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CINEMA SERV. CORP. v. TWENTIETH CENTURY-FOX FILM C

October 1, 1979

Cinema Service Corp.
v.
Twentieth Century-Fox Film Corp.



The opinion of the court was delivered by: KNOX

MEMORANDUM OPINION

Presently before the Court is defendant Twentieth Century-Fox Film Corp.'s (hereinafter "TCF") motion for summary judgment with respect to all four counts of plaintiff's amended complaint. Extensive briefs, affidavits and exhibits were received from both parties and oral argument was heard by the Court on June 28, 1979. After careful consideration of the issues presented by defendant's motion, the Court has determined that the motion will be granted with respect to count III and denied with respect to counts I, II, and IV.

 We begin with the rule that summary judgment may be granted only if the record shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Ely v. Hall's Motor Transit Co., 590 F.2d 62 (3rd Cir. 1978). Fed.R.Civ.P. 56(c). The burden is on the moving party to demonstrate that the test is met and the non-moving party is entitled to the benefit of all reasonable doubts and inferences that may arise in connection with the consideration of such motion. In applying this standard to the issues in the present case, we are mindful of the Supreme Court's admonition in a celebrated antitrust case that "(t)rial by affidavit is no substitute for trial by jury which so long has been the hallmark of "even handed justice.' " Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S. Ct. 486, 491, 7 L. Ed. 2d 458 (1962); Harold Friedman, Inc. v. Thorofare Markets, 587 F.2d 127, 131-132 (3rd Cir. 1978).

 COUNTS I, II, and IV

 In its amended complaint, plaintiff has alleged in three separate counts, that TCF has violated section one of the Sherman Act, 15 U.S.C. § 1, by engaging in various alleged conspiracies to restrain trade and lessen competition. In order to sustain a cause of action under § 1 of the Sherman Act, the plaintiff must prove (1) that defendant contracted, conspired, or combined with others; (2) that the combination or conspiracy produced adverse, anti-competitive effects within the relevant product and geographic markets; (3) that the objects of and the conduct pursuant to that contract, combination, or conspiracy were illegal; and (4) that the plaintiff was injured as a proximate result of the conspiracy. Martin B. Glauser Dodge Co. v. Chrysler Corp., 570 F.2d 72, 81 (3rd Cir. 1977).

 Defendant contends that it has acted unilaterally in negotiating its terms and that the differences in house allowances resulted from competitive forces in the market. Defendant denies that such allowances were set pursuant to an unlawful conspiracy in which TCF and various exhibitors participated.

 The plaintiff's president, Edson C. Jones, testified at the Hearing on the Motion for Preliminary Injunction in this action *fn1" that when he had requested an increase in plaintiff's house allowance in November, 1976, the defendant refused to negotiate such increase unless plaintiff agreed to submit an audited breakdown of actual expenses. (Hearing 38, 39, 69). Jones stated that defendant granted higher house allowances to affiliated and circuit theatres without requiring audited breakdowns of their actual expenses. (Jones Dep. 193-204, 230-232). Jones testified that because of defendant's licensing policy, plaintiff was unable to license some of the films distributed by the defendant and, as a result thereof, plaintiff sustained a loss of revenue. (Hearing 102, 113).

 In support of its allegations in count I and count II, Infra, plaintiff has offered to prove that defendant has discriminated against it and in favor of the affiliated and circuit theatres through various kinds of contractual advantages. These contractual advantages include, among others, extended runs, favorable credit terms, and various kinds of rebates. (Plaintiff's affidavit in opposition to defendant's motion for summary judgment, ex. 3). Plaintiff alleges that the competitive advantages of these provisions were so great that their inclusion in contracts with the circuit and affiliated theatres and their exclusion from contracts with the plaintiff constituted an unreasonable restraint against the plaintiff. Plaintiff contends that each allegedly discriminatory contract constituted a conspiracy between the defendant and one of the exhibitors who are identified in plaintiff's pretrial narrative. See United States v. Paramount Pictures, 334 U.S. 131, 68 S. Ct. 915, 92 L. Ed. 1260 (1948).

 Defendant has asserted that these contractual terms were subject to negotiation and that the discriminations of which the plaintiff complains are not evident from the documents which are attached to plaintiff's affidavit.

 While we make no finding with respect to the strength or weakness of the plaintiff's allegations as supported by the testimony of Edson C. Jones and the documents attached to plaintiff's affidavit, we are persuaded that genuine issues of material fact have been identified and that, accordingly, summary judgment is inappropriate with respect to count I.

 In count II, plaintiff has alleged that defendant conspired with various affiliated and circuit theatres in the Pittsburgh area in a split arrangement. *fn2" Plaintiff has asserted that multi-theatre owners agreed among themselves to the split and, as a part of the agreement, the exhibitor would call defendant and defendant would supply a particular film to that exhibitor. Plaintiff has contended that defendant allocated films only to those exhibitors involved in the split. Jones testified that defendant participated in split arrangements with exhibitors which affected the availability of desirable films to the plaintiff. (Hearing 21-26).

 In count IV, plaintiff has asserted that when plaintiff refused to participate in the illegal conspiracies as alleged in counts I and II, and commenced this action, defendant ceased to do business with plaintiff in retaliation. Defendant contends that it has made an independent decision to discontinue dealing with the plaintiff and that plaintiff has failed to adduce any ...


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