Lexis Nexis - Case Brief

Not a Lexis Advance subscriber? Try it out for free.

Law School Case Brief

United States v. Paramount Pictures, Inc. - 334 U.S. 131, 68 S. Ct. 915 (1948)

Rule:

It is not necessary to find an express agreement in order to find a conspiracy. It is enough that a concert of action is contemplated and that the defendants conformed to the arrangement.

Facts:

The United States sued to restrain violations of §§ 1 and 2 of the Sherman Act by (i) five corporations that produce motion pictures and their respective subsidiaries or affiliates which distribute and exhibit films and own or control theatres, (ii) two corporations that produce motion pictures and their subsidiaries which distribute films, and (iii) one corporation engaged only in the distribution of motion pictures. The complaint charged that the first group of defendants conspired to and did restrain and monopolize interstate trade in the exhibition of motion pictures in most of the larger cities of the country and that their combination of producing, distributing and exhibiting motion pictures violated §§ 1 and 2 of the Act. It also charged that all of the defendants, as distributors, conspired to and did restrain and monopolize interstate trade in the distribution and exhibition of films. After a trial, the District Court granted an injunction and other relief, holding that defendants had not acquired a monopoly, but rather had only committed restraints of trade. In its order, the District Court held that the only way the competition could be introduced into the existing system of fixed prices was to require films to be licensed on a competitive bidding basis.

Issue:

1) Did the defendants only commit restraints of trade?

2) In order to introduce competition into the existing system, should films be licensed on a competition bidding basis?

Answer:

1) No. 2) No.

Conclusion:

As to the first issue, the Supreme Court reversed the lower court's decision concerning divestiture and monopoly because the lower court's conclusion that defendants had not acquired a monopoly, but rather had only committed restraints of trade, was insufficient. According to the Court, the lower court should have focused on what results the conspiracy achieved and how they could be undone.

As to the second issue, the Court held that licensing films on a competitive bidding basis was not likely to bring about the desired result. Furthermore, the Court held that it would require too much judicial supervision,  thereby, making the task unpalatable.

Access the full text case Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class