Opinion ID: 1546173
Heading Depth: 1
Heading Rank: 2

Heading: Res Judicata Effect Of The Oklahoma District Court Judgments.

Text: The present state of facts raising questions of res judicata developed in the following manner. It will be remembered that the plaintiff and his father organized the various corporations who are the assignors of the plaintiff in this lawsuit. These corporations made their assignments to him on April 13, 1931 and again on December 31, 1933. The first suit was commenced April 17, 1931, in the United States District Court for the Western District of Oklahoma against the present defendants and others. That action was dismissed without prejudice on April 19, 1937. The plaintiff then split the litigation into three parts. The present action was commenced June 7, 1937. Also in 1937, the plaintiff brought two actions in the United States District Court for the Western District of Oklahoma, Nos. 6516 and 6517, 37 F.Supp. 649. In Oklahoma 6516, the defendants are the same as here except Metro-Goldwyn-Mayer Distributing Corporation (Metro) which is a defendant here but was not a defendant in 6516. In 6517, plaintiff named other defendants than those in the present action. Vitagraph, however, one of the defendants here, was and is a wholly-owned subsidiary of Warner Bros., a party defendant in 6517. In all three actions  the present one and Oklahoma suits 6516 and 6517  the plaintiff first alleges what he has characterized in this litigation as the generic conspiracy, a combination on the part of the defendants to monopolize and restrain interstate commerce in motion pictures by twenty of their business practices. [6] In the present action, plaintiff then sets out in ten counts the alleged effect of this conspiracy upon ten of the assignor corporations. In Oklahoma 6516 he complained of injury to five other assignor corporations and two of the ten involved here. In 6517 he complained of injury to all fifteen of the assignor corporations. The Oklahoma actions (6516 and 6517) were consolidated for trial and concluded before the present case came to trial on the merits. From the findings in the Oklahoma consolidated trial, this much is clear and pertinent to the res judicata rulings: the defendants were found to have conspired in violation of the anti-trust laws only by (1) using standard exhibition contracts and taking concerted action to enforce the compulsory arbitration provisions therein, and (2) adopting and enforcing credit committees' rules concerning the credit statement and rating of vendees of theaters who had not assumed the licensing contracts of their vendors. [7] Defendants were found not to have conspired in the other respects charged. In the suit numbered 6516 it was found that the plaintiff had suffered no injury from the defendants' unlawful conduct. In the suit numbered 6517, the plaintiff recovered judgments against two corporations not parties here and lost as against the others named. In order to give res judicata effect to the Oklahoma judgments, two problems must be resolved. The first concerns the relationship of the parties. The second involves issues of the compulsory joinder of causes of action and suggests interesting excursions into the codifiers' hunting ground where elusive concepts like cause of action are tracked down. The problem as to the parties concerns principally Metro. In all the cases the plaintiff is the same. [8] All the defendants in the present case except Metro were defendants in Oklahoma 6516. In 1936, however, one year before Oklahoma 6516 was instituted, Loew's Inc. acquired all the assets and assumed the liabilities of Metro. Loew's Inc. was a defendant in Oklahoma 6516. It is clear, therefore, that Loew's and Metro are in privity. [9] The plaintiff's argument against the application of the doctrine of res judicata to his claim against Metro in the present case leads us into the second problem. He contends that he has a separate claim against Metro for its conduct before the merger of Metro with Loew's. He argues further that the cause of action he asserted against Loew's in Oklahoma 6516 was for the tortious conduct of Loew's itself. Therefore, says the plaintiff, the cause of action against Metro has never been prosecuted and the merger of Metro with Loew's should not destroy that cause of action. Fortunately we need not resolve the interesting questions of the separate identity of causes of action and their compulsory joinder which are raised by the plaintiff's argument. [10] The reason we are relieved from doing so is that, whether or not the causes of action, if separate, had to be joined, they were in fact joined. Metro's part in the alleged conspiracy was set out in Oklahoma 6516, and the court there expressly found that Loew's was a party to the illegal practices    through the agency of Metro-Goldwyn-Mayer Distributing Corporation   . The conspiracy issues were thus litigated with respect to Metro in Oklahoma 6516, and the plaintiff in the present case may not relitigate those issues. The same analysis applies to Vitagraph which is a party defendant here but was not named in Oklahoma 6517. All the named defendants in 6517 were different from those named in the present case. Warner Bros., however, was a party defendant in 6517, and Vitagraph was and is a wholly owned subsidiary of Warner Bros. The consolidated findings in Oklahoma 6516 and 6517 expressly state that Warner Bros. was involved in the illegal practices in part through Vitagraph. The same rule, therefore, applies to the Warner-Vitagraph as applies to the Loew's-Metro relation and the rule of collateral estoppel, as that phrase is used in the Restatement of Judgments, applies. [11] What has been said thus far establishes a proper relationship of the parties for the application of the doctrines of res judicata. A further problem, however, takes us back to the questions of separate identity and joinder of causes of action. The plaintiff contends that he is asserting a separate cause of action for the injury alleged to have been caused by the defendants to each operating company. He contends also that Momand Realty Corporation, which was in the position of lessor to a number of the operating companies, and Momand Theatres Inc., which was the management head of all the operating companies, had as many separate causes of action for the injuries done to them as there were operating companies. The resolution of these questions will be material only to determine whether the plaintiff is barred by the earlier judgments from asserting any cause of action at all, or whether only the matters of fact found for or against him in the earlier litigation will be foreclosed to him in the present case. Assuming, therefore, without deciding, that as to the operating companies the plaintiff had separate causes of action, it is clear that collateral estoppel is properly applied in this case to prevent the plaintiff from relitigating questions of fact which were decided against him in the earlier lawsuits. It is clear, also, that as to Momand Realty Corporation and Momand Theatres Inc., collateral estoppel applies. Furthermore, as to these two corporations no claim of damage can be supported if, as we have already decided, there is no proof that damage to the operating companies was caused by the illegal practices of the defendants. The trial court's ruling that proof of the claims of the operating companies could not involve relitigation of fact issues decided in the earlier Oklahoma case was, therefore, correct. Whether or not the trial court was correct in ruling that suit on any claim of Momand Realty or Momand Theatres was barred by the earlier litigation, the claims of these companies fall for lack of proof of damage to the operating companies. Plaintiff's final contention in this phase of the case is that the law as the federal court in Oklahoma applied it has been changed by recent United States Supreme Court decisions and that, therefore, the doctrines of res judicata should give way to a more favorable climate of judicial opinion than that existing at the time of the Oklahoma litigation. We do not think they should. The plaintiff had a full trial in Oklahoma of all the issues arising out of his dealings with the defendants. He could have appealed from the judgments of the Oklahoma District Court, but he did not do so. He took no part in creating the more favorable climate of opinion in the appellate courts, if such exists, although he had an opportunity to do so. We think that the policy that there be an end to litigation prevents him from now asserting that changed climate as a basis for relitigation of issues once decided. Two further points merit brief mention. First, the trial court in the present case ruled that certain practices which the Oklahoma District Court had found defendants had followed and which that court declared illegal were to be treated conclusively as illegal practices here. In Oklahoma 6516, however, it was further found that no damage resulted to the plaintiff, despite the illegal practices, and final judgment was entered for the defendants. That left the defendants with no grounds for appeal, unless, as has happened here, the plaintiff had appealed. Under the principle of Restatement, Judgments § 69(2), comment c, defendants should not have been collaterally estopped from relitigating the issues decided against them. But this point would be material only if this case were to go back for a new trial. Second, assuming the correctness of the res judicata rulings, the plaintiff argues that he was prevented from proving a new conspiracy not previously charged, a conspiracy to destroy the plaintiff's business. This is of a piece with the too generalized character of the plaintiff's proof. Of course a new conspiracy would be open to proof in this case and the trial judge said so over and over again. But a conspiracy to destroy a business must take specific forms to achieve that end. Attention must be directed to the practices and conduct by which the defendants sought to accomplish their purpose. At no point does the plaintiff present, nor does the record reveal offers of evidence to show that anything beyond the twenty already familiar business practices is involved. The res judicata rulings, so far as they are material to the disposition of the case, are correct. We go on to the issue of time limitation.