Motion Picture Herald (Mar-Apr 1947)

CITE 39 ERRORS BY COURT (Continued from preceding page) herein referred to as the Sherman Act, as stated in said conclusion of law, by : "Acquiescing in the establishment of a price fixing system by conspiring with one another to maintain theatre admission prices." | *2 The Court erred in its Conclusions of ±%J» Law No. 8(a) and No. 8(b) in concluding that the defendants therein .named, or any of them, have violated the Sherman Act, as stated in said conclusions of law, by : "(a) Conspiring wkh each other to maintain a nationwide system of fixed minimum motion picture theatre admission prices ; (b) Agreeing individually with their respective licensees to fix minimum motion picture theatre admission prices." UThe Court erred in failing to conclude • that a distributor-defendant had a lawful right under the Copyright Law and under the common law to agree with its licensee that the latter shall charge an admission price not less than that specified in the license agreement during the exhibition of the feature as a roadshow. "I SZ The Court erred in making its Finding of Fact No. 79 reading as follows : "79. The major defendants have acquiesced in and forwarded a uniform system of clearances and in numerous instances have maintained unreasonable clearances to the prejudice of independents." 1 The Court erred in making its Finding J-vJ» of Fact No. 81 reading as follows : "81. The distributor-defendants have acted in concert with the formation of a uniform system of clearance for the theatres to which they license their films and the exhibitor-defendants have assisted in creating and have acquiesced in this system." "I *7 The Court erred in its Finding of Fact A M « No. 82 in finding defendants or any of them "acted in concert in their grant of run and clearance." | O The Court erred in Section II, ParaJLvJ* graph 2 of the Decree in enjoining each of the distributor-defendants "from agreeing with each other or with any exhibitors or distributors to maintain a system of clearances." "1 Q The Court erred in Section II, Para-L x • graph 4 of the Decree in decreeing that "Whenever any clearance provision is attacked as not legal under the provisions of this decree, the burden shall be upon the distributor to sustain the legality thereof." The Court erred in making its Finding of Fact No. 84 reading as follows : "84. Both independent distributors and exhibitors, when attempting to bargain with the defendants, have been met by a fixed scale of clearances, runs, and admission prices to which they have been obliged to conform if they wished to get their pictures shown upon satisfactory runs or were to compete in exhibition either with the defendants' theatre or theatres to which the latter had licensed their pictures." O"! The Court erred in its Conclusions of <wJ-« Law No. 7(b) and No. 8(c) in concluding that the defendants, or any of them, have violated the Sherman Act, as stated in said conclusions of law, by conspiring with each other to maintain a nation-wide system of runs and' clearances which is substantially uniform in or as to each local competitive area. The Court erred in its Conclusions of UU» Law No. 9(c) and No. 9(d) in concluding that the exhibitor-defendants, or any of them, have violated the Sherman Act, as stated in said conclusions of law, by : "(c) Conspiring with each other and with the distributor-defendants to fix substantially uniform minimum motion picture theatre admission prices, runs and clearances : (d) Conspiring with the distributor-defendants to discriminate against independent competitors in fixing minimum admission prices, run, clearance and other license terms." The Court erred in its Finding of Fact ±4%J* No. 110 to the extent that it found that these defendants or any of them have discriminated against small independent exhibitors in favor of large affiliated and unaffiliated circuits. /A The Court erred in its Conclusion of Law No. 8(d) in concluding that the distributor-defendants, or any of them, have violated the Sherman Act, as stated in said conclusion of law, by: "Agreeing individually with their respective licensees to grant discriminatory license privileges to theatres affiliated with other defendants and with large circuits as found in finding No. 110." The Court erred in its Finding of Fact £*\J% No. 115 in finding that the joint interests therein referred to between an exhibitordefendant in conjunction with independent exhibitors enabled the parties to operate theatres collectively rather than competitively. The Court erred in its Finding of Fact No. 116 in finding that when theatres are jointly owned by a major defendant and an independent exhibitor it is evident that both joint owners wish to participate and are directly or indirectly participating in the business of exhibiting motion pictures and that the defendant thereby eliminates putative competition between itself and the other joint owner who otherwise would be in a position to operate theatres independently. 'O'T The Court erred in its Conclusions of ~' • Law No. 9(a) and No. 9(b) in concluding that the exhibitor-defendants therein named, or any of them, have violated the Sherman Act, as stated in said conclusions of law, by: "(a) Jointly operating motion picture theatres with each other and with independents through operating agreements or profit-sharing leases ; (b) Jointly owning motion picture theatres with each other and with independents through stock interests in theatre buildings." The Court erred in Section III, Paragraph (2) of the Decree in enjoining the exhibitor-defendants, or any of them, from continuing to perform existing agreements, therein referred to, with exhibitors not defendants herein. The Court erred in Section III, Para• graph (5) of the Decree in enjoining the defendants or any of them "From continuing to own or acquiring any beneficial interest in any theatre, whether in fee or shares of stock or otherwise, * * * in conjunction with an independent [meaning any former, present or putative motion picture theatre operator which is not owned or controlled by the defendant holding the interest in question,] where such interest shall be greater than five per cent unless such interest shall be ninety-five per cent or more." , "■^0 ^'ie Court erred in Section III, Para*-JV/« graph (6) of the Decree in enjoining the defendants therein named, or any of them, from expanding their present theatre holdings in any manner whatsoever except as permitted in Section III, Paragraph 5 of the decree. The Court erred in denying Paragraph I of these defendants' motions to amend and modify the decree so as to make Paragraph (6) of Section III thereof read as follows: " 'From expanding its present theatre holdings in any manner whatsoever, except as permitted in the preceding paragraph ; or except for the purpose of acquiring theatres or interests therein in order to protect its investments, or in order to enter a competitive field, if such defendant shall show to the satisfaction of the Court, and the Court shall first find, that such acquisition will not unduly restrain competition in the exhibition of feature motion pictures. Reasonable notice of the intention to make any such acquisition shall be served upon the Attorney General and the plaintiff shall be given an opportunity to be heard with respect thereto before any such acquisition shall be approved by the Court'." The Court erred in denying Paragraph %J*4* (4) 0f the motion of these defendants to amend and modify Conclusion of Law 9(d) to read as follows : "Conspiring with the distributor defendants to receive discriminatory license privileges as found in Finding No. 110 above." '5'5 The Court erred in not decreeing that *-'*-'• any defendant might apply to the Court for permission to retain a given partial interest in a theatre or group of theatres upon a showing to and finding by the Court that the particular relationship did not or would not unreasonably restrain competition. The Court erred in decreeing in Section •J V of the Decree that the Consent Decree entered November 20, 1940, should be of no further force or effect, except insofar as it might be necessary to conclude arbitration proceedings now pending, and to liquidate in an orderly manner the financial obligations of the defendants and the American Arbitration Association, and in failing to permit the said Consent Decree to remain in effect as a final determination between the plaintiff and the defendants as to the matters therein set forth. 'J C The Court erred in failing to decree that disputes between one or more of these defendants and exhibitors arising under the Decree should be determined by arbitration under the Rules of Arbitration provided for in the Consent Decree, as the same might be modified by the order of the Court from time to time. ^i/C The Court erred in denying and in failing to grant the motions made by the defendants and each of them to dismiss the petition and amended and supplemental complaint and to strike exhibits and evidence upon the grounds set forth in their respective motions appearing at pages 383-4, 503-526 and 2501 of the Record. '^'T The Court erred in so much of Find• ing of Fact No. 154 as states that there were illegalities and restraints. The Court erred in finding and conclud«-'0« ing that these defendants or any of them have violated the Sherman Act in the respects herein assigned as error. ■^JQ The Court erred in making and entering so much of the Decree as is herein appealed from. MOTION PICTURE HERALD, MARCH I, 1947