre are fixed by the parties, either in writing or through a committee, or through arbitration, or upon the happening of any event or in any manner or by any means." 2 The Court erred in failing to conclude • that a distributor-defendant has a lawful right under the Copyright Law and under the common law to agree with its licensee that the latter shall charge a price not less than that specified in the license agreement during the exhibition of the feature licensed, and erred in failing to permit a distributor-defendant to make such provisions in its license agreements with each licensee with whom it does business. 3 The Court erred in making its Finding • of Fact No. 64 reading as follows : "64. The defendants' licenses are in effect price-fixing arrangements among all of the distributer-defendants, as well as between such defendants individually and their various exhibitors. Thus there was a general arrangement of fixing prices in which both the distributors and exhibitors were involved. The licenses required existing admission price schedules to be maintained under severe penalties for infraction. In the case of such exceptional features as "Gone With the Wind," "For Whom the Bell Tolls," 'Wilson," and "Song of Bernadette," licensed for exhibition prior to general release and as to which the distributors were not satisfied with current prices, they would refuse to grant licenses unless the prices were raised." 4 The Court erred in making its Finding • of Fact No. 65 reading as follows : "65. The defendants granting film licenses have agreed with their licensees to a system which determines minimum admission prices in all theatres where feature motion pictures licensed by them are exhibited. In this way are controlled the prices to be charged for most of the feature motion pictures exhibited either by the defendants or by independents within the United States." 5 The Court erred in its Finding of Fact • No. 66 in finding that these defendants or any of them have a definite interest in keeping up prices in any given territory in which they own theatres, and in finding that they or any of them safeguarded this interest by fixing minimum admission prices in their respective licenses when distributing films to exhibitors in those areas. 6 The Court erred in its Finding of Fact • No. 66 in finding that there was a system which presupposed a fixing of prices by all parties concerned in all competitive areas. 7 The Court erred in its Finding of Fact • No. 67 in finding that the agreements therein mentioned showed the intent of the defendants, who were parties thereto, to maintain admission prices at artificial levels. 8 The Court erred in its Finding of Fact • No. 69 in finding that RKO, Loew's, Warner, Paramount and Fox, in granting and accepting licenses with minimum admission prices specified therein, have among themselves engaged in a national system to fix prices, and in finding that Columbia, Universal, and United Artists have participated in that system. 9 The Court erred in making its Finding • of Fact No. 70 reading as follows : . "70. The distributor-defendants have acquiesced in the establishment of a price-fixing system and have conspired with one another to maintain prices." "| f\ The Court erred in making its Finding JL\/» of Fact No. 71 reading as follows: "71. In agreeing to maintain a stipulated minimum admission price, each exhibitor thereby consents' to the minimum price level at which it will compete against other licensees of the same distributor whether they exhibit on the same run or not. The total effect is that through the separate contracts between the distributor and its licensees a price structure is erected which regulates the licensees' ability to compete against one another in admission prices. Each licensee knows from the general uniformity of admission price practices that other licensees having theatres suitable for exhibition of a distributor's feature in the particular competitive area will also be restricted as to maintenance of minimum admission prices, and this acquiescence of the exhibitors in the distributor's control of price competition renders the whole a conspiracy between each distributor and its licensees. An effective system of price control in which the distributor and its licensees knowingly take part by entering into price-restricting contracts is thereby erected." nThe Court erred in its Finding of Fact • No. 72 in finding that the differentials in admission prices appearing in licenses of a particular feature in theatres exhibiting on different runs in the same competitive area were calculated or intended by the distributor-defendants, or any of them, to give prior run exhibitors as near a monopoly of the patronage as possible. ~i *J The Court erred in its Conclusion of J-^« Law No. 7 (a) in concluding that the defendants therein named, or any of them, have violated the Act of Congress approved Julv 2, 1890 (26 Stat. 209; 15 U.S.C.), as amended; (Continued on following page) MOTION PICTURE HERALD, MARCH I, 1947 13