Theatre Enterprises, Inc. v. Paramount Film Distributing Corp.

346 U.S. 537 (1954)

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Nature of the Case

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Facts

P owns and operates the Crest Theatre, located in a neighborhood shopping district some six miles from the downtown shopping center in Baltimore, Maryland. The Crest opened on February 26, 1949. P repeatedly sought to obtain first-run features for the theatre. P approached each D separately, initially requesting exclusive first-runs, later asking for first-runs on a 'day and date' basis. Ds uniformly rebuffed P's efforts and adhered to an established policy of restricting first-runs in Baltimore to eight downtown theatres. There is no direct evidence of illegal agreement between Ds, and no conspiracy is charged as to the independent exhibitors in Baltimore, who account for 63% of first-run exhibitions. Ds advanced much the same reasons for denying P. Ds asserted that day-and-date first-runs are normally granted only to noncompeting theatres. Since the Crest is in 'substantial competition' with the downtown theatres, a day-and-date arrangement would be economically unfeasible. Further, no downtown exhibitor would waive his clearance rights over the Crest and agree to a simultaneous showing. An exclusive license would be economically unsound because the Crest is a suburban theatre, located in a small shopping center, and served by limited public transportation facilities; and, with a drawing area of less than one-tenth that of a downtown theatre. P sued Ds for treble damages for a restraint of trade. Ds had previously been found guilty of having conspired in restraint of trade in violation of the Sherman Anti-Trust Act. The jury returned a general verdict for Ds. P appealed. The court of appeals affirmed. The Supreme Court granted certiorari.