Motion Picture News (Nov-Dec 1923)

December i , 1923 2547 Blacklisting of Exhibitor Is Banned CO M TIO trU 0 M B I N ATIOXS of disb u to r s to blacklist an exhibitor and refuse jointly to furnish him with product were declared illegal in an important decision rendered by the Supreme Court of the United States on November 18 in the case of Charles G. Binderup, of Minden, Neb., vs. Pathe Exchange, Inc., Famous Players-Lasky, First National, Fox, Vitagraph, Select Pictures, Goldwvn, Universal. Hodkinson. Metro, A. H. Blank, the Omaha Film Board of Trade, and the individual Omaha exchange managers of these distributors. The lower courts had held there was no conspiracy and upheld the defendants' contention that the films were shipped from New York to the exchange in Omaha as an agent before being actually placed in distribution and were therefore not in interstate commerce within the meaning of the Anti-Trust Act. The Supreme Court reversed this ruling with costs and remanded the case for trial in the Federal District Court at Omaha on the basis that interstate commerce was involved. In handing down the ruling of the highest court in the land, Justice Sutherland said: " It is difficult to imagine how interstate commerce can be more effectively restrained than by suppressing it and that, in effect, so far as the exhibitor is concerned, is what the distributors in combination are charged with doing and intending to do. " It is doubtless true that each of the distributors, acting separately, could have refused to furnish films to the exhibitor without becoming amenable to the provisions of the att, but here it is alleged they combined and conspired together to prevent him from releasing any of them. " Combination and Conspiracy " " The illegality consists, not in the separate action of each, but in the conspiracy and combination of all to prevent any of them from dealing with the exhibitor." This is the first case brought to the Supreme Court under the Sherman Anti-Trust Act which directly involved the question, whether transactions between a person residing in one state, with a branch agency or exchange in the same state, are interstate commerce when the property comes into the state and comes to rest in the hands of the agent before shipment to the user or purchaser within the state. In 1919, Mr. Binderup personally operated six motion picture houses and supplied programs to 22 other theatres in south central Nebraska. In an action for $750,000 damages, brought in the United States District Court at Omaha, he alleged that in 1919 he was obtaining his pictures from four of the defendant companies. He charged that coercive practices were used to require him to give bookings to defendants with whom he did not wish to deal. Binderup further alleged that the Omaha Film Board of Trade caused the circulation of a blacklist, based on charges brought in bad faith, and that the defendants refused to serve those who maintained any relations with him. He charged also that there was a further refusal of all defendants, by virtue of common agreement for the purpose of destroying his business, to have anv further dealings with him. He also alleged that he had been " driven out of business by a Binderup Wins in Supreme Court Decision Affects F.P.-L. Case, Fuller Declares THAT the Binderup decision by the United States Supreme Court strengthens the contention that the Federal Trade Commission has jurisdiction in the case against Famous Players-Lasky, is the declaration of W. H. Fuller, Chief Counsel for the Commission. Mr. Fuller, asked by Motion Picture News to comment on the Supreme Court ruling with reference to its bearing on the Famous Players case, telegraphed the following statement from Washington: " The Binderup decision strengthens the contention that the Commission has jurisdiction because interstate commerce is involved. It indirectly affects other issues." Mr. Fuller also announced that Famous Players will begin the presentation of defense testimony at the hearings at Jacksonville, Fla., in January. The Government finished its testimony at the recent sessions in Los Angeles. at rest upon arrival in Omaha and that the subsequent movement is intrastate. Irving F. Baxter, of the firm of Baxter & Van Deusen, of Omaha, attorneys for Binderup, declared : " We can show damage of $250,000 and that will entitle us to recover $750,000. I believe we can force payment of the full amount. " The immediate effect of this decision is to send our case to trial on its merits, but it also affects business in various other lines. In fact, it is almost revolutionary in its effect on business." conspiracy among manufacturers and distributors of films, through denial by them of the use of their pictures." When the case was called in the District Court at Omaha, the court sustained a motion .for a directed verdict in favor of the defendants on the ground that interstate commerce was not involved and that the acts complained of were legal. This verdict was rendered without submission of testimony. Mr. Binderup then appealed to the United States Circuit Court at St. Louis where the lower court was sustained. He took an appeal to the United States Supreme Court for a review of the case, which was denied. In October last, however, counsel for Binderup succeeded in getting the case before the Supreme Court on a writ of error. This appeal resulted in a reversal of the lower courts and the return of the case to the District Court at Omaha for trial on its merits. In the Supreme Court the defendants alleged that the facts stated in the complaint describe transactions which, as a matter of law, were local and not interstate and hence the allegations were insufficient in a jurisdictional respect to constitute a cause of action under the Sherman Act. Defendants' Contention The defendants also maintained that films are sent to Omaha for the purpose of sale or lease and further that although the local exchange finds the buyer, it is no more than the solicitor of orders on behalf of its Xew York principal. This contention was put in the following language : " It derives all of its powers from the. principal and its acts are the acts of its principal whose long arm reaches from New York into the State of Nebraska. The argument of defendants must, of necessity, be based upon a separation between the movement of films from Xew York to the Omaha agencies and from the Omaha agencies to the plaintiff in Xebraska Butte Houses Open After Month of Strike Theatre managers and representatives of the striking musicians and film operators in Butte, who have been out a month, finally got together in a conference, composed their differences and decided to open the theatres again on the old scale of wages. So the theatres opened on the third of Xovember with their original personnel and did a land office business. With hardly an exception all the theatre employees were at their former posts and the same spirit of harmony prevailed that marked the theatres before the strike. House Peters-Baumann Suit Decision Reserved Decision has been reserved by Supreme Court Justice Daniel F. Cohalan in the injunction proceedings brought by House Peters against Charles O. Baumann. Peters sued on the injunction to restrain Baumann from publishing statements to the effect that he was unjder contract to him and warning others against employing him. The two entered into an agreement for five years on May 1st, 1923, by which Peters bound himself to the management of Baumann. It is alleged by Peters that Baumann has. violated the terms of the contract. Four Malaga Houses Show American Pictures Vice Consul Julian F. Harrington writes from Malaga, Spain, to say: "Malaga with its 150.000 inhabitants, has but four motion picture theatres, with an aggregate seating capacity of about 2,800 people. This figure is indeed small when compared to the total seating capacity of the theatres in many cities of equal population in the United States*. These four theatres use American pictures for 90 per cent of their programs." T . O. C. C. Discusses " Enemies of Women" Bookings At a meeting of fifty .members of the Theatre Owners' Chamber of Commerce of Xew York City who hold contracts for " Enemies of Women," Nathan Burkan, attorney for Cosmopolitan, discussed the difficulties* over the booking of the picture. Old contracts will be observed, but individual settlement will probably be made in each ease. The meeting was held at the Hotel This involves the proposition that the films are Astor November 16.