St. Louis Amusement Co. v. Paramount Film Distributing Corp.

168 F.2d 988, 1948 U.S. App. LEXIS 4032, 1949 Trade Cas. (CCH) 62,278
CourtCourt of Appeals for the Eighth Circuit
DecidedJuly 6, 1948
DocketNo. 13502
StatusPublished
Cited by2 cases

This text of 168 F.2d 988 (St. Louis Amusement Co. v. Paramount Film Distributing Corp.) 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
St. Louis Amusement Co. v. Paramount Film Distributing Corp., 168 F.2d 988, 1948 U.S. App. LEXIS 4032, 1949 Trade Cas. (CCH) 62,278 (8th Cir. 1948).

Opinion

JOHNSEN, Circuit Judge.

The appeal is from a summary judgment entered against the plaintiffs on motions of the defendants. The trial court’s opinion appears in 61 F.Supp. 854.

The action is one under the Sherman Anti-Trust Act, 15 U.S.C.A. § 1 et seq., brought by six motion picture exhibitors in St. Louis, Missouri, operating a total of 31 local theatres, against five major distributers in the industry,1 together with the American Arbitration Association, two of its agents, and the separate operators of two other movie theatres in St. Louis,2 for injunctive relief and treble damages.

The combination and conspiracy relied on consisted of an alleged, agreement among the defendant distributors not to make any license contracts for films with an exhibitor against whom the American Arbitration Association should have entered an award fixing the clearance period3 between such exhibitor’s theatre and other theatres, except upon the basis of the period prescribed by the award. The American Arbitration Association and its two agents were claimed to be a party to the combination and conspiracy in that the Arbitration Association had consented to receive complaints from exhibitors on clearance questions and to make decisions and awards on the complaints, which necessarily would affect the situation of other exhibitors. The operators of the two local movie theatres referred to were charged with having joined the combination and conspiracy by having filed complaints with the Arbitration Association seeking an award on the clearance rights of each of such theatres in relation to the theatres of plaintiffs.

The complaint further alleged that on one of these complaints the Arbitration Association had entered an award directing the distributors (all of which were parties to the proceeding) to reduce the clearance period which they had previously allowed plaintiffs’ theatres as against the cornplaining theatre from fourteen to seven days; that the distributors had since that time refused to contract or supply pictures to plaintiffs except on the basis of this reduced clearance period; that the clearance reduction had resulted in a loss of patronage at plaintiffs’ theatres amounting to and occasioning damages to plaintiffs in the [990]*990sum of $95,000 ;4 and that plaintiffs would similarly continue to suffer great loss and damage in the future because of the situation unless injunctive relief were granted.

As to the complaint filed on behalf of the second theatre, it was alleged that the Arbitration Association was taking steps looking toward the making of an award5 and that plaintiffs thus were being threatened with a reduction also in the clearance period theretofore enjoyed by them against this theatre.

On the allegations so far stated, the complaint could present a situation that might fall within Paramount Famous Lasky Corporation v. United States, 282 U.S. 30, 51 S.Ct. 42, 75 L.Ed. 145, affirming United States v. Paramount Famous Lasky Corporation, D.C., S.D.N.Y., 34 F.2d 984, on which plaintiffs rely. But this is not the whole of the complaint. The complaint further showed that the agreement which was claimed to constitute the unlawful combination and conspiracy had consisted in fact of the execution by each of the distributors of a written consent to the entering of an interlocutory decree in a general anti-trust suit, brought against them and others in the film industry by the Attorney General in the District Court for the Southern District of New York, entitled United States of America, Plaintiff, v. Paramount Pictures, Inc., et al Defendants, 70 F.Supp. 53. It was under the provisions of this consent decree that the arbitration system for the handling of clearance complaints by exhibitors was set up and that the consenting defendants became bound to abide by the results of any awards so made.

The arbitration system as provided for in the consent decree was obviously merely “an auxiliary enforcement procedure” which the court authorized to be used during the pendency of the action or until a modification or vacation of the consent decree. The final decree entered by the statutory three-judge court, which heard the case ultimately on its merits, terminated the arbitration set-up, “except in so far as may be necessary to conclude arbitration proceedings now pending and to liquidate in an orderly manner the financial obligations of the defendants and the American Arbitration Association, incurred in the establishment of the consent decree arbitration systems.” See United States v. Paramount Pictures, Inc., D.C., S.D.N.Y., 70 F.Supp. 53, 75. But in the written opinion which the court filed preceding the formulation of its decree, it took occasion to comment that the arbitration system had been of “demonstrated usefulness” as an enforcement expedient during the pendency of the action, Id., 66 F.Supp. 323, 333, and it also made a formal finding, No. 160, that “The arbitration system created by the Consent Decree of November 20, 1940, has demonstrated its usefulness in dealing with exhibitors’ complaints of unreasonable clearance * * Id., 70 F.Supp. at page 71. Again, in connection with the final decree, the court emphasized its previous comment and said: “The arrangement for arbitration and an appeal board has been terminated except as to unfinished litigations and other matters referred to in the decree, because of the unwillingness of some of the parties to consent to their continuance. Nevertheless, as we have indicated in the opinion, these tribunals have dealt with trade disputes, particularly those as to clearances and runs, with rare efficiency, as both government counsel and counsel for other parties have conceded.” Id., 70 F.Supp. at page 76.

The decree of the three-judge court (in which clearance relations in the motion picture industry was only one of the many questions involved) was made the subject of appeals by the various parties in the suit to the Supreme Court. We are not here concerned with any of the matters considered and discussed by the Supreme Court in its opinion on the appeals, except as to the use of the arbitration system and the expressions made in relation thereto, [991]*991r such light as they may throw upon the erits of plaintiffs’ contentions here.

It is plaintiffs’ contention that the court m the anti-trust case in New York could ot validly make a provision in its decree or an arbitration system; that even hough the setup was made with the conent of the parties in the case it was in ffect the creation of a private judicial system; that in any event the creation of an arbitration system and the attempt to fix rules governing clearances were legislative matters which would lie solely within the jurisdiction of Congress; that the arbitration provisions of the consent decree were therefore void; and that the agreement of the distributors to the creation and maintenance of the system and to be bound by the awards under it constituted accordingly an unlawful combination and conspiracy, falling within Paramount Famous Lasky Corporation v. United States, supra, 282 U.S. 30, 51 S.Ct. 42, 75 L.Ed. 145.

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Bluebook (online)
168 F.2d 988, 1948 U.S. App. LEXIS 4032, 1949 Trade Cas. (CCH) 62,278, Counsel Stack Legal Research, https://law.counselstack.com/opinion/st-louis-amusement-co-v-paramount-film-distributing-corp-ca8-1948.