Motion Picture Herald (Mar-Apr 1947)

INDUSTRY WAITS ON APPEAL BUT TRUST SUITS CONTINUE Myers Counsel for Theatre in Washington Action; Majors Widen Bidding Uneasily marking time between one court decision and another, the industry finds itself in an experimental, confused and uncertain state. Until the Supreme Court decides whether the New York District Court was right or wrong in its decree in the U. S. vs. Paramount, et al, anti-trust suit nothing is settled. That fact was borne in upon the industry last week when three new anti-trust suits were filed against the five major distributors and others and when an Ohio amusement company sued Universal-International because it would not sell its product under the outlawed franchise agreement. Face Problems on Pools, Bidding, Arbitration And if further evidence were needed of the difficulties being encountered during the industry's limbo period, snags, snares and delusions continue to be reported in the dissolution of pools, the when and how of bidding', the need for new exchange centers, and the arbitration system. In Washington District Court, at the weekend, Shore Amusement, Inc., Milford, Del., filed an anti-trust suit seeking treble damages totaling $105,000 against Schine Circuit, Inc., its affiliated Chesapeake Theatres Corporation, the five major distributors, Universal, United Artists and Republic. Abram F. Myers, counsel for National Allied, is, with two other attorneys, representing Shore. The brief charged that the defendants conspired to keep the Shore theatre from getting frrst run product and kept the market open to the Schine-affiliated theatre, the Plaza, in Milford. The brief also asked that the distributor defendants be enjoined and restrained from refusing to lease features to the plaintiff on a "competitive basis" for exhibition. Two Anti-Trust Actions Filed in Vermont The two other anti-trust actions both centered about Vermont theatres. A $1,400,000 anti-trust suit against 10 distributors and four exhibitors has been filed in the U. S. District Court in Burlington, Vt., by Joseph P. Wilson, operator of the Brandon Community theatre, charging that in 1935 the defendants had formed a combine in a conspiracy allegedly to break the law. Distributors named are : Paramount, Loew's-MGM, Warners, RKO, United Artists, Universal, Columbia, Republic, Monogram and PRC. The exhibitors named are: Samuel Kurson, Bangor, Me.; Newell CASE RECORD MAY COST $90,000 FOR PRINTING It may cost an estimated $90,000 to print the record of the New York anti-trust suit for submission to the Supreme Court, to which all interested parties in the case have appealed. Last week attorneys for the eight distributor defendants in the suit indicated they would confer with Robert L. Wright, who prosecuted the case for the Government, on how much of the record should be printed. If all the hundreds of exhibits offered in the case are printed, the cost might rise to that $90,000 figure. Nobody knows yet who will pay the printing costs. and Kenneth Kurson, Newton, Mass., and the Millinocket Opera House. The suit charges the combine was directed against independent operators who were discriminated against in that they could not obtain first run pictures. In the second Vermont action, State Amusements, Inc., operator of the State theatre, Bellows Falls, Vt., filed an anti-trust suit in the U. S. District Court at Boston against Interstate Theatre Corporation, Rockingham Operating Company, Paramount, Loew's, Twentieth Century-Fox, Warner Brothers, RKO, United Artiste Universal, Columbia and Republic. The complaint alleges that as a result of conspiracy, Interstate and Rockingham have overbought the product of the defendant distributors, who have refused to sell any product to the plaintiff on first run and that an illegal clearance of 60 to 90 days has been imposed against the plaintiff. Interstate operates 32 houses in New England. Rockingham operates the Opera House in Bellows Falls. If the District Court's decree is sustained in toto by the Supreme Court, there will be an end to anti-trust suits, many industry observers believe. They base this idea on the belief that the decree covers all points of argument which have prompted anti-trusts suits in the past. Ohio Court Dismisses Theatre Franchise Suit In the first case of its kind reported since the decree, Judge Cecil Randall in Franklin County Circuit Court, Columbus, Ohio, dismissed the injunction suit of the Drexel Amusement Company against Universal-International in which Drexel sought to prevent U-I from. selling films to other theatres in the Drexel competitive area and com plained that the company refused to sell product under the terms of the three-year franchise which Drexel held with the distributor. Attorneys for Universal argued that the franchise was inoperative under the New York decree which ruled that franchises were illegal. The oral decision in this case was handed down March 12. See Bidding Provision Actually Effective April 1 Meanwhile the complexities of the bidding provisions of the decree, on which stays have been requested of the Supreme Court by Columbia, Universal and United Artists, continue to be another unsettling influence within the industry. On the one hand is the possibility that paragraph nine, Section II, of the decree, which becomes effective April 1, will make bidding compulsory for all on that date instead of on July 1, the date on which the decree expressly states competitive bidding shall go into effect. Paragraph nine enjoins the distributor from arbitrarily refusing the demand of an exhibitor to license a feature to him for exhibition on a run selected by the exhibitor. Currently RKO, MGM, Twentieth Century-Fox, Paramount, Columbia and Universal are conducting bidding experiments. The bidding provision, the experiments have shown already, make for added work at the exchange center. This work has mounted to the level where serious consideration is being given to dividing the 31 existing exchange areas into smaller units, perhaps establishing exchanges where shipping centers are now established. Paramount is reported seeking to establish an exchange center at Jacksonville, Fla., where it now has a shipping station, to divide the Atlanta labor load. The company also may establish an exchange at San Antonio to help out the Dallas exchange's work. May Ask Stay of Order Ending Arbitration The motion picture arbitration system, doomed to be dissolved April 1 under the terms of the decree, may get some additional and life-giving backing. The five theatreowning defendants, it is reported, are considering asking the U. S. Supreme Court for a stay of the District Court's dissolution order. The five previously appealed the order after arguing during the hearings on the case for the retention of arbitration. The court, however, felt itself without power to order compulsory arbitration and contented itself with urging voluntary arbitration. The five majors are understood to have (Continued on following page) MOTION PICTURE HERALD, MARCH 22, 1947 13