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BROWNLEE v. MALCO THEATRES

August 23, 1951

BROWNLEE
v.
MALCO THEATRES, INC. ET AL.



The opinion of the court was delivered by: John E. Miller, District Judge.

The questions before the court arise on the motion of defendant, Tenarken Paramount Corporation, to dismiss, and motions of defendants, Malco Theatres, Inc., and Malco Realty Corporation, to dismiss.

The contentions of the parties have been presented on written briefs and oral argument.

The basis of each of the motions of these defendants is that the complaint does not state a claim against them. In addition to the motion to dismiss for failure to state a claim, each of these defendants seeks to strike portions of the complaint.

The motions to dismiss for failure to state a claim challenge the sufficiency of the complaint and raise the question whether a claim against the defendants is stated.

In considering the motions the court must accept as true the allegations of the complaint constituting the alleged cause of action and damages suffered by the plaintiff by reason or on account of the acts alleged to have been committed by the defendants, and if the allegations of ultimate facts would justify a recovery, then the motions should be overruled. The courts recognize the difficulty in actions of this character in setting forth in precise detail the acts which constitute alleged violations of the anti-trust laws, and in view of the provisions of Rule 8(a), Federal Rules of Civil Procedure, 28 U.S.C.A., it is not necessary to set out in detail the acts complained of, nor, the circumstances from which the pleader draws his conclusions that violations of the Acts of Congress have occurred and the pleader has been damaged. Louisiana Farmers Protective Union, Inc., v. Great Atlantic & Pacific Tea Co. of America, Inc., et al., 8 Cir., 131 F.2d 419.

In determining the sufficiency of a complaint in a case of this kind the plaintiff must be given liberal latitude in the pleadings, since it is inherent in such action that all of the details and specific facts relied upon cannot properly be set forth as part of the pleadings.

Sec. 1, Title 15 U.S.C.A. provides: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal".

Sec. 15, supra, provides: "Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee."

Sec. 16, supra, provides that any final judgment or decree rendered in any criminal prosecution or any suit in equity brought by the United States under the anti-trust laws which holds in effect that a defendant has violated said laws shall be prima facie evidence against said defendant in any suit or proceeding brought by any other party against such defendant under said laws as to all matters respecting which said decree would be an estoppel as between the parties thereto.

Briefly stated the complaint in paragraph 1 alleges the legal status of the defendants and the character of the business in which they are engaged.

Paragraph 2 alleges that the jurisdiction of this court is invoked under the various provisions of the anti-trust laws.

Paragraph 3 alleges that Paramount Pictures, Inc., and the defendant, Malco Theatres, Inc., had prior to the institution of the suit engaged in a combination in restraint of trade by entering into a partnership for the operation of theatres in Fort Smith, Arkansas, and other places; that in a suit brought by the United States in the United States District Court for the Southern District of New York against the said Paramount Pictures, Inc., a decree was entered apparently based upon a statement of the Paramount Pictures, Inc., that in order to prevent discrimination against other exhibitors and distributors of motion pictures and for the purpose of promoting substantial independent theatre competition for the Paramount theatres and in order to promote competition in the distribution and exhibition of films generally that it was willing to have the court direct, and the court did direct, it to sever its relationship with the defendant, Malco Theatres, Inc. At that time the theatres in Fort Smith in which Paramount Pictures, Inc., and the defendant, Malco Theatres, Inc., were jointly interested were Hoyt's, Fort, Uptown, Temple, Plaza, New and Joie. The plaintiff further alleges that the consent judgment enjoined Paramount "from making or enforcing any agreement which restricts the right of any other exhibitor to acquire a motion picture theatre." In the division of the property of the defendant, Malco Theatres, Inc., and the said Paramount Pictures, Inc., Paramount obtained the Joie and Hoyt's Theatres, while the defendant, Malco Theatres, Inc., obtained the New, Plaza, Fort and Uptown.

In Paragraph 4 the plaintiff alleges that prior to the filing of the complaint, which was filed June 9, 1951, he had been employed by the defendant, Malco Theatres, Inc., Paramount Theatres, Inc., and Tenarken Paramount Theatres, Inc., as manager and operator of its theatres, presumably in Fort Smith, Arkansas; that on July 16, 1950, plaintiff entered into negotiations with certain representatives of the defendant, Tenarken Paramount Corporation, for the purchase of Hoyt's Theatre and that he continued his negotiations for the purchase of said theatre until and after he was relieved of his employment as manager of the Joie and Hoyt's Theatres. On January 20, 1951, he was discharged from his employment by a representative of the defendant, Tenarken Paramount Corporation, and that said representative advised him at that time that Hoyt's Theatre was for sale and that he believed the plaintiff might be able to purchase it; that during the pendency of the negotiations the defendants, Malco Theatres, Inc., and Malco Realty Corporation, learned of the negotiations between the plaintiff and the defendant, Tenarken Paramount Corporation, and thereupon induced the defendant, Tenarken Paramount Corporation to sell to them the said Hoyt's Theatre on the promise that the said Hoyt's Theatre would be closed and thereby withdrawn from competition with the other theatres owned by the defendants in Fort Smith; that later the Hoyt's Theatre was reopened and plaintiff alleges that it was reopened because it was learned by the defendants that the plaintiff intended to file this suit. Plaintiff further alleges that the sale and purchase of the said Hoyt's Theatre was contrary to the express provisions of the consent decree referred to by the plaintiff and that the defendants conspired in the sale of the said theatre to discriminate against this plaintiff from promoting substantial independent theatre competition for Paramount theatres; and that the acts of the defendants in entering into the contract for the sale of Hoyt's Theatre shows a combination in the form of a trust and conspiracy in restraint of trade and commerce, and that by reason of the wrongful and unlawful acts of the defendants herein in conspiring to keep the plaintiff, Ollie Brownlee, from the purchase of the said Hoyt's Theatre he has been damaged in the sum of $50,000.

The defendants contend in support of their motions to dismiss that the complaint does not state any facts showing that they were engaged in interstate commerce or that the acts complained of were in restraint of interstate commerce, and that the plaintiff has suffered damage to his property ...


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