The opinion of the court was delivered by: KRAFT
After a decade
of collateral proceedings, and virtually on the eve of trial, the defendants have moved for summary judgment in these antitrust actions, in which plaintiff charges the defendants with violations of §§ 1 and 2 of the Sherman Act
for the period 1933-1960 and claims damages allegedly suffered from 1950 to 1960.
For the sole and limited purpose of deciding these motions, the defendants admit that they have engaged in a combination in restraint of trade in the booking and presentation of legitimate theatre attractions throughout the United States and in the presentation of legitimate attractions in Philadelphia, Baltimore, Boston, Chicago, Cincinnati, Detroit, Los Angeles, New York, Pittsburgh and Washington, D.C.
" WHEREAS the party of the first part controls the booking and playing of first - class theatrical attractions throughout the United States and Canada, and
WHEREAS the party of the second part is desirous of securing the presentation of the attractions thus controlled by the party of the first part and is desirous of arranging with the party of the first part for the production of such and other plays at the said [name of theatre] in the city of [name of city].
. . . the party of the second part hereby retains and engages the services of the party of the first part for a period commencing on the day of . . ., for the exclusive booking of legitimate attractions during the term of this agreement at the said . . . theatre in the city aforementioned, and the said party hereby irrevocably appoints the party of the first part the sole and exclusive booking agent of the . . . theatre in the city of . . . ." (Vol. I p. 163 of Plaintiff's Pre-Trial Memorandum)
By reason of such agreements the defendants stultified all competition by non-affiliated theatre operators, who were unable to secure legitimate attractions from the defendants. It gave the defendants as well a coercive power over the affiliated theatres, since the contract did not restrict U.B.O. from booking other theatres in the geographical area where the affiliated theatre was located.
The defendants' coercion was not limited to operators of theatres alone. It was extended to producers, who were compelled to book their shows through U.B.O. In occasional instances in which an independent producer of a recognized "smash hit" undertook to compete with the defendants' monopoly, his challenge was defeated. When the producers of Life With Father and the Merry Widow attempted to arrange independent tours for their productions, their efforts failed because of the pressure exerted by the defendants on theatre operators with whom the producers negotiated. Eventually, the producer of Life With Father capitulated to the Shuberts' position of strength and agreed to book his show through U.B.O. on September 1, 1942. (Vol. I Plaintiff's Pre-Trial Memorandum p. 143).
The Merry Widow, in 1944, arranged a booking in Detroit, Michigan only to find itself in competition with a Shubert-produced Merry Widow which had been deliberately booked there one week before the run of the established hit. Confusion reigned. Theatregoers frequently presented tickets at the wrong theatre, unaware that the Merry Widow was playing, competitively and concurrently, at two theatres. Thereafter, the producers of the " hit show" were unable, on a 12 week road tour, to book their attraction into a single Shubert affiliated theatre. (Vol. I Plaintiff's Pre-Trial Memorandum p. 147).
The defendants urge that, assuming the truth of the plaintiff's allegations for the purposes of the present motion - the plaintiff is not entitled to damages, because it was in pari delicto with the defendants and participated in the violations of §§ 1 and 2 of the Sherman Act. Crest Auto Supplies, Inc. v. Ero Manufacturing Company, 360 F.2d 896 (7 Cir. 1966).
The defendants claim to be entitled to judgment as a matter of law, asserting that the plaintiff corporation was formed in 1950 by William Goldman (Goldman) and Lawrence Shubert Lawrence, pursuant to an agreement among Goldman and the defendants in violation of the Sherman Act §§ 1 and 2 in which the parties agreed:
"(b) That the defendants would exercise their alleged monopoly power to compel producers whose attractions had been allocated to plaintiff to present their attractions at plaintiff's theatre."
"(c) That the defendants would not compete with plaintiff in the solicitation of producers whose legitimate attractions had been ...