United States v. Paramount Pictures, Inc., et al.
Decided May 3, 1948, 334 US 131


 
I. ISSUES II. CASE SUMMARY III. AMICI CURIAE IV. DECISION V. WIN OR LOSS?
I. ISSUES:

A. Issues Discussed: Monopoly, price fixing

B. Legal Question Presented:

Did the District Court decree properly address the claims of price-fixing and "conspiracy to restrain and monopolize interstate trade in the exhibition of motion pictures?"
II. CASE SUMMARY: A. Background:

The US instituted this suit under the Sherman Anti-Trust Act, to prevent and restrain a monopoly in the movie distribution and production industry.

"The complaint charged that all the defendants, as distributors, had conspired to restrain and monopolize and had restrained and monopolized interstate trade in the distribution and exhibition of films... It also charged that the five major defendants had engaged in a conspiracy to restrain and monopolize, and had restrained and monopolized, interstate trade in the exhibition of motion pictures in most of the larger cities of the country. It charged that the vertical combination of producing, distributing, and exhibiting motion pictures by each of the five major defendants violated 1 and 2 of the Act. It charged that each distributor-defendant had entered into various contracts with exhibitors which unreasonably restrained trade."

The District Court issued a decree prohibiting the practices of fixing minimum prices, of licensing copywritten movies in blocks of several, prohibited joint ownership of theaters by distributors and exhibitors, and several other provisions. The District Court also issued a competitive bidding proclamation, where every movie would be licensed on an individual basis, to the highest bidder in any particular area. On appeal the US Supreme Court affirmed in part and reversed in part the judgment of the District Court for the Southern District of New York.

B. Counsel of Record:
ACLU Side
(Respondent/Appellee)
Opposing Side
(Petitioner/Appellant)
Unavailable Unavailable
C. The Arguments:
ACLU Side
(Respondent/Appellee)
Opposing Side
(Petitioner/Appellant)
Unavailable Unavailable
III. AMICI CURIAE:
ACLU Side
(Respondent/Appellee)
Opposing Side
(Petitioner/Appellant)
Messrs. Tom C. Clark, Atty. Gen., Robert L. Wright, of Washington, D. C., and John F. Sonnett, Asst. Atty. Gen., for the United States. Mr. Thurman Arnold, of Washington, D.C., for American Theatres Ass'n and others. Messrs. John G. Jackson, of New York City, and Robert T. Barton, of Richmond, Va., for W. C. Allred and others. Mr. John W. Davis, of New York City, for Loew's Inc. Mr. William J. Donovan, of Washington, D.C., for Radio-Keith-Orpheum Corporation and others. Mr. Joseph M. Proskauer, of New York City, for Warner Bros. Pictures, Inc., and others. Mr. James F. Byrnes, of Washington, D.C., for Twentieth Century-Fox and others. Mr. Whitney North Seymour, of New York City, for Paramount Pictures, Inc., and another. Mr. Louis D. Frohlich, of New York City, for Columbia Pictures Corporation and another. Mr. Thomas Turner Cooke, of New York City, for Universal Pictures Co. and others Mr. George A. Raftery, of New York City, for United Artists Corporation.
IV. THE SUPREME COURT'S DECISION:

The US Supreme Court upheld the prohibition against minimum prices, block licensing, joint ownership, and master franchises. However, the Court struck down the competitive bidding provision because it was not likely to bring about the desired result of involving small independent distributors, and because it was not clear whether bids could be fairly compared, given that some theaters pay a percentage, while others pay a flat fee, and the length of runs and the frequency of shows often affects the licensing cost, further complicating a fair comparison. The Court felt that the competitive bidding provision would require too much judicial supervision, without achieving the provision's stated goal.

The US Supreme Court affirmed in part and reversed in part the judgment of the District Court for the Southern District of New York.

Justice Vote: 1 Pro vs. 7 Con
  • Frankfurter, F.Pro (Wrote dissenting opinion)
  • Douglas, W. Con (Wrote majority opinion)
  • Vinson, f. Con (Joined majority opinion)
  • Black, H. Con (Joined majority opinion)
  • Reed, s. Con (Joined majority opinion)
  • Murphy, F. Con (Joined majority opinion)
  • Rutledge, W. Con (Joined majority opinion)
  • Burton, H. Con (Joined majority opinion)
  • Jackson, R. Took no part in the decision
  • V. A WIN OR LOSS FOR THE ACLU?

    The ACLU, as amicus curiae, urged affirmance of the judgment of the District Court for the Southern District of New York.; the Supreme Court affirmed in part and reversed in part in a 1-7 vote, giving the ACLU an apparent loss.