Legal Document

334 U.S. 110 68 Supreme Court Reporter 947 92 L.Ed. 1245 SCHINE CHAIN THEATRES, Inc., et al.v.UNITED STATES. Number 10. Argued Dec. 15, 1947. Decided May 3, 1948. Petition for Clarification Denied June 1, See 831, 1343. Appeal from the District of United States Western New York. [Syllabus pages 110-112 intentionally omitted] Mr. Bruce Bromley, York City, appellants. Robert L. Wright, Washington, D.C., appellee. Justice DOUGLAS delivered opinion Court. 1 This is a companion case to versus Griffith, 100, 941, and here by way appeal The appellants, who were defendants below, are parent company, three its officers directors, five wholly owned subsidiaries—to whom we refer collectively as Schine. As 19, 1942, Schine or had financial interest in chain approximately 148 motion picture theatres1 located 76 towns 6 states,2 greater portion being 78 theatres 41 36 17 Ohio. Of towns, 60 closed i.e., places where only theatre all town.3 was acquired beginning 1920 largest independent circuit country. Since 1931 118 theatres. 1928 increased 56. In 1941 there which Schine's competitors playing major film products. 2 sued prevent restrain appellants violating §§ Sherman Act. 26 Statutes-at-Large 209, 50 693, 15 Code KF62 2, Annotated KF65 U5 2. complaint charged that interests pooling their entire buying power negotiation films distributors so combine open got advantages itself imposed restrictions on otherwise would not have been possible. It granted certain favors withheld competitors, e.g., giving first run, refusing at times second runs charging with lower rentals than it others, licensing excess reasonable requirements. 3 also forced attempted force out business sell threatened build built an opposition theatre, deprive deprived desirable cut admission prices, engaged other unfair practices. these ways used maintain monopoly n d trade. conspiracy between themselves them distributors. 4 found conspired each eight distributors4 violate § Its findings may be summarized follows: 5 utilized negotiate distributors, negotiations ending master agreements distributor exhibitor. large power5 gave 'opportunity exert pressure obtain preferences.' Moreover, combining able 'to dictate terms distributors.' bought some no (but respects most option purchase). performed service (under so-called agreements) groups others interested. Through use such arbitrarily second-run pictures, many secure unreasonable clearances6 year after 90 180 days. obtained long-term rental (franchises) preferences given operators,7 received more advantageous concessions respecting prices get. made threats order sales various entry operator. prices. compete long years extended well. filmrental available independents. entered decree enjoining practices requiring divestiture 63 F.Supp. 229. First. For reasons stated Griffiths, restraint trade violation concerted action subsidiaries, named directors endeavor immunized reason fact members closely affiliated rather independent. Yellow Cab Co., 332 218, 227, 67 1560, 1565, 91 2010; Crescent Amusement 323 173, 65 254, 89 650. resulted execution exhibitors. brought into unlawful combinations defendants. Paramount Pictures, 131, 915. course makes plain commerce affected interstate. company supra, 180, 183, 184, page 259, 7 Second. Appellants object evidence numerous inter-office communications officials dealt. placed considerable relianceo making findings. We will advert later documents prove unreasonableness clearances. sufficient this point say since established evidence, letters memoranda admissible against conspirators declarations associates far they furtherance project. Hitchman Coal & Coke Mitchell, 245 229, 249, 38 65, 71, 62 260, L.R.A.1918C, 497, Ann.Cas.1918B, 461; 650; Gypsum 333 364, 525. 8 Third. make detailed challenges based holdings violated 9 (1) They vigorously attack independents first-and pictures. Their chief contention support finding arbitrary part Schine, did buy pictures beyond needs keep away any successful purchaser first- has exclusive privilege necessarily deprives period advantage regard result operation forces competiton. 10 read underlying finding, power—represented towns—which enabled could obtain. Deprivation indeed sense product power, competitive forces. That construction give Court; construed supported substantial evidence. There exceptions subsidiary But do stop relate them. even if lay aside clearly erroneous lack conclusion irresistible gain which, purely basis, achieved. 11 (2) Defense agreements—the franchises—is ground accepted methods doing industry,8 favored devices stabilize end save expense, chosen instruments suppress competition. seems us apparent served intensify impact competitors. when acquire produced two one alone, plainly strengthened through exercise dominant position over 12 challenge franchises, addition supplies operators. One inequitable clearance provisions; another, special film-rental concessions. consider later. aspects analyze. franchise employed restraints stated; must permanently enjoined, though assume collateral accurately described condemned. 13 (3) ones inaccuracies episodes susceptible interpretations, innocent unlawful. still unmistakable earmarks intent expand empire On whole think justified drawing inference purpose ambiguous those coupled adequate 14 (4) reach same exacted out. enough valid under local law. Even lawful device weapon effort monopolize commerce. Agreements purpose. American Tobacco 221 106, 174, 31 632, 646, 55 663; 181, 258, If complete, inferences drawn might warranted. setting record, background monopolistic practices, infer requisite present additional weapons arsenal sought extended. (5) operators intelligible us. went state 'These provisions contracts independents.' How constitute therefore apparent. set clarified remand cause. 16 (6) contained minimum subsequent runs, relieved requirements imposing fixed. well settled fixing like types price fixing, per se. Socony-Vacuum Oil 310 150, 811, 84 1129. either favorable required unlike said adhered to. exist, speculate what sanction had. (7) uncontroverted. cutting without practice record shows common industry. Thus instrument eliminate bring knees. se, facts circumstances adduced show effect m ployed power. Here nothing except bare sufficiently discriminating withstand analysis injunction cutting. 18 (8) clearances presents issues. elaborated 915, need repeat there. Clearance agreement exhibit filn nor license within area last date showing licensee made.9 is, words, specified successive dates. designed protect value granted. While thus protects income exhibitor, se competition otherwise. All purported condemn, appellee maintains unlawful, 'unreasonable clearances.' reasonableness test, factors bear appear numerous.10 Court, however, greatly illuminate problem. What standards criteria applied does appear. are, few clues basis classifying unreasonable. 'over operate.' (63 238.) irrelevant problem clearances, definition run both him clearance. 19 'were previous clearance.' cleaa nce 'unreasonable.' 'some distant upwards 20 miles' 'outside comparably small population, justified.' different areas, come closest revealing standard determining whether reasonable, unless possibly instances cites view illegal because time. turn situations town. So perhaps absence question. can guess then wonder our correct, suggests vice ran but towns. left somewhat inthe dark followed theory areas. 21 Appellee proof periods almost uniformly wide variations condition size type played clue face attempt discrimination appraising 22 argue dispensed statements matter exhibitors identical. self-interest call militate best distributors.11 clear properly fall scope project sponsoring. Cf. Pinkerton States, 328 640, 647, 648, 66 1180, 1184, 1489. however be, advance very too fail specific content concept 23 resort seeks sustain least deal met. obtained, evident, adopted look see manner. 24 short know mean, aside. intimate here, case, adverse hold before pass questions tendered, reflect appraisal complex bearing question reasonableness. function 25 Fourth. enjoins acts practices.12 To extent directed reflected aside, re-examined case. generality 'monopolizing' films.13 statutory requirement injunctions 'shall terms, shall describe detail, reference bill document, act restrained.' 738, 28 383, 383. And Federal Rules Civil Procedure, rule 65(d), following section 723c. determine provision read, light paragraphs (Swift 276 311, 328, 48 315, 72 587) muster. public requires phase precise should specifically enjoined. 27 considered objections parts (apart discuss later) find merit. Fifth. included adjudging appellant companies 'dissolved, realigned, reorganized ownership control fair restored thereafter maintained.' parties subsequently submitted plans hearings Department approved modifications. plan provide dissolution separation several corporations done 188, 189, 261, 262, keeps intact selection 33 four larger Rochester, York.14 divested 40 70-odd operating.15 one-theatre unaffected. 29 dissolves agreements. A trustee appointed ordered. prohibited acquiring 'except affirmative acquisition unreasonably competition.' ordered book owns interest. concluded program necessary restore 'free enterprise amongst branches industry.' 30 noted, follow procedure combination corporations. presented rejected. contemplated division among separate corporations, family owning corporation. rejected furnish assure discontinuance constituted violations pursue further prospect dismemberment geographical groupings unaffiliated ownerships. Nor inquiry reveal, properties lawfully acquired; permitted retain may, tactics start premise future forbid repetition conduct, unlawfully empires preserve intact. full dividends profit inflicted Such enforcement Act futile thing perchance moved incipient stages essential feature decrees. 650, cases cited. 32 require add penalties Congress provided antitrust laws. Like restitution merely defendant gains his wrongful conduct. equitable remedy undo prevented outdistanced government National Lead 319, 351—353, 1634, 1649—1650, 2077, opposed view. plants manner violative Divestiture take account conditions particular industry past violations. serves functions: puts violatio. benefits conspiracy. break up render impotent violates 188—190, 941. 34 phases products Hence direction unscramble warrant direct method causing surrender dispose acts. score address upshot reveal rewards were; consequently court preferable remanded appropriate 35 starting ordered, fruits conspiracy, kind condemns (see 781, 809, 1125, 1138, 1139, 1575), spite restrictive decree. Monopoly condemned obtained. mere existence monopolize, together so, constitutes evil aimed. 941; Aluminum America, Cir., Reporter, 2nd Series 416, 432. await accordingly approve agreements, prohibition booking interest, restriction acquisitions 185—187, appointment implements reconsidered 37 judgment affirmed reversed cause proceedings conformity opinion. 39 Affirmed part. FRANKFURTER concurs result. MURPHY JACKSON took consideration decision These figures include converted uses. (78), Ohio (36), Kentucky (18), Maryland (12), Delaware (2), Virginia (2). each, town six another 87 cent cities villages populations 25,000 10,000. Fox, Loew, Paramount, RKO, Warner, Columbia, Universal, Artists. 1939-1940 season paid $1,647,000 rental. By meant time agreed upon elapse 'independents' 'independent operators' mean exhibitor-distributors. course, circuit, term consent provided, inter alia, enter released during having longer void thirtieth day order. note 6, supra. Bertrand, Evans Blanchard, Motion Picture Industry—A Pattern Control 40-41 (TNEC Monograph 43, 1941): 'The establishment schedules intricate procedure. involves bargaining process balance variety opposing economic interests. initially primary objective maximize total revenue picture. aim gives periods. higher fees prior-run exhibitor directly conditioned protection he granted, general showing, fee pay. 'On hand, distributor's subsequent-run exhibition important him; difference black red ink ledgers. period, smaller returns—not customers attended prior wait exhibition, effects advertising exploitation efforts vitiated general, box-office return earned showings, revenue. relation zoning, price, seating capacity, one. range covered indicated fact: amounting thousands dollars metropolitan theater, exhibited theater city less $20.' 10, provides: 'Each hereby enjoined restrained: '1. From monopolizing supply situation competing suitable thereof thereof. '2. demanding receiving operated restricts ability corporation controlled attempting demands means whatsoever. '3. conditioning outside Buffalo, York, entering franchise. '5. enforcing existing heretofore restrict real estate non-theatrical purposes. '6. using deception whereby competitor induced sell. '7 continuing contract, person maintaining monopolies preventing them, similar restraining States.' 12, paragraph 1. remaining unsold 1942. withdrawn pursuant

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