Source: https://www.legalcrystal.com/case/99653/beacon-theatres-inc-vs-westover
Timestamp: 2018-05-25 20:57:39
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Matched Legal Cases: ['§ 1651', '§ 1', '§ 15', '§ 2201', '§ 400', 'art, 300', '§ 1651', 'art, 300', '§ 1370', '§ 182', '§ 2072', '§ 16', '§ 38', 'art, 300']

Beacon Theatres Inc Vs Westover - Citation 99653 - Court Judgment | LegalCrystal
Beacon theatres, Inc. Vs. Westover - Court Judgment
LegalCrystal Citation legalcrystal.com/99653
Case Number 359 U.S. 500
Appellant Beacon theatres, Inc.
Respondent Westover
beacon theatres, inc. v. westover - 359 u.s. 500 (1959) u.s. supreme court beacon theatres, inc. v. westover, 359 u.s. 500 (1959) beacon theatres, inc. v. westover no. 45 argued december 10, 1958 decided may 25, 1959 359 u.s. 500 certiorari to the united states court of appeals for the ninth circuit syllabus in anticipation of a suit by petitioner for treble damages under the sherman and clayton acts, the prospective defendant brought suit against petitioner in a federal district court for a declaratory judgment which would have settled some of the key issues in such an antitrust suit, and prayed that the bringing of such a suit be enjoined pending outcome of the declaratory judgment litigation. petitioner filed a.....
Beacon Theatres, Inc. v. Westover - 359 U.S. 500 (1959)
U.S. Supreme Court Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959)
Held: the judgment of the Court of Appeals is reversed. Pp. 359 U. S. 501 -511.
1. The District Court's finding that the complaint for declaratory relief presented basically equitable issues draws no support from the Declaratory Judgment Act, which specifically preserves the right to a jury trial for both parties. P. 359 U. S. 504 .
2. If petitioner would have been entitled to a jury trial in a treble damage suit, he cannot be deprived of that right merely because the prospective defendant took advantage of the availability of declaratory relief to sue petitioner first. P. 359 U. S. 504 .
3. Since the right to trial by jury applies to treble damage suits under the antitrust laws, and is an essential part of the congressional plan for making competition, rather than monopoly, the rule of trade, the antitrust issues raised in the declaratory judgment suit were essentially jury questions. P. 359 U. S. 504 .
the case in one suit, nevertheless, under the Declaratory Judgment Act and the Federal Rules of Civil Procedure, neither claim can justify denying petitioner a trial by jury of all the issues in the antitrust controversy. Pp. 359 U. S. 506 -511.
(a) Today, the existence of irreparable harm and inadequacy of legal remedies as a basis of injunctive relief must be determined not by precedents under discarded procedures, but in the light of the remedies now made available by the Declaratory Judgment Act and the Federal Rules of Civil Procedure. Pp. 359 U. S. 506 -510.
(b) Viewed in this manner, the use of discretion by the District Court under Rule 42(b) to deprive petitioner of a full jury trial of the issues in the antitrust controversy cannot be justified. P. 359 U. S. 508 .
5. Mandamus is available under the All Writs Act, 28 U.S.C. § 1651, to require jury trial where it has been improperly denied. P. 359 U. S. 511 .
Dimick v. Schiedt, 293 U. S. 474 , 293 U. S. 486 .
Fox had asked for declaratory relief against Beacon, alleging a controversy arising under the Sherman Antitrust Act, 26 Stat. 209, as amended, 15 U.S.C. §§ 1, 2, and under the Clayton Act, 38 Stat. 731, 15 U.S.C. § 15, which authorizes suits for treble damages against Sherman Act violators. According to the complaint, Fox operates a movie theatre in San Bernardino, California, and has long been exhibiting films under contracts with movie distributors. These contracts grant it the exclusive right to show "first run" pictures in the "San Bernardino competitive area" and provide for "clearance" -- a period of time during which no other theatre can exhibit the same pictures. After building a drive-in theatre about 11 miles from San Bernardino, Beacon notified Fox that it considered contracts barring simultaneous exhibitions of first-run films in the two theatres to be overt acts in violation of the antitrust laws. [ Footnote 1 ] Fox's complaint alleged that this notification, together with threats of treble damage suits against Fox and its distributors, gave rise to "duress and coercion" which deprived Fox of a valuable property right, the right to negotiate for exclusive first-run contracts. Unless Beacon was restrained, the complaint continued, irreparable harm would result. Accordingly, while its pleading was styled a "Complaint for Declaratory Relief," Fox prayed both for a declaration that a grant of clearance between the Fox and Beacon theatres is reasonable and
not in violation of the antitrust laws, and for an injunction, pending final resolution of the litigation, to prevent Beacon from instituting any action under the antitrust laws against Fox and its distributors arising out of the controversy alleged in the complaint. [ Footnote 2 ] Beacon filed an answer, a counterclaim against Fox, and a cross-claim against an exhibitor who had intervened. These denied the threats and asserted that there was no substantial competition between the two theatres, that the clearances granted were therefore unreasonable, and that a conspiracy existed between Fox and its distributors to manipulate contracts and clearances so as to restrain trade and monopolize first-run pictures in violation of the antitrust laws. Treble damages were asked.
Beacon demanded a jury trial of the factual issues in the case, as provided by Federal Rule of Civil Procedure 38(b). The District Court, however, viewed the issues raised by the "Complaint for Declaratory Relief," including the question of competition between the two theatres, as essentially equitable. Acting under the purported authority of Rules 42(b) and 57, it directed that these issues be tried to the court before jury determination of the validity of the charges of antitrust violations made in the counterclaim and cross-claim. [ Footnote 3 ] A common issue of the "Complaint for Declaratory Relief," the counterclaim, and the cross-claim was the reasonableness of the clearances granted to Fox, which depended, in part, on the
The District Court's finding that the Complaint for Declaratory Relief presented basically equitable issues draws no support from the Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202; Fed.Rules Civ.Proc. 57. See also 48 Stat. 955, 28 U.S.C. (1940 ed.) § 400. That statute, while allowing prospective defendants to sue to establish their nonliability, specifically preserves the right to jury trial for both parties. [ Footnote 4 ] It follows that, if Beacon would have been entitled to a jury trial in a treble damage suit against Fox, it cannot be deprived of that right merely because Fox took advantage of the availability of declaratory relief to sue Beacon first. Since the right to trial by jury applies to treble damage suits under the antitrust laws, and is, in fact, an essential part of the congressional plan for making competition, rather than monopoly, the rule of trade, see Fleitmann v. Welsbach Street Lighting Co., 240 U. S. 27 , 240 U. S. 29 , the Sherman and Clayton Act issues on which Fox sought a declaration were essentially jury questions.
by Fox's complaint read as a whole. In addition to seeking a declaratory judgment, the court said, Fox's complaint can be read as making out a valid plea for injunctive relief, thus stating a claim traditionally cognizable in equity. A party who is entitled to maintain a suit in equity for an injunction, said the court, may have all the issues in his suit determined by the judge without a jury, regardless of whether legal rights are involved. The court then rejected the argument that equitable relief, traditionally available only when legal remedies are inadequate, was rendered unnecessary in this case by the filing of the counterclaim and cross-claim which presented all the issues necessary to a determination of the right to injunctive relief. Relying on American Life Ins. Co. v. Stewart, 300 U. S. 203 , 300 U. S. 215 , decided before the enactment of the Federal Rules of Civil Procedure, it invoked the principle that a court sitting in equity could retain jurisdiction even though later a legal remedy became available. In such instances, the equity court had discretion to enjoin the later lawsuit in order to allow the whole dispute to be determined in one case in one court. [ Footnote 5 ] Reasoning by analogy, the Court of Appeals held it was not an abuse of discretion for the district judge, acting under Federal Rule of Civil Procedure 42(b), to try the equitable cause first, even though this might, through collateral estoppel, prevent a full jury trial of the counterclaim and cross-claim which were as effectively stopped as by an equity injunction. [ Footnote 6 ]
Beacon takes issue with the holding of the Court of Appeals that the complaint stated a claim upon which equitable relief could be granted. As initially filed, the complaint alleged that threats of lawsuits by petitioner against Fox and its distributors were causing irreparable harm to Fox's business relationships. The prayer for relief, however, made no mention of the threats, but asked only that, pending litigation of the claim for declaratory judgment, Beacon be enjoined from beginning any lawsuits under the antitrust laws against Fox and its distributors arising out of the controversy alleged in the complaint. Evidently of the opinion that this prayer did not state a good claim for equitable relief, the Court of Appeals construed it to include a request for an injunction against threats of lawsuits. This liberal construction of a pleading is in line with Rule 8 of the Federal Rules of Civil Procedure. See Conley v. Gibson, 355 U. S. 41 , 355 U. S. 47 -48. But this fact does not solve our problem. Assuming that the pleadings can be construed to support such a request, and assuming additionally that the complaint can be read as alleging the kind of harassment by a multiplicity of lawsuits which would traditionally have justified equity to take jurisdiction and settle the case in one suit, [ Footnote 7 ] we are nevertheless of the opinion that, under the Declaratory Judgment Act and the Federal Rules of Civil Procedure, neither claim can justify denying Beacon a trial by jury of all the issues in the antitrust controversy.
remedies. [ Footnote 8 ] At least as much is required to justify a trial court in using its discretion under the Federal Rules to allow claims of equitable origins to be tried ahead of legal ones, since this has the same effect as an equitable injunction of the legal claims. And it is immaterial, in judging if that discretion is properly employed, that, before the Federal Rules and the Declaratory Judgment Act were passed, courts of equity, exercising a jurisdiction separate from courts of law, were, in some cass, allowed to enjoin subsequent legal actions between the same parties involving the same controversy. This was because the subsequent legal action, though providing an opportunity to try the case to a jury, might not protect the right of the equity plaintiff to a fair and orderly adjudication of the controversy. See, e.g., New York Life Ins. Co. v. Seymour, 45 F.2d 47. Under such circumstances, the legal remedy could quite naturally be deemed inadequate. Inadequacy of remedy and irreparable harm are practical terms, however. As such, their existence today must be determined not by precedents decided under discarded procedures, but in the light of the remedies now made available by the Declaratory Judgment Act and the Federal Rules. [ Footnote 9 ]
Viewed in this manner, the use of discretion by the trial court under Rule 42(b) to deprive Beacon of a full jury trial on its counterclaim and cross-claim, as well as on Fox's plea for declaratory relief, cannot be justified. Under the Federal Rules, the same court may try both legal and equitable causes in the same action. Fed.Rules Civ.Proc. 1, 2, 18. Thus, any defenses, equitable or legal, Fox may have to charges of antitrust violations can be raised either in its suit for declaratory relief or in answer to Beacon's counterclaim. On proper showing, harassment by threats of other suits, or other suits actually brought, involving the issues being tried in this case, could be temporarily enjoined pending the outcome of this litigation. Whatever permanent injunctive relief Fox might be entitled to on the basis of the decision in this case could, of course, be given by the court after the jury renders its verdict. In this way, the issues between these parties could be settled in one suit giving Beacon a full jury trial of every antitrust issue. Cf. Ring v. Spina, 166 F.2d 546. By contrast, the holding of the court below while granting Fox no additional protection unless the avoidance of jury trial be considered as such, would compel Beacon to split his antitrust case, trying part to a judge and part to a jury. [ Footnote 10 ] Such a result, which involves the postponement and subordination of Fox's own legal claim for declaratory relief, as well as of the counterclaim which Beacon was compelled by the Federal Rules to bring, [ Footnote 11 ] is not permissible.
substantial procedural reform while retaining a distinction between jury and nonjury issues and leaving substantive rights unchanged. [ Footnote 12 ] Since, in the federal courts, equity has always acted only when legal remedies were inadequate, [ Footnote 13 ] the expansion of adequate legal remedies provided by the Declaratory Judgment Act and the Federal Rules necessarily affects the scope of equity. Thus, the justification for equity's deciding legal issues once it obtains jurisdiction, and refusing to dismiss a case merely because subsequently a legal remedy becomes available, must be reevaluated in the light of the liberal joinder provisions of the Federal Rules which allow legal and equitable causes to be brought and resolved in one civil action. [ Footnote 14 ] Similarly, the need for, and therefore the availability of, such equitable remedies as Bills of Peace, Quia Timet, and Injunction must be reconsidered in view of the existence of the Declaratory Judgment Act, as well as the liberal joinder provision of the Rules. [ Footnote 15 ] This is not only in accord with the spirit of the Rules and the Act,
"[t]he right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States shall be preserved . . . inviolate. [ Footnote 16 ]"
If there should be cases where the availability of declaratory judgment or joinder in one suit of legal and equitable causes would not in all respects protect the plaintiff seeking equitable relief from irreparable harm while affording a jury trial in the legal cause, the trial court will necessarily have to use its discretion in deciding whether the legal or equitable cause should be tried first. Since the right to jury trial is a constitutional one, however, while no similar requirement protects trials by the court, [ Footnote 17 ] that discretion is very narrowly limited, and must, wherever possible, be exercised to preserve jury trial. As this Court said in Scott v. Neely, 140 U. S. 106 , 140 U. S. 109 -110:
"In the Federal courts, this [jury] right cannot be dispensed with except by the assent of the parties entitled to it, nor can it be impaired by any blending with a claim, properly cognizable at law, of a demand for equitable relief in aid of the legal action, or during its pendency. [ Footnote 18 ]"
most imperative circumstances, circumstances which, in view of the flexible procedures of the Federal Rules, we cannot now anticipate, [ Footnote 19 ] can the right to a jury trial of legal issues be lost through prior determination of equitable claims. See Leimer v. Woods, 196 F.2d 828, 833-836. As we have shown, this is far from being such a case.
Respondent claims mandamus is not available under the All Writs Act, 28 U.S.C. § 1651. Whatever differences of opinion there may be in other types of cases, we think the right to grant mandamus to require jury trial where it has been improperly denied is settled. [ Footnote 20 ]
Compare Enelow v. New York Life Ins. Co., 293 U. S. 379 , with American Life Ins. Co. v. Stewart, 300 U. S. 203 . See also City of Morgantown v. Royal Ins. Co., 337 U. S. 254 ; Peake v. Lincoln Nat. Life Ins. Co., 15 F.2d 303.
252 F.2d at 874. In Ettelson v. Metropolitan Life Ins. Co., 317 U. S. 188 , 317 U. S. 192 , this Court recognized that orders enabling equitable causes to be tried before legal ones had the same effect as injunctions. In City of Morgantown v. Royal Ins. Co., 337 U. S. 254 , the Court denied at least some such orders the status of injunctions for the purposes of appealability. It did not, of course, imply that, when the orders came to be reviewed, they would be examined any less strictly than injunctions. 337 U.S. at 337 U. S. 258 .
See, e.g., Smyth v. Ames, 169 U. S. 466 , 169 U. S. 515 ; Detroit of Detroit Citizens' Street R. Co., 184 U. S. 368 , 184 U. S. 378 -382; cf. Matthews v. Rodgers, 284 U. S. 521 .
E.g., 54 U. S. Wheeling & Belmont Bridge Co., 13 How. 518, 54 U. S. 561 ; Parker v. Winnipiseogee Lake Cotton & Woollen Co., 2 Black 545, 67 U. S. 551 ; Enelow v. New York Life Ins. Co., 293 U. S. 379 .
See, e.g., Cook, Cases on Equity (4th ed.), 18; 4 Pomeroy, Equity Jurisprudence (5th ed.), § 1370; 5 Moore, Federal Practice, 154-158; Morris, Jury Trial Under the Federal Fusion of Law and Equity, 20 Tex.L.Rev. 427, 441-443. Cf. Maryland Theater Corp. v. Brennan, 180 Md. 377, 389, 24 A.2d 911; Hasselbring v. Koepke, 263 Mich. 466, 248 N.W. 869. But cf. 1 Pomeroy, Equity Jurisprudence (5th ed.), §§ 182, 183. Significantly the Court of Appeals itself relied on the procedural changes brought about by the Federal Rules when it found the plea for equitable relief valid, for it did so by relying on Conley v. Gibson, 355 U. S. 41 , which emphasized the liberal construction policies of the Rules.
Since the issue of violation of the antitrust laws often turns on the reasonableness of a restraint on trade in the light of all the facts, see, e.g., Standard Oil Co. v. United States, 221 U. S. 1 , 221 U. S. 60 , it is particularly undesirable to have some of the relevant considerations tried by one factfinder, and some by another.
See 28 U.S.C. § 2072; Fed.Rules Civ.Proc. 39(a), 57. See also Stainback v. Mo Hock Ke Lok Po, 336 U. S. 368 , 336 U. S. 382 , note 26; United States v. Yellow Cab Co., 340 U. S. 543 , 340 U. S. 555 -556.
See 36 Stat. 1163, derived from Act of Sept. 24, 1789, § 16, 1 Stat. 82. This provision, which antedates the Seventh Amendment, is discussed in 5 Moore, Federal Practice, 32. See, e.g., 60 U. S. Town of Babin, 19 How. 271, 60 U. S. 277 -278; Insurance Co. v. Bailey, 13 Wall. 616, 80 U. S. 620 -621; Grand Chute v. Winegar, 15 Wall. 373; Buzard v. Houston, 119 U. S. 347 , 119 U. S. 351 -352.
See Hurwitz v. Hurwitz, 78 U.S.App.D.C. 66, 136 F.2d 796, 798-799; cf. 53 U. S. Fitzhugh, 12 How. 443, 53 U. S. 459 -460.
This Court has long emphasized the importance of the jury trial. See Parsons v. Bedford, 3 Pet. 433, 28 U. S. 446 . See also Galloway v. United States, 319 U. S. 372 . Id. at 319 U. S. 396 (dissenting opinion).
E.g., Ex parte Simons, 247 U. S. 231 , 247 U. S. 239 -240; Ex parte Peterson, 253 U. S. 300 , 253 U. S. 305 -306; Bereslavsky v. Caffey, 161 F.2d 499 (C.A. 2d Cir.); Canister Co. v. Leahy, 191 F.2d 255; Black v. Boyd, 248 F.2d 156, 160-161 (C.A. 6th Cir.). Cf. Bruckman v. Hollzer, 152 F.2d 730 (C.A. 9th Cir.). But cf. In re Chappell & Co., 201 F.2d 343 (C.A. 1st Cir.). See also La Buy v. Howes Leather Co., 352 U. S. 249 .
by the extraordinary writ of mandamus. [ Footnote 2/1 ] In any event, no abuse of discretion is apparent in this case.
The Court of Appeals found that the complaint, although inartistically drawn, contained allegations entitling the petitioner to equitable relief. [ Footnote 2/2 ] That finding is accepted in the prevailing opinion today. If the complaint had been answered simply by a general denial, therefore, the issues would, under traditional principles, have been triable as a proceeding in equity. Instead of just putting in issue the allegations of the complaint, however, Beacon filed pleadings which affirmatively alleged the existence of a broad conspiracy among the plaintiff and other theatre owners to monopolize the first-run exhibition of films in the San Bernardino area to refrain from competing among themselves, and to discriminate against Beacon in granting film licenses. Based upon these allegations, Beacon asked damages in the amount of $300,000. Clearly these conspiracy allegations stated a cause of action triable as of right by a
Upon motion of Fox, the trial judge ordered the original action for declaratory and equitable relief to be tried separately to the court and in advance of the trial of the defendant's counterclaim and cross-claim for damages. The court's order, which carefully preserved the right to trial by jury upon the conspiracy and damage issues raised by the counterclaim and cross-claim, was in conformity with the specific provisions of the Federal Rules of Civil Procedure. [ Footnote 2/3 ] Yet it is decided today that the Court of Appeals must compel the district judge to rescind it.
Assuming the existence of a factual issue common both to the plaintiff's original action and the defendant's counterclaim for damages, I cannot agree that the District Court must be compelled to try the counterclaim first. [ Footnote 2/4 ]
That Act merely provided a new statutory remedy, neither legal nor equitable, but available in the areas of both equity and law. When declaratory relief is sought, the right to trial by jury depends upon the basic context in which the issues are presented. See Moore's Federal Practice (2d ed.) §§ 38.29, 57.30; Borchard, Declaratory Judgments (2d ed.), 399-404. If the basic issues in an action for declaratory relief are of a kind traditionally cognizable in equity, e.g., a suit for cancellation of a written instrument, the declaratory judgment is not a "remedy at law." [ Footnote 2/5 ] If, on the other hand, the issues arise in a context traditionally cognizable at common law, the right to a jury trial, of course, remains unimpaired, even though the only relief demanded is a declaratory judgment. [ Footnote 2/6 ]
Thus, if, in this case, the complaint had asked merely for a judgment declaring that the plaintiff's specified manner of business dealings with distributors and other exhibitors did not render it liable to Beacon under the antitrust laws, this would have been simply a "juxtaposition of parties" case in which Beacon could have demanded a jury trial. [ Footnote 2/7 ] But the complaint in the present case, as the Court recognizes, presented issues of exclusively equitable cognizance, going well beyond a mere defense to any subsequent action at law. Fox sought from the court protection against Beacon's allegedly unlawful interference with its business relationships -- protection which this
"that equitable jurisdiction existing at the filing of a bill is not destroyed because an adequate legal remedy may have become available thereafter. [ Footnote 2/8 ]"
American Life Ins. Co. v. Stewart, 300 U. S. 203 , 300 U. S. 215 . See Dawson v. Kentucky Distilleries & Warehouse Co., 255 U. S. 288 , 255 U. S. 296 . It has also been long settled that the District Court, in its discretion, may order the trial of a suit in equity in advance of an action at law between the same parties, even if there is a factual issue common to both. In the words of Mr. Justice Cardozo, writing for a unanimous Court in American Life Ins. Co. v. Stewart, supra:
300 U. S. 300 U.S. 203, 300 U. S. 215 -216. [ Footnote 2/9 ]
The Court today sweeps away these basic principles as "precedents decided under discarded procedures." It suggests that the Federal Rules of Civil Procedure have somehow worked an "expansion of adequate legal remedies" so as to oust the District Courts of equitable jurisdiction, as well as to deprive them of their traditional power to control their own dockets. But obviously the Federal Rules could not and did not "expand" the substantive law one whit. [ Footnote 2/10 ]
Like the Declaratory Judgment Act, the Federal Rules preserve inviolate the right to trial by jury in actions historically cognizable at common law, as under the Constitution they must. [ Footnote 2/11 ] They do not create a right of trial
by jury where that right "does not exist under the Constitution or statutes of the United States." Rule 39(a). Since Beacon's counterclaim was compulsory under the Rules, see Rule 13(a), it is apparent that, by filing it, Beacon could not be held to have waived its jury rights. [ Footnote 2/12 ] Compare American Mills Co. v. American Surety Co., 260 U. S. 360 . But neither can the counterclaim be held to have transformed Fox's original complaint into an action at law. [ Footnote 2/13 ] See Bendix Aviation Corp. v. Glass, 81 F.Supp. 645.
The Rules make possible the trial of legal and equitable claims in the same proceeding, but they expressly affirm the power of a trial judge to determine the order in which claims shall be heard. Rule 42(b). Certainly the Federal Rules were not intended to undermine the basic structure of equity jurisprudence, developed over the centuries and explicitly recognized in the United States Constitution. [ Footnote 2/14 ]
Cf. De Groot v. Peters, 124 Cal. 406, 57 P. 209; California Grape Control Bd. v. California P. Corp., 4 Cal.App.2d 242, 244, 40 P.2d 846. Compare Kessler v. Eldred, 206 U. S. 285 ; International News Service v. Associated Press, 248 U. S. 215 , 248 U. S. 236 ; Truax v. Raich, 239 U. S. 33 , 239 U. S. 38 .
is plainly inconsistent with many of the cases in which the rule has been applied. See, e.g., Beedle v. Bennett, 122 U. S. 71 ; Clark v. Wooster, 119 U. S. 332 .