Movie 1 & 2 v. United Artists Communications, Inc.

909 F.2d 1245, 1990 WL 61419
CourtCourt of Appeals for the Ninth Circuit
DecidedMay 14, 1990
DocketNo. 88-1734
StatusPublished
Cited by30 cases

This text of 909 F.2d 1245 (Movie 1 & 2 v. United Artists Communications, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Movie 1 & 2 v. United Artists Communications, Inc., 909 F.2d 1245, 1990 WL 61419 (9th Cir. 1990).

Opinion

BREWSTER, District Judge:

The Movie 1 & 2 (“The Movie”) appeals a district court judgment dismissing its case against numerous antitrust defendants. This case involves allegations that two motion picture exhibitors in Santa Cruz, California, entered into an illegal film licensing agreement in which 19 national film distributors participated, and that the exhibitors attempted to monopolize, conspired to monopolize, and did monopolize the film exhibition market in Santa Cruz. The United States District Court for the Northern District of California, excluding from evidence certain statements offered by The Movie that the court deemed inadmissible, granted the defendants’ multiple motions for summary judgment as to all of the antitrust claims.

We reverse and remand as to all of the remaining defendants the district court’s grant of summary judgment, finding that: (1) the court erred in excluding the appellant’s proffered evidence; (2) a genuine issue of material fact exists as to whether the exhibitor United Artists Communications, Inc. (“UA”) and the Group I distributors participated in an illegal split agreement in violation of section 1 of the Sherman Act, precluding summary judgment; and (3) a genuine issue of material fact exists as to whether the exhibitors attempted to monopolize, conspired to monopolize, or monopolized the Santa Cruz exhibition market in violation of section 2 of the Act, precluding summary judgment.

I. BACKGROUND

Appellant The Movie is a general partnership consisting of Harold Snyder and his two sons, David and Larry Snyder. In February of 1984, the Snyders opened a motion picture theatre in Santa Cruz, California. The twó-screen theatre, which has 225 seats in each auditorium, is located in downtown Santa Cruz in a converted storefront which it shares with a moped shop. The Snyders’ intent was to exhibit both “commercial” and “art” films on a first-run basis.

The exhibitor defendants in this case were two of The Movie’s competitors, UA, which operates five theatres in Santa Cruz with a total of twelve screens, and the Nickelodeon, which operates two theatres with a total of four screens. The distributor defendants included ten major motion picture distributors (“Group I”) and nine smaller independent distribution companies (“Group II”).1

[1248]*1248The relevant geographic market in this case is the greater Santa Cruz area, which includes Aptos, Scotts Valley, and Capitola. The relevant product market is first-run motion pictures. Although theatres can either show “first-run” films or subsequently run “sub-run” films, first-run films provide the greatest grossing potential. The Santa Cruz area has only ten theatres at present. UA’s five theatres exhibit primarily first-run “commercial” films. The Nickelodeon’s two theatres exhibit primarily first-run and vintage “art” films.2 The only other competitors in Santa Cruz are two non-defendant independent exhibitors who apparently show primarily sub-run films.

The appellant alleges that The Movie was unable to obtain licenses to first-run commercial or art films from the defendant distributors, who concertedly refused to deal with it. Appellant alleges that the distributors cooperated in an illegal “split agreement” between UA and the Nickelodeon, whereby nearly all first-run commercial films were licensed to UA and nearly all first-run art films were licensed to the Nickelodeon. A split agreement is an exhibitor agreement which divides a normally competitive market by allocating films to particular members with the understanding that there will be no bidding among members for licensing rights to the films assigned. Exhibitors’ Serv., Inc. v. American Multi-Cinema, Inc., 788 F.2d 574, 576 (9th Cir.1986).

Appellant alleges that the split agreement in this case was part of a boycott against The Movie, which had the purpose of eliminating it as a competitor, a restraint of trade in violation of section 1 of the Sherman Act, 15 U.S.C. § 1 (1982). Appellant also alleges that UA maintained a monopoly on first-run commercial film exhibition and that the Nickelodeon maintained a monopoly on first-run art film exhibition, in violation of section 2 of the Sherman Act, 15 U.S.C. § 2 (1982).

On December 22, 1987, the district court, after excluding several items of evidence which it deemed inadmissible, granted the defendants’ multiple motions for summary judgment as to both the section 1 and section 2 claims and relinquished its jurisdiction of the pendent state claims.

II. STANDARD OF REVIEW

In reviewing a grant of summary judgment, our task is identical to that of the trial court. Viewing the evidence de novo in the light most favorable to the party against whom summary judgment was granted, we must determine whether the trial court correctly found that there was no genuine issue of material fact and that the moving party was entitled to judgment as a matter of law. Whittaker Corp. v. Execuair Corp., 736 F.2d 1341 (9th Cir.1984). Our review of the trial court’s rulings on the admissibility of evidence is plenary where the rulings call for the application of a legal standard, as opposed to a factual determination. In re Japanese Electronic Products, 723 F.2d 238, 257 (3rd Cir.1983), rev’d on other grounds, 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see also Whittaker, 736 F.2d at 1347.

Summary judgment is disfavored in complex antitrust litigation. The Supreme Court, in Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962), stated:

We believe that summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot. It is only when the witnesses are present and subject to cross-examination that [1249]*1249their credibility and the weight to be given their testimony can be appraised.

Although Poller does not preclude summary judgment in the proper antitrust case, it does advise caution. Barnes v. Arden Mayfair, Inc., 759 F.2d 676, 680 (9th Cir. 1985). Summary judgment is appropriate only in the clear absence of any significant probative evidence tending to support the complaint. Theee Movies of Tarzana v. Pacific Theatres, Inc., 828 F.2d 1395, 1398 (9th Cir.1987), cert. denied, 484 U.S. 1066, 108 S.Ct. 1028, 98 L.Ed.2d 992 (1988).

III. DISCUSSION

A. THE TRIAL COURT’S EXCLUSION OF EVIDENCE

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Bluebook (online)
909 F.2d 1245, 1990 WL 61419, Counsel Stack Legal Research, https://law.counselstack.com/opinion/movie-1-2-v-united-artists-communications-inc-ca9-1990.