Law School Case Brief
Theatre Enters., Inc. v. Paramount Film Distrib. Corp. - 346 U.S. 537, 74 S. Ct. 257 (1954)
Section 5 of the Clayton Act, 15 U.S.C.S. § 16, provides that a final judgment or decree rendered against a defendant in an equity suit brought by the United States under the antitrust laws shall be prima facie evidence against such defendant in any suit or proceeding brought by any other party against such defendant under said laws as to all matters respecting which said judgment or decree would be an estoppel as between the parties thereto.
Plaintiff Theatre Enterprises, Inc. (Theatre Enterprises), operator of a suburban motion picture theater, sought treble damages from and an injunction against Defendant Paramount Film Distributing Corp. et al. (Paramount), motion picture producers and distributors, who had previously been held to have conspired in violation of §§ 1 and 2 of the Sherman Act, 15 U.S.C.S. §§ 1, 2 and § 2 of the Clayton Act, 15 U.S.C.S. § 13. in this suit, Theatre Enterprises alleged that Paramount had violated the antitrust act by conspiring to restrict, for unreasonable periods of time, "first-run" motion pictures to downtown theaters. At the trial the jury returned a verdict for defendants, and the District Court's judgment based upon the verdict was affirmed by the United States Court of Appeals for the Fourth Circuit. The United States Supreme Court granted Theatre Enterprises' petition for certiorari review.
Did decrees in the government's prior equity suit against Paramount form basis for a directed verdict for Theatre Enterprises either alone or in conjunction with Theatre Enterprises' proof in the instant case?
The United States Supreme Court rejected Theatre Enterprises' claim that the unanimity of action by Paramount should be measured against the findings in the prior decrees. The Court explained that alone or in conjunction with other proof of Theatre Enterprises, the decrees formed no basis for a directed verdict in the instant case. Further, the Court found that the trial court's jury instruction as to the effect of the prior decrees was not so superficial as to deprive Theatre Enterprises of any benefits conferred upon it by § 5 of the Clayton Act, 15 U.S.C.S. § 16.
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