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ORSON, INC. v. MIRAMAX FILM

November 3, 1997

ORSON, INC. d/b/a The Roxy Screening Rooms, Plaintiff,
v.
MIRAMAX FILM, CORP., Defendant.



The opinion of the court was delivered by: JOYNER

 JOYNER, J.

 NOVEMBER 3, 1997

 Presently before this Court is Defendant, Miramax Film, Corp.'s ("Miramax" or "Defendant"), post trial motion for Judgment as a Matter of Law pursuant to Federal Rule of Civil Procedure 50 or in the alternative for a New Trial pursuant to Federal Rule of Civil Procedure 59. This action was commenced on August 2, 1993 by Orson, Inc. ("Orson" or "Plaintiff"). Plaintiff's second amended complaint alleged three counts: Count I alleged that Miramax violated section 1 of the Sherman Act; Count II alleged that Miramax violated Pennsylvania's "common law doctrine against unreasonable restraint of trade;" and Count III alleged that Miramax violated the Pennsylvania Feature Motion Picture Fair Business Practices Law, 73 P.S. § 203-1, et. seq.1 ("Pennsylvania Act" or "the Act"). This Court granted Miramax's Motion for Summary Judgment as to Counts I and II and granted partial summary judgment as to Count III. See Orson v. Miramax, 862 F. Supp. 1378 (1994). The Third Circuit affirmed the grant of summary judgment as to Counts I and II, but vacated and remanded on Count III. See Orson v. Miramax, 79 F.3d 1358 (1996). At trial, this Court granted Defendant, Miramax's, Motion for Judgment as a Matter of Law pursuant to Federal Rule of Civil Procedure 50(a) on plaintiff's claims that Miramax violated sections 203-4 and 203-8 of the Pennsylvania Act. See (Trial Transcript 2/27/97, 2). A jury trial followed on the merits of plaintiff's claim that Miramax violated section 203-7 of the Pennsylvania Act. The jury found that Miramax violated section 203-7 of the Act with regard to seventeen (17) Miramax films *fn2" and awarded damages in the amount of $ 159,780 to Orson. It is from this judgment that Miramax presently seeks post trial relief. For the following reasons, Miramax's motion is denied.

 BACKGROUND

 The facts surrounding this case have been described at length in several prior opinions of this Court, Orson, Inc. v. Miramax, Corp., 867 F. Supp. 319 (1994), 862 F. Supp. 1378 (1994), 1994 WL 7708 (1994), 836 F. Supp. 309 (1993), and in the Third Circuit opinion, Orson, Inc. v. Miramax, Corp., 79 F.3d 1358 (1996). Thus, familiarity with these facts is assumed, and they are not repeated here. Rather, we summarize the statutory provisions at issue and the claims of Miramax.

 Section 203-7 of the Pennsylvania Act provides that:

 No license agreement shall be entered into between distributor and exhibitor to grant an exclusive first run or an exclusive multiple first run for more than 42 days without provision to expand the run to second run or subsequent run theatres within the geographical area and license agreements and prints of said feature motion picture shall be made available by the distributor to those subsequent run theatres that would normally be served on subsequent run availability.

 73 P.S. § 203-7. Orson was able to sustain a claim under this provision after the Third Circuit interpreted the term "within the geographical area" to mean that there must be expansion to second run theaters within the geographic area for which the original license was granted. See Orson, 79 F.3d at 1373-74 (overruling this Court's interpretation of the term "geographic area"); see also Orson, 862 F. Supp. at 1387 (overruled in part Orson, 79 F.3d 1358)(finding that the term geographic area did not mean "increasing market rivalry among direct competitors, but instead [meant] promoting the wide distribution of movies throughout Pennsylvania").

 Section 203-10 of the Pennsylvania Act provides a cause of action for violation of any of the statutory provisions. Section 203-10 states:

 73 P.S. § 203-10.

 Miramax currently seeks judgment as a matter of law or a new trial claiming that the Pennsylvania Act is unconstitutional under the Supremacy Clause of the United States Constitution because it is preempted by the Copyright Act; claiming the Act is unconstitutional under the Commerce Clause of the United States Constitution because it is an undue burden on interstate commerce; claiming there was not sufficient evidence from which the jury could find that Miramax's conduct caused any injury to Orson; claiming that there was insufficient record evidence from which the plaintiff's damages expert could base his damages calculations; and claiming there was not sufficient evidence from which the jury could find that Miramax acted in a willful or intentional manner as required by section 203-10 of the Act. Further, Miramax argues that it is entitled to a new trial because this Court committed errors by admitting any evidence of Miramax' violation of section 203-4 of the Act since that provision of the statute was no longer an issue at trial; claiming that this Court erred in instructing the jury as to the articulated legislative purposes of the Act; and that this Court erred in not instructing the jury what is legally required to find a violation of section 203-7 of the Act. As stated supra, Miramax's motion will be denied.

 DISCUSSION

 I. Legal Standards for Judgment As a Matter of Law and for New Trial

 A renewed motion for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(b) should only be granted if, "'viewing the evidence in the light most favorable to the non- movant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury could reasonably find liability.'" Coleman v. Kaye, 87 F.3d 1491, 1497 (3d Cir. 1996)(quoting Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993)). However, a mere scintilla of evidence is not enough. Walter v. Holiday Inns, Inc., 985 F.2d 1232, 1238 (3d Cir. 1993). Instead, there must be sufficient "evidence upon which the jury could properly find a verdict for that party." Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993) (citations omitted). In making the determination, the court "may not weigh the evidence, determine the credibility of witnesses, or substitute its version of the facts for the jury's version." Id.

 Under Federal Rule of Civil Procedure 59, the standard for granting a new trial is if "the verdict is contrary to the great weight of the evidence or errors at trial produce a result inconsistent with substantial justice." Sandrow v. United States, 832 F. Supp. 918, 918 (E.D. Pa. 1993) (citations omitted). A new trial should only be granted "where a miscarriage of justice would result if the verdict were to stand." Olefins Trading, Inc. v. Han Yang Chemical Corp., 9 F.3d 282, 289 (3d Cir. 1993).

 II. Judgment As A Matter of Law Pursuant to Rule 50

 A. Supremacy Clause: Copyright Act

 Miramax argues that it is entitled to judgment as a matter of law because, as applied, section 203-7 of the Pennsylvania Act violates the Supremacy Clause. Specifically, Defendant argues that section 203-7 infringes on rights granted copyright owners by the Copyright Act and is, therefore, preempted by the express provisions of the Act. See 17 U.S.C.A. §§ 106 & 301. Miramax claims that the jury's verdict compels it to "terminate a first run at one theater, such as the Ritz, after 42 days and open another run at a competing theater such as the Roxy." (Def.'s Mem. at 7-8). Miramax further argues that the jury's verdict requires it to license a film to an inferior "subsequent run" theater even if there is no request from such a "subsequent run" theater. This, according to Miramax, constitutes a compulsory license because "it is the exhibitor demanding the film and the Commonwealth of Pennsylvania, not Miramax, which determine how Miramax' copyrighted materials will be distributed." (Def.'s Mem. at 8). Thus, Miramax claims section 203-7 infringes on the rights granted by the Copyright Act and violates the Supremacy Clause.

 Plaintiff responds that the Third Circuit decision in Associated Film Distribution Corp. v. Thornburgh, 800 F.2d 369 (1986) ("Associated Film II ") forecloses this argument. For the following reasons, we must agree.

 The Copyright Act of 1976, 17 U.S.C.A. § 1 et. seq., gives to the owner of a copyright:

 the exclusive rights to do and to authorize any of the following:

 (1) to reproduce the copyrighted work in copies or phonorecords;

 (2) to prepare derivative works based upon the copyrighted work;

 (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

 (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to ...


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