Motion Picture Herald (1954)

SUPREME COURT DOCKET RUST Hit "Decree Violation 99 In Illinois Numerous Film Cases Are to Be Heard as Court Sets Fall Session by J. A. OTTEN WASHINGTON . The U. S. Supreme Court returns from its long summer vacation next week to find — as usual — a docket crowded with film cases. The cases raise such important issues as whether films can be licensed to television without their stars’ consent ; whether clearances growing out of a conspiracy must be held illegal, even if reasonable; whether treble damage awards collected by exhibitors are taxable, and whether Indiana can tax film exchanges in other states on rentals received from Indiana exhibitors. The justices will hold their first meeting of the new term Monday, October 4. But this session is only a formality; the judges transact no business, merely saying hello to each other and then quitting for the week. The court really gets down to business the following Monday, October 11. Then, at noon, the justices start announcing which of the many appeals filed during the summer they will hear argument on. Following this, they start hearing argument on cases accepted for review last spring. Chief Justice Warren and his eight associates already have said they would review a lower court decision in one case which very indirectly affects the film industry. That’s the Justice Department’s anti-trust suit against the Shubert Brothers, alleging an attempt to monopolize the legitimate theatre business in major U.S. cities. Others Are New Appeals The suit was thrown out by a New York district court on the ground that under the Supreme Court's decision in the baseball anti-trust case, entertainment industries are not subject to the anti-trust laws. The Justice Department, in appealing the decision, said it did not think the baseball case affected the legitimate theatre and other entertainment industries, and emphasized that the courts have sustained almost exactly parallel charges against motion picture theatre owners. The high court probably will hear argument on this case in November; its decision, to be handed down later in the year, could have some new things to say about the extent to which the anti-trust laws apply to all entertainment industries. The other film cases are all newly appealed to the court. The justices must say — probably some time this month — whether or not they will review the lower court decisions or whether they will leave the lower court decisions stand. If the justices agree to review the cases, argument will be held later in the year, with a final decision unlikely before some time next year. Probably the most widely publicized of the other film cases are the two in which Roy Rogers and Gene Autry are asking the court to restrict the right of Republic Pictures to license their old films to television. The Ninth Circuit Court of Appeals gave Republic the right to license these films pretty much as it saw fit, and the Supreme Court’s disposition of the Rogers-Autry appeals could have broad ramifications for the entire film industry. Another pending appeal is from F. E. Harrison, owner of the Bryn Mawr theatre in suburban Philadelphia. He’s appealing a Third Circuit Court of Appeals decision throwing out his anti-trust suit against the eight major distributors, Warner Brothers Circuit Management Corp. and Stanley Co. of America. Mr. Harrison argues the lower court erred in not permitting his attorneys to give greater weight to the Government’s Paramount case consent decrees and also in not holding that clearances growing out of a conspiracy must be held illegal, even if reasonable. Distributors counter that Mr. Harrison has leased the theatres to others to operate for the past 20 years, has never had any business with the distributors and therefore has no status to sue. Test Damage Awards The tax status of damages awarded in anti-trust suits is being tested in another case. William Goldman Theatres won an anti-trust suit and was awarded $125,000 damages, trebled to $375,000. It paid Federal income tax on the first $125,000, representing lost profits, but refused to pay on the remaining $250,000. The Internal Revenue Service took the matter to court, but the Tax Court and the Third Court ruled for Mr. Goldman. Now Internal Revenue is appealing to the Supreme Court. The Indiana income tax case involves immediately Warner Brothers, but is undoubtedly a test case for all distributors. The state attempted to levy its gross income tax on rentals received by Warners’ Chicago exchange from Indiana exhibitors. Warner pays tax on rentals received by its Indianapolis exchange from exhibitors in southern Indiana, but refused to pay on rentals received by its Chicago exchange from exhibitors in northern Indiana. The Indiana Supreme Court upheld Warner. Schine Trial Set for Nov. 22 United States District Court Judge John Knight on Monday in Buffalo set November 22 for the trial of six officers and nine corporations of the Schine theatrical organization on criminal and civil contempt charges. The charges were lodged by the anti-trust division of the Justice Department March 10. CHICAGO : “Shocked” at what he termed many apparent violations of decrees in the United States vs. Paramount case in various Illinois areas, Herman M. Levy, general counsel of Theatre Owners of America, declared last week that “violations reported at exhibitor meetings concerning certain distributors, mainly in the field of conditioning the sale of one picture upon another or others, are disheartening.” Speaking at the regional meeting of the United Theatre Owners of Illinois at the Leland Hotel in Springfield, Mr. Levy said, “I am heartened by the fact that the exhibitors concerned have agreed to put their complaints in writing, giving the time, place, name of sales representative, and the demands made by him, so that the appropriate action can be taken.” Sixty-seven exhibitors were in attendance from the central Illinois area around Springfield in what was the fourth of the “grass roots” conferences being conducted by George Kerasotes, UTOI vice-president, assisted by George Gaughan, TOA field representative. Also on and for the Springfield meeting were Edward G. Zorn, UTOI president, and Albert M. Pickus, TOA vicepresident. Later in the week the fifth in the series of “grass roots” conferences was held in Waukegan, Illinois, at which time Hank Rhyan was elected regional vice-president of the Waukegan district. Elected as directors to represent the Waukegan region along with Mr. Rhyan on the UTOI board of directors were Joe Sikes, of Zion, and W. R. Catlow, of Barrington. V. Quarta was named secretary of the local group. Mr. Levy, Mr. Pickus, Mr. Gaughan and Mr. Kerasotes also addrressed the exhibitors at the meeting. Walter Reade Files Suit Over Sale of Drive-ins Charging breach of contract, Walter Reade, Jr., this week in Trenton filed suit in New Jersey Superior Court against William Scully, former vice-president of Universal Pictures ; James J. Thompson, operating administrator of Easter Drive-in Theatres, and Monroe Stein, industry antitrust attorney. The complaint alleges that in December, 1953, Scully, Thompson and Stein agreed to sell six New Jersey driveins to Mr. Reade and that after the agreement had been reached, Mr. Scully, Mr. Thompson and Mr. Stein breached their contract and refused to accept payment in accordance with the terms. Reade, alleging that he had tendered the purchase and offered to comply with the terms of the contract, is suing for specific performance of the contract or, as an alternative for monetary damages for the sum of $1,000,000. 26 MOTION PICTURE HERALD, OCTOBER 2, 1954