Fox Film Corp. v. Muller

296 U.S. 207 (1935)

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Nature of the Case

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Facts

P action brought in a Minnesota state court to recover damages for an alleged breach of two contracts by which D was licensed to exhibit certain moving-picture films belonging to P. P answered claiming the contracts were invalid under the Sherman Anti-trust Act. The contracts are substantially the same as the one involved in United States v. Paramount Famous Lasky Corp., 34 F.2d 984, aff'd 282 U.S. 30; that P was one of the defendants in that action; and that the 'arbitration clause,' is the same as that held in that case to be invalid. The court held that each contract violated the Sherman Anti-trust Act, and dismissed the action. In a supplemental opinion the court held that the arbitration plan is so connected with the remainder of the contract that the entire contract is tainted, and, second, that the contract violates the Sherman Anti-trust law. The state supreme court affirmed. P appealed. The Supreme Court granted certiorari but no final judgment had been entered and the writ was dismissed as improvidently granted. The case was then remanded to the state supreme court; and, the judgment having been made final, and again affirmed by the state supreme court on the authority of its previous opinion. The State Supreme Court held: 'The question presented on this appeal is whether the arbitration clause is severable from the contract, leaving the remainder of the contract enforceable, or not severable, permeating and tainting the whole contract with illegality and making it void.' The contract was void. P appealed.