Court Opinion

ID: 9460927
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:02:42.491137+00
Date Added: 2024-06-11T17:36:49.804775
License: Public Domain

LUMBARD, Circuit Judge
(dissenting) :
I dissent.
We have recently held that a preliminary injunction may be granted if a showing has been made (1) of sufficiently serious questions going to the merits to make them a fair ground for litigation and (2) a balance of hardships tipping decidedly toward the party requesting the preliminary relief. Gulf & Western Industries v. Great Atlantic & Pacific Tea Company, 476 F.2d 687, 692-693 (2d Cir. 1973); Sonesta International Hotels Corporation v. Wellington Associates, 483 F.2d 247 (2d Cir. 1973).
With regard to the first of these prerequisites, there can be little doubt that several substantial and highly complex issues involving antitrust law have been raised by the plaintiffs here. This view was shared by Judge Palmieri, who wrote in his opinion for the district court that:
There are vast and intricate problems of fact and law inherent in the contentions advanced by the plaintiffs which cannot be fairly resolved short of a thorough examination of the facts, which only a trial proceeding can afford.
A further indication of the substan-tiality of these antitrust issues involving allegations of unreasonable restraints of trade and monopolization is the antitrust suit which the Justice Department has commenced against the three major networks in the Central District of California. This suit also challenges on antitrust grounds the networks’ policy of televising programs produced by their own subsidaries.
Moreover, we are confronted here with unique and unsettled questions regarding how the antitrust laws are to be applied to the government-licensed, limited-frequency, entry-proof market of television in which the three networks have a virtual monopoly on the type and quality of programs and ideas that are disseminated to the public by television.
Indeed, ABC’s interest actually reach far beyond television itself to encompass production of motion pictures1 and ownership and operation of motion picture theatres.2
This court has previously recognized the monopoly position and the inclination of the networks to engage in predatory and restrictive trade practices. Mt. Mansfield Television, Inc. v. F.C.C., 442 F.2d 470 (2d Cir. 1971). This makes it all the more essential that the issues here raised be preserved for trial, where these questions will be given the full consideration they require.
As for the second prerequisite for a preliminary injunction, it, too, is satisfied by the record before us. Little, if any, damage would be suffered by ABC were it to be enjoined from showing its own films on its television network. Whatever the merit to the assertion by ABC that in 1967 there was a shortage of films which prompted it to enter film production, it seems clear that ABC presently has an adequate supply of motion pictures of varying quality to fulfill its programming needs for at least another year or two, if not longer. The trial should be concluded within that time, especially in light of Judge Palmi-eri’s stated intention of expediting this litigation as much as possible. Under the circumstances, ABC would suffer no substantial harm by the granting of a preliminary injunction.
*901In contrast, the injury that might be suffered by some, if not all, of the appellants could be serious. An important factor to consider in this regard is ABC’s concession at oral argument that if we affirm the decision below, ABC will feel free to show during the pen-dency of this litigation as many of its own productions as it deems desirable, even conceivably all of the thirty-nine films presently available.3 This would deny the independent producers many millions of dollars in potential income. It could also have the additional adverse effect of postponing the exhibition of independently produced ABC-owned films, thereby denying the plaintiffs further income which they might otherwise have earned, as a substantial portion of the fees from these films are not paid until the pictures are actually shown.
Even if ABC was permitted to show only the three movies presently scheduled to be televised, which is the approach adopted by the majority, substantial potential revenues running into the millions of dollars would be lost by independent producers, since each theatrical film has an average network television value of approximately $700,000. The fact that the plaintiffs here face a multimillion dollar loss, while the defendant is in no way threatened with material injury, brings this case squarely within the “balance of hardships” test set forth in Gulf & Western and Sonesta International Hotels and supports the granting of the preliminary injunction sought by the plaintiffs.4
The argument made by the defendant that preliminary relief should, nevertheless, be denied because the plaintiffs can always recover damages later if they prevail ultimately on the merits in the district court is not entitled to any weight. As plaintiffs have pointed out, it will be impossible to determine at that point which companies’ films would have been purchased and thus which companies would be entitled to relief. While conceivably some solution to the damages problem could be worked out, any solution would be highly speculative and would be best avoided.
Although the hardships would weigh dramatically against the plaintiffs were we to deny the plaintiffs preliminary relief, defendant argues that the plaintiffs are barred by laches and unclean hands. This argument lacks merit. Plaintiffs have not been dilatory in seeking a preliminary injunction. While it is true that the plaintiffs did not initially seek injunctive relief when the ABC produced movie “Whatever Happened to Aunt Alice” was scheduled for viewing on October 29, 1972, as soon as ABC indicated on April 4, 1973 that it would be following a policy of televising on a regular basis films which it had produced, the plaintiffs forthwith sought relief. It was good judgment, and proper regard for the court’s time, not to press forward for preliminary relief until it was entirely clear that ABC was about to show some of the films it had produced.
The claim of unclean hands, resting on the allegation of block-booking, should be given no weight. The claim has been vigorously denied by the plaintiffs and Judge Palmieri made no findings with regard to this disputed issue. But aside from the fact that there has been no finding that any of the plaintiffs employed block-booking, the thrust of the Supreme Court’s decision in Per-ma Life Mufflers v. International Parts Corporation, 392 U.S. 134, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968), if not its holding, was precisely “the inappropriateness of invoking broad common-law barriers to relief where a private suit serves important public purposes,” 392 *902U.S. at 138, 88 S.Ct. at 1984, such as “the overriding public policy in favor of competition.” 392 U.S. at 139, 88 S.Ct. at 1984. Since this is the very interest which plaintiffs assert to be at stake, the unclean hands defense should not influence our determination whether to grant relief.
Defendant’s further argument that the preliminary relief sought here is equivalent to the ultimate relief sought is also without foundation. As was emphasized at oral argument by plaintiff’s counsel, the permanent relief requested goes considerably further and includes fundamental restrictions on ABC’s participation in the feature film industry as well as a prohibition against its producing, distributing, or having any interest in television entertainment programming.
In sum, I would reverse and grant the relief prayed for without expressing any views on the merits, for the reason that complex and important questions of law have been raised and the hardships which would result from a denial of the preliminary injunction would weigh, far more heavily against the plaintiffs than a grant of the injunction would weigh against ABC.

. Since 1967, ABO has produced or financed 39 theatrical feature films. Recently, however, it ceased production.

. Apparently, ABC’s stake in motion picture theatres is considerable. While we are not advised as to the figures at the present time, the record shows that in 1967 ABO owned and operated the largest theatre circuit in the United States, on which distributors were dependent for between 10% and 11% of their annual turnover. At oral argument appellants’ counsel stated that ABC owned some 400 theatres. Ilis statement was not denied.

. The defendant’s frank concession supports plaintiffs’ fears of a massive foreclosure by ABC and runs counter to Judge Palmieri’s conclusion that these fears are based on “prognostications” backed by “no persuasive evidence.”

. Although CBS also has produced films for television, no preliminary injunction has been sought against it because it has yet to indicate any definite plans to televise these films on its own network. As for NBC, unlike the other two national networks, it does not produce theatrical feature films.