compared with others of the same type, nor with any local competitive situation. Of course, this case grows out of the demand of a single theatre owner and a local situation is incidentally, though only incidentally, involved, but the reasons for refusing him first-run pictures are wholly directed to the position of the drive-in theatre in the motion picture industry. The sum of the testimony is that the plaintiff is excluded from first-run bidding simply because his theatre is a drive-in. If the course which has been applied to him is adhered to generally (and, from the reasons given, the only possible conclusion is that it will be) no drive-ins within 30 or 40 miles of any city anywhere will get first-run pictures.
In the present case the restraint is effected through the device of clearances. The question, however, is not whether the term of the 28 day clearances offered to the plaintiff is unreasonably long, but whether the total denial of first runs to the plaintiff is reasonable or unreasonable. As Judge Hand pointed out in United States v. Paramount Pictures, D.C., 66 F.Supp. 323, 345, clearances and runs are practically alike 'and the practice of clearance is so closely allied with that of run as to make comment on the one applicable to the other.'
In the Paramount case the District Court held that clearances, unlike price fixing agreements, are not unlawful per se. On appeal the Supreme Court did not consider the question because the government abandoned its position in that regard. It has, therefore, been generally accepted that there is no illegality in attaching to the licensing of a film an agreement that no competing theatre shall have the film until a certain agreed time has expired, and it has also been held that under certain conditions the protection of clearance may be given to a single theatre or to a group of theatres in a particular locality as against other theatres, although, as far as I know, the Supreme Court has never had occasion to rule upon the practice as applied to theatres rather than the pictures themselves. The opinion of the District Court in the Paramount case, however, made it clear that what was said was intended to apply to clearances imposed in particular situations by reason of special considerations having to do with the pictures and theatres immediately involved. ' * * * licenses between one distributor and one exhibitor with reasonable clearance provisions do not, in our opinion, involve anything unlawful', United States v. Paramount Pictures, District Court, opinion, supra, 66 F.Supp.at page 341. Both the District Court and the Supreme Court, in the Paramount case, unqualifiedly condemned any system of clearances which had 'acquired a fixed and uniform character' and which were 'made applicable to situations without regard to the special circumstances which are necessary to sustain them as reasonable restraints of trade.' United States v. Paramount Pictures, 334 U.S. 131, 146, 68 S. Ct. 915, 924, 92 L. Ed. 1260.
Progress under the competitive system comes from the constant development of new forms and methods and their entry into free competition with the old. Unless, or until, they have been demonstrated to be detrimental to the public, they should so far as possible be allowed to find their proper place in the industry, rather than have a place assigned to them by a dominant group with monopolistic power. The erection of a fence around an industry to keep out newcomers is wholly repugnant to the policy which underlies our anti-trust legislation.
I am of the opinion that a restraint of commerce in the distribution of motion pictures which is imposed as a result of the adoption of a general policy, implemented by a system of clearances intended to operate uniformly throughout the entire field of exhibition and wholly to suppress a new form of competition, is an unreasonable restraint and I hold that these defendants, in imposing such a restraint, are violating the anti-trust laws.
I find no evidence of unlawful conduct on the part of the intervening defendants.
On Requests for Findings
The parties have submitted a great many requests for findings of fact. Before answering them it may be well to mention some general considerations which bear upon a number of the requests, which may be grouped according to their subject matter.
One such group deals with the matter of competition between the plaintiff's theatre and those of the intervening defendants. There is undoubtedly such competition, but how extensive it is is hard to say. Many patrons of the drive-in theatre are persons who for various reasons would very seldom attend theatres located in the heart of the city. Apparently no investigation or check has been made to determine the extent to which the drive-ins cut into the business of the other type. However, on the whole, I think that the competition, in the case of Allentown and Bethlehem at least, is substantial or would be if the Boulevard could get first-run pictures.
I think, however, that the matter of competition has much less importance in this case than the parties have given it. It is only one of the things which the Supreme Court in the Paramount case said was proper for consideration in determining whether in any given instance the imposition of a clearance upon a certain theatre is unreasonably restrictive, and the mere fact that competition exists does not always justify such discrimination. It has no bearing whatever upon the real issue presented in this case, namely, whether a general system of clearances, uniform in that if carried out it would deny first runs to every theatre of a certain type, with the object of eliminating first-run competition by such type of theatre, is a lawful restraint upon commerce. The testimony of the defendants' witnesses and the reasons given by them for the course which they have adopted make it clear that drive-ins generally will be excluded from first runs regardless of the competitive factors in any given situation.
For generally similar reasons, another group of requests, intended to form a basis for comparison between the plaintiff's drive-in and the Allentown theatres, is not particularly important. So far as the plaintiff's theatre is concerned, they are, of course, relevant because the chief basis for the defendants' refusal to give the plaintiff first runs seems to be their concern about the possible depreciation of the value of their product for second and subsequent runs in other theatres and the characteristics and general suitability of the plaintiff's theatre would have a bearing upon this point. These requests have already been answered in the foregoing opinion. The net result is that if any drive-in theatre is suitable for a showing of a feature picture on first run the plaintiff's is.
Comparison between it and the intervening defendants' theatres is futile. The two types of theatres are simply not comparable. If the Boulevard were a downtown theatre of the conventional type with no roof, no seats and no heating plant, comparison between it and a first-class theatre would advance the inquiry considerably. As it is, it is of no great help.
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