Independent Productions Corp. v. Loew's Inc.

30 F.R.D. 377, 5 Fed. R. Serv. 2d 438, 1962 U.S. Dist. LEXIS 5870, 1962 Trade Cas. (CCH) 70,340
CourtDistrict Court, S.D. New York
DecidedMay 15, 1962
StatusPublished
Cited by11 cases

This text of 30 F.R.D. 377 (Independent Productions Corp. v. Loew's Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Independent Productions Corp. v. Loew's Inc., 30 F.R.D. 377, 5 Fed. R. Serv. 2d 438, 1962 U.S. Dist. LEXIS 5870, 1962 Trade Cas. (CCH) 70,340 (S.D.N.Y. 1962).

Opinion

METZNER, District Judge.

This is a suit under the Sherman and Clayton Acts against more than one hundred corporate and individual defendants. Plaintiff Independent Productions Corporation is the producer of a motion picture, “Salt of the Earth”, and plaintiff IPC [379]*379Distributors, Inc. is the assignee of exclusive distribution rights in the picture. The defendants are producers, distributors and exhibitors of motion pictures, companies engaged in the business of developing and processing motion picture film, and officials of the International Association of Theatrical and Stagehand Employees Union (IATSE).

This motion is brought pursuant to Fed.R.Civ.P. 37(b), 28 U.S.C.A. to dismiss the complaint, or for such other relief as may appear just, on the ground that plaintiffs have failed to comply with an order of this court under Rule 37 (a), directing that plaintiffs by their managing agent, Paul Jarrico, answer certain questions propounded by defendants. The order reserved to plaintiffs the right to challenge the relevancy of the questions and Jarrico’s status as managing agent. Jarrico again refused to answer these questions and this motion followed.

The complaint charges a conspiracy to prevent the production, distribution and exhibition of plaintiffs’ film, which conspiracy it is alleged tended to and actually did restrain and monopolize interstate commerce.

Defendants have denied the essential allegations of the complaint and interposed affirmative defenses which are not relevant to the disposition of this motion. Defendants Walsh and Francavilla, officials of IATSE, in addition allege an affirmative defense that plaintiffs were formed by persons affiliated with the Communist Party, to employ Communists and to produce and distribute pictures designed to promote Communist aims, and that defendants acted pursuant to union rules proscribing dealings with Communists, rather than in pursuance of a conspiracy to restrain trade.

The controversy turns on questions relating to Communist Party membership and sympathies of persons associated with plaintiffs. Defendants have already examined plaintiffs by three individuals in addition to Jarrico, to whom these questions have been propounded. These individuals refuse to answer any questions of this type other than those inquiring as to present Communist Party affiliations of the deponent, and whether deponent advocates the forceable overthrow of the government.

Plaintiffs contest the imposition of sanctions requested by this motion on two grounds. First, they deny that Jarrico is their managing agent and assert that therefore they cannot be penalized for his default. Second, they challenge the relevancy of the posed questions. They further contend that if some sanction is imposed, an order of dismissal would be improper since it would violate due process.

Jarrico and Herbert Biberman are the producer and director, respectively, of plaintiffs’ motion picture. They were among the founders of plaintiffs and, until May 1956, were officers of plaintiffs. They retain a financial interest in the proceeds of the picture through substantial stock interests in plaintiff corporations.

In 1955 plaintiff IPC instituted an action in the United States District Court for the Northern District of Illinois to enjoin the Chicago Moving Picture Machine Operators Union from interfering with the exhibition of the film. Interrogatories were posed that asked political questions of Biberman and Jarrico. Upon their refusal to answer, the complaint was dismissed. Shortly thereafter, Jarrico and Biberman were advised by counsel that the same result might follow in the instant suit which plaintiffs were about to file. Jarrico and Biberman thereupon resigned as officers of plaintiff corporations.

After the filing of the instant suit, defendants served notices to take plaintiffs’ depositions by Biberman and Jarrico as managing agents. A motion to vacate these notices on the ground that neither was a managing agent was denied by Judge Sugarman, D.C., 24 F.R.D. 19 (1959). The deposition of Biberman proceeded and when he refused to answer [380]*380questions similar to those involved on this motion, a motion was made under Rule 37(a) to compel answers. Plaintiffs on the argument of that motion again denied that Biberman was their managing agent and an oral motion to dismiss the complaint on the ground that plaintiffs had failed to appear was granted. D.C., 24 F.R.D. 360 (1959). The order of dismissal was reversed by the Court of Appeals, 2 Cir., 283 F.2d 730 (1960) predicated on the holding that when Biberman was sworn and submitted to examination plaintiffs had complied with the prior order of the court ordering them to appear, and thus the dismissal was an abuse of discretion. Inherent in this determination is a finding that Biberman was a managing agent of plaintiffs. Since the operative facts are the same in the case of Jarrico, he too is to be considered plaintiffs’ managing agent. See Independent Prods. Corp. v. Loew’s Inc., 28 F.R.D. 19, 21 (S.D.N.Y.1961).

In June 1961 the court was presented again with the argument that Jarrico was not a managing agent, on a motion to fix a date for his deposition. Judge Sugar-man again rejected this contention. 28 F.R.D. 19.

Plaintiffs for the third time challenge Jarrico’s status as managing agent and point to certain facts elicited on his deposition which were not before Judge Sugarman. They claim that Jarrico has been employed by some of the defendants since 1958, and discussed work with other defendants. Furthermore, to show their good faith and that Jarrico no longer serves their interests, they rely on the fact that they consented to the order requiring him to answer as managing agent, that they requested him to answer, and that he refused to answer, though aware that dismissal of the complaint might follow.

The fact that Jarrico may have worked for defendants is irrelevant to the question whether he is managing agent of plaintiffs, since a man may hold two positions at one time. If plaintiffs’ contention is sustained that Jarrico is not now ready to serve their interest because he refuses to answer the questions, any managing agent would cease to be a managing agent eo instanti when he refused! to answer any question that his corporation directed him to answer. The evasion of discovery rules that would follow such a ruling is apparent. The fact of direction to answer and refusal should be considered only in connection with the type-of sanction appropriate under Rule 37(b).

Ordinarily on a motion under 37(b) there will be no need to inquire into the-propriety of the questions unanswered,, since this will have been determined on the motion under 37(a). See 2A Barron & Holtzoff, Federal Practice and Procedure § 851, at 532 (Wright rev. 1961); 4 Moore, Federal Practice ¶ 26.16, at 1069 (2d ed. 1950); Note, Developments in the Law—Discovery, 74 Harv.L.Rev. 940, 986 (1961). However, the 37(a) order in this case, entered on consent, specifically reserved to plaintiffs the right, to raise this issue on this motion.

Defendants contend that the questions-that Jarrico refused to answer are relevant to show that defendants’ conduct was individual rather than conspiratorial..

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30 F.R.D. 377, 5 Fed. R. Serv. 2d 438, 1962 U.S. Dist. LEXIS 5870, 1962 Trade Cas. (CCH) 70,340, Counsel Stack Legal Research, https://law.counselstack.com/opinion/independent-productions-corp-v-loews-inc-nysd-1962.