Ring v. Spina

148 F.2d 647, 160 A.L.R. 371, 65 U.S.P.Q. (BNA) 65, 1945 WL 47789, 1945 U.S. App. LEXIS 4590, 1945 Trade Cas. (CCH) 57,347
Court of Appeals for the Second Circuit·Decided March 19, 1945·No. 230·Published·Cited by 100 cases

Opinion

148 F.2d 647 (1945)

RING
v.
SPINA et al.

No. 230.

Circuit Court of Appeals, Second Circuit.

March 19, 1945.
Rehearing Denied April 19, 1945.

*648 Carl E. Ring, of New York City (Ring & Murray, of New York City, on the brief), for plaintiff-appellant.

Philip Wittenberg, of New York City (Wittenberg, Carrington & Farnsworth, of New York City, on the brief), for defendants-appellees Spina, Heyman, Hannan, and Pauker.

Jonas J. Shapiro, of New York City (Greenbaum, Wolff & Ernst, Sidney R. Fleisher, and Monroe R. Lazere, all of New York City, on the brief), for defendant-appellee The Authors' League of America, Inc., sued herein as The Dramatists' *649 Guild of the Authors' League of America, Inc.

Before EVANS and CLARK, Circuit Judges.

CLARK, Circuit Judge.

This is an appeal from an order of the District Court vacating a temporary injunction and denying a motion for such injunction pending trial in an action for treble damages under the Sherman Act, as amended, 15 U.S.C.A. § 15, and for other relief. Defendants Spina, Heyman, and Hannan are authors of a theatrical production called "Stovepipe Hat." The other defendants are Pauker, agent of these authors, and The Dramatists' Guild of the Authors' League of America, Inc., an association said to include substantially all the playwrights in the country. Restraint of trade is alleged to be accomplished by means of the Guild's Minimum Basic Agreement, which a producer or "manager" must sign before any Guild members, such as the authors herein, may license or sell to him their works. The Basic Agreement, among other things, fixes the minimum terms under which the Guild permits any of its members to lease or license a play, including the minimum advance payments and the minimum royalties to be paid by a manager. It limits contracts by both managers and authors to those made under its own terms, and between managers and members, both of whom are "in good standing" with the Guild.[1] It also provides that any dispute shall be finally adjudicated by arbitration.

It appears from the moving papers that plaintiff signed this Minimum Basic Agreement after he had invested $50,000 in the play. He came into the venture first by association with, later by taking over the rights of, one Gaumont, who had entered into a "Production Contract" with the three authors on February 7, 1944, whereby Gaumont was to produce the play upon stated royalties and other payments — all subject to the provisions of the Basic Agreement. Then plaintiff on May 4, 1944, to safeguard his investment, and upon his agreement to advance the balance necessary for the show to open in New Haven, May 18, 1944, attempted to enter into an agreement with the authors on the basis of Gaumont's contract with them; but they signed only on condition that their lawyer would later approve. Their lawyer held, however, that this contract could not be made with plaintiff, a non-Guild member; and it was destroyed. Thereupon plaintiff, as he says, "against his will and under the coercive pressure of the monopolistic practice and rules and regulations" of the Guild, signed its Basic Agreement, in order that he might protect his part in the venture. The play did open in New Haven, and then went on to Boston, preparatory to going to Philadelphia and then to New York City; and plaintiff put up an additional $75,000, as he alleges. A dispute having arisen as to changes which plaintiff thought should be made in the play, the authors then took the position that plaintiff had breached the Basic Agreement by making changes without consent of the authors, contrary to its provisions, and hence that the production contract was terminated. The play was then forced to close and the authors requested arbitration of the dispute pursuant to the arbitration clauses of the Basic Agreement. Thereupon plaintiff commenced this action and asked for a temporary injunction, which was first granted pending a further hearing, but later denied after the hearing had been held.

The motion for a temporary injunction pending trial asked that defendants be enjoined from proceeding with arbitration or otherwise enforcing the Basic Agreement and from interfering with plaintiff's production of the show, and that royalties be withheld pending assessment of damages in this action. In denying the motion the District Court stated that not enough facts had been furnished to indicate that the *650 Basic Agreement was void under the Sherman Act, that the transactions here involved were not in interstate commerce, and that relief should be denied, since the parties were in pari delicto and since plaintiff was seeking at the same time to be awarded rescission and enforcement of a contract.

The granting or denial of an interlocutory injunction is usually relegated to the discretion of the District Court, which an appellate tribunal is reluctant to disturb. State of Alabama v. United States, 279 U.S. 229, 230, 231, 49 S.Ct. 266, 73 L. Ed. 675. But here the trial court's denial of the injunction was based in substantial measure upon conclusions of law which can and should be reviewed because of their basic nature in this litigation. Cf. Bowles v. Nu Way Laundry Co., 10 Cir., 144 F.2d 741; Bowles v. May Hardwood Co., 6 Cir., 140 F.2d 914; Coty, Inc. v. Leo Blume, Inc., 2 Cir., 24 F.2d 924; Schey v. Turi, 2 Cir., 294 F. 679. The case then should be remanded for action by the District Court in the light of the legal principles thus enunciated.

Plaintiff attacks the Basic Agreement for its provisions for compulsory arbitration, for price fixing, and for dealing with only Guild members. It is now well settled that a contract covering a large part of an industry will be void and illegal under the Sherman Act for such restrictive agreements and that these constitute adequate proof of a combination in restraint of trade. United States v. Trenton Potteries Co., 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700, 50 A.L.R. 989; Ethyl Gasoline Corp. v. United States. 309 U.S. 436, 458, 60 S.Ct. 618, 84 L.Ed. 852; United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 720, 64 S.Ct. 805, 88 L.Ed. 1024; United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 218, 60 S.Ct. 811, 84 L.Ed. 1129; United States v. Univis Lens Co., 316 U.S. 241, 250, 251, 62 S.Ct. 1088, 86 L.Ed. 1408; United States v. Masonite Corp., 316 U.S. 265, 274, 62 S.Ct. 1070, 86 L.Ed. 1461; Paramount Famous Lasky Corp. v. United States, 282 U.S. 30, 51 S.Ct. 42, 75 L.Ed. 145; Fox Film Corp. v. Muller, 296 U.S. 207, 56 S.Ct. 183, 80 L.Ed. 158; Youngclaus v. Omaha Film Board of Trade, D.C. Neb., 60 F.2d 538, 540. The agreement also forbids outright sale of radio, television, and other subsidiary rights in the play prior to its stage presentation; and even thereafter such sales still require the Guild's written approval. These and similar provisions in the Basic Agreement indicate an attempt to control the industry; and the affidavit of Richard Rodgers, president of the Guild, tends to admit that such is the purpose of the organization. We think we must hold that there is a showing prima facie of an agreement in restraint of

Free access — add to your briefcase to read the full text and ask questions with AI

Ring v. Spina, 148 F.2d 647, 160 A.L.R. 371, 65 U.S.P.Q. (BNA) 65, 1945 WL 47789, 1945 U.S. App. LEXIS 4590, 1945 Trade Cas. (CCH) 57,347 (2d Cir. 1945).

148 F.2d 647 (Ring v. Spina) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

City of Whitefish v. Board of County Commissioners
2008 MT 436 (Montana Supreme Court, 2008)
Lake Communications, Inc. v. ICC Corp.
738 F.2d 1473 (Ninth Circuit, 1984)
Rothberg v. Kirschenbaum
725 F.2d 880 (Second Circuit, 1984)
Board of Regents v. National Collegiate Athletic Ass'n
546 F. Supp. 1276 (W.D. Oklahoma, 1982)
Donovan v. Bierwirth
680 F.2d 263 (Second Circuit, 1982)
Porter v. K & S PARTNERSHIP
627 P.2d 836 (Montana Supreme Court, 1981)
Federal Trade Commission v. Texaco, Inc.
555 F.2d 862 (D.C. Circuit, 1977)
Puerto Rico Telephone Co. v. Tribunal Superior de Puerto Rico
103 P.R. Dec. 200 (Supreme Court of Puerto Rico, 1975)
Congoleum Industries, Inc. v. Armstrong Cork Company
366 F. Supp. 220 (E.D. Pennsylvania, 1973)
Cobb v. Network Cinema Corp.
339 F. Supp. 95 (N.D. Georgia, 1972)
FIVE BORO ELEC. CONTRACTORS ASSN. INC. v. City of New York
37 A.D.2d 807 (Appellate Division of the Supreme Court of New York, 1971)