Syufy Enterprises v. American Multicinema, Inc.

793 F.2d 990, 1986 U.S. App. LEXIS 29854
Court of Appeals for the Ninth Circuit·Decided February 25, 1986·No. Nos. 83-2725, 84-1728·Published·Cited by 87 cases

Opinion

NORRIS, Circuit Judge:

In this antitrust case involving the exhibition of major feature films in the San Jose area, a jury returned a general verdict in favor of appellees American Multicine-ma, Inc. (AMC)1 on its counterclaim against appellant, Syufy Enterprises. The jury awarded AMC damages totaling $1,006,421. Judgment was entered for that amount trebled and for attorney’s fees.2

The case went to the jury on AMC’s claims that Syufy monopolized, attempted to monopolize and conspired to monopolize in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2 (1982). Syufy’s principal arguments on appeal relate to the sufficiency of the evidence to support the general verdict in favor of AMC.3 Syufy also challenges the admission of certain evidence.

Syufy contends that the district court erred in failing to grant a judgment non obstante veredicto. The standard for determining the propriety of a judgment n.o.v. is the same for district and appellate courts. California Computer Products v. International Business Machines, Inc., 613 F.2d 727, 734 (9th Cir.1979). It is also the same as the standard for determining the propriety of a directed verdict: whether, “viewing the evidence as a whole, there is substantial evidence present that could support a finding ... for the nonmoving party.” Id. (quoting Chisholm Brothers Farm Equipment Co. v. International Harvester Co., 498 F.2d 1137, 1140 (9th Cir.), cert. denied, 419 U.S. 1023, 95 S.Ct. 500, 42 L.Ed.2d 298 (1974)). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Washington v. United States, 214 F.2d 33, 41 (9th Cir.), cert. denied, 348 U.S. 862, 75 S.Ct. 86, 99 L.Ed. 679 (1954).

Four distinct theories of Section 2 violations by Syufy were submitted to the jury. We hold that the evidence was sufficient to support a jury finding that Syufy violated Section 2 with respect to two of the theories: that Syufy monopolized and attempted to monopolize the San Jose hardtop major film exhibition market. We further hold that the evidence was inadequate to support a verdict for AMC with respect to the remaining two theories: that Syufy violated Section 2 by leveraging its monopoly power in the San Jose drive-in theater market and that Syufy conspired to monopolize the major film hard-top exhibition market. Finally, we reject Syufy’s arguments that the district court erred in admitting certain evidence.4

[993] Part I of our opinion addresses AMC’s theory that Syufy monopolized the hardtop market. Part II considers AMC’s theory that Syufy leveraged its monopoly power in the drive-in market to gain a competitive advantage in the hardtop market. Parts III and IV evaluate the attempt to monopolize and conspiracy to monopolize theories. In Part V, we consider whether the general verdict may be affirmed as attributable to one of AMC’s two viable theories. Part VI responds to Syufy’s claim that the trial court erred by admitting evidence concerning Syufy’s acquisition of the Mann Theater. In Part VII we address Syufy’s contention that AMC’s damage estimates were flawed.

I. THE THEORY THAT SYUFY MONOPOLIZED THE MAJOR FILM HARDTOP EXHIBITION MARKET

AMC’s monopolization claim stems from Syufy’s extensive ownership of both drive-in and hardtop movie theaters in the San Jose area. During the relevant period, Syufy owned all four drive-in theater complexes in the San Jose market. Syufy also operated a total of fifteen screens in large domed hardtop theaters, each with a seating capacity of 680-900 people. Syufy’s domed hardtop theaters were known as “event” theaters because of their wide screens, state of the art sound, high ceilings and rocking chair seats.

During the same period, AMC owned and operated four theater complexes in the San Jose area. Each complex housed six auditoriums with seating capacities of approximately 250 people. AMC’s theaters were generally located within shopping malls and lacked many of the amenities found in Syufy’s hardtop theaters. But AMC’s theaters were conveniently located and offered greater selection of movies than Syufy’s theaters. They also charged, on average, a lower admission price.

AMC claims that Syufy used its dominant position in the Ownership of both hardtop and drive-in theaters to monopolize the exhibition of major films in the San Jose area. AMC advanced two discrete theories in support of this claim. AMC’s first monopolization theory is that Syufy effectively deprived AMC of any chance to compete for major motion pictures in the San Jose area by using its dominant position in the market to license such pictures on an exclusive basis.

To establish monopolization under Section 2 of the Sherman Act, “a plaintiff must prove: (1) possession of monopoly power in the relevant market; (2) willful acquisition or maintenance of that power; and (3) causal ‘antitrust’ injury.” Transamerica Computer Co., Inc. v. International Business Machines Corp., 698 F.2d 1377, 1382 (9th Cir.), cert denied, 464 U.S. 955, 104 S.Ct. 370, 78 L.Ed.2d 329 (1983); see also California Computer Products, Inc. v. International Business Machines Corp., 613 F.2d 727, 735 (9th Cir.1979). Thus, we must decide whether AMC presented substantial evidence with respect to each of the three elements of a monopolization claim.

A. Monopoly power.

Monopoly power — the first element of monopolization — is the power to control prices or exclude competition. United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391, 76 S.Ct. 994, 1005, 100 L.Ed. 1264 (1956). We begin our analysis of the issue of market power with a discussion of market definition and then turn to the question whether there is substantial evidence that Syufy had monopoly power within the relevant market.5

[994]*9941. Market definition.

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

Syufy Enterprises v. American Multicinema, Inc., 793 F.2d 990, 1986 U.S. App. LEXIS 29854 (9th Cir. 1986).

793 F.2d 990 (Syufy Enterprises v. American Multicinema, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Casey Clarkson v. Alaska Airlines, Inc.
59 F.4th 424 (Ninth Circuit, 2023)
Jang v. Boston Scientific Corporation
872 F.3d 1275 (Federal Circuit, 2017)
California Ex Rel. Harris v. Safeway, Inc.
651 F.3d 1118 (Ninth Circuit, 2011)
Lombino v. Bank of America, N.A.
797 F. Supp. 2d 1078 (D. Nevada, 2011)
Stanislaus Food Products Co. v. USS-POSCO Industries
782 F. Supp. 2d 1059 (E.D. California, 2011)
California Ex Rel. Brown v. Safeway, Inc.
615 F.3d 1171 (Ninth Circuit, 2010)
In re Live Concert Antitrust Litigation
247 F.R.D. 98 (C.D. California, 2007)
Coalition for ICANN Transparency Inc. v. VeriSign, Inc.
464 F. Supp. 2d 948 (N.D. California, 2006)
Webb v. Sloan
330 F.3d 1158 (Ninth Circuit, 2003)
ID Security Systems Canada, Inc. v. Checkpoint Systems, Inc.
249 F. Supp. 2d 622 (E.D. Pennsylvania, 2003)
Image Technical Services, Inc. v. Eastman Kodak Co.
125 F.3d 1195 (Ninth Circuit, 1997)
Aquatherm Industries, Inc. v. Florida Power & Light Co.
971 F. Supp. 1419 (M.D. Florida, 1997)
Yeager's Fuel, Inc. v. Pennsylvania Power & Light Co.
953 F. Supp. 617 (E.D. Pennsylvania, 1997)