John Wright & Associates, Inc. v. Ullrich

328 F.2d 474, 1964 U.S. App. LEXIS 6196, 1964 Trade Cas. (CCH) 71,033
CourtCourt of Appeals for the Eighth Circuit
DecidedMarch 2, 1964
DocketNo. 17193
StatusPublished
Cited by5 cases

This text of 328 F.2d 474 (John Wright & Associates, Inc. v. Ullrich) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
John Wright & Associates, Inc. v. Ullrich, 328 F.2d 474, 1964 U.S. App. LEXIS 6196, 1964 Trade Cas. (CCH) 71,033 (8th Cir. 1964).

Opinion

MEHAFFY, Circuit Judge.

This is an appeal from an adverse judgment of the District Court in a non-[476]*476jury, antitrust action in which plaintiff sought injunctive relief and treble damages under the Sherman and Clayton Acts, 15 U.S.C.A. §§ 1-8, and §§ 12-27, respectively.

Plaintiff-appellant, John Wright & Associates, Inc. (hereinafter referred to as “appellant”), is a Minnesota corporation and during the time involved owned and operated a motion picture theater known as the Chief Theater in Red Wing, Minnesota, a city of some eleven thousand population. In 1904, the City of Red Wing, a municipal corporation, acquired the T. B. Sheldon Memorial Auditorium by testamentary disposition which provided for its management to be vested in a five member board to serve without remuneration and selected from resident voters by the city fathers.

All members of the municipality’s auditorium board, James Fraser, the present manager of the motion picture theater originally established in the auditorium building in 1911, the Red Wing Publishing Company and its manager, and various film distributors, among others, were joined as defendants in the original action. At the conclusion of the trial but before submission of the case for decision, the action was dismissed as to all defendants except three of the members of the auditorium board, the Auditorium Theater manager, and the publishing company and its manager, who collectively represent the appellees in this appeal.

When the City first acquired the auditorium, it was used for a variety of stage entertainments in addition to public meetings and other civic functions. Motion pictures were first shown in the auditorium in 1911. John Wright, president of appellant corporation, was employed by the Board as manager of the auditorium from 1936 until 1943, leaving to later open his own motion picture theater, the Chief. During all of the times pertinent hereto, the Auditorium and the Chief were the only motion picture theaters within the city limits although there was a drive-in theater in the suburbs of Red Wing. In 1955, the manager of the Auditorium who had replaced Wright died, and the Board filled the vacancy by accepting the application of Fraser, who was then working for Wright as manager of the Chief.

For many years the Chief and the Auditorium split the available film product pursuant to an oral understanding. The Chief obtained the majority of its films from Universal, RKO, Monogram, and Republic Studios, while the Auditorium’s main sources of supply were United Artists, Paramount, and Fox. The two theaters divided equally the films distributed by Warner Brothers and Metro.

Until RKO went out of business shortly before 1956, it had been distributing Walt Disney pictures, recognized as the most popular product of the film industry. Thereafter Disney pictures were distributed by the Buena Vista Company. Soon after Fraser’s installation as manager of the Auditorium he asked appellant for an equal division of all the Disney pictures which amounted to from four to eight pictures annually — just a fraction of the approximately one hundred thirty-five pictures shown per year at each theater. He justified his request for alteration of the division arrangement on grounds RKO, whose releases were formerly shown exclusively at the Chief, was no longer in existence and no film product comparable to the quality of the Disney pictures was obtainable elsewhere.

When appellant refused his request, Fraser initiated the practice of bidding for the Disney pictures in the fall of 1956. At first, appellant voluntarily refrained from bidding on the first eight Disney pictures released, but decided in early 1957 to bring an action in Minnesota state court to enjoin the City and the Board from operating a motion picture theater in the auditorium. Ultimately, the Minnesota Supreme Court in «1958 upheld a decision enjoining the municipality from operating a movie theater in private competition with appellant. John Wright & Associates, Inc. v. City of Red Wing, 254 Minn. 1, 93 N.W.2d 660 (1958).

[477]*477To legally circumvent the effect of this decision, the Board leased the motion picture theater portion of the auditorium to Fraser in February, 1959, for a monthly rental of $500.00. In a subsequent suit by appellant attacking the lease agreement, the Minnesota Supreme Court held the lease valid and Fraser continued operating the Auditorium Theater as an independent enterprise. John Wright & Associates, Inc. v. City of Red Wing, 259 Minn. 111, 106 N.W.2d 205 (1960).

During the period from the fall of 1956 until the lease was executed in February, 1959, there was no bidding for films between the Auditorium and the Chief, except for the Disney product. While appellant deferred from bidding on the first eight Disney films, it eventually bid on the remaining six of the fourteen released during this period and obtained three. After the lease of the Auditorium Theater to Fraser, there was a dearth of attractive films available from all the distributors and bidding was instituted for all the distributors’ films. Experiencing a continual decline in profits thereafter, appellant subsequently closed the Chief Theater and went out of business in July of 1960, charging appellees with antitrust violations. Appellant maintains that the ultimate closing of its theater through appellees’ combined use of an advantageous competitive position as a municipality and excessive bidding practices resulted in a monopolization of the market by the Auditorium proscribed by § 2 of the Sherman Act.

Of the voluminous record consisting of over twelve hundred pages of testimony, appellant has furnished us with but thirty pages as support for his claims regarding the trial court’s erroneous findings based on the evidence. Notwithstanding appellant’s failure to send up a sufficient amount of the printed record in support of the questions raised in its appeal contrary to Rule 10(b) of this Court, we have decided the considerable amount of time and ostensible cost expended by the parties to this litigation justifies this Court in availing itself of the original record in order to dispose of the important issues before it.

Appellant first contends that the trial court erred in its finding appellant was required and failed to prove a “specific intent” by appellees to monopolize as necessary to a prima facie violation of § 2 of the Sherman Act. Appellant points to excerpts of the court’s post-trial memorandum as indicative of this error:

“It must be remembered that it is the existence of the power to exclude competitors from a particular field of interstate commerce, together with the intent to exercise such power, which is condemned by the antitrust laws.”
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“(T)he evidence, when examined in the light of the antitrust principles previously discussed, does not reveal any substantial basis from which to infer * * * the existence of any intent on the part of defendants to exercise monoply power to the detriment of plaintiff.”

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328 F.2d 474, 1964 U.S. App. LEXIS 6196, 1964 Trade Cas. (CCH) 71,033, Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-wright-associates-inc-v-ullrich-ca8-1964.