Source: https://openjurist.org/349/us/322
Timestamp: 2019-04-24 08:36:29+00:00

Document:
NATIONAL SCREEN SERVICE CORPORATION et al.
Argued Feb. 9, 10, 1955.
Mr. Francis T. Anderson, Philadelphia, Pa., for petitioners.
Mr. Louis Nizer, New York City, for respondent National Screen Service Corp.
Mr. Earl G. Harrison, Philadelphia, Pa., for respondents Columbia Pictures Corp. et al.
Petitioners are engaged in the business of leasing advertising posters to motion picture exhibitors in the Philadelphia area. Such posters, known in the trade as standard accessories, embody copy-righted matter from the motion pictures being advertised. Until recent years, standard accessories could be purchased directly from the motion picture companies themselves. Beginning with Paramount in 1939, however, the eight major producers granted to National Screen Service Corporation the exclusive right to manufacture and distribute various advertising materials, including standard accessories as well as specialty accessories and film trailers, for their motion pictures. RKO followed in 1940, Loew's in 1942, Universal in 1944, Columbia in 1945, United Artists and Warner Brothers in 1946, and 20th Century Fox in 1947.
In 1943, prior to any trial, the suit was settled. The basis of the settlement was an agreement by National Screen to furnish the plaintiffs with all standard accessories distributed by National Screen pursuant to its exclusive license agreements with producers, including exclusive license agreements which might be executed in the future. In exchange, the plaintiffs agreed that they would withdraw the suit and that they would pay National Screen for the materials at specified prices. Pursuant to the settlement, the suit was dismissed 'with prejudice' by court order. No findings of fact or law were made.
The sublicense was to run three years. In 1946 it was renewed for another five-year term. In 1949, while the sublicense was still in force, petitioners brought the instant action, again seeking treble damages and injunctive relief. Named as defendants respondents here—were National Screen, the three producers who were parties to the 1942 suit, and the five producers who licensed National Screen subsequent to the dismissal of the 1942 suit.
In their present complaint, petitioners allege that the settlement of the 1942 suit was merely a device used by the defendants in that case to perpetuate their conspiracy and monopoly. They also allege: that five other producers have joined the conspiracy since 1943; that National Screen has deliberately made slow and erratic deliveries of advertising materials under the sublicense in an effort to destroy petitioners' business; and that for the same purpose National Screen has used tie-in sales and other means of exploiting its monopoly power.1 Petitioners seek damages for resulting injuries suffered from August 16, 1943 in other words, for a period beginning several months after the dismissal of the 1942 complaint.
It is of course true that the 1943 judgment dismissing the previous suit 'with prejudice' bars a later suit on the same cause of action.11 It is likewise true that the judgment was unaccompanied by findings and hence did not bind the parties on any issue—such as the legality of the exclusive license agreements or their effect on petitioners' business—which might arise in connection with another cause of action.12 To this extent we are in accord with the decision below. We believe, however, that the court erred in concluding that the 1942 and 1949 suits were based on the same cause of action.
That both suits involved 'essentially the same course of wrongful conduct' is not decisive. Such a course of conduct—for example, an abatable nuisance—may frequently give rise to more than a single cause of action.13 And so it is here. The conduct presently complained of was all subsequent to the 1943 judgment.14 In addition, there are new antitrust violations alleged here—deliberately slow deliveries and tie-in sales, among others—not present in the former action. While the 1943 judgment precludes recovery on claims arising prior to its entry, it cannot be given the effect of extinguishing claims which did not even then exist and which could not possibly have been sued upon in the previous case. In the interim, moreover, there was a substantial change in the scope of the defendants' alleged monopoly; five other producers had granted exclusive licenses to National Screen, with the result that the defendants' control over the market for standard accessories had increased to nearly 100%.15 Under these circumstances, whether the defendants' conduct be regarded as a series of individual torts or as one continuing tort, the 1943 judgment does not constitute a bar to the instant suit.
This conclusion is unaffected by the circumstance that the 1942 complaint sought, in addition to treble damages, injunctive relief which, if granted, would have prevented the illegal acts now complained of. A combination of facts constituting two or more causes of action on the law side of a court does not congeal into a single cause of action merely because equitable relief is also sought. And, as already noted, a prior judgment is res judicata only as to suits involving the same cause of action.16 There is no merit, therefore, in the respondents' contention that petitioners are precluded by their failure in the 1942 suit to press their demand for injunctive relief. Particularly is this so in view of the public interest in vigilant enforcement of the antitrust laws through the instrumentality of the private treble-damage action. Acceptance of the respondents' novel contention would in effect confer on them a partial immunity from civil liability for future violations. Such a result is consistent with neither the antitrust laws nor the doctrine of res judicata.
348 U.S. 810, 75 S.Ct. 42.
E.g., Cromwell v. County of Sac, 94 U.S. 351, 352—353, 24 L.Ed. 195; United States v. Moser, 266 U.S. 236, 241, 45 S.Ct. 66, 67, 69 L.Ed. 262. See also Restatement, Judgments, §§ 47, 48, 68. The term res judicata is used broadly in the Restatement to cover merger, bar, collateral estoppel, and direct estoppel. Id., c. 3, Introductory Note.
Id., 211 F.2d at page 936.
Id., 211 F.2d at pages 936—937.
United States v. Parker, 120 U.S. 89, 95, 7 S.Ct. 454, 458, 30 L.Ed. 601; United States v. International Building Co., 345 U.S. 502, 506, 73 S.Ct. 807, 809, 97 L.Ed. 1182.
See United States v. International Building Co., supra, 345 U.S. at page 505, 73 S.Ct. 807, at page 808, 809.
Restatement, Judgments, § 62, Comment g. Antitrust violations are expressly made abatable. 15 U.S.C. § 26, 15 U.S.C.A. § 26.
Restatement, Judgments, § 62, Comment g. Compare Federal Trade Commission v. Raladam Co., 316 U.S. 149, 150—151, 62 S.Ct. 966, 967, 968, 86 L.Ed. 1336.
99 F.Supp. 180, 183—184. The complaint in the 1942 suit alleged that 40% of National Screen's business in standard accessories consisted of standard accessories for the motion pictures of two (Paramount and RKO) of the three defendant producers. The complaint also alleged that 20% to 33% of the plaintiffs' business consisted of standard accessories for the motion pictures of the third defendant producer (Loew's). As to the pertinence of 'the percentage of business controlled,' see United States v. Columbia Steel Co., 334 U.S. 495, 527—528, 68 S.Ct. 1107, 1124, 92 L.Ed. 1533.
That the same rule is applicable in equity, see Restatement, Judgments, § 46, Comment b; id., § 53, Comment c.
See Restatement, Judgments, c. 4.
Compare Bruszewski v. United States, 3 Cir., 181 F.2d 419, on which both courts below relied. It should also be noted that the Bruszewski decision was an application of collateral estoppel and not res judicata as that term is used here.
Restatement, Judgments, § 94. See Bigelow v. Old Dominion Copper Co., 225 U.S. 111, 132, 32 S.Ct. 641, 644, 56 L.Ed. 1009.
Id., 225 U.S. at page 127, 32 S.Ct. at page 642.

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