Variety (May 1936)

Wednesday, May 6, 1936 r I C T ■ II E s VARIETY riticize Goveminent Attitude on St. L Appeal Washington, May 5. ■Strong criticism, of the Crovern- ment's action In the film monopoly suit, ^yas Voiced by Warner Bros., • RKO, and f^arampunt today in a lengthy brief urging the u;' jiretne Court to rule on the pro- priety' of the dishiissal of the St. lioitis equity case last January. Veheinently cbmplaininir against judge Molyneaux's action, the St. iiouls defendants declared that un- less the highest tribunal holds-the dismissal unjustifled, the Industry be subject to unlimited annoyr varice W the Department of Justice, ;and may bie repeatedly prosecuted for a-single offense.- Purpose of thl^ appeal was plainly to prevent re- vival of tlie civil case in New Yoi'lc or any other jurisdiction. . Defendant firms contended that the St. Louis acquittal on the. crlm- Inil' charge ishould automatically iiix any further civil, prosecution, -and argued that Judge Jiolyneaux sbould have required the Govern- indrit to go througli with the aban- doned ©Quity proceeding to final de- ^ision. : ,• 'If -there ever \yas a" case, in which dlBmissal without prejudice should have been denied, It Is this case,' •ctiunsel for the tbree distributors tpid the Supreme Court. 'The Issues presented were the same as those In the criminal case already litir girted and In which the defendants hjjrere acquitted* Clearly, if in any 'situation a plaintiff should be re- ,quired to proceed or- to subject 'themselves to a dismissal with ' prejudice, the situation, exigtlng At ihe time the Government's motion in this case was made is such a 6ltuation. Harassment •If the Gdvernment Is correct In Its contention that its right to dis- miss without prejudice Is absolute, theri It c4n continue the process of bringing suit, trying its case, and thfen dlsmlesing it before It formally rest^i' • thus indefinitely harassing, and ahnoylng tlie. defendants with su^ceBSiye unsuccessful efforts to provfr them guilty, first In one court arid" then in andther. of a charge of which they have already been ac- quitted.'" ■ 'Bfy'Jthls Ingenious procedure the Gov^Pfiment is at liberty to Inflict upoh'the Innocent persons pecuniary loss and damage far in excess of the •m^xlmuni $5,000 fine provided by Congress for those found guilty of violating the Sherman law.' Distributors argued that they never should have been forced to Irtal oh the civil case after being UCftultted of criminal charges. They .'■cofttehded that Judge Molyneaux made an initial error in permitting the second case to start. This po- sition'was based on the claim that, judgment of acquittal in a criminal case la a definite bar to subsequent civil, action on the same charge wliere the same issues must be proved. Distributors further argued that the second proceeding was unfair beqaUse the criminal trial was 'long and tedious,' imposed great (expense, and Involved 'considerable demoral- ization of the business of the de- fendants.^ Judge Molyneaux erred, the brief argued, in denying the dis- tribs 'motion to dismiss and also in holding he was compelled to grant the Government's motion to' disniiss -although the case had proceeded at sreat length.' The Government in a counter- .appeal has asked the Supreme Court .to either dismiss the distributors' appeal or to affirm the order dis- missing the civil suit. Both of these ■Federal pleas should, be denied, the aistrlbs contended, in order that definite limitations may be placed on the Government's right to harass the industry repeatedly for ihe same offense. Surprise .ove The Aimers' step came as a com- plete surprise to offlclals of the Jus- "fe Department, and was not im- ."mediately explained by attorneys ^'110 have handled the film monop- crusade. The general Interpre- *«MOn placed on the appeal was that Warner Bros., RKO and Paramoiint were taking a long shot in the ef- fort to protect themselves against any revival of the criminal charges. .This view was based on the fact that the stipulation which led tp abandonment of the moi-e recent New Yorlv monopoly suit involved a'qualification under which the gov- ernment reserved the right to reviye the case If the Fanchon & Miarco houses in St. Louis were not given an adequate supply of film in the future. Strategic? While the exact purpose of the appeal from the St Louis dis-. missal ,was not partlculairly clear, Government counsel, siiecu- Jated that the major distributors were trying' to forestall any poWslble renewal of the New York suit. If the. Supreme Court should hold that Judge Molyneaux erred in granting the Government's dismissal motion, the distribiltors thfjn might be in-a position to successfully evade any future attempts to bring the New York suit to trial/ There was little expectation here; howevei-, that the,. Supreme Court will consider the distributor's peti- tion for review of Judge Moly-. neaux's action. Justice Department officials took the slant that the court Would not be likely to jeop- ardize tlie effectiveness of the N. Y. cornpromise and. were, not appre- hensive over the potential results of the latest move. Whether the government will attempt to inform the court oflicially of the N. Y. agreement was still undecided, but department executives indicated every weapon will be used to infiu- ence the .court not to review tlie St.- Louis dismissal prder.. The Government filed a brief op- ppsing the distributors' petition on the ground the appeal was 'frivol- ous.' Ma Barrymore Charges Short Count in $30,000 Suit Vs. Warner Bros. Los Angeles, May 5. Asking damages of $30,000 and an accounting of proceeds from five pictures he made for studio under sharing agreement, John Barry- more has taken legal action against Warners. At same time player started suit against Henry Hotche- ner, his former confidential advisor and agent, asking an accounting. He asserts Hotchener failed to de- liver to him various securities, monies and records when dismissed. Suit against Warners alleges stu- dio kept two sets of records of grosses on 'Man From Blankley's,' 'Mad Genius,' 'SvengaH,* 'Moby Dick* and 'General Crack.' Barry- more complaint cha.rges he was en- gaged to make pictures for a flat sum and 10 per cent of gross profit. He claims studio paid off on rctui-ns from prints without sound, and that a separate record was kept of gross of prints with sound.' Barrymore al leges this latter ran over $300,000. Miriam Hopkins Mixing Biz With London Vacash London, May 5. Miriam Hopkins, here' on vaca- tion, signed with Victor Saville for the first of his pictures for United Artists release. production is set to start May 12. Votion Stays on at Par Hbllywood. May 5. Jack Votion has signed a new Paramount contract as talent scout. He tours the country to bolster studio's stock company. FARMHSfG FRANCES FARMER Hollywood. May 5. raramoiint has loaned Frances Fanner to Goldwyn for one picture. ^Slie gets featured .spot in 'Dbds- worLli' or 'Come and Get It* Wkrner Deserts That Key Completely—Costly Legal Battle Over the St. Louis Situation Incurred Over $1,000 in Barristers' Fees 10 YEAR DEAL Fanchon & Marco, Inc., Is placed in virtual control of St. Louts itol- iPwihg settlement of the anti-trust a.cti6n recently filed by the U. S. Government in New York. In; addi-- tion to' the Ambassador, Missouri, Grand Central^ Pox arid St Louis, which it has been operating, F. & M. acquires the Shubert-Rialto and Orpheum, up to now operated by the Warners, as well as control of the St. Louis Amusement Co., which lias around 15 houses and Includes most of the neighborhood first runs. .• Thus, the 'settlement' of the-suit becomes virtually a victory for the. Goyernment and F. & M. F. & M. becomea as strong an operating power in St Loiils as can be found in any key. Film companies' acquiescence to the settlement was predicated prin- cipally on the economic equation. The St. Louis defense, while a. tech- nical victory for the picture firms on. both the criminal and the civil proceedings, is said to have Involved a legal bill of $1,000,000 to the three picture companies; a sizable sum to the Government, albeit a rela- tively' light figure to F&M. When Sol A. Rosenblatt, as mediator in this situatloii, in behalf of the Government, Is said tp have indicated how much more It might cost the industry In legal cP]St'0,~ the' wisdom,; p| the coriiprpnilse settle- ment started to wii\ favbr. No costs,' however, are to be assessed foi". either side. Under tlie settlement,. F&M not only greatly strengthens' Its theatre operating position in..St^ Louis but through product .franchises and agreements, will have call on every- thing but Metro and United Artists pictures which are held, under franr chise, by Loew's State. Settlement agreement, specifying 10-year fran- chises Tor Warner and BKO prod- uct, makes these pictures available not only to the Ambassador, Mis- souri and Grand Central, which figured in the conspiracy action, out also to the St. Louis, Ftialto and Orpheum. F. & M. also obtains right to purchase the Paramount pictures for these six houses, while for another house F. & M. operates, the Fox, it has' the 20th Century- Fox output. While the government regards that the agreements, if entirely car- ried out, establish a situation in liarmoriy with law' In trade circles, it is pointed out that the curious result of the situation is that F&M now will have what amounts to a monopoly in St. Louis, although Its iiowers under such a monopoly of st run theatres may iiever bo abused. Warner Bros, remove entirely from St. Louis as operators by the terms of the agreements which en- abled a settlement of the If. S. con- .splracy and restraint of trade case against this Company, Paramount; iRKO, various subsidiaries of each and 40 individuals. The stipulation, filed Thursday (30), and signed by Judge John C. Knox in U, S. District Court, in settlement of the government's ac-. tion ba.sed on an original complaint from F&M, includes letters signed by Sol A. Rbsenbiatt which outline the agreements entered into. Ro.sen- blatt acted as the mediator through whom the settlement and stipulation were drawn. Papers reveal that W-arners is to give F&M a. 10-year franchise on all its pictures, in addition to the balance of this season's (1025-36) output, making product available immediately., Prices and ..playing arrangement* on pictures are to be Repercussions to F. £ M. Setdement *pream' Twice Daily lit Balto Colored Theatre Baltimore, May 5. . ^Midsummer Night's Di'eam' wiil get what -is believed to be .fllm'3 first two-a-day showing in a col- ored theatre when Lou Rome screehi3. it at his Harlem, Balto's newest liegro house, for three days, beginning May 19. Top will be 55c for miats and 83c for evenings. Tall- est tap in colored theatres here regularly is at the vaudfilm Royal, which gets 40c high. Not the first time a pic was twice- dallied here, since several years ago an all-colored cast, film got It's pre- miere aV the iRoyal under such ausr pices, and flopped at the b;p.'Dream" is the first niajor studio release to get to colored public via, tAvo-a-day- route, howe'ver. HORROR FILMS USKED HPllywood,- May 5. ITnlversal is ringing curfew on horror picture production for at least a year, following release of 'Dracula's Daughter,' " just com- pleted. Latter will be released on current season's schedule, with no chiller pictures contemplated for 1936-37 release. Reason attributed by U for aban- donment of horror cycle is that -Eoropean-countrles, .<!specially ,Eng— latid, ' are prejudiiCed against this type producl.' "Despite heavy local consumption of its chillers, U Is taking heed to warning from abroad. . Universal lias for long time had virtual monopoly on this tyjie of production, with unusual success at box 'ofllce. Stiidio's London rep has cau-. tloned production exec, to scruti- nize carefully all so-called chiller productions, to avoid any possible, conflict with British censorship. LOEW PONDERS FIRST JOE E. BROWN FEATURE Hollywood, May 6. After setting releasing deal with RKO for series of pictures starring Joe E. Bi'own, David Loew has re- turned from New "yorlt. Producer conferring Avith comic on first of the features, as well as seting up his production organization. Expected that Loew wli make his Brown pictures at Pathe, STARRING SFANKT Hollywood. May 5. Spanky McFarland will be starr.Cd by Hal Roach in a full-length comedy of war between the states. Fred Newmoyer directs. mutually agreed upon annuall.v. In the absence of an agreement^ the matter is to be decided by S. R. Kent, .president of 20th-Fox. )io will also settle any disputes as to other terms of the franchl«c. In case of Kent's deati) or Incapacity, hi» plarc as arbiter is to be filled by someone appointed by a senior U. S. District Court judge. Question P£ fees In reaching the settlement to be decided by Kent and Will H. Hays.. F. & M.'s Obligations ^I.'ndcr agreement reached, .F&^I Is to pay Warner Bros. $3.85,000 for its stock in St. howin Amnnement Co., a claim against Skouras Bros Enterprises. Inc.. lea.qes on Rialto and Orpheum, and other considera- tions. Ill connfctlOM. with turning over (Cpntit)ued on page 38) istrict Court Judge John C., Knox niay have established an en« tirely novel precedent In approve ing. the terms of settlement of th» government's restraint "of trade suit against Warners, RKO, Paramount and some Individual defendants, the case which arose from the Fan- chon & Marco invasion of the St. Louis theatre situation. (a) Fanchon &'Marco, by ternns of the government-dictated settle- ment, dominates the'exhibition side of the film business in St. Loulsi. (b) F. & M, has tied up for 10 years, in St. Louis, Warner and RKO product, constituting aggre- isrately an estlma:fed: 26^ of the an- nual^ total major film output, Fanchon & Marco. ^.cqulres con- trol of'seven first-runs ^all except- lH0 Loe\y's State) and 20 neighbor^ bpod theatres iSt Louis Amus. Co., chief suburban theatrfe' firm). Some in the trade see the. govern- ment placed in a paradoxical posi- tion by' effecting such a., fiettlement: of domination for the parties behind the government's accusations of re- straint of trade. Others question whether the gov- ernment by such' a' move: (lire- moves itself from future prosetu- tlon by similar complaints; (2) rec- ommends block booking;. Analysis seemingly places JT,. & M. under the terms o< settlement, lii. a posltlpji, singly, to determine in St. Louis: (a) .film reiittit pt*ices from dlstrlbutoris; (b) bpx ofllce scales, although It ' Is conditiohecl that terms are subject to mutuality, A Penalty? "There is'trade spectilation wheth- er the settieihent is more In the na- ture of a penality s^gt^lnst the de- fendamtr THther niiari^^ withdrawal by the government. The government Insisted »n the defend- ants grainting iO-yeiv film fran- chises to F. & M.,' <vhlle accuslngr the defendants' of restralt of trade. The gpvernment had Insisted at the start that Paramount also give F. & M. a lO-year franchise. In asso- ciation ytrlth Warners and RKO, the price of peace. Paramount re- fused. Paramount may have feared posr slble stockholder consequences if acquiescing to the. government's.de- mands, additional tp the possibi trade restraining aspects of sucli n combination, even with governriient consent. Although he approved RKO's lO^year franchise. Federal Judge J, Bondy, in, charge of RKO's, 770 operations, is held to have had. some misgivings oh the* matter when it was first put before him. Among po,SBible repercussions to th . situation is the possibility of taxpa.ver squawks about the heavy government expense Involved in ef- fecting this kind of settlement, which smacks of a private business nature. But the trade, it is felt, undoubt- edly welcomes freedom from e;^- pensive legal entanglements. F.,& M, Incurred the least expense, al-, though being the actual complain- ant. The government assumed the major burden of the prosecution costs. The defendants were under heavy expense. One final perplexing possIbSlity to the trade, arising out of this St. Louis settlement, is the potential- Ity of It being used to attract easy squawkers who would expect the government, at taxpayer expense, to fight such Intrarfllm Industry sultSi PREVIN AT UNIVERSAL AS MUSK DIRECTOR Hollywood. May 6. Charles Prevln, for last eight years in radio, two of theiri airedt- ing muKir on Realsilk air ]^rogran|« goes with Universal -as musics^ director. First assignment will l»e' #•! studio's 'Parole*