VIKING THEATRE v. PARAMOUNT FILM
Legal provision: Sherman
Argument of Edward Bennett Williams
Chief Justice Earl Warren: Number 481, Viking Theatre Corporation, Petitioner, versus Paramount Film Distributing Corporation et al.
Mr. Edward Bennett Williams: Mr. Chief Justice and may it please the Court.
The case at bar is a civil antitrust case.
It's here on writ of certiorari to the United States Court of Appeals for the Third Circuit, which affirmed the judgment of the lower court.
The trial judge, if the Court please, had directed a verdict for the defendants at the conclusion of the plaintiff's case thereby taking the case away from the jury.
With the Court's indulgence and for convenience of identification, I shall refer to the petitioner, if I may, as the plaintiff and the respondents as the defendants.
The plaintiff in the court below was an exhibitor of motion pictures, first run motion pictures in the City of Philadelphia, the Viking Theatre Company.
The defendants, if the Court please, were the seven major distributors of motion pictures in the United States, Paramount, Warner Brothers, Columbia, Universal, MGM, United Artist, and Twentieth Century-Fox and three chain exhibitors which operated first run houses in the City of Philadelphia, William Goldman Theatres, which operated the Midtown, the Randolph and the Goldman Theaters, Stanley-Warner, which operated the Mastbaum, the Stanley and the Stanton and Fox Philadelphia Building, Incorporated, an affiliate of the National Theaters Chain which operated the Fox Theater.
There were some other very small independent exhibitors in the Philadelphia area.
The Arcadia and the Trans-Lux, each of which had theaters with seating capacity around 650, in the case of the Trans-Lux, 493 and two other theaters, the Studio and the World, which although included by the defendants as first run Philadelphia houses, actually showed only six first run films during the 123-week period involved in this case.
They usually showed reissues or art films.
The thrust of the complaint below was that the defendants and each of them were engaged in a conspiracy violative of the federal antitrust laws injurious to the plaintiff from July 2nd, 1954 to November 12 of 1956.
The defendant exhibitors, if the Court please, dominated the Philadelphia first run exhibition business, as the record shows, controlling 83% of all seats available for first run motion picture exhibition in the City of Philadelphia.
Now, the issue in the case, as presented to this Court, is whether or not the plaintiff made a prima facie case entitling him to have this case decided by the jury, whether or not a jury of reasonable men from the evidence in the record could have concluded a violation of the antitrust laws an injury to this plaintiff.
It's axiomatic that on an issue of this kind, all reasonable inferences should be drawn in favor of the party plaintiff and adverse to the parties than officiary to the directed verdict.
It's my purpose, if the Court please, in the time that's allotted to me, to cut through the mulish of economic (Inaudible) this record and point out to this Court that there is clear, direct evidence of an agreement and an unlawful agreement to which each of the parties, defendant in this case, were parties.
I think it's -- it's not an overstatement to say that this case is almost unique in the long annals of motion picture antitrust litigation because we are here not relying on -- on inferences from conduct or on conscious parallelism of conduct.
We're here saying, if the Court please, that there is in this record direct evidence of an agreement that is unlawful per se.
And secondly, while the end object of this agreement was economic homicide for this plaintiff, it was not direct sudden homicide of a readily demonstrable nature but rather a slow lingering type induced by creeping pellagra caused by a carefully planned dietary deficiency.
Now, I'd like, in the first instance, to touch upon the evidence in the record of the agreement among the defendants, it's unlawfulness, how it worked in theory and what's its purpose was and then point out to the Court an invidious refinement of this agreement known as the Schwalberg agreement and then showed to the Court from the record how the agreement worked in operation vis-à-vis the plaintiff.
Before the Viking Theatre came into the Philadelphia market for first run motion picture exhibition, the Stanley-Warner Chain had five first run theatres in Philadelphia.
Goldman had three, Fox, one.
Stanley-Warner converted its Boyd Theatre from a first run theatre into a Cinerama house, selling reserved seats, thereby taking it out of the first run motion picture exhibition business.
It then closed its Alden Theatre, bringing about a position of perfect parody between IT and Goldman, each then had three first run houses in Philadelphia.
Fox had one.
At this point, an agreement was entered into and this is undisputed.
There is no dispute from the defendants concerning this.
An agreement was entered into between Stanley-Warner and Goldman that they would not compete against each other for acquisition of film from the distributors that they would draw a list.
On one side of the list would be pictures allocated to Goldman, on the other side of the list would be pictures allocated to Stanley-Warner.
Sometimes a list would be drawn by Goldman in which case Stanley-Warner had its first pick and sometimes, the list would be drawn by Stanley-Warner in which case Goldman would have his first pick and in some instances, the lists were drawn by the distributors because in this -- in this agreement, the distributors acquiesced.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Edward Bennett Williams: It did under the Shwalberg agreement which I'll come to.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Edward Bennett Williams: Yes.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Edward Bennett Williams: That's right, sir.
Justice Potter Stewart: So far, you've just referred to an agreement between Goldman and Stanley-Warner.
Mr. Edward Bennett Williams: Yes.
Justice Potter Stewart: Not involving the distributors at all, isn't that correct, up to now?
Mr. Edward Bennett Williams: I said, Mr. Justice Stewart, that the distributors gave their approbation and their acquiescence to this agreement.
There was no dissent from the distributors and in fact, in the case of Paramount and United Artists, they actually drew the lists.
In volume 6 of the record, over a period of about 30 pages or a space of about 30 pages, there is a physical exhibit showing the split, showing how it was done.
The first page of volume 6 shows the Paramount split and on one side, ours, on the other side, Goldman, that's a split that was drawn --
Justice William J. Brennan: I can't understand what you -- what do you mean by acquiescence or approbation without hearing something, would that -- was there anything that the --
Mr. Edward Bennett Williams: Well, of course --
Justice William J. Brennan: -- maybe they should have done?
Mr. Edward Bennett Williams: Well, of course, they could easily have complained and they had ready basis for complaint under the antitrust laws but they do not complain.
In fact, they urged this Court to approve this split arrangement among these exhibitors and in fact, they approved of it at the time that it was in existence in Philadelphia.
Justice William J. Brennan: What I don't follow is, are you tying the distributors into this agreement?
Mr. Edward Bennett Williams: Yes, sir, and you'll see that --
Justice William J. Brennan: Well, how, by -- by in action?
Mr. Edward Bennett Williams: Well, they -- they not only fail to act against it, they cooperated throughout with it.
Its -- the record will show as I unfold it to you, Mr. Justice Brennan.
Justice Byron R. White: But they don't deny it either.
Mr. Edward Bennett Williams: They don't deny it, sir.
Justice Byron R. White: They -- as a matter of fact, they admitted?
Mr. Edward Bennett Williams: They admitted and defended.
Justice Byron R. White: And urged the -- urged the --
Mr. Edward Bennett Williams: Court to approve it.
Now, how did Fox fit into this split?
Unknown Speaker: (Inaudible)
Mr. Edward Bennett Williams: Yes, I -- I shall do that.
Unknown Speaker: (Inaudible)
Mr. Edward Bennett Williams: I'll -- I'll show you how it -- it heard him.
Justice Byron R. White: Well, Mr. Williams, that issue was not passed upon by the Court of Appeals, was it, it was by the Court -- District Court but not by the Court of Appeals?
Mr. Edward Bennett Williams: Yes, it was passed upon by the Court of Appeals, Mr. Justice White.
It refused to hold the split agreement unlawful.
Justice Byron R. White: Yes, but -- on the question of damage --
Mr. Edward Bennett Williams: Oh, the question of damage, no, sir.
That was not pointed.
That was --
Justice Byron R. White: That -- that was passed on by the District Court but not by the Court of Appeals.
Mr. Edward Bennett Williams: But not by the Court of Appeals.
The course of damage, that's right, sir.
Justice Byron R. White: Yes.
Or illegal entry to you?
Mr. Edward Bennett Williams: Yes, that's right, sir.
Now, how did Fox fit into this?
I'd like to describe the split first and then show its operation.
Fox fitted in this way.
Fox took only pictures from Twentieth Century-Fox.
And it agreed that it would not compete for the pictures from the other distributors.
It would leave the pictures from the other distributors to Goldman and Stanley-Warner.
And in return for that, Goldman and Stanley-Warner did not compete for Fox Pictures, so that Fox, for all practical purposes insofar as the parties to this litigation were concerned, had a virtual monopoly on pictures coming from Twentieth Century-Fox.
Now, Viking came into the market (Voice Overlap) --
Justice Potter Stewart: Did anybody else ever -- did anybody else ever exhibit a Fox Picture during the period involved?
Mr. Edward Bennett Williams: Yes, sir, that -- that did happen and I'll explain how it happened as we go into the evidence.
There were times, Mr. Justice Stewart, when there were too many Twentieth Century-Fox Pictures for the Fox Theatre and then on those occasions, they allowed other exhibitors in the Philadelphia area to show Fox Pictures.
Justice Potter Stewart: Now, whose they?
Who allowed them?
Mr. Edward Bennett Williams: Fox and -- Fox Theatre and Twentieth Century-Fox.
Justice Potter Stewart: And which exhibitors did show the Fox Pictures over the period (Voice Overlap) --
Mr. Edward Bennett Williams: I think the record would show that each of them showed at least one or more, in fact, Viking showed some Fox Pictures during this period.
Justice Potter Stewart: Is there anything to show that Viking could've be it on any Fox Pictures any time?
Mr. Edward Bennett Williams: Viking did, in fact, did on Fox Pictures.
Now, I'll show you what happened when those -- this remained as we go into the --
Justice Potter Stewart: Well, but at least so far we know they -- they got at least some (Voice Overlap) --
Mr. Edward Bennett Williams: Yes.
Now, Viking came into operation this way.
When the Alden Theatre was closed by Stanley-Warner bringing it into perfect position of parity with Goldman, Mr. Harry Sley of Philadelphia, the President of the Viking Corporation, purchased the Alden Theatre.
As soon as he manifested an intension to operate it as a theatre, immediately, Stanley-Warner undertook negotiations to buy it back.
However, the record shows that he spent some $600,000 refurbishing it and making it into one of the finest theatres in the City of Philadelphia for first run motion picture exhibition, and then notified each of the distributors that he intended to compete for film in the Philadelphia market and to operate it as a first run house.
So when Viking came into business on July 2nd of 1954, it entered into a split market.
It entered into a market wherein certain films were split on the Goldman side, certain on Stanley-Warner and the Twentieth Century-Fox Films were reserved for the Fox Theatre.
So Viking immediately found that every time it came into the market for a picture, it was in a competitive market.
It had to compete against one of the major exhibitors for film, whereas when Viking got a film and was committed for a period of weeks to play it, the other defendant exhibitors enjoyed a competitive low in the Philadelphia market and were able to get their pictures without competition from Viking.
So, a vicious cycle set in.
The higher that Viking bid and the longer the playing commitments that it made, the longer the competitive low it made in the -- in the market in the City of Philadelphia inuring to the advantage of the defendant exhibitors so that they could get stronger while Viking grew weaker to use a homely analogy.
Assume that here, in the City of Washington, we had three retailers of coal, A, B and C, A with three large storage bins, B with three large storage bins and C with one storage bin.
A and B entered into an agreement that they won't compete against each other in buying coal from the wholesalers.
Now, what does this mean?
It means that every time C goes into the market to buy coal from a wholesaler for its bin, it's got to compete against A or B.
When A --
Justice Potter Stewart: Probably, I guess the both, as -- as it would have --
Mr. Edward Bennett Williams: Right.
Justice Potter Stewart: -- there'd been no such a great --
Mr. Edward Bennett Williams: Just against one.
Justice Potter Stewart: Yes.
Mr. Edward Bennett Williams: And so when A's bin is filled, if the Court please -- when C's bin is filled, A and B then have a period of competitive tranquility.
There is no competition for the acquisition of coal in the City of Philadelphia.
And whereas C must pay competitive prices, let's assume $20 a ton, when it fills its bin, A and B, during the period when C is filled, can buy their coal at noncompetitive prices, say $15 a ton, and if the retail price is $20 a ton, with the expiration of the year, you can see that C is constantly buying its coal at $20 a ton, selling it at $20 a ton and you have economic ruin at the end of the year whereas A and B can survive because they have periods when they can buy their coal at noncompetitive prices and sell it at a profit.
This split agreement, if the Court please, is nothing more than a very, very thinly veiled device to circumvent the pronouncements of this Court made four times with respect to pooling agreements for purchasing film.
The first time it was made -- it was made in the Crescent Amusement case, United States against Crescent Amusement Company in 1944 where the Court struck down an agreement whereby a number of exhibitors vended together and designated a common purchasing agent to acquire film from the distributors.
And the Court struck it down because they were ally.
They had coerced all of their economic power into one market, allied against the -- the nonmember exhibitors.
Again, it spoke in United States against Griffith in 1948 against these pooling agreements among exhibitors for the purchase of film.
It spoke again in 1948 in Shine -- Schine Theatre against the United States and finally in the Paramount case in 1948, it said that these pooling agreements were illegal because they used the language of the Court.
They have the effect of nullifying competition between the allied theatres and of making more effective the competition of the group against theatres not members of the pool.
Clear restraints of trade are difficult to imagine.
Justice Byron R. White: Do you think the antitrust provision agrees with you?
Mr. Edward Bennett Williams: Your Honor, I haven't been able to get an expression of opinion from them on this subject so I don't know whether they agree or don't agree and the --
Justice Byron R. White: But you -- they haven't -- they haven't taken any position of the Court anywhere that these --
Mr. Edward Bennett Williams: They have not, sir.
Justice Byron R. White: -- that these splits are --
Mr. Edward Bennett Williams: No.
They have said, Your -- Mr. Justice White, with respect to two splits, one in Alpine, Texas and the other in Wichita Falls, Texas, one city which had two exhibitors and the others which had three that all inclusive splits were all right.
In other words, splits from which no exhibitor was excluded but they have specifically refused to give their benediction to a split arrangement from which any exhibitor has been excluded as Viking was excluded in the case at bar.
Justice Byron R. White: Well, then their position must be hearsay such kind of (Inaudible)
Mr. Edward Bennett Williams: I -- I don't like to make that jump because I've tried to get them to express themselves on this subject unsuccessfully.
Justice Byron R. White: Well, how about in administering the Paramount (Inaudible) are they -- are they opposed in the split in operation of it?
Mr. Edward Bennett Williams: The Department of Justice has not taken the position insofar as I know, Mr. Justice White, with respect to --
Justice Byron R. White: But the judge has, isn't it?
Mr. Edward Bennett Williams: -- to splits, with respect to -- which some exhibitor has been excluded.
Justice Byron R. White: But the judge has in that case, I suppose, the Paramount case.
Mr. Edward Bennett Williams: I know that the judge is extremely interested in what this Court says about the splits but I don't know what his position is.
I have no firsthand information on that.
Now, if the Court please, I -- I was about to say that the split arrangement is nothing more or less than a device to circumvent the ruling of this Court on pooling arrangements because the split has exactly the same effect as the pooling arrangement.
Number one, it eliminates competition against otherwise competitive exhibitors.
Number two, it allocates product without competition.
And number three, it affects prices.
Now, what these -- what these exhibitors did, if the Court please, was to create in the Philadelphia area three submarkets.
They divided the market.
In one submarket were all the pictures on the Goldman side of the split.
In another submarket were all the pictures on the Stanley-Warner side of the split.
And the other submarkets were those pictures which were allocated without competition to Fox.
Then these exhibitors channeled their total market power.
In the case of Goldman, he put his total market power into this submarket which included those pictures on his side of the split.
Stanley-Warner gave him no competition, Fox gave him no competition, so that the arithmetic as shown in our brief at page 14 was that -- whereas he might have had only 22% of the market power in a free open competitive market where he was competing with equal or nearly equal competitors when he went into this submarket and competed against the small independence, he had 80% of the -- of the market power measured in terms of seating capacity from the Philadelphia area.
So, if the Court please, we have here a classic division of the market case.
We have the Philadelphia market divided into submarkets.
We have each of them -- defendant exhibitors coercing their total economic power, their market power into a submarket against wholly unequal independent exhibitors without any competition from the other nearly equal or coequal chain exhibitors in the City of Philadelphia.
Now, that is just precisely the kind of thing which the Attorney General's National Antitrust Advisory Committee spoke out against several years ago.
And they said the contracting parties to such a market division gained only if the result is to give each a substantial degree of power in his own market.
There is no doubt either as a matter of principle or precedent that agreements among competitors for market division should be and are treated like price arrangements.
Now, when you add this fact to it, if the Court please, here, these three party exhibitors had films from which no competition would emanate from the other party defendants.
You'll add this fact that sometimes they got film on their side of the split which they really didn't even want.
But what did they do?
Notwithstanding that fact, they still bid on it.
Because when they bid on it, they drove Viking up in order to get pictures.
They drove up the small independents' -- the small independents' advice even though they didn't want the picture itself and if the Court would look at page 102 of the record, you -- you have that testimony quite clear from Mr. Fabian of Stanley-Warner who said, "Some of the pictures we never even wanted after they were split.
They weren't suitable.
But then the other exhibitor in the territory wanted the picture, we would be as a rule for us to bid against it," notwithstanding the fact that they didn't want it.
Now, if the Court please, this is the way the split arrangement operated vis-à-vis Viking.
But in addition to the split of product, in addition to the split of product in the Philadelphia area, there was, as I indicated earlier, an invidious refinement of this split agreement called the Schwalberg agreement.
Now, with respect to the Schwalberg agreement, not even the defendants are audacious enough to defend its legality.
But they adopt a sort of evidentiary myopia with respect to it and say that there is no evidence in the record that it was operative, that it actually was put into operation.
And I'd like now to address the Court's attention to the Schwalberg agreement, what it was and how it operated and show that it did in fact operate and there was evidence in this record that it operated across the board.
First of all, volume 6 of the record, plaintiff's Exhibit Number 8 at page 2393, we have a letter from the Vice President of Paramount to the President of Paramount.
This is an exhibit in evidence in the record.
"Dear George, the so-called Schwalberg agreement, with Goldman of Philadelphia, envisaged an equal division qualitatively and quantitatively of our product between Goldman and Stanley-Warner in Philadelphia.
Under this arrangement, bids were invited from Stanley-Warner and Goldman as well as other theatres in Philadelphia requesting a bid invitation.
If any bid was acceptable, the acceptance closes the sales file.
If no bid was acceptable, Paramount agreed to negotiate with either Stanley-Warner or Goldman governed by whether the individual picture was on Goldman's or Stanley-Warner's split.
My understanding is that we were not permitted if all bids were rejected to negotiate with the unsuccessful bidders or any other theatre that did not offer a bid.
We were obligated upon rejection of all bids to negotiate with one of the other and I'm told that in one or more cases, the negotiated deal was reviewed or adjusted.
This arrangement, whether authorized or not, was actually in effect."
Now, what did Mr. Schwalberg say about this agreement?
Justice John M. Harlan: (Inaudible)
Mr. Edward Bennett Williams: That's in volume 6, Mr. Justice Harlan, at page 2393.
Justice William J. Brennan: Are you still quoting when you said this arrangement whether authorized or not?
Mr. Edward Bennett Williams: I was still quoting, sir, yes, from the exhibit.
Now, at volume 4 at page 1834, we have Mr. Schwalberg's testimony on this subject.
Mr. Schwalberg said, "Yes, Mr. Goldman took this position."
He said he would not make any formal bids if an exhibitor came in and requested an opportunity, and that picture was put on the block.
He let it be known he wasn't going to bid because this is the thing he sought to do away with and he was not going to go back on it.
He said, however, if we found that bids received did not measure up to our national policy of what we thought of the picture and we wanted to come back to him and he negotiated a deal and that deal was equal to or better than national policy, he didn't want Paramount to take that bid and go across the street and try to better it.
Did you agree to that?
Justice Hugo L. Black: What page is that?
Mr. Edward Bennett Williams: That's at page 1834, Mr. Justice Black.
Then again, I don't want to suggest that the defendants and their officers were totally devoid -- totally devoid of the noble emotion with respect to the small independent exhibitor in the Philadelphia area because at page 1924, we have Mr. Minsky, an officer of the Paramount Company speaking with respect to the arrangement in Philadelphia and this is what he says, talking about the last part of 1955, "So I went to my home office and spoke with those executives under whom I work and I said to them that I would like to have the privilege of doing something unusual.
And coming back to Philadelphia and offering to all the first run theatres in Philadelphia an opportunity to share in Paramount Pictures on both the quantity and quality basis and I was given such approval."
Question, "Excuse me, when you say share, do you mean?"
Answer, "I mean the split."
Question, "In the same way that Goldman and Stanley-Warner had a split?"
Justice Potter Stewart: Is that Schwalberg testimony?
Mr. Edward Bennett Williams: That's Mr. Howard Minsky, the District Manager for Paramount in the Philadelphia area, Mr Justice.
Justice Potter Stewart: And who is -- what title -- what position did Schwalberg --
Mr. Edward Bennett Williams: President of Paramount, sir.
Justice Potter Stewart: President of Paramount.
Mr. Edward Bennett Williams: President of Paramount.
Now, plaintiff's Exhibit 7, which is in volume 6.
And -- and how, in the name of reason, the defendants can say that the Schwalberg agreement was not in -- in effect in the light of plaintiff's Exhibit 7, which appears at page 2391, is beyond comprehension because here, we have a letter from the President -- the new President of -- of Paramount, Mr. -- Mr. Weltner to Mr. William Goldman.
This is dated December 12, 1955, and he says, "Dear Bill, at our conference at the hotel plaza last Thursday in which Harry Calman and Louis Phillips were also present, you turn to me and said, "George, let's forget, there ever was an agreement between Paramount and me made with Al Schwalberg.
I won't ever hold Paramount to it.
I want to be a Paramount customer.
Let's do business with a clean start."
And then the -- the letter writer, Mr. Weltner goes on to say, "If this is not accurate word for word, it isn't substance.
I express my appreciation and stated that we wanted you as a customer.
We then try to work out a formula that would be mutually satisfactory and practical and yet would not put us in a position where anyone could rightly claim that we favored you and discriminated against him.
At this meeting, we could not come up with such a formula, one that was satisfactory to you."
Now, consider the Schwalberg agreement for a moment, in the light of the fact, that Goldman wouldn't bid on motion pictures.
There are about 250 pictures that were released in the Philadelphia area as shown by plaintiff's Exhibit 1, the splits, the first -- very first part of volume 6, which were earmarked for Goldman.
Stanley-Warner couldn't bid on him because of its agreement, Fox couldn't bid on him because of its agreement and Goldman wouldn't bid on him because Goldman wouldn't bid and this record is ramped with statements from Goldman that he wouldn't bid.
For example with plaintiff's Exhibit Number 5 in this record, on one occasion when Goldman made a bid, he was so upset that the fact didn't broke his policy, he never did a bid but he wrote a letter to Paramount's lawyers and he said, "This doesn't set any precedent.
As you know, we take the position we are not to bid on any pictures but only to negotiate for them."
So what happened with respect to those 250 pictures?
When the distributor came in to the Philadelphia market with pictures that run the Goldman side of the split, he couldn't get a bid from Stanley-Warner, he couldn't get a bid from Fox and he couldn't get one from Goldman because Goldman wouldn't bid.
So he got one from Viking or Trans-Lux or Arcadia but obviously, he wanted to negotiate with the top chain exhibitor.
He then go over to Goldman and talk to Goldman about the picture and under the Schwalberg agreement, if Goldman made him an offer, he couldn't take the offer across the street to Viking and give Viking a chance to need it because --
Justice Potter Stewart: Now, wait a minute.
I -- you -- you went a little fast at least for me.
If he commend the Philadelphia with a film, I -- I suppose his interest wasn't getting the highest price, wasn't it?
Mr. Edward Bennett Williams: Certainly.
Justice Potter Stewart: You told us -- you told us that under this agreement that -- under the split agreement, Goldman, if it -- it was a Goldman -- if it was a Goldman split, Stanley-Warner couldn't bid on it, Fox didn't bid on it and Goldman wouldn't bid on it.
Mr. Edward Bennett Williams: He wouldn't bid on it.
Justice Potter Stewart: So, what was to prevent Viking from bidding on it?
Mr. Edward Bennett Williams: Well, Viking could bid on it but --
Justice Potter Stewart: Wouldn't it be -- to the interest of the distributor to get the highest price?
Mr. Edward Bennett Williams: Well, it certainly should be to the interest of the distributor to get the highest price.
But if he offered his picture in a market, in a submarket where he could only get bids from the small independents, obviously, he would want the loss of economic preservation would indicate to him that he ought to try to get a bid from Goldman, the chain exhibitor in the Philadelphia area.
If he went to Goldman and said, "Let's negotiate on it," Goldman had an agreement which said, "Well, okay, I'll negotiate with you."
Justice Potter Stewart: Now, he couldn't go to Goldman and say, "Let's negotiate on it," even on the Schwalberg agreement until he had rejected all bids, isn't that correct?
Mr. Edward Bennett Williams: Well, he -- he did go through the -- he did go through the procedure of inviting bids.
Justice Potter Stewart: And this wasn't -- you're suggesting there's some phony about this?
Mr. Edward Bennett Williams: I -- I think we'll see as we see the split in operation that it was in many instances simply of a façade and nothing -- maybe that's to dignify the term for it because in many instances, it was a sham.
The picture was already awarded at the time that Viking was invited to bid and I could show you that in the record as we go along.
Now, let's see the split in operation.
I'll show you one right now, Mr. Justice Stewart.
Let's see this split in operation.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Edward Bennett Williams: The record is very clear on this, Mr. Justice Goldberg.
We've heard a lot of talk about -- well, we asked you in.
Why didn't you come in?
Well, first of all, the record at pages 974 and 975 show very -- shows very clearly that Viking was not invited into this split until after its lawyers wrote letters to these distributors and these other exhibitors in 1956, then they were asked after they'd been victimized by an illegal split over a period of two years, then they were invited to join the gang.
But the fact of the matter is, of course, there were certainly no obligation on them to join something that was per se illegal with respect to the small independent exhibitors and it's been our position from the beginning that this is a per se illegal violative agreement.
Now, Your Honor, if the Court please, I said that I would show you this -- this split in operation and some of the sham bidding that went on under it.
First of all, Goldman, at page 1661 of the record, conceded that he had an arrangement similar to that, that he had with Paramount in effect with Warner Brothers.
But let's look at Warner Brothers and see the Schwalberg agreement and operation insofar as that distributor was concerned.
A typical illustration, there was a picture called a McConnell Story.
On July 15, Viking was invited to bid for that picture.
In July 19, 1955, it received a letter from Warner Brothers saying, "We've given the picture to Goldman."
Now, four -- that was four days later.
Now, at the trial, Mr. Mansell of Warner Brothers said, "Well, we gave that picture to Goldman because we wanted the picture shown in Philadelphia over Labor Day and we want it on August 25 opening day."
And Viking was committed until September 9th.
But where did the picture go?
The picture went to the Goldman Randolph Theatre which at that time, was committed to show a picture until the 29th day of September.
Now, what did Mr. Mansell say at the trial?
Mr. Mansell said, "Well, I didn't make the decision to give to Goldman until mid-August."
But the record shows that he wrote a letter to Viking on the 19th day of July saying, "Too bad, it's not yours, it's Goldman's."
Mr. Justice Stewart, an illustration of the sham bidding that went on.
If -- if you'll look at plaintiff's Exhibit Number 53, which is in volume 6 at page 2465, you'll see a very dramatic illustration of it.
Plaintiff's Exhibit 53 is a contract between Universal and the Mastbaum Theatre.
It gives the Mastbaum Theatre a picture called the Helen Beck and it provides that Helen Beck will start after Mr. Roberts finishes at the Mastbaum Theatre.
When was that contract entered into?
On May 19th of 1955.
What happened then?
The exhibit immediately before it, plaintiff's Exhibit 52, Warner Brothers invited Viking to bid on Mr. Roberts on May 23rd, the picture has already been awarded on May 19th to the Mastbaum Theatre as evidenced by the contract plaintiff's Exhibit 53 and that's an illustration of the sham bidding that went on in the Philadelphia market during this 123-week period.
Now, with respect to the picture Serenade in Pete Kelly's Blues, Viking bid, bid is rejected.
Never a chance was given to Viking to negotiate after the bids, the pictures went to the Goldman Theatre in precise accord with the Schwalberg agreement.
Justice Potter Stewart: It's your contention that the so-called Schwalberg agreement was an agreement among to what people?
Mr. Edward Bennett Williams: Well, I say, Mr. Justice Stewart, that all the parties in this case were parties to the Schwalberg agreement.
Goldman made in the whole life of this conspiracy only 11 bids per film and he got 134 pictures all across the board from the distributors in this case and I say without the operation on the Schwalberg agreement on across the board basis, he couldn't have got those pictures without bidding.
Now, look again at the United Artist to see the Schwalberg agreement in -- in operation with respect to them.
Plaintiff's Exhibit 145 A, B and C show that there were three pictures, Barefoot Contessa, Summertime and Gentlemen Marry Brunettes.
Letters went out inviting bids on those pictures.
They didn't go out to Stanley-Warner or Goldman or Fox because they didn't have to bid.They went out to Viking, they went out to Trans-Lux, Arcadia and the Little Studio and the World.
They didn't even bother inviting bids from the big three.
Justice Potter Stewart: Whose product was it?
Mr. Edward Bennett Williams: This was United Artist.
Justice Potter Stewart: United Artist.
Mr. Edward Bennett Williams: What happened?
All bids, of course, were rejected.
And how were the pictures allocated?
Precisely according to the split.
Barefoot Contessa went to the Midtown, Summertime to the Randolph, both, Goldman picture -- Theatres and Gentleman Marry Brunettes to the Stanley.
Again, if the Court please, with respect to Columbia, two pictures, Picnic and Caine Mutiny, Viking bid, bid's rejected, pictures allocated precisely according to the split.
Now, with respect to Universal, when Viking came into the market, he wanted a chance to get Universal Pictures.
He wrote a letter to Universal in April of 1954.
And then it was told, "We don't have any available."
Then it wrote a letter in October asking again for chance to have pictures.
On October 26, a letter went out from Universal to Viking, no pictures available.
Within 10 days, five pictures were licensed, class 183 to 186, five pictures were licensed to the Goldman Theatre precisely in accordance with the split.
Again, if the Court please --
Unknown Speaker: (Inaudible)
Mr. Edward Bennett Williams: Your Honor, the -- the fact of the matter is that plaintiff's Exhibit 1 was an exhibit which was extracted under the discovery procedures in Stanley-Warner.
We have no knowledge whether these were all the pictures that were split but they're over 530 as among that split.
And of course that Viking was to get any pictures that it come off to splits because it's our contention that virtually, every picture that went into the City of Philadelphia was split.
And some of the pictures, as Mr. Fabian said he didn't even want.
But even though he didn't want any bid on them and Viking would make premium bids and get some pictures, and that's why I say it was a carefully designed diet of malnutrition.
It was not absolute cutoff starvation.
That -- it was a more sophisticated form of economic homicide than we usually see in these cases.
Justice Potter Stewart: This isn't a murder case (Voice Overlap) --
Mr. Edward Bennett Williams: It's an economic murder case, Your Honor.
Justice Potter Stewart: At least you're trying to make it, I appreciate.
But am I right in thinking that under the agreement, under the terms of the agreement, at least that the -- that Viking was free to bid on every picture and that the highest bidder will get the picture.
Mr. Edward Bennett Williams: Viking was free to bid, there's no question about that.
We can contend otherwise.
But unfortunately, Mr. Justice Stewart, some of the exhibitors didn't bid you see if the picture was on the Goldman.
Justice Potter Stewart: Like how -- how could this be a conspiracy against Viking, the fact that a couple of exhibitors among themselves would agree not to bid against each other?
Mr. Edward Bennett Williams: Because -- well, let's take for example the -- a picture on the Goldman split.
Stanley-Warner won't bid.
Fox won't bid.
And Goldman won't bid because he's against bidding.
So, the distributors then confronted with the (Inaudible) that he must offer a picture in the Philadelphia market and he has only the small independents who have a total of only 17% of all the seats available first run exhibition in the City of Philadelphia.
He wants a bid from Goldman, of course, because Goldman is a big exhibitor.
So he rejects all bids and says, "I'll negotiate."
But if he then negotiates with Goldman, this is the end, it's a one way street and he finds himself in a cul-de-sac because he -- he can't go on and then offer Goldman's terms back to Viking and give them a chance to bid because he's got the Schwalberg agreement which says, "Once I make a deal or make an offer that's equivalent to your national policy on this picture, you can't take it across the street and give Viking a chance for the play.
Justice Potter Stewart: I follow your argument all except the vital key in it and that is why does he reject all bids.
Mr. Edward Bennett Williams: Because --
Justice Potter Stewart: He gets -- he gets a bid higher than the national, whatever it is, national average --
Mr. Edward Bennett Williams: Because --
Justice Potter Stewart: -- and -- and favorable in terms of -- of date and everything else, why does he reject it?
Mr. Edward Bennett Williams: Because it may very well be that first of all, a picture on the Goldman's side of the split which can attract no bids from Stanley-Warner, Fox and will not attract them from Goldman, maybe that the only theatre in the City of Philadelphia which is then available for pictures to Viking, so we get a bid from the Viking.
Well, he wants to see if he can better it from Goldman so he goes to Goldman and Goldman tops the bid.
But then our complainants --
Justice Potter Stewart: Not on bidding though, that what be negotiations.
Mr. Edward Bennett Williams: The negotiation.
But then, Viking can't get a chance under this agreement to top Goldman.
Because he's bound once he negotiates with Goldman to give the picture to Goldman and Viking is, therefore, out of the market for that picture and can't get it even though it manifested its interest by a bid.
Justice Potter Stewart: But I still don't understand why if the bid had been satisfactory to the producer of the bid, Viking's bid would not have been accepted.
Mr. Edward Bennett Williams: Because he hopes to get a better -- a better offer from Goldman and once he gets it, the whole game is over because it's future --
Justice Potter Stewart: And Goldman won't bid, you told us that.
Mr. Edward Bennett Williams: Goldman won't bid but Goldman will negotiate.
Now, once Goldman negotiates and tops the Viking first bid, it's all over.
You can't go -- Viking can't get a chance to that picture notwithstanding that it has manifested its interest by making an open competitive bid form.
Justice Potter Stewart: And I suppose if Goldman had bid then it offered the same terms that under your case he later bid by negotiation and Viking also would have been refused.
Mr. Edward Bennett Williams: Yes.
Justice Potter Stewart: Because the distributor's interest is in getting the highest price and the best conditions with the exhibition of his product, isn't that right?
Mr. Edward Bennett Williams: It should be.
It certainly should --
Justice Potter Stewart: What?
Are you suggesting it wasn't in this case?
Mr. Edward Bennett Williams: Well, it certainly -- the bargaining we view here appeared to be with the chain exhibitors because otherwise, the distributors wouldn't have acquiescence in this kind of -- of an understanding.
But I don't presume to explain why the distributors took this position.
There will be -- I'm sure there'll be explanations forthcoming.
But let me show the Court first of all, what was an egregious area, I believe, by the Court of Appeals in discussing the Schwalberg agreement.
I think that there's evidence in the record to show that each distributor was a part of the Schwalberg agreement.
There was either evidence in the record or a valid proffer.
Now, what the Court of Appeals say with respect to the Schwalberg agreement, it says the plaintiff takes the position that the agreement made by Stanley-Warner and Goldman with Paramount so modified the split as to render it unlawful and that the agreement constitutes direct evidence of an illegal conspiracy.
The illegality is said to arise from the requirement that Paramount negotiate exclusively with either Stanley-Warner or Goldman upon the rejection of all bids for inadequacy.
The agreement may not be held illegal within the framework of this case unless the other distributors gave their adherence to the plan who participated in it.
This, of course, violates a hornbook principle of law of conspiracy from its beginning in Anglo-Saxon jurisprudence.
It takes only two to conspire.
Here, you had admittedly by the Court of Appeals both the horizontal conspiracy among the two party exhibitors and a vertical conspiracy with Paramount.
And yet, they said this was not sufficient evidence to make a prima facie case.
Now, let's look if -- if we may at -- at how the split operated in and what happened to Viking under the split.
The record shows --
Justice Byron R. White: Mr. Williams, does it make any difference to your case whether -- whether this one is a series of three party agreement or an overall one?
Mr. Edward Bennett Williams: No.
I think that -- I said -- I think, Mr. Justice White, that I think this is just an artfully designed device to circumvent the pooling agreement that have been struck down by this Court on four occasions where exhibitors designate a single agent to buy their pictures from the distributors.
This has the effect of stifling competition allocating product and affecting price.
And this is simply a device which accomplishes precisely the same thing and attempt to circumvent, to pronounce them to this Court on that subject.
Justice Byron R. White: But it doesn't make any difference to you whether each of the distributors agreed with each other to -- on each -- each person's split arrangement.
I don't suppose -- I thought that each distributor had his own acquiescence or agreed to the -- to his own split arrangement with -- with Stanley and Goldman, you had the same result.
Mr. Edward Bennett Williams: We have exactly the same results.
Now, what happened?
In 123 week period, Viking got 31 pictures on 87 bids.
Goldman got 134 pictures or 45 per theatre on 11 bids.
Only one of which was made before the expiration of the Schwalberg agreement.
Stanley-Warner got 291 pictures or 97 pictures at theatre.
Now, it's a measure of a film's economic worth is its gross national film rental.
That's the amount of rent that the film attracts from various theaters across the country on its run all over the nation.
In the jargon of the industry, a picture that gets as much as $4 million of national film rental is called a blockbuster.
Now, in a 123-week period, Viking got films which aggregated $45 million in national film rental.
Goldman got an average of $71.9 million per theatre and by, I suppose, a start fortuity.
Stanley-Warner got exactly $72 million.
That's how well the parody was kept here.
Fox got $80 million.
How many of these so-called blockbusters did Viking get pictures that grossed over $4 million?
It got one in a 123-week period.
Stanley-Warner got 13 and by another strange fortuity, Goldman got exactly 13 or 4.3 -- 3 per theatre.
Fox got 4.
How many pictures did Viking get that had a national film rental of over $3 million?
Viking got two.
How many did Goldman get?
Goldman got 18 or 6 per theatre.
Stanley Warner got 20 or 6 and 2/3 per theatre.
Fox got 9.
Then there was a matter of film adjustments.
A common trade practice whereby the distributor makes an adjustment downward for the benefit of the exhibitor plan -- the exhibitor has a bad experience with a picture on which he has a bid and then which -- which he has exhibited.
The dependent exhibitors got 143 adjustments downward from the defendant distributors aggregating $167,000 or about $25,000 per theatre.
How many did Viking get it?
He got two, aggregating $1930.
Now, let's look at the -- the vital statistics here, the one that made Viking nonvital.
The record shows that Viking paid 52% of its gross box office for film rental.
Because every time that went into the market, it had to compete, whereas the other parties to this suit didn't have to compete when they went into the market.
They had periods of tranquility with respect to competition, whereas Viking paid 52% of its box office for film rental.
The average of all the other to theatres involved in this suit was 40%.
Justice Potter Stewart: How about -- how about in dollars?
Mr. Edward Bennett Williams: In dollars, the record shows that Viking's net after film rental was $391,000 lower than the average of all the other theatres involved in this case.
Justice Potter Stewart: Or -- how about in dollars for -- what they paid for film rental?
Because so far, your figures may simply in -- indicate that the plaintiff was an inexperienced in an efficient business.
Mr. Edward Bennett Williams: Well, the record shows that this, the Viking and the Midtown were really exactly comparable theatres.
Their seating capacities were about the same, they were in about the -- they're in the same neighborhood and they -- whereas the Midtown had 1230 -- had 1100 seats, Viking had 1017, I believe.
Now, what happened?
Goldman made the argument that you're suggesting, Mr. Justice Stewart.
Justice Potter Stewart: Well, I guess so far, I've asked you a question.
Mr. Edward Bennett Williams: He said --
Justice Potter Stewart: How about in dollar?
How about --
Mr. Edward Bennett Williams: Well, I said he made the argument your question suggests.
He said, "We are more experienced.
We had better selection of pictures, and therefore, we -- we could do better but the record belies it because their gross in these two almost identical houses was almost identical, a million two.
But what made the difference was the fact that the film rental that Viking paid was 52% whereas the film rental that they paid on the Midtown was only 42%, the film rental paid on the Goldman was 33% and on the Stanley was 33% and these are the figures which brought the Viking to the brink of economic ruin because it had to pay --
Justice Potter Stewart: You have the figure in dollars as to what they paid?
Mr. Edward Bennett Williams: Yes, I have it exactly.
You'll find all those figures on record -- in the record volume 5 at page 2067.
Justice Potter Stewart: Alright.
Mr. Edward Bennett Williams: And precisely to answer your question --
Justice Potter Stewart: It's okay if you don't.
Mr. Edward Bennett Williams: The Viking paid $630,000 for film rental whereas the Stanley paid only $381,000, the Goldman, $514,000, the Midtown, $521,000.
But they're all there, all -- all the figures are there.
So, if the Court please, in addition to this fact, the record shows that Viking had to play 22 pictures that grossed to $1,500,000 or less for 50 weeks.
The economics of the industry of such that if you can get a bad picture in and out in a week and you don't have to make a long playing commitment, you have a chance to make some money on it.
But Viking had to pay -- play 22 pictures for 50 weeks.
It had to play nine pictures which exceeded $1,500,000 in film rental for 78 weeks during this period.
Well, these reasons, if the Court please, we respectfully say that there was evidence in this record of an illegal conspiracy in the form of the split arrangement, that the Schwalberg arrangement was an invidious refinement of the split arrangement, which the defendants don't even define -- defend insofar as its legality is concerned.
They simply say it was not operative, notwithstanding the exhibits which I read to the Court.
We have shown the record with respect to the economic impact on Viking.
The economic impact, I've just detailed for you.
For these reasons, we say to the Court that there was evidence in this record from which a jury of reasonable men might have concluded a conspiracy violative of the antirust laws and might have concluded injury to the plaintiff and we ask for the opportunity to have a jury pass on this question.
Unknown Speaker: (Inaudible)
Mr. Edward Bennett Williams: Yes, I'm sure they did.
Unknown Speaker: (Inaudible)
Mr. Edward Bennett Williams: Well, I can --
Unknown Speaker: (Inaudible)
Mr. Edward Bennett Williams: Yes.
Unknown Speaker: (Inaudible)
Mr. Edward Bennett Williams: They -- they did show Fox Pictures.
And the record shows, if the Court please, with respect to Fox, first of all, what the practice was, Mr. Mocklare testified that when Fox was filled up and -- and had adequate pictures, that Twentieth Century-Fox could offer these pictures to the other theatres and in fact, they did offer these pictures to the other theatres.
Now, also Mr. Goldman said that there were occasions on which he was able to get film from Fox because the Fox Theatre was committed and had pictures.
And Viking also made bids and did get Fox Pictures from time-to-time.
I don't recall the precise number that we've got but I can't again say that it was many as they.
Justice Potter Stewart: You don't specifically question the Court of Appeals' statement.
Mr. Edward Bennett Williams: I -- I do not, but we've got a --
Justice Potter Stewart: That they get 15 pictures, the Fox Pictures over the period and --
Mr. Edward Bennett Williams: I do not (Voice Overlap) --
Justice Potter Stewart: -- and got 8 which would be considerably higher than the -- than the law (Voice Overlap) --
Mr. Edward Bennett Williams: See, the only competition that had for Fox Pictures on the bid would be the Fox Theatre that had only one theatre competing against them.
And if the Fox Theatre was committed to play a picture as result of a surplus of product in Twentieth Century-Fox, it had a chance to get such pictures.
Chief Justice Earl Warren: Mr. Nizer.
Argument of Louis Nizer
Mr. Louis Nizer: May it please the Court, Mr. Chief Justice.
I represent all of the distributors in this case, seven of them with the exception of Warners and Fox Companies.
When this suit was instituted, the complaint charged that there was a conspiracy to deprive the plaintiff of certain first run quality motion pictures.
This is not a deprivation of product the case.
In the ordinary sense, it is conceded that at all times the plaintiff played first run quality motion pictures of all the motion picture companies though he entered the field against 11 of the first run theatres in Philadelphia.
Justice Byron R. White: Mr. Nizer, you -- is there no claim in this case that the long runs plaintiff made the pictures of (Inaudible)
Mr. Louis Nizer: No, sir.
Indeed the --
Justice Byron R. White: -- the deliberate policy to play pictures for long -- for long periods?
Mr. Louis Nizer: He didn't play them for particularly long periods.
Indeed, he complained -- he urged as an argument in his favor that being a small theatre of only 1000 seats roughly competing with theatres two and three, and four times this size, he could make up the gross because he would play long times.
Justice Byron R. White: (Voice Overlap) that but -- but didn't -- didn't the Goldman Theatres play more pictures in a year than the Viking?
Mr. Louis Nizer: The quality of the picture determines the length of its run --
Justice Byron R. White: How about --
Mr. Louis Nizer: -- and I can only --
Justice Byron R. White: -- how about just a pure fact of -- of it?
Mr. Louis Nizer: I -- I can only answer it this way.
I'm not evading the question, sir.
I say that the -- according to the evidence in the record, the quality of the pictures proven by box office receipts determines the length that will be kept and there was some evidence that in certain of the Goldman Theatres, they didn't have good enough quality, for example, the Midtown that was mentioned had 20% less quality on this basis and therefore played more pictures.
On the other hand, the Randolph played less, so that I can only say that the figures vary in each theatre depending upon the guests as to the quality of the picture based not on artistic quality but production of the box office.
And so there are variable figures on those -- on -- in answer to that question.
Chief Justice Earl Warren: We'll recess now, Mr. Nizer.
Argument of Louis Nizer
Chief Justice Earl Warren: Mr. Nizer, you may continue your argument.
Mr. Louis Nizer: Thank you.
When this suit was instituted, there were 13 alleged discriminations set forth in the complaint ranging from the rejection of allegedly superior offers by Viking in favor of inferior offers by competitors to the failure to screen on days requested or advertising clauses that were different from other advertising clauses but the word "split" never appeared in the complaint as a discrimination or as a charge.
There were seven pretrial conferences resulting in five pretrial orders.
Not only was there no allegation that splits were per se illegal but an affirmative order was made by the Court on consent at Record 30.
The question was whether Stanley-Warner-Goldman splits were illegal per se and it was held that they were not, it's abandoned, no longer an issue in this case haec verba.
At the trial, the plaintiff's executive realm was on the stand for 20 days.
In all of his specifications of discriminations and grievances, the word "splits" never passed his lips.
Any of the theories that we now have about -- that are now presented about this, of course, could not be cross-examined because they were never even presented.
Instead, for 42 days, 7700 pages of the record, we were involved in the trial in which on a blackboard, we compare the chief charge that superior offers by Viking were rejected in favor of inferior offers and that became a shambles, the plaintiff out of his own mouth, repeatedly said, "I take it back.
Now that I see that I'm wrong, cross it off", and we crossed off picture after picture.
And all of his other alleged discriminations had the same fate and there was nothing left since there was not even a proper of -- fact of damage.
There was nothing left but for a directed verdict at the end of 42 days of trial.
We went to the Court of Appeals.
There, for the first time, although the chief time was taken up on all these alleged discriminations, reviewing them, splits escape their anonymity and were mentioned at least as one of the ways of discrimination from which circumstantial evidence of conspiracy could be spelled out.
Judge Biggs allowed a full day of oral argument, requested cross indexes so that the Court could check every exhibit and every bit of testimony and then the Court unanimously wrote a 31 page opinion, which after dissecting the plaintiff's testimony with microscopic care, analyzing each of the distributors' conduct first separately.
Then referring to the Continental Ore doctrine by name and saying we now look upon the entire matter as an integrated whole and giving every favorable inference to the plaintiff, we find there is no evidence from which a jury could find conspiracy.
But the Court of Appeals went further.
It analyzed the new argument that splits were illegal, all the arguments made in this Court.
And they found that it was not unlawful, that splits were not unlawful and that the evidence showed no injury to the plaintiff therefrom.
Then came the petition of certiorari to this Court and for the first time that was contented that the splits are the conspiracy.
That all the other discriminations flow from it, the phrase used is syllogistically.And splits emerged as the doctrine of law upon which, indeed, if they had believed in it, they could have moved for summary judgment as a question of law instead of trying the case for 42 days without mentioning it.
And the company in this concoction in this Court are contrived theories in the brief of submarkets which do not exist in the realistic economic life of this industry, alleged monopolization of submarkets, these non-existent submarkets, monopoly becomes measured by computing theatre seats and incidentally, manipulated so that they multiply the defendants' exhibitor seats by three and divide the plaintiff's seats by three on the theory that the Viking had to enter three submarkets therefore one-third of the seats were competing in each market.
The theory that by storing up financial resources during the split, the defendant exhibitors were able to give premium offers against the Viking and other semantic and mathematical legit domain about syllogistic inevitability.
And all these, Your Honor, in this Court, without any record to support it, dismembered from all the evidence, floating in midair, detached from anything in the record.
Now, when one concocts such a verba, there are 1000 facts which rise to be dealt with.
The new theory that there's -- this is a monopoly case of the submarket runs into the fact that there was an expressed concession cited in page 5 of our brief, that this case does not involve monopoly and no charge of monopoly is made.
That position wasn't even changed in the Court of Appeals.
Section 2, the monopoly statute wasn't even cited among the statutes involved in the Court of Appeals.
And therefore, the Court of Appeals in its opinion necessarily treated with this simply as a conspiracy case.
The new theory that the defendants through splits, the defendant exhibitors were able to store up finances to make premium office, subsequently runs into the fact that in the trial, the plaintiff's entire burden was to demonstrate that it was the plaintiff that made the premium bids and that they were rejected in favor of non-premium bids, lower bids or offers by his competitors.
And the new theory that seats are the determining factor in this so-called submarket of monopoly runs into the theory that the plaintiff's insisted at the other end of the spectrum, in the court below, that seats aren't even a factor in determining an evaluation of an offer or a bid.
He was asked, supposed a 600 seat theatre competed against Radio City 6000 seats, would the difference in seats be a factor?
His answer was, "No, sir."
And in the reply brief, after being faced with these references to the self-stultification of the plaintiff, there is no answer to these contentions.
Now, what are splits and what are their function?
Due to television impact upon the industry, there was an alarming shrinkage of the number of theatres in this country and also an alarming shortage and reduction of motion pictures.
And so there was a shortage of products.
And as this Court had occasions, to Mr. Justice Douglas, to say that we will not compel bidding, competitive bidding, when the matter came before you, there was a search for alternative methods, than simply competitive biding.
And one of the alternatives that grew up in the nation and as the reason for the amicus curiae brief filed by 12,500 theaters in this country opposing the Viking's position, one of the alternative methods was the splitting of product.
And as in Philadelphia when there are 12 first-run theatres and only eight companies to feed the 12 mouths, there is a problem of whether these theatres can exist and this -- this is one of the outlets, the relief and ameliorated -- amelioratory process to say particularly the little theatres, the grassroots splitters throughout the country that want the splitting arrangements.
Now, how does the split operate?
I'm afraid there is some misunderstanding from the pre -- presentation.
Very rarely, indeed, the record shows never does the distributor put all of these pictures on a split.
Apparently, he has some special productions and he doesn't wish to put them on, he has a special sales policy.
The two exhibitors or there may be more come to the distributor and say, "Would you mind if we didn't compete against each other on your product coming out for the next three months?" And they make a list of pictures.
No terms, no financial terms, just names.
And presumably, they divide this list to have parody between them.
And the distributor is asked to make the sacrifice of consenting to eliminate the competition between these two for those particular pictures.
The arrangement is always terminable at will.
The distributor makes no commitment to the exhibitor that he will receive the pictures on the split, not at all.
The evidence is conclusive and there's no contradiction of it that the split is always subject to the distributors having the right as he must insist to recoup his money to offer that picture on the split to all other exhibitors in the territory.
The exhibitor makes no commitment that he'll buy that picture on the split, neither does he.
Indeed, the exhibitor very often ignores the picture on his own split, not only because it may not turn out to be attractive to him for practical reasons he may not have planned that.
But above all, the finding of the Court of Appeals and the uniform testimony without contradiction was that no competitor in the territory was affected by pictures being put on the split.
They all had an opportunity to negotiate a bid for those pictures.
And indeed, without wishing to trespass on my colleague who will develop this fact, just one statistical fact, I leave the rest to him.
The Viking was interested in 87 pictures.
Of these 48 were on splits.
The Viking got 17 of these 48 pictures from the split, proof enough that the splits didn't affect it.
And indeed as Mr. Wolf will demonstrate, Stanley-Warner and Goldman got less pictures on this split than the Viking did of those that the Viking went for.
Justice William J. Brennan: Now Viking would get them only as a result of bidding, wouldn't it?
Mr. Louis Nizer: No.
25, that also, I'm afraid was a misapprehension here.
25 out of the 34 pictures that the Viking got were by negotiations, Your Honor.
25 out of 34, the theory that he was compelled to bid is simply not supported by the record.
Justice Potter Stewart: At what stage would it (Voice Overlap) --
Mr. Louis Nizer: And that -- that's in the record.
I -- I beg your pardon.
Justice Potter Stewart: Would there first be a bidding?
Mr. Louis Nizer: No.
Many pictures were never put on (Voice Overlap) --
Justice Potter Stewart: They never bid.
Mr. Louis Nizer: The practices vary from company to company.
Columbia Pictures for example had what it called competitive negotiation.
They never had bids but they competed with negotiations.
Each companies was varied and the plaintiff who lumps all of the distributors together here, he wasn't -- you can hardly find the name Columbia Pictures in his record because he only went for a few pictures and got one of Columbia whereas he went for Metro Pictures, the first year, the best product that year and played, I think 11 out of 18.
That's how well he did.
Now, the Court of Appeals found as a fact and since the petition for certiorari raises a legal point on which plaintiff succeeded in getting here, his attempt to review the facts here, it seems to us not in good standing.
Justice Byron R. White: (Inaudible) or something you said that what -- what the -- this is the distributors' consent as to a split agreement between two -- two exhibitors.
Mr. Louis Nizer: Without it, they are dividing his property either secretly or overtly and that is -- would be a violation of law.
And Mr. Stan -- Stanley Barnes, the Assistant Attorney General made that distinction in addressing the small business --
Justice Byron R. White: But as a -- but -- but as a matter regardless of the legality, part of it Mr. Nizer, this is a matter of operation.
Would it make any difference to -- in the operation of the system whether distributors consented?
If two -- if two chain exhibitors agreed on a split and all that would mean as far as the distributor is concerned, is it -- is it only one or the other would be bidding on certain pictures.
The distributor can't make that bid, I don't suppose, he could offer it to them both.
Mr. Louis Nizer: But I think Your Honor as the Goldman case held, if there is --
Justice Byron R. White: I know but if -- but how about if they -- what --
Mr. Louis Nizer: The practical --
Justice Byron R. White: Yes.
Mr. Louis Nizer: If -- if Your Honor is directing the question to the practical impact, it -- it is so precisely what Your Honor implies, namely, that it -- the record shows in no instance that all exhibitors did or negotiate for a picture.
Justice Byron R. White: Yes.
Mr. Louis Nizer: There were always exhibitors missing so that the distributor wasn't making an enormous sacrifice by consent.
It merely meant in this case he had one less.
Justice Byron R. White: Why would anyone want the exhibitors -- the distributor to consent at all?
Mr. Louis Nizer: Because without it, I think it would be illegal.
One divides his product stopping competition for his product without his consent.
Justice Byron R. White: But it has no practical, I mean -- practically, why would the --
Mr. Louis Nizer: It may --
Justice Byron R. White: -- exhibitors want the distributors' consent.
It doesn't add anything to the split arrangement, doesn't (Voice Overlap) --
Mr. Louis Nizer: (Voice Overlap)
Justice Byron R. White: -- in any way.
Mr. Louis Nizer: It gives it -- it gives it I think, legality Your Honor.
Without it, I'm afraid the exhibitor would be seizing the property of another and dividing it amongst -- suppose all the exhibitors in the territory said, "We won't negotiate a bid except by arrangement on the following pictures each for each.
The distributor could be vitally hurt.
It may not affect him but it could and it would be illegal.
And the -- that distinction between the consent of the distributor being essential was made by Judge Palmieri who was Your Honor knows deals with applications with respect to United States Paramount's decree, and he said concededly, this is United States against Loew's, quoted at page 34 of our brief.
Concededly any arrangement whereby exhibitors agreed with each other that they will not compete in the buying of the product cannot be countenanced.
Although it is equally clear that splits of product with the consent of both distributors and exhibitors are proper and that same contention was made by Assistant Attorney General Stanley N. Barnes that appears at the footnote on page 33 of our brief in which he said and he's testifying with it respect to the report of the subcommittee on small business select committee.
He said, "I threw out the suggestion that in the situation as outlined by him, it would seem that one possible solution might be splitting product and told him that we would regard an agreement between exhibitors to split product as improper.
But that we had not taken the position it was improper for the distributors in such a situation to advise the exhibitors that they were willing to split their product, as long it was -- as long as it was understood that it was up to the distributors that if they found that it did not work to their best interest, there was nothing to prevent them from changing their policy.
It is only caveat as a solicitude for the distributors' position.
And the antitrust division of the Department of Justice took the position in two letters which appear in the annex of Mr. Williams' brief, that splits are legal.
Indeed, they requested -- the antitrust division requested several of our companies to consent the splits in certain territories where it might be of aid to the small theatre and we did so.
It is true as Mr. Williams points out that in those particular situations, it was of a small town and the split was between all of the theatres in that town.
But I failed to see any distinction as to whether there are two or three or four theatres and how many are joined in it.
Indeed, if there was any pernicious effect of the split, it would be more pernicious if all joined than if only two or three joined.
Justice Byron R. White: But the (Inaudible) said the -- of the distributor, you suggest to --
Mr. Louis Nizer: Different legality.
Justice Byron R. White: -- to ensure legality, that's because without the consent, the distributor might be able to sue for an illegal agreement --
Mr. Louis Nizer: That's right.
Justice Byron R. White: -- then recover damages.
Mr. Louis Nizer: That's right.
Justice Byron R. White: Now if it so happened that the split didn't include everybody and the split hurt some other parties, other than the -- other than the -- than the distributor.
Certain -- would the distributors' consent insulate the otherwise illegal agreements?
Mr. Louis Nizer: Certainly not if it were illegal.
But it cannot hurt the other party so long as that every picture is submitted to all exhibitors in the territory and that's why the distributor insists upon it incidentally for a selfish business reason.
He won't speak at the best offer and bid.
He's not going to permit two people --
Justice Byron R. White: But this seems to go to -- this seems to me, they go to the question of legal injury or damage to some third party and say, that they just couldn't hurt them.Even if it was illegal it couldn't hurt them.
Mr. Louis Nizer: Yes, and I say that the evidence -- where the evidence is clear that all exhibitors had an opportunity to negotiate a bid.It is not only legal, it is a beneficent practice which these 12,500 theaters in the United States have joined to plead with this Court not to declare illegal.
They opposed the Viking position vigorously in their amicus curiae brief.
I may say in connection --
Justice Tom C. Clark: (Inaudible) if Mr. Goldman did not have to bid, Mr. Nizer, is it true that Goldman did not have to bid under your arrangement?
Mr. Louis Nizer: He did bid -- let me give Your Honor a direct answer as -- by skipping to that point.
The so-called Schwalberg Agreement arose out of the effort by one company Paramount to solve the problem with one exhibitor Goldman who stubbornly and on grounds of principle as he felt refused to bid.
He said that bids up the price, it's uneconomic.
I will not deal that way.
When Paramount said this is legal under the Supreme Court decree, Goldman sued Paramount and said, "You are only submitting pictures to me, certain pictures on bid and I say it' illegal”, and he brought suit.
The resolution of that suit was the following.
That if bids were requested and not very, very rarely or bids or requested on bad pictures or weak pictures but in some certain pictures, if bids were requested.
And the bid did not bring in a -- an amount equal to the national -- national film rental requirement which is set in advance, the minimum.
Paramount, as any other company, could reject all bids like an auctioneer who has a $10,000 property and its highest offer is $100.
He rejects the bids.
In that event, it would either rebid or if it negotiated, it would then give Goldman the second refusal, he having refused to bid.
He still would not bid.
If Goldman met the national film terms or exceeded them, he requested that he then not be used as a slaking horse to go across the street and improve his offer which was the highest that had been offered by anybody up to that point.
This is the so-called Schwalberg Paramount Agreement.
Justice Tom C. Clark: Is that only prevent those of Paramount?
Mr. Louis Nizer: Only Paramount and Your Honor we say it was a perfectly reasonable and legal arrangement, but, we needn't stop there.
The Court of Appeals analyzed this and my time wouldn't permit a detailed analysis that appears at 2778 of the Court of Appeals' record.
But may I just indicate in passing that the evidence contrary to what counsel advised you.
The evidence shows that Exhibits D (19) and D (30) which are at 2669 of the record and 2677, that in the very instances where Paramount had rejected this, you will find letters sent to Viking and all others saying, "We invite you to negotiate further with us, to negotiate with each of you".
And the Court of Appeals found on the uncontradicted record that actually -- I'll read from the Court of Appeals conclusion after a very detailed analysis of every picture, incidentally, there were only four pictures involved in this entire matter.
And not only did the Viking -- was the Viking invited to negotiate but it actually got one of those pictures.
And that picture was the Gallant -- Lucy Gallant and it's interesting to observe that the terms were of such a nature that Paramount loss $3000 on that picture by paying for advertising and the Viking made a profit.
Now the conclusion of the Court of Appeals and I'll have to run only to the conclusion that this -- the detailed analysis on the preceding page.
The conclusion is this.
The evidence as a whole failed to completely to support the alleged uniform plan of distribution incorporating terms such as those embodied in the Paramount Agreement.
We are of the opinion that a jury would not be justified in inferring that any distributor other than Paramount, either new of, acquiesced in, or adhered to the agreement.
And this is the uncontradicted record in this case, one or two of the instances of pictures which have been cited, there are complete answers on our brief too, they were not -- I regret to say correctly analyzed.
Now I go back to the indicia of the splits and point out in answer to Mr. Justice Goldberg's question that it is uncontradicted that the Viking never requested to be included in the splits but more than that Your Honor, the distributor executive testified that Viking was invited to go into the split and refused.
That appears at Record 1924.
And when Mr. Williams attempted to explain that refusal by saying it was made on the eve of a certain lawsuit that that was an unfortunate error.
The date as appears at Record 1923 is September, 1955, that offer to join the splits and their refusal, September 1955, one year before the suit and before we had any indication that there would be a suit.
Justice Tom C. Clark: Did they invite the other --
Mr. Louis Nizer: Yes.
Justice Tom C. Clark: -- exhibitors (Inaudible)
Mr. Louis Nizer: Yes, sir.
The same testimony, that they called everyone and then I concentrated, whom did you call of the Viking.
And he told the gentleman he spoke to.
And the man said, "Will you put it in writing, Mr. Rim (ph), the Executive of the Viking.
And he said, "I certainly will".
And he called up after he got that writing and he said no, we'd rather not to go in".
And the reason he would not join the split as all other exhibitors were invited to join, the reason for it Your Honor is this, as was indicated by one of the questions before.
He was able to compete for a 100% of the product of any company whereas Goldman and Stanley-Warner could only compete for 50% by virtue of the split arrangement they have made between them.
And it was an advantage to him.
The split, I'm sure, was not arranged to advantage him.
But the result of taking out one competitor from the market certainly is an advantage to another competitor.
He cannot be heard to complain.
And the analogy drawn with pooling arrangements is of course false.
In the pooling arrangement, you merge the interest, the profits, the share to control is shared, and obviously you eliminate competitors against the remaining competitors.
The split works the precise opposite way.
You eliminate an offer of bid for a particular picture thus leaving the Viking Theatre with one less competitor to compete with.
How could he possibly be hurt by that in ordinary common sense?
And what was the duty of the distributor in that case?
Who are we to say to the Viking, "We want you to approve for us, competing against one less exhibitor in the market."
Was it necessary to do that?
In most industries there is no auction bidding for profit and when we, the distributors find that to our advantage to have auction bidding in the form of competitive bidding, we're advised that by some exhibitors like Goldman and the 12,500 theatres that joined here, that they would prefer the splitting arrangements.
Justice Byron R. White: Mr. Nizer, you say that the Viking couldn't have been hurt by this arrangement?
Why -- why was it -- do you suppose that?
I'm just curious, why did the Court of Appeals did not get to this question?
That there was a -- there they -- at the outset, there was not an illegal arrangement so it didn't have to reach this question at all.
The District Court did, I take it.
Mr. Louis Nizer: The District Court, Your Honor, I would -- I can only offer my interpretation of it.
The offer of damage, the fact of damage in this case was so vacuous, a mere schedule without an expert testifying to anything completely defective because what the plaintiff did was to average the receipts of theatres two and three and four times his size.
And set it up against his own average as if he would have the same receipts.
He included nondependent pictures such as Oklahoma.
He included pictures in which he never had an interest.
It was completely barren and defective of any probative value.
Consequently, the lower court Judge Lloyd (ph) said that -- and invited plaintiff's counsel.
The record shows, he said, "Please, put in some -- some evidence of damage if you have it."
And this is all they could come up with.
And he has now in his reply brief, the plaintiff virtually conceded that that wasn't the proper schedule.
He now limits it to two theatres the Midtown and the Viking, which are a little more comparable and that's wholly defective for reasons -- I would rather save my time for another moment if Your Honor permits.
Now the -- after the film rental, I will make only this point.
The counsel stated that he paid higher film rental.
The film rental of the plaintiff's Viking Theatre equates favorably with any of the exhibitor defendants theatres.
If one eliminates one grievance, one grievous error of judgment made by the plaintiff, that accounts that one picture for 16% of his total film rental, and he conceded in the record that he voluntarily made this bid, the picture was the man with the great rental suit and the Trans-Lux Theatre, another defendant theatre offered a 100,000 guarantee, and then has -- his anxiety to get this picture bid up not by any defendants and not involved in the split.He bid $106,500.
This resulted in the disaster to him and he conceded in the record, I would just like to read that.
“Did you make this offer voluntarily?”
“Nobody compelled you to bid on great rental suit and nobody told you not to bid on any (Inaudible) story?
That is a matter of your judgment, right?”
And he say, “Yes, sir.”
“And if you make a mistake in judgment, you don't expect subsequently that either your competitors or the motion picture companies will give you back the money that you lost due to your bad exercise of judgment, do you?
You don't' claim that?”
Answer: “No sir.”
Now, if one eliminates that one disastrous error of anticipated receipts, you will find not only that the Viking's film rentals compare favorably, indeed they are lower than most of the comparable theatres in this case.
I should like to save if I have any few moments for rebuttal if Your Honor will permit me to -- or no?
Justice John M. Harlan: (Inaudible)
Chief Justice Earl Warren: (Inaudible)
Mr. Louis Nizer: Well then, if I have a few more moments, I would like to point out that the splitting arrangements throughout the nation grew up and in Philadelphia --
Chief Justice Earl Warren: Mr. Nizer, if you need a little more time, you may have five minutes for and Mr. Williams may have five minutes more for -- for his rebuttal.
Mr. Louis Nizer: I will stay within my time, sir.
Now, if the three --
Chief Justice Earl Warren: Very well.
Mr. Louis Nizer: -- the splitting arrangements in Philadelphia began three years prior to the Viking coming into operation.
Therefore, the allegation and the complaint that the splitting arrangement was aimed at destroying the Viking is of course obviously not true.
Justice Tom C. Clark: I understand that the arrangement was initiated by the exhibitors?
Mr. Louis Nizer: Yes, Your Honor.
Justice Tom C. Clark: And they went to the distributors?
Mr. Louis Nizer: Yes.
Justice Tom C. Clark: Somewhat along the line of interstate circuit case?
Mr. Louis Nizer: I'm not familiar with the detail of that fact in that case.
I know that sometimes in some companies, the distributor would make the separation of the list as to values of pictures.
Most of the time, the exhibitors made them but it was always the exhibitor who sought the privilege of splitting and the consent of the distributor because it eliminated their competitive bidding would state that was an advantage to them.
Justice Tom C. Clark: Well, what advantage would it be to the distributor?
Mr. Louis Nizer: Only from a view point of enlightened self interest that he would rather lose a few dollars if he does have to lose it on a particular picture and keep the theatre in business and have a better healthy market.
The decline of theatres in this nation is alarming.
And if a distributor seller chooses to do something for the economic health of the nation such as the antitrust division request them to do in some particular situations, and as Attorney General Barnes indicated is advisable, I do not think that the antitrust laws were designed to discourage him there.
Justice Tom C. Clark: Well, I assume they asked for information.
I just wondered what is (Inaudible)
Mr. Louis Nizer: If that's --
Justice Tom C. Clark: Perhaps how many --
Mr. Louis Nizer: He gave him no advantage.
It's a sacrifice on the part of the distributor which he makes --
Justice Tom C. Clark: (Inaudible)
Mr. Louis Nizer: -- in the interest of keeping the industry as healthy as possible to have a longer -- a bigger market for the future.
Justice Tom C. Clark: When they examined this invitation to the remainder of the exhibitors, if you know how many of them accepted it.
Mr. Louis Nizer: In Philadelphia, the -- there were some in -- I -- I'm afraid I cannot say fairly on the record, there was inchoate evidence with respect to some of this but it never became firm.
I think I'd better say that I don't know of any they had accepted.
Justice Tom C. Clark: Now in effect, suppose all of them accepted, then they would get a -- the split would be all the way down the line and get (Voice Overlap) --
Mr. Louis Nizer: Yes, Your Honor.
Justice Tom C. Clark: -- to bid on three pictures and half of them on the other three.
Mr. Louis Nizer: And --
Justice Tom C. Clark: And that -- the effect of that would be to eliminate the -- so far as the distributors who are concerned, half of the bidders, wouldn't it?
Mr. Louis Nizer: No.
Oh, it would eliminate -- yes for any particular --
Justice Tom C. Clark: (Voice Overlap) --
Mr. Louis Nizer: -- picture.
I think, even pictures.
But Your Honor, even in towns where the split is among three theatres, those are the only three.
They still have to negotiate and bid for the pictures and one theatre may get 60%, the other only 20%.
Pictures were continuously bought and licensed by others who were not party to the splits.
It is not an allocation of product neither the distributor commits themselves nor the exhibitor to get that picture.
Justice Tom C. Clark: Well, I understand the -- if I'm on the firm Goldman, I'm on this side of the three, I'd bid on those three, I'm suppose to, is that right, after the split?
Mr. Louis Nizer: You don't have to be.
You can ignore them if they frequently did.But if you wish --
Justice Tom C. Clark: (Inaudible) then negotiate later?
Mr. Louis Nizer: Or -- or negotiate either way, you don't have to negotiate.
But if you do negotiate, you negotiate only for the pictures on your side of the split and not on Mr. Goldman.
Justice Tom C. Clark: Of course I'd have to take the bid wouldn't I if I knew the others did not have to bid.
Mr. Louis Nizer: No Your Honor because you have in this case 11 other theatres that do bid.
And the Trans-Lux for example, a theatre -- a non-defendant theatre offered a $100,000 guarantee to get a particular picture here and there are many other real-estates, a 50,000 guarantee, 75,000 guarantee.
In short, you would still be competing against 11 other theatres.
Justice Tom C. Clark: Suppose everyone decided they wouldn't bid, everyone had that option, (Voice Overlap)?
Mr. Louis Nizer: Then the distributor would simply -- it's true they had that option, would simply negotiate and do the best they could.
Sometimes he couldn't sell a picture at all.
There are some pictures that never see distribution.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Louis Nizer: I think they would prefer that Your Honor.
But the distributor has some control over his product and I -- I think would be adverse to that general rule.
He makes too much of a sacrifice in some instances.
But I think the exhibitors would dearly prefer that.
But I wish to call your attention Your Honor to the fact that one of these exhibitor associations, the Allied States Association representing small grassroots theatres, 5000 of them throughout the United States and the Theatre Owners of America, 7500 small and large, and this is the first time in the history of motion picture litigation that they have joined on this point.
Unknown Speaker: (Inaudible)
Justice Arthur J. Goldberg: (Inaudible)
Mr. Louis Nizer: Particularly --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Louis Nizer: Particularly small theatres Your Honor.
The Allied, it represents chiefly the grassroots little theatres.
(Inaudible) to Your Honors.
Chief Justice Earl Warren: Mr. Wolf.
Argument of Morris Wolf
Mr. Morris Wolf: Before I address the Court on behalf of the exhibitors, Stanley-Warner and Goldman, I beg your permission at the request of Royall, Koegel & Rogers who are counsel for the Fox distributors to make the following statement which they asked me to make.
Fox, Philadelphia and Twentieth Century-Fox will not be heard by separate counsel because of this Court's ruling that only two counsels shall be heard for all the respondents.
They rest upon the separate brief which they have filed and the following statements by the Court of Appeals which were fully warranted by the record, and I quote, “The evidence in this case shows that the product of Twentieth Century was available to all exhibitors and was licensed to own the basis of open competitive bidding.
The plaintiffs did not become interested in Twentieth Century pictures until after March, 1955.
The plaintiff then submitted bids on 15 pictures and of these licensed and exhibited eight just as Mr. Justice Stewart stated.
The product of Twentieth Century was licensed picture by picture on a competitive bidding basis except where no bids were submitted.
Its product was not split between Stanley-Warner and Goldman and was apparently made available to all interested exhibitors.”
This is from the opinion of the Court of Appeals.
Counsel goes on to say, "Fox, Philadelphia operated only one theatre and was not a party to any split of product.
The Viking does not claim that at any superior bid or offer by it was rejected in favor of Fox Philadelphia."
That closes the quote.
I acquiesce to the position of the Fox respondents and request that there is not time to discuss it further.
I pass on to speak of the charges against Stanley-Warner and Goldman.
Although these charges are in many respects different as to each of them common to both is the charge that there are separate loose agreements with various distributors and with each other terminable at will, the so-called splits were illegal and injured Sley.
As presented to this Court by Mr. Williams, Sley's case bears little resemblance to the case as it was tried so meticulously for 10 weeks in Philadelphia before Mr. Williams came into it.
There, Sley's position was not that the splits were illegal, but that the distributors sold Stanley-Warner and Goldman so many pictures for which Sley had made better offers that these sales tended to prove a conspiracy to starve Sley of product and thus bring about his ruin.
Sley's efforts to prove this charge ended in failure and the trial court had no alternative to directing a verdict for the defendants which the Court of Appeals headed by Chief Judge Biggs unanimously affirmed in a careful opinion which analyzed all the evidence.
Now, this Court is told that although on the surface, this case is just another of a hundreds of damaged suits brought by discontented theatre operators to get the Courts, to give them better pictures, they're alert in it heretofore unsuspected legal issues of heavy import, dominant market positions, division of market, monopoly power and that awesome intercontinental ballistic missile of antitrust litigation per se.
This heavy artillery is introduced on the theory that the Court's refusal to allow Sley to go to the jury seriously threatens the enforcement of the antitrust laws of our country.
For us who have been familiar with this case from the beginning, the attempt to create an image of Harry Sley as a modern Henry V, fighting his second Battle of Agincourt against the Mighty Motion Picture Industry makes to say the least a dim impression.
The evidence which Sley produced showed that there was no restraint of trade or monopolistic practice to which he or any other exhibitor would suggest was subjected.
No interference with his getting all the pictures to which he was entitled.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Morris Wolf: He ran a small neighborhood theatre on a long back from first-run policy.
This case contest -- concerns not Sley splits in general, but the particular split in this case namely agreements between Stanley-Warner and Goldman consented to by the distributors which not only let Sley free to seek every film that was released but benefited him by reducing the competition he had to meet on those he did bid.
The history of the splits begins in 1951.
At that time, Stanley had six first-run houses, Goldman had three.
There was no parody between the number of houses they had as Mr. Williams has suggested.
Goldman had protested continuously by argument and by lawsuits that the sale of pictures by bidding was pre -- prejudicial to him and harmful to the industry.
As you have heard, 12,500 theatre operators feel the same way about it as Goldman did, and they are asking you to support the view that splits, which are their only remedy against bidding are not illegal provided in no case do they prevent any outsider from bidding just as generously as he could have done if there had been no split and with the added benefit of having only one competitor instead of two.
As the result of Goldman's protest, MGM, Stanley -- and Stanley-Warner agree in 1951 that Stanley-Warner and Goldman, each would seek only one half of the pictures which MGM was willing to have split.
Both Stanley-Warner and Goldman understood clearly and never questioned that the arrangement in no way was to interfere with MGM's right to solicit any other customers they had wanted or any in the pictures it had, and in no way bound MGM to sell the pictures Stanley-Warner or to Goldman or bound them to buy any of MGM's pictures.
By the spring of 1953, other distributors individually had consented in principle to substantially similar arrangements in every case preserving their freedom of action with regard to selling their pictures.
Paramount agreed --
Justice Tom C. Clark: Isn't that because of the --
Mr. Morris Wolf: I beg your pardon?
Justice Tom C. Clark: Was that because of the insistence of Goldman and Warner?
Mr. Morris Wolf: The -- that they agreed to it?
Justice Tom C. Clark: Yes.
Mr. Morris Wolf: No, I think it was because they felt that it was the best way to run the industry just as the exhibitors did and just as MGM which was the strongest in the industry at that time did.
Justice Tom C. Clark: Why don't they extend it to everyone then (Voice Overlap) --
Mr. Morris Wolf: They did.
Justice Tom C. Clark: Not for two years.
Mr. Morris Wolf: They did.
Justice Tom C. Clark: Mr. Nizer said in 1955.
Mr. Morris Wolf: Oh!
Oh, you mean why didn't the distributors immediately go along?
Well they went along as they were asked gradually.
I pray they'd probably would all have gone along at the same time if they had been asked.
Chief Justice Earl Warren: Mr. Wolf, what is your answer to the statement of Mr. Williams that some of the pictures that were offered to the plaintiff to bid on had already been awarded under the split and had been contracted for to one of the defendants?
Mr. Morris Wolf: All that I can say is that there must have been a slip up of some clerk in one case out of a total of 87 pictures of which you made here.
What it -- how it actually happened, nobody knows.
It was just a clear mistake along the dating --
Chief Justice Earl Warren: I thought he was asking --
Mr. Morris Wolf: -- in all the testimonies they'd given.
Chief Justice Earl Warren: I thought he said there was more than one instance?
Mr. Morris Wolf: Well, there may have been one or two but even in the motion picture industry, you cannot avoid an occasional error.
It was not by any means a matter of practice nor was there any pattern of such thing shown in the testimony.
I think I can show that a little later on.
Justice Tom C. Clark: That was only written on --
Mr. Morris Wolf: I beg your pardon?
Justice Tom C. Clark: It is in the evidence that -- it's not in writing that it was trying to show that the same thing had occurred in other pictures?
Mr. Morris Wolf: No.
With respect to the Schwalberg Agreement, Paramount agreed with Goldman that if no one else was wiling to pay what Paramount wanted for a particular picture on the Goldman side of this split and Goldman was willing to pay it, Paramount with license set to Goldman.
That's all there was in the Schwalberg Agreement.
Justice Tom C. Clark: But it was -- Mr. Williams said that Goldman had a practice did not bid at all.
Mr. Morris Wolf: That is true.
That is true.
Justice Tom C. Clark: Then he would -- after the other's bid, having the advantage of their bid, would you know what the bids were?
Mr. Morris Wolf: Well, it was not -- it was not an advantage of that.
Justice Tom C. Clark: Well, I'll -- I'll take that back.
Did you know what the bids were?
Mr. Morris Wolf: No.
There's no evidence at all that he did.
Probability is that he wouldn't.
Justice Tom C. Clark: But he would know that whatever the bids were, they were not sufficient.
Mr. Morris Wolf: So there'd would no -- there would be no -- there was no evidence to whether he would, whether he did know.
The probability is that he didn't, because a distributor would state what he wanted for his picture and Goldman could either pay it or not.
There was no discussion as to what anybody else had offered for the picture.
Justice Tom C. Clark: But the offer was sufficient, I'd suppose that the distributor would accept it.
Mr. Morris Wolf: Of course.
Or else it wouldn't have --
Justice Tom C. Clark: Then they wouldn't have (Voice Overlap) -- it would not have gone to Goldman --
Mr. Morris Wolf: The presumption that -- excuse me.
Justice Tom C. Clark: I say, it would not go to Goldman in any event?
Mr. Morris Wolf: No.
The presumption would be if they came to Goldman, then nobody else had been willing to offer what the distributor wanted for the picture.
The -- all -- all of the splits had been arranged as has been said openly and above board and every one of them before Sley ever was dreamed of as a theatre owner or operator in Central Philadelphia.
As far as the respondents were concerned, Sley wasn't even born when these splits were arranged.
Now, I'll tell you how he came into the picture.
By 1953, due to the impact of radio and television as Mr. Nizer has said, there were not enough quality pictures released to supply all of the theatres seeking them in Central Philadelphia.
Goldman had given -- I mean Stanley-Warner had given up two of its six theatres and it still could not get enough products.
So it decided that in order to help the other theatres it had -- it would sell the Alden Theatre which was the poorest of its four remaining houses.
For obvious reasons, he didn't intend to sell the property to anyone who would use it as a picture house.
Sley, a well known garage and parking lot operator offered to buy the property for remodeling as he said into a garage.
Relying on this expression of Sley's purpose, Stanley-Warner sold the property to him and he carrying out what had been his concealed purpose from the beginning, fixed it up, gave it a belligerent name of the ancient North Sea pirates Viking and became one of 12 city houses, seeking first-run pictures.
If Sley charges, the respondents had entered into a conspiracy to sabotage his operation from the date he opened, one would have expected them to try to choke him off before he got joined.
Following Brutus' advised to Julius Caesar, think him as a serpent's egg which hatched, would as his kind, grow mischievous and kill him in his shell.
When most "Shakespeare" in this anniversary week.
If they didn't sell -- if they didn't kill Sley, on the contrary for his opening, Sley got exactly the picture he wanted.
The Student Prince, got it from MGM, the outstanding company in the business, although in fact, the picture was on Goldman's side of the split.
And from that time until this suit was brought, despite the shortage of product, Sley continuously got first-run pictures from the very distributors and now sues as conspirators.
During that entire period, he never complained to Stanley-Warner or Goldman and their first knowledge that they too were supposed to be conspirators because when they got the complaint in this case, the history of how well Sley faired when his path crossed theirs in seeking pictures explains why he hadn't complained.
During the two and a quarter years involved in the action, the Philadelphia exhibitors played 468 pictures of which Sley made some effort to buy 87.
As to the other 381, any or all of which, Sley was at perfect liberty to see -- Sley's counsel stated frankly in their brief and the Court of Appeals.
There were some hundreds of pictures on which plaintiffs elected not to bid.
Sley selected only 87 because of the entire 468, they were the only ones that he wanted.
As to these, Sley does not deny that the door was opened to him at the trial as far as the door can be opened, to put in every particle of evidence which he wanted to offer.
These pictures were diagnosed, x-rayed, psychoanalyzed, (Inaudible) -- postmortem and quartered.
And this is why they merged.Of the 87, Sley got 37 for the Viking, Stanley-Warner and Goldman together got 36 or six for each of their six houses.
Now if Sley had any complaint against Stanley-Warner or Goldman, it must be about the 36 pictures they got.
He certainly could not complain to Stanley-Warner or Goldman about the 37 pictures he himself got, nor could he complain about the 14 pictures which neither he or Stanley-Warner, nor Goldman got.
So we now consider whether those 36 pictures were sold to Stanley-Warner and Goldman in this regard of Sley's rights.
In this case there was no direct proof of the conspiracy not even the conventional evidence of clandestine meetings, secret conversations, confidential letters or a loose talk in which some blundering salesmen at a bibulous party made damaging admissions about a plot against Sley.
The only circumstantial evidence which could be of probative value would be evidence that the conspirators frequently according to a discernible pattern of conduct sold pictures to the favorite exhibitors on terms so much less advantageous than Sley's offer.
That a reasonable person would think that they had a malicious and deliberate purpose to deprive Sley of pictures to which he was entitled.
In the brief -- in the Court of Appeals, this was the claim that was made.Viking's bids offering terms superior to those proposed by the defendant exhibitors were routinely rejected if they were the defendant exhibitors.
In support of this, Sley charged that 25 of the 36 pictures which Stanley-Warner and Goldman got were sold to them although Sley had made superior bids with these 25 pictures.
The fantastic way in which Sley tried to prove this case in the lower court was so much riddled on cross examination of his witness that he was compelled to admit the judge by his results with other pictures, Sley's bids were inferior to those of Stanley-Warner and Goldman on these 25 pictures.
Sley does not any longer argue here that the licensing of these pictures, the Stanley-Warner and Goldman was dishonest.
His change of front in this Court forced him to this surrender.
In the lower court and in the Court of Appeals, Sley had taken the position that the greater seating capacity of the Stanley-Warner and Goldman Theatres over Viking was not a factor at all which justified the distributors in deciding to sell their pictures to those houses rather than the Viking.
Sley's manager, as Mr. Nizer has said, testified emphatically that the greater number of seats was absolutely no factor in determining the grossing ability of the theatres as proven he said, by the fact that the Stanley Warner's 4000 seat may as bound had to be taken down because they couldn't fill the seats.
In his brief in the Court of Appeals on which I see Mr. Williams name, appears the famous Footnote 72 on page 48 although the Mastbaum had 4378 seats to the Viking's 1017, the extra seats were a liability rather than an asset.
Stanley-Warner's president admitted that the Mastbaum was obsolete in 1954.
So, when Mr. Williams came up with his new theory that the great seating capacity of the Stanley-Warner and Goldman houses gave them buying power amounting almost to monopoly, he ran head on into Sley's prior contrary position.
He then was faced with the alternative of agree -- arguing that the sale of pictures to Stanley-Warner and Goldman were not justified because as Sley had asserted, their seating capacity was no factor in calculating their gross ability or of contradicting Sley and admitting that the sales were justified because seating capacity was of vital decisive factor than grossing ability.
He took the latter view and abandoned Sley's position that the great seating capacity with Stanley-Warner and Goldman did not justify the awards of pictures to them.
But where did this leave Sley?
If Stanley-Warner and Goldman got it -- the only pictures which Sley also wanted for legitimate business reasons, what ground was left for complaints by Sley?
Thus left high and dry.
Sley conceded in his brief in this Court frankly that if his evidence of conspiracy was limited to the 87 pictures which he wanted, "he could not give a coherent statement of the conspiracy."
In this crisis, Sley made his offers in the trial court to include evidence about the 371 pictures which he had elected not to see.
These offers were considered carefully by the Court of Appeals and found to contain no matter of probative value.
For this finding, the Court of Appeals is held up to this Court as both ignorant and prejudice, terms which sound to us who are familiar with that Court as singularly inappropriate.
The first offer was to show that Viking got a disproportionately small number of films with high national film rentals over $3 million and that this was viewed of the dominant, economic market power of the exhibitors.
Let us see.
During the two and a quarter years, there were 55 such pictures released.
Of this 55, 20 were among the 87 which Vikings sought.
Of those 20, Viking got two.
And Stanley-Warner and Goldman 10 for their six houses less than two a piece.
One of Sley's by the way was not as a stranger, a very tough $6 million which was on Stanley-Warner side of the split, was bid for by Stanley-Warner, and nevertheless was sold to Sley.
So, there were 35 of these pictures which Sley did not seek.
Since Sley did not seek any of them of course, he didn't get any of them.
But nevertheless, he claims that the fact that Stanley-Warner and Goldman who did seek them, got many of them, was probative value of the conspiracy against him and to benighted Third Circuit made an egregious error in not considering it as such.
This raises interesting questions as to Sley's mental processes.
In order to avoid a charge of conspiracy, thus Sley suggests that the distributors and Stanley-Warner or Goldman had to go to see him and inquire whether it would be satisfactory to him if the distributors sold these pictures which he had not sought to Stanley-Warner or Goldman, and whether the terms proposed were alright with Sley, and if Sley did not approve that in his view that the distributor should bury the pictures in the ground and kill Sley, either sought them for himself or graciously change his mind and allow the sale to be made to Stanley-Warner or Goldman.
His second offer was to prove that Stanley-Warner and Goldman got many more rental adjustments than he got.
Of these, an insignificant number, we're on the 381, were -- were all (Inaudible) insignificant number, were on the 381 in which he was not interested.
On the 87 in which he was interested, he faired better than Stanley-Warner or Goldman did.
Why adjustments were granted in this particular case would require a separate trial as to each picture.
But, we come back to the underlying inquiry.
Did the respondents always owe Sley a duty to allow him to decide when adjustments should be granted and in what amounts even in the case of pictures which he didn't want?
Finally, Sley offered to show and Stanley-Warner and Goldman played more pictures than he did, that the national film rental of their pictures was more, that he had to play his pictures longer, that he had to pay more for them, always he had to.
Why did he have to?
He -- why -- with a hundred and -- with 468 pictures released, why did he seek only 87 of them?
If there were 59 $3 million pictures released, why did he pass up 39 of them?
He deliberately and voluntarily adopted and carried out as was his right the policy with respect to the pictures he sought, which he considered best for his theatre.
He now thinks perhaps he would've done better to have sought more pictures, played them in shorter time and paid less for them.
But had he the right not only to set the policies for his own house but to set the policies for Stanley-Warner and Goldman houses as well, and tell them how many pictures they should play, and how long, and what they should play for them.
In effect, Sley's position with regard to the 381 pictures which he scorned is like that of a girl who flatly turns down an ardent suitor for her hand, but demands the right to pass judgment on any other girls he may want to woo.
With Freudian forgetfulness, Sley, in setting out the statutes involved in his brief, omitted any reference to Section 4 of the Clayton Act on which his entire right of recovery depends and he now sees himself not as a plaintiff in an ordinary private antitrust case, but as an ad hoc deputy, protecting the Attorney General and speaking on behalf of all the citizens of the United States.
Whatever may be the terms of others splits, the splits involved in our case, violated no antitrust act, violate and injured no private party, least of all Sley who was immeasurably helped by them in his unrestricted pursuit of pictures which he did want because he did not have to compete for them with both Stanley and Goldman, with only one of them.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Morris Wolf: Doesn't -- doesn't it sound solely to tell us quite a -- quite a tremendous economic power these two theatres had.
And then to say that because they could save a few dollars possibly, there's no evidence that they did, by buying pictures on which there was no competition from distributors who are much larger than they and well able to care of themselves.
They were in a position to overbid Sley on the pictures he wants, when the evidence is not that he complained that they overbid him, but that they got the pictures in spite of the fact that they underbid him.
The economic game, which indirectly might have resulted, if they had been able to get their pictures more cheaply as a result of his staying out of the market and as a result of their split, is so infinitesimal and so unproven that it certainly amounts to no evidence.
Nor can Sley complain of the fact that these two people did not compete when he was not in the field himself.
There's no law in the world that makes it essential that people must compete against each other if there were some pictures which Stanley-Warner did not want or which Goldman did not want.
There's no reason why they should've competed against each other, to get what products they did not want and the split was merely a question of settling which was the product they didn't want.
If without producing anymore evidence of the conspiracy than Sley did, -- may I finish my sentence?
Chief Justice Earl Warren: You -- of course you may.
Mr. Morris Wolf: He is entitled to go to a jury and gamble that the bewildered jurors, floundering and foundering in Mr. Gladstone's words, in the morass of 7500 pages of names, states and figures, may give him a verdict then every entrance into the motion picture business as a probable plaintiff in an antitrust suit because no exhibitor ever got all the pictures he wanted.
Justice Byron R. White: Mr. Wolf, a good deal of your argument again goes to the -- the question of damage to the -- to the plaintiff here, now and the Court of Appeals did not pass on -- it was --
Mr. Morris Wolf: The courts what?
Justice Byron R. White: The Court of Appeals did not pass on that?
Mr. Morris Wolf: Oh, no they -- they -- they did --
Justice Byron R. White: What they did --
Mr. Morris Wolf: -- I think, at least inferentially, passed on the fact that there was no injury to him.
Justice Byron R. White: But let's assume for the moment that -- let's assume for the moment, I'm not suggesting that I or anyone else thinks this that -- that the -- assume that you're wrong on the legality of this -- of this split arrangement and you must get to the next issue, what would you suggest the Court do, to -- to decide it here or send it back to the Court of Appeals?
Mr. Morris Wolf: I -- I don't -- I can't -- I can't conceive myself, even attempting to answer a question which is based on the -- in -- on the illegality of the split which can -- which constituted no restraint of trade.
I can't answer the question.
Chief Justice Earl Warren: Mr. Williams.
Argument of Edward Bennett Williams
Mr. Edward Bennett Williams: The Court please, on at least three occasions this -- this afternoon and this morning, counsel for the respondents had said to this Court that Viking was invited into this arrangement, this splitting arrangement.
And in response to a question by Mr. Justice Clark, this afternoon, it was suggested that they were inviting -- invited in some time midway in the alleged conspiratorial period.
Well, I -- I'd like to call the Court's attention to the record on that because I think it's time we lay this to rest.
First of all, at page 974 (a) --
Justice Tom C. Clark: What volume is that?
Mr. Edward Bennett Williams: In -- this is in Volume 3, Mr. Justice Clark.
The question is asked, do you recall, Mr. Nizer asking you whether Brooks or your rascal, Stanley-Warner, had not invited you into some wordage, whatever it may have been to talk about a split at this luncheon meeting, do you recall that?
And when was that event?
August of what year, Mr. Rim (ph)?
The same year?
Now, prior to the letter from your lawyers, which you state was about the middle of July, were you ever invited to join the split?
That's at page 975.
So it isn't an accurate statement to say that this record shows that they were invited into the split at the inception of their entry into the motion picture business or midway.
They were invited in when they made a complaint about the fact that there was an illicit arrangement in the Philadelphia market.
Justice William J. Brennan: Is that the --
Mr. Edward Bennett Williams: Now --
Justice William J. Brennan: Is that only evidence in the record on that subject?
Mr. Edward Bennett Williams: There's a -- a testimony of a -- a witness named Minksy, if the Court please, from Paramount, that he had made such an offer to Mr. Rim (ph) in 1955 but it specifically contradicted and under the basic rules applying to a directed verdict, we're entitled to the most favorable inferences from the record.
Now, Mr. Nizer suggested that Judge Palmieri and Mr. Burns had to give in by some language, their benediction to this split arrangement.
I suggest to the Court that the language is exactly contrary to this because Judge Palmieri was very careful to say as pointed out at page 33 of Mr. Nizer's brief that splits which embraced all exhibitors might be countenance.
And when Judge Burns was using the language which Mr. Nizer quoted in a testimony before a congressional committee, he was talking about the Wichita Falls and the Alpine-Texas splits which embraced all the exhibitors, all of whom were parties.
And when a letter was addressed at the request of Mr. Levenger, the Assistant Attorney General of the Department of Justice, asking him to elucidate on this approbation.
He specially said and you'll find this language at the very last page of our brief in chief that he would not extend his approbation.
He would not say anything with respect to a split that included less that all of the exhibitors.
Justice Byron R. White: Even then (Inaudible)
Mr. Edward Bennett Williams: Yes sir, of course.
And of the producers who are coming to a market which has been rigged as a result of an agreement for no competition.
Now, if the Court please, the suggestion has been made here that the split was a great afterthought that came about after new counsel came into the case, nothing could be more remote from the fact.
The record shows very clearly at supplemental appendix, pages 2741, 2742 and 2743, which is the small volume that was added to the record in the -- in the lower court that Mr. Henry Sawyer, who tried this case below, vigorously urged upon the trial judge, the illegality of the split system in which rebuffed by the trail court.
The record shows that the Third Circuit at page 2777, Volume 10, specifically ruled that the split in this case was lawful.
This is not a new concept.
This concept has been advanced to every court that has passed upon this question, from the trial court through the Circuit, to the Supreme Court of the United States.
Now, again, we've been told that there is no evidence that the Schwalberg agreement was in existence and that Mr. Nizer directed the Court's attention to the defendant's Exhibit 19 and defendant's Exhibit 31 and said, see, after these pictures were bid upon by Viking, which appeared upon the Goldman side of the split, a letter went out.
Defendant's 19 and Defendant's 31, inviting Viking to negotiate and Viking didn't negotiate, but what he failed to tell the Court, was that these pictures were awarded precisely according to the split.
And at page 201 of Volume 1, why were they awarded according to the split?
Because the testimony is, and I want to read it exactly so that they're will be no mistake as to what the record says, talking about the Desperate Hours, the picture which was covered by defendant's Exhibit 19.
Did Viking bid?
The offer was rejected.
By Mr. O'shea, who at that time was a sales manager for Paramount.
In what fashion was it rejected?
Did you receive a notice?
I assume, we received a notice but in addition to that, I got a call from Mr. O'shea, telling me, we weren't going to get the picture that he had promised the picture.
And I said, well what happens to us?
What happens to us?
And he said, don't worry, your turn will come.
Now, the question was asked toward the very end of Mr. Wolf's statement, well, what about Goldman?
Did Goldman know what the bids were?
Plan -- the distributor came to him after rejecting all the bids and Mr. Wolf answered quite categorically.
No, Mr. Goldman didn't know.
Well, let's see what the record says on that.
At page 1716, Volume 4, Goldman said, he could figure out what the bids were once they were rejected.
At page 1606 and 1607, Volume 4, Mr. Minsky of Stanley-Warner, said in the negotiations, the distributor would say what he wanted for the picture.
Mr. Mansell of Warner Bros. said, the negotiation started with something better than the rejected bids.
So Mr. Goldman didn't have to have clairvoyance to figure out what he had to bid in order to get the picture and bar the Viking from getting a chance to get it after he made his offer when they in the first instance had been the only exhibitor in the Philadelphia area, willing to make a competitive bid against the other distributors for or other exhibitors for a picture on the Goldman side of the market.
These are the facts, if the Court please, in the record --
Justice Tom C. Clark: Can you give me those two pages again, just -- just the pages (Inaudible)
Mr. Edward Bennett Williams: There are three pages Mr. Justice Clark.
Page 1716 of Volume 4, testimony by Goldman himself, page 2037 of Volume 5, testimony of Mr. Mansell of Warner Brothers and page 1606 and 1607, Record Volume 4, are the testimony of Minsky of Stanley-Warner.
Justice Tom C. Clark: (Inaudible)
Mr. Edward Bennett Williams: But these reasons we say to the Court, I think that the argument from the respondents have dramatized far better than any brief that this was a case for a jury, for argument to a jury and the plaintiff should've had the opportunity to let a jury pass upon whether there was a conspiracy, whether it was damaging to them, whether it was unlawful.
Thank you, sir.