IN RE: Motion Picture Licensing Antitrust Litigation

: Case MDL No. 366 Document 2 Filed 05104 Ke 10f43 :
: : Ln STERN nN oo
BEFORE THE JUDICIAL PANEL
ON nPR-3 13S
MULTIDISTRICT LITIGATION en i Co| paris BNL Po |
In re Motion Picture Licensing ) Docket Ng.b7366' "" Vey PoAntitrust Litigation )
OPINION AND ORDER
BEFORE MURRAY I. GURFEIN, CHAIRMAN, AND EDWIN A. ROBSON, So
STANLEY A. WEIGEL, ANDREW A. CAFFREY, ROY W. HARPER, AND Lon
CHARLES R. WEINER, JUDGES OF THE PANEL. IEEE
PER CURIAM
I. BACKGROUND |
This litigation presently consists of nine actionsl/
perding in a total of seven federal districts: two each
in the District of Arizona and the Southern District of
Texas; and ome each in the Southern District of California,
the Northern District of Georgia, the Western District of a
Tennessee, the Middle District of Florida and the District
17 Two Zdditlonal actions, Wilder Enterprises, Inc. v.
Kllied Artists Pictures Corporation, et Ea E. D. Virginia,
C. A. No. /7-637-N and FLW Theatre Co. v. General Cinema,
et al., N. D. Texas, C. A. No. 3-77-0170, were included :
in the motion for transfer in this litigation. Since the
time of the Panel's hearing on this motion, defendants have :
obtained a directed verdict against the plaintiff in Wilder, EE
and consideration of the question of transfer with respect
to that action is therefore moot. In FLW, the court in
the Northern District of Texas has recently dismissed all
but one of the claims. The two parties involved in that
single remaining claim have advised the judge to whom FLW
is assigned, and he in turn has notified the Panel, that : :
this claim "will not be tried, but will be settled." This
claim presently is scheduled for trial commencing on June
4, 1979. On the recommendation of the judge before whom
FLW is pending, FLW is excluded from the transfer we are
herewith ordering.

Case MDL No. 366 Document 2 Filed 05/04/15 Page 2 0f 43 |
- 2 = :
of Utah. The complaint in each action involves alleged _
: violations of the federal antitrust laws in connection with oo :
4 the distribution, licensing and exhibition of motion picture | |
films. a
Each action was filed by one or more entities that
own and operate motion picture theaters (exhibitors). The IIR
principal defendants in these actions are a total of eleven RET -
motion picture producers and/or distributors (distributors). Lo
One of these distributors has been named as a defendant
in each action, and five other distributors have been named
ie defendants in eight of the nine actions before the Panel.
Four of the remaining five distributors have been named : Co ’
as defendants in at least two of these actions.2/ In addition, N
with only one exception (the Utah action), the complaints
include certain exhibitors as defendants; a few of the exhibitor Lo
defendants are named as defendants in two or more actions.
The complaints in all nine actions allege that defendants
conspired, in violation of Section 1 of the Sherman Act, :
unreasonably to restrain trade and commerce in the distribution, .
licensing and exhibition of motion picture films, and that AA
defendants, in violation of Section 2 of the Sherman Act,
conspired to, attempted to and did in fact monopolize that
2] Most ofthese distributors are allegedly members of Ce
the Motion Picture Association of America, which itself
is named as a co-conspirator in the Tennessee action.

- ' Case MDL No. 366 Document2 Filed 05/04/15 Page	3 of 43
- 3 =
® trade and commerce. The primary purposes.	of defendants’
conduct, the complaints generally allege, were 1) to establish
an artificially high price and/or rental rate for the licensing
and exhibition of motion picture films; 2) to establish
the terms and conditions for such licensing and exhibition;
and 3) to eliminate or reduce competition for motion pictures
distributed by the defendant distributors. In particular,
the complaint in each action charges that the defendants
named in that action engaged in one or more of the following
allegedly illegal acts or practices: ''blind-bidding' on
motion picture films (requiring exhibitors to negotiate
® or bid for film licenses without an opportunity to see thefilms in advance); "move overs' (switching a motion picture
from the screen to which a bid was awarded to different
screens, which were not involved in the bidding process);
giving preferential treatment in the awarding of licenses
to large theater circuits; bid rigging or sham bidding as
to motion picture licenses; fixing prices and terms of film
licenses; fixing movie admission prices; '"block-booking"
of motion pictures (licensing or offering for license one
motion picture feature or group of features on condition
that an exhibitor will also license another feature or group
of features released by a distributor during a given period);
"splitting" (a device by which exhibitors agree among themselves
®

Case MDL No. 366 Document2 Filed 05/04/15 Page	4 of 43 ‘ g
or ®
~ that only one, or certain of them, will attempt to license
any particular motion picture offered by a given distributor
in a specific geographic market); unreasonable "clearances"
(the contractual periods between "runs" of a film); and
boycotts.
Most of the complaints allege that some of these acts
or practices are prohibitted under the terms of a series
of consent decrees of nationwide scope and application entered
as a result of United States v. Paramount Pictures, Inc.,
334 U.S. 131 (1948), and related proceedings such as United
States v. Loew's, Inc., et al., 1950 CCH Trade Cases $62,573
(S.D.N.Y.).3/ Most of the distributor defendants in the C
present litigation are subject to those decrees.
The allegations of the complaints in five actions before
us (the Southern District of Texas®/ and Arizona actions,
37 The practices enjoined in Paramount include, inter
alia, the following: 1) Granting any license in which minimum
prices for admission to a theater are fixed by the parties
in any manner; 2) Agreeing to maintain a system of clearances;
3) Granting any clearances between theaters not in substantial
competition, or granting or enforcing any clearance against
theaters in substantial competition in excess of that reasonably
necessary to protect the license in the run granted; 4)
With only limited exceptions, making any franchise agreements;
5) Making any formula deal or master agreement (a licensing
agreement covering the exhibition of films in a number of
theaters, usually comprising a circuit); 6) Licensing any
film for exhibition upon any run in any theater in any other
manner than that each license shall be offered and taken
theater by theater, solely upon the merits and without dis-
crimination in favor of affiliated theaters, circuit theaters C	or others.
4/ Tercar Theatre Company (Tercar), the sole plaintiff
in one of the Southern District of Texas actions, is named
as a defendant in the other Southern District of Texas action.

: : Case MDL No. 366 Document2 Filed 05/04/15 Page	5 of 43
- 5 —
and the California action) specifically focus on the geographic
area in which plaintiffs in those actions operate theaters.
The complaint in the Georgia action is not limited on its
face to the area in which plaintiff in that action is located,
but discovery in that action has been restricted geographically
to a relatively local area by court order. A somewhat similar
geographic limitation on discovery has been accomplished
by stipulation in the Florida action, but at least some
plaintiffs in this action presently are seeking permission
to conduct additional discovery concerning ''mational issues."
Transcript at 24. In the Tennessee action, where the complaint
® includes allegations of a national conspiracy, plaintiff	has not to date contested defendants' confinement of their
responses to plaintiff's discovery requests to particular
geographic areas. Finally, the Utah action also includes
allegations of a national conspiracy, and discovery in that
action has proceeded on national issues.
II. PROCEEDINGS BEFORE THE PANEL
Twelve of the fourteen plaintiffs in the Florida action
have moved the Panel, pursuant to 28 U.S.C. §1407, to centralize
these nine actionsd/ for coordinated or consolidated pretrial
57 Movants have advised the Panel of two potential tag-along
actions -- Twentieth Century-Fox Film Corporation v. Dubinsky,
et al., D. Nebraska, C.A. No. 78-0-276 ar Stopulos, etal Vv. Buena Vista Distribution Co., S.D. Iowa, C.A. No.
C 75-16-D. See Rules I, 9 and 10, R.P.J.P.M.L., 78 F.R.D.	561, 562, 567-69 (1978). Pursuant to Rule 10(e), id. at
568-69, all parties now before us are ordered to keep the
clerk of the Panel informed of any additional potential
tag-along actions in this litigation.

Case MDL No. 366 Document2 Filed 05/04/15 Page	6 of 43 ‘ :
- 6 - ®
proceedings. Movants have not suggested a transferee district.
Plaintiffs in the Southern District of Texas actions subsequent-
ly moved the Panel to centralize this litigation in the
Southern District of Texas; these plaintiffs oppose Section
1407 transfer to any other forum. All other responding
parties -- which include all distributor defendants, many
exhibitor defendants, the remaining two plaintiffs in the
Florida action, and plaintiffs in the Georgia, Tennessee
and Utah actions -- oppose Section 1407 transfer.
We find that these actions involve common questions
of fact and that, with the exception of the Georgia action,
centralization of these actions under Section 1407 in the ®	Southern District of Texas will best serve the convenience
of the parties and witnesses and promote the just and efficient
conduct of the litigation.
III. THE QUESTION OF TRANSFER
Opponents to transfer argue that each action before
the Panel raises a multitude of individual factual issues,
and that no overriding common questions of fact are involved
in this litigation. The core of each complaint except one,
opponents contend, is the allegation that certain exhibitors,
which are in competition with the plaintiff in the limited
geographic area from which plaintiff draws its patronage,
conspired with certain distributors to prevent plaintiff
from obtaining films by causing plaintiff's bids or offers o

. . Case MDL No. 366 Dogument 2 Filed 05/04/15 Page	7 of 43
® to license films to be rejected in favor of those of competing
exhibitors. Thus, opponents maintain, most of the complaints
allege a separate conspiracy involving a variety of different
distributor and exhibitor defendants, market areas and time
periods. And although some of the complaints include sweeping
allegations relating to antitrust violations outside the
local area in which a plaintiff operates, as a practical
matter discovery in all but one action has been almost totally
limited to those local areas, opponents state.
Such disparate factual allegations and localized discovery
requests are inevitable in these actions, opponents assert,
given the nature of the motion picture licensing process.
® Arriving at the final terms upon which a film will be licensed |
to a particular exhibitor is a complex business calculation
which depends on a distributor's estimates concerning a
number of distinctly "local" factors including, inter alia,
the grossing potential of a film in a given market, the
age and other characteristics of the potential audience
for the film, the grossing potential of specific theaters
in that market for that audience, and the licensing terms
offered by the operators of those theaters, opponents argue.
Opponents further contend that numerous courts that have
dealt with alleged antitrust violations concerning the distri-
bution, licensing and exhibition of films (including many
® of the specific acts and practices enumerated on pages 3-4,supra) have held that these allegations must be resolved
on the basis of local issues.

Case MDL No. 366 Document2 Filed 05/04/15 Page	8 of 43 ‘ :
- 8 =
®
Also, opponents contend that unique questions of fact
clearly predominate in the present actions because of defenses
raised, or almost surely to be raised, in each action.
In response to each plaintiff's contention that plaintiff
was not able to license films as a result of illegal conduct,
the defendants state that they will attempt to prove that
any failure to obtain films was caused by legitimate business
circumstances peculiar to that particular plaintiff -- for
example, that plaintiff was not awarded a film because plain-
tiff's bids or offers were inferior to bids or offers of
competing theaters, or that plaintiff was not awarded films
because of its theater's poor location or less desirable ®facilities. |
Opponents deny that Section 1407 transfer would serve
the convenience of the parties and witnesses or promote
the just and efficient conduct of these actions.’ While
some opponents admit that a few of the witnesses for the
distributor defendants might be called to give depositions
in more than one action, these opponents maintain that,
in the light of the local nature of the issues, even testimony
of the same witness about marketing films in one city will
67 Someopponents contend that Section 1407 proceedings
would be particularly complicated by the fact that Tercar
is the plaintiff in one of the Southern District of Texas
actions and a defendant in the second Southern District C	of Texas action.

- . Case MDL No. 366 Document2 Filed 05/04/15 Page	9 of 43
-9 =
® have little or no relevance to marketing practices in another
city. If there is any such relevance, these opponents state,
duplication can be avoided by filing notices of a particular
deposition in all actions. At any rate, all opponents contend,
because the licensing of motion pictures is done market
by market, the vast majority of discovery concerns witnesses
and factual issues that vary widely from market to market.
Even where a party is a defendant in more than one action,
opponents argue, the employees of that party who have knowledge
of relevant facts generally differ from action to action.
Thus, opponents assert that Section 1407 transfer would
increase the costs of litigating these actions by entangling
o the parties in massive, and often quite irrelevant, coordinated
or consolidated pretrial proceedings. Opponents also urge
that Section 1407 proceedings are particularly inappropriate
here because pretrial proceedings in several actions
are very well advanced and some of the actions may be nearly
ready for trial.
We find these arguments unconvincing. While we recognize
that each action before us may involve some unique, localized
factual issues, a careful review of the entire record before
the Panel has persuaded us that all these actions, regardless
of the market area involved, share numerous common questions
of fact on the economic and conspiratorial issues, particularly
regarding the manner in which film distribution decisions
C are made in the motion picture industry.

: Case MDL No. 366 Document2 Filed 05/04/15 Page 10 of 43 : :
oo ®The national conspiracy alleged in the complaint in
the Utah action necessarily encompasses many aspects of
the somewhat more limited conspiracies alleged in many of
the other actions before us. See, e.g., In re Cement and
Concrete Antitrust Litigation, F. Supp. s
(J.P.M.L., filed February 28, 1979) (slip opinion at 4);
In re Airport Car Rental Antitrust Litigation, 459 F. Supp.
1006, 1007 (J.P.M.L. 1978). In the Utah action, plaintiff,
which operates approximately 140 theaters located in the
states of Utah, Arizona, Nevada and California, alleges
that six distributor defendants? have agreed to 1) fix
the terms and conditions upon which motion pictures are
licensed to exhibitors throughout the United States; and (
2) distribute their motion pictures through blind-bidding.
Plaintiff further alleges that defendants have established
and maintained a national monopoly in the distribution of
motion pictures. Thus the allegations of this complaint
alone provide a unifying theme to this litigation. As we
stated in In re "East of the Rockies'' Concrete Pipe Antitrust
Cases, 302 F. Supp. 244, 248 n.3 (J.P.M.L. 1969):
If there is, as claimed by plaintiffs, an overall unlawful
multi-state conspiracy affecting a large number of
local markets, in which small local producers join,
each small local producer is responsible for the conspira-
torial activities of all on the basis of agency.
McCandless v. Furlaud, 296 U.S. 140, 56 S.Ct. 41, 80
L.Ed. 121; Standard 0il Co. of Cal. v. Moore (C.A.
9) 251 F.2d 188, cert. den. 356 U.S. 975, 7/8 S.Ct.
1139, 2 L.Ed.2d 1748. Tocal markets and local conspiracies
are not synonymous.
77 PTZIatiTT in the Utah action has reached a settlement
with two of these six defendants.

: Case MDL No. 366 Document2 Filed 05/04/15 Page 11 of 43
- 11 -
In addition to the overriding claims raised by plaintiff
in the Utah action, our conclusion that the actions before
us share numerous factual issues is buttressed by the strong
commonality of distributors as defendants in these actions.
See, e.g., In re Commonwealth 0il/Tesoro Petroleum Securities
Litigation, 458 F. Supp. 225, 229 (J.P.M.L. 1978). Moreover,
movants have represented to us that discovery already conducted
in some of these actions 'demonstrates that regional decisions
are made or approved (tacitly or overtly) on a national
level." For example, movants state, various licensing instruc-
tion manuals published by some of the distributor defendants
and obtained by plaintiffs in this litigation provide that
® particular minimum terms and licensing policies for any
given film are "inaugurated and substantially controlled"
by supervisory and headquarters personnel. And at the hearing
on this matter, counsel for plaintiffs in the two Southern
District of Texas actions stated:
While it seems there are markets where suits are filed
claiming only violations in those markets, all the
decisions in the industry are made by eight or nine
men who are the general sales managers of the various
companies. They decide the sales policy, the blind
bidding policy, the bidding criteria, the subjective
criteria in awarding the pictures, the rejection and
negotiations of all bids, and they seem to be able
to place their pictures on the terms and guarantees
and play time as they decide, regardless of the state
of the bidding records, and we have found in deposing
local people that they all say that those decisions
were made at the home office, either Los Angeles or
New York, and consequently when you go to take those
® depositions you find you are deposing the same people.Transcript at 11-12.

E Case MDL No. 366 Document2 Filed 05/04/15 Page 12 of 43 -
- 12 -
We are thus convinced that transfer under Section 1407
for coordinated or consolidated pretrial proceedings is
necessary in order to prevent duplicative discovery, eliminate
the possibility of inconsistent pretrial rulings, and conserve
the time and efforts of the. parties, the witnesses and the
judiciary. The transferee judge, of course, has the authority
to schedule discovery and other pretrial proceedings on
any issues unique to a particular market area, party,’
or group of parties to proceed in separate tracks concurrently
with the common pretrial proceedings, thus enhancing the
efficient conduct of all aspects of this litigation. See
In re Republic National-Realty Equities Securities Litigation,
382 F. Supp. 1403, 1405-06 (J.P.M.L. 1974). Moreover, no ®
party need participate in pretrial proceedings unrelated
to that party's interests. See, e.g., Parts I and II, §§2.31,
Manual for Complex Litigation (rev. ed. 1977).
On the recommendation of the judge before whom the
Georgia action is currently pending, we are excluding that
action from our transfer order. He has advised us that
87 The fact that Tercar is both a plaintiff and a defendant
in the Southern District of Texas actions should not unduly
complicate coordinated or consolidated pretrial proceedings.
We note that both Texas actions are already pending before
the transferee judge in this litigation, and that Tercar
"1s one of the parties before us that favors Section 1407
transfer. We are confident, as we have observed in analagous
situations in the past, that any unique discovery needs
regarding Tercar and any antagonistic interests among the
parties may be accommodated by the transferee judge in designing
the pretrial program. See, e.g., In re Corrugated Container
Antitrust Litigation, 447 F. Supp. 468, &471 FFT 19787.

- - Case MDL No. 366 Document 2 Filed 05/04/15 Page 13 of 43
® a final discovery conference was held in the Georgia action
on March 16, 1979, and that the remaining discovery is scheduled
to be concluded shortly and is of a local nature. Accordingly,
transfer of the Georgia action is not now appropriate.
See In re Multi-Piece Rim Products Liability Litigation,
F.Supp. ___, ~~ (J.P.M.L., filed January 18, 1979)
(slip opinion at 11-12). We recognize that all actions
in this litigation are not at the same stage of pretrial,
but we are convinced that the remaining eight actions before
us will benefit from centralized pretrial proceedings under
Section 1407.2/ We observe that if and when an action or
claim is, in fact, ready for trial or otherwise ready for
C remand because the transferee judge finds that the Section
1407 proceedings pertaining to that action or claim are
completed, the transferee judge may suggest to the Panel
that the Panel remand the action or claim to its transferor
court. 28 U.S.C. §1407(a), Rule 1ll(c¢c)(ii), R.P.J.P.M.L.,
78 F.R.D. 561, 569 (1978). See, e.g., In re A. H. Robins
Co., Inc. '"Dalkon Shield'" IUD Products Liability Litigation,
453 F. Supp. 108 (J.P.M.L. 1978). And, of course, procedures
exist to allow discovery completed in any action to be made
9/7 We also note that additional actions are pending which
may be appropriate for inclusion in the coordinated or consoli-
dated pretrial proceedings we are herewith ordering. See
C note 5, supra.

Case MDL No. 366 Document2 Filed 05/04/15 Page 14 of 43 : -
- 14 -
®
available to all interested parties in the other actions.
See, e.g., In re South Central States Bakery Products Antitrust
Litigation, 433 F. Supp. 1127, 1130 (J.P.M.L. 1977); Manual,
supra, at Parts I and II, §§3.11.
We are keenly sensitive to the argument that Section
1407 transfer may cause certain parties to suffer some incon-
venience. See, e.g., In re "East of the Rockies" Concrete
Pipe Antitrust Cases, supra, 302 F. Supp. at 254-56 (concurring
opinion). Nevertheless, we are confident that prudent counsel
in all actions, under the supervision and guidance of the
transferee judge, can apportion their workload and otherwise
combine forces to effectuate a significant overall savings Cof cost and a minimum of inconvenience to all concerned
with the pretrial activities. See, e.g., In re Sugar Industry
Antitrust Litigation, 427 F. Supp. 1018, 1027 (J.P.M.L.
1977); Manual, supra, at Part I, §§1.90-1.93.
Iv. THE TRANSFEREE DISTRICT
On the basis of the record before us, no single district
stands out as the most appropriate transferee forum. We
have selected the Southern District of Texas as the transferee
district because that district is centrally located and
easily accessible to all parties in the pretrial proceedings.
Moreover, the Honorable John V. Singleton, Jr., who heretofore
has been supervising the two actions already pending there,
has had an opportunity to become familiar with many aspects C
of this litigation.

* - Case MDL No. 366 Document2 Filed 05/04/15 Page 15 of 43
- 15 =
| IT IS THEREFORE ORDERD that transfer pursuant to 28
U.S.C. §1407 of the action entitled Southway Theatres,
Inc. v. Cinerama Releasing Corp., et al., N. D. Georgia,
C. A. No. C75-1631 A, be, and the same hereby is, DENIED.
IT IS FURTHER ORDERED that, pursuant to 28 U.S.C. §1407,
the remaining actions listed on the following Schedule A
and pending in districts other than the Southern District
of Texas be, and the same hereby are, transferred to the
Southern District of Texas and, with the consent of that
court, assigned to the Honorable John V. Singleton, Jr.
for coordinated or consolidated pretrial proceedings with
C the actions listed on Schedule A and pending there.
ROY W. HARPER, JUDGE OF THE PANEL, dissents from this opinion.
®

8 .- Case MDL No. 366 Document 2 Filed 05/04/15 Page 16 of 43
® DOCKET NO. 366	SCHEDULE A
CIVIL ACTION NO.
MIDDLE DISTRICT OF FLORIDA
Florida West Theatres, Inc., et al. v. 74-326-Civ-J-T
Warner Brothers Distributing Corp., et al.
SOUTHERN DISTRICT OF TEXAS
Tercar Theatre Co. v. General Cinema H-77-1294
Corp., et al.
Universal Amusement Co., Inc., et al. v. H-78-192
General Cinema Corp., et al.
DISTRICT OF ARIZONA
Cineworld Corp. of Texas, et al. v. United 77-055-TUC
Artists Corp., et al.
Harkins Amusement Enterprises, Inc. 77-736-PHX-WEC
® General Cinema Corp., et al.WESTERN DISTRICT OF TENNESSEE
Balmoral Cinema, Inc. v. Allied Artists 77-2101
Pictures Corp., et al.
SOUTHERN DISTRICT OF CALIFORNIA
Family Enterprises, Inc. v. Twentieth 78-0061-T
Century Fox, et al.
NORTHERN DISTRICT OF GEORGIA
Southway Theatres, Inc. v. Cinerama C75-1631A
Releasing Corp., et al.
DISTRICT OF UTAH
Syufy Enterprises v. Columbia Picture C-77-0181
Industries, Inc., et al.

Case MDL No.366 Document? Filed 05/04/15 Page 17 of 43 |
J55EIAL PANEL ON ;
: KULTAHSTRICT UTIGATION A ER
FILED EES
BEFORE THE JUDICIAL PANEL NOY -5 7g Zs) ooMULTIDISTRICT LITIGATION PATRICIA D..HOW 400 y | ‘
IN RE MOTION PICTURE LICENSING ) pocket GhERNLQG	THE PAKEL |
ANTITRUST LITIGATION )
Re: Ten Potential Tag-Along Actions
OPINION AND ORDER Co Co RE
BEFORE MURRAY I. GURFEIN, CHAIRMAN, AND ANDREW A. CAFFREY,* . B :
ROY W. HARPER, CHARLES R. WEINER, EDWARD S. NORTHROP AND
ROBERT H. SCHNACKE, JUDGES OF THE PANEL.
PER CURIAM
I. BACKGROUND
A. The Panel's Earlier Decisions |
The Panel, pursuant to 28 U.S.C. §1407, previously Co |
centralized eight actions in this litigation in the
Southern District of Texas for coordinated or consolidated
pretrial proceedings before the Honorable John V. Singleton, |
Jr. In re Motion Picture Licensing Antitrust Litigation,
468 F. Supp. 837 (J.P.M.L. 1979). On June 27, 1979, and
September 27, 1979, the Panel denied motions by numerous
parties in this litigation for reconsideration of the Panel's I
decision. |
B. The Proceedings in the Transferee District
On April 17, 1979, Judge Singleton entered an order :
governing the practice and procedure of the actions in
the transferee district. That order, inter alia, consolidated oo
the actions for pretrial proceedings. In addition, the
ere took no part in the decision of this| matter.
| FE MAR3.27.78.5M1781

Case MDL No. 366 Document 2 Filed 05/04/15 Page 18 of.43
- 2 -
1 order states in part as follows: | CL
2 The court is acutely aware of the magnitude of . . no
this litigation and of the potential expense to the .
3 litigants and the burdens that the litigation will, Co :
impose upon all the parties and attorneys. To that
end the court expects and will, if necessary, require
4 all attorneys and clients to cooperate to the fullest
extent to lessen the potential expense and the burden
5 of time. For example, the court would expect that
counsel on all sides attempt in every way to keep
6 to a minimum the number of motions proposed to be Core
filed and, where possible, file only one motion, pleading SE
or brief pertaining to the same subject matters.
7 By local rule in this court, the number of interrogatories
is limited to thirty questions that can be submitted Co }
8 to any one party or any one witness. Also, the court
expects complete cooperation regarding the scheduling
9 of depositions and this likewise should be limited
to only those depositions that are absolutely necessary
0 . for either discovery or for the perpetuation of testimony.
- yd .
1 ’ At the first pretrial conference in this litigation,
held on May 30, 1979, Judge Singleton ordered the parties :
2 ‘ :
to establish a joint document depository in Houston, Texas, |
.3 in which all parties were to place all pre-transfer discovery
4 documents, deposition transcripts and interrogatory answers; oo
5 to prepare status reports on the actions in the transferee
6 district; and to file "position papers" concerning the
v. appropriate scope, order and priority of discovery in this :
8 litigation. Judge Singleton also organized the parties ol :
into three "liaison groups" (plaintiffs, distributor defendants
9
and exhibitor defendants), and appointed steering committees
0
for plaintiffs and the distributor defendants.
1 On August 3, 1979, a second pretrial conference was
2 held in the Southern District of Texas. In an order dated }
3 August 20, 1979, Judge Singleton ruled that discovery in
4 the actions in the transferee district would be confined
5 "for the present to the common legal and factual issues."
|FRl—-MAR—3.27.79-6M-178"

. } Case MDL No. 366 Doctsrent2 Filed 05/04/15 Page 19 of 43
i
| Judge Singleton's order further provides that: |
® | [aJ1l discovery presently on file in any of the actions || comprising this litigation, and all discovery to be	3 undertaken while these cases are consolidated in this
court, shall be considered as having been made in and
4 available to all parties in all other actions herein and
all later transferred 'tag-along' cases, absent a showing
5 of good cause why it should not apply to some particular
: case or party.
6
| Te August 20, 1979, order also establishes a schedule for7 |
| document discovery on the "common legal and factual issues.” |
8 +
| On September 6, 1979, all plaintiffs in seven of the |9 tt eight actions in the transferee district made a motion
10 cor leave to file a proposed "unified and consolidated" |
11 | compiain: This complaint, if allowed by Judge Singleton, |
: ls | rene inter alia, (1) be brought on behalf of a class
o consisting of "all ... persons or entities ... who are| or were engaged in the business, among others, of exhibiting14 |
| feature motion pictures to the public throughout the United	15 !
| States (exclusive of defendant distributors) during the
16 | period January 1, 1978" to the present; (2) add severalI
17 | new defendants to each action; (3) include nearly every |
18 | alleged violation of Sections 1 and 2 of the Sherman Act
19 | that is raised in the complaints in the actions in the|
20 i transferee district; and (4) add some alleged violations |
- Section 1 of the Sherman Act that have not to date been |21 |
re by the complaints in the transferred actions.22
Plaintiff in the eighth action in the transferee district |
23 i has also recently moved to amend the complaint in that
25 j
FI wAR—3.07.73.64.174!

Case MDL No. 366 Document2 Filed 05/04/15 Page 20 of 43 . .
- 4 -
|
1 action to, inter alia, add new defendants. No class is |
2 sought in this action. o|
3 C. The Potential Tag-Along Actions
4 | Ten potential tag-along actions presently are before |
the Panell’/ either on the Panel's own initiative by means |	5
of orders to show cause issued by the Panel pursuant to |	6
Section 1407 and Rule 10(b), R.P.J.P.M.L., 78 F.R.D. 361,
7| 568 (1978), and/or as a result of motions under Section
8 | 1407.27
9 The allegations of the complaint (and counterclaim, |
10 if any) and the status of discovery and other pretrial
11 proceedings in each of the actions before us may be summarized |i
as follows:	12
13 | | C| 17 An additional action, General Cinema Corporation of14 | Texas v. United Artists Corporation, N.D. Texas, C.&4. No. :
| CA3-77-170, was also before the Panel at the time of our15 hearing on this matter. Since that time, however, that
action has been settled and dismissed, and on October 17,
16 it 1979, we vacated our order to show cause concerning the
| action.
f
17 12/ On July 26, 1979, and August 8, 1979, the Panel issued
| orders to show cause why seven of the ten actions now before
18 | us should not be transferred to the Southern District of
| Texas.
19 | On July 26, 1979, the Panel also issued an order to
| show cause, in the Virginia action before us, why (1) the
20 | claims raised in the complaint and the counterclaim in
i this action should not be transferred to the Southern District
i of Texas, and (2) the original claims brought by plaintiffs
21 | should not be separated and remanded to the Eastern District
+ of Virginia. Some of the defendants-counterclaimants in
22 I this action, however, subsequently moved the Panel to transfer
| plaintiffs’ original claims to the Southern District of
23 | Texas.
i Finally, on August 17, 1979, certain defendants in
24 ' the two Western District of New York actions moved the
Panel to transfer those actions to the Southern District
of Texas.
25 i

\ . Case MDL No. 366 Document2 Filed 05/04/15 Page 21 of 43
- 5 =
1 1. American Multi-Cinema, Inc., et al. v. Motion
Picture Association of America, Inc., et al.,
yr C.D. California (hereinafter referred to as AMC)
3 AMC was filed on May 10, 1979, by eight exhibitors
4 (six of which are named as defendants in at least one action
in the transferee district) against seven distributors;
5
the Motion Picture Association of America, Inc. (MPAA),
6
a corporation allegedly engaged in nationwide activities
7 on behalf of its member distributors; and Sargoy, Stein
8 & Hanft (Sargoy), an "auditing Firm. n3/
9 Plaintiffs allege that, in violation of Sections 1
10 and 2 of the Sherman Act, defendants and unnamed co-conspirators,
11 from at least 1970 until the present, have conspired
to fix license fees, admission prices and certain uniform
12
practices and conditions favorable to distributor defendants
o in connection with the distribution of motion pictures
14 throughout the United States. Plaintiffs also allege that
15 defendants have monopolized the domestic distribution of
16 motion pictures. In furtherance of this alleged conspiracy,
17
18
3/ The complaint in AMC describes Sargoy as follows:
19
Sargoy is primarily an auditing firm totally controlled
20 by distributor defendants, performs services solely
for them on matters pertaining to distribution of
feature motion pictures and conducts on their behalf,
21 throughout the United States, audits and reviews of
the books and records maintained by exhibitor licensees,
22 including those maintained by plaintiffs. Sargoy
also employs a number of attorneys who purport to
23 | and do act from time to time as attorneys solely for
| distributor defendants.	3 Although neither MPAA nor Sargoy is currently a defendant
| in any of the actions in the transferee district, plaintiffs	lin the transferee district are seeking leave to add MPAA
and Sargoy as defendants. FPI—MAR~—3.27.79-6M-178!

Case MDL No. 366 Document 2 Filed 05/04/15 Page 22 of 43 . .
- 6 -
1 the complaint alleges, defendants have, inter alia: (1)
2 blind bid motion pictures; (2) joined together for the
3 purpose of using the MPAA's Classification and Rating Admin-
4 istration (CARA) to discriminate in favor of MPAA members
and independent producers who distribute their pictures
> through members of MPAA, and to rate deceptively the motion
6 pictures distributed by MPAA members; (3) limited the source
7 of supply and discouraged new entry into the production
8 and distribution of motion pictures; (4) imposed uniform
9 license agreements upon exhibitors; (5) construed provisions
10 of license agreements uniformly; (6) enforced these uniform
11 license provisions "through purported audits ... and other
forms of policing practices and coercive activities conducted
2 by Sargoy...."; (7) required exhibitors to charge certain
13 minimum admission prices in order to obtain licenses to exhibit
14 motion pictures; and (8) set and maintained uniform licensing
15 fees, terms and conditions. The defendants are alleged
16 to have implemented and enforced their activities through
17 use of personnel and facilities of Sargoy and the MPAA,
18 and by establishing joint and interlocking business arrange-
ments.
19
Only minimal, if any, discovery and other pretrial
20 proceedings have yet occurred in AMC.
21 2. General Cinema Corporation v. Buena Vista Distribution
Co., Inc., C.D. California (hereinafter referred
22 to as General Cinema)
23 This action was commenced in August, 1978, by General
24 Cinema Corporation (General Cinema), the largest theater
a5 chain in the United States (and a defendant in four of
FPI—MAR-—3-27.79.6M.1781

Case MDL No. 366 Document 2 Filed 05/04/15 Page 23 of 43
. . oo
|
the actions in the transferee district), against Buena
® Vista Distribution Co., Inc. (Buena Vista), the domestic
3 distributor of motion pictures produced by Walt Disney
4 Productions. The complaint alleges that, in violation
of Section 1 of the Sherman Act, Buena Vista and the exhibitor
> licensees which contract with Buena Vista have agreed to
© raise and fix theater admission prices throughout the United
7 States by the use of minimum per capita royalty provisions
8 in Buena Vista's license agreements. These provisions
9 provide for the computation of the minimum film rental
10 owed to Buena Vista on the basis of an amount (generally
11 either a flat figure or an amount derived by multiplying
a percentage figure offered by the exhibitor times an amount
stated by Buena Vista) for each person admitted to the
@® theater to view the picture. Plaintiff claims that these
14 provisions amount to price fixing because, as a practical
15 economic matter, exhibitors must charge an admission price
16 at least equal to the amount they must pay to Buena Vista
17 as the minimum film rental calculated under the per capita
18 royalty provision.
19 Buena Vista has filed a counterclaim against General
Cinema, charging that General Cinema and other exhibitors |
20 have agreed to illegal splitting arrangements. |
21 Discovery has begun in this action, but no discovery |22 cutoff or trial dates have been established.
.
® || |
FRIMAR—3.27.79.6M.1781

Case MDL No. 366 Document 2 Filed 05/04/15 Page 24 of 43 . .
- 8 -
1 3. Fred Stein, et al. v. United Artists Corporation, |
et al., C.D. California (hereinafter referred
2 to as Stein)
3 Stein was commenced in May, 1979, by two individuals?
against four distributors, four exhibitors, and certain
4
individual defendants. Plaintiffs allege, inter alia,
5
that, in violation of Section 1 of the Sherman Act and
6
California state law, defendants and unnamed co-conspirators
7 refused to license first run motion pictures to Century's
8 theaters located in Hollywood and Westwood, California;
9 denied Century's theaters the opportunity to bid or negotiate
10 for or to obtain first run motion pictures; supplied pictures
to Century's competitors instead; gave Century's competitors
11
preferential treatment in bidding or negotiating for first
12
run motion pictures; and refused to evaluate Century's
13
offers on their merits and ina non-discriminatory manner.
14 The complaint alleges that defendants undertook these activities
15 in order to coerce one of the plaintiffs to sell the individual
16 defendants a one-half interest in Century.
17 The complaint further alleges a cause of action based
18 upon the common law doctrine of intentional interference
with contractual rights and prospective advantage. Plaintiffs
19
allege that defendants' activities disabled Century from
20
repaying its indebtedness to the plaintiffs and their in-
21 dividual assignors, or to the creditors whose claims they |22 guarantied.
23
4/ One of these individuals has brought Stein both in
24 his own right and as an assignee of Century Cinema Circuit,
I Inc. (Century), a former exhibitor of motion pictures in
Il southern California and Arizona. The other individual
25 plaintiff has commenced this action in her own right and
as assignee of the right of two other individuals who had
an unspecified relationship to Century.
FPI—-MAR—3-27-79.6M-1781}

. i Case MDL No. 366 Document2 Filed 05/04/15 Page 25 of 43
- 9 =
1 Discovery has commenced in this action. Some depositions
¢ have been taken, and answers to interrogatories are due	-
3 in the near future. Defendants have recently filed a motion
4 under Rule 12(b)(6), Fed.R.Civ.P., to dismiss Stein on
the ground that plaintiffs do not have standing to bring
> their action.
6 4, Holiday Theatres, Inc. v. Wometco Enterprises,
- Inc., et al., S.D. Florida
5 This action was commenced by a Miami, Florida exhibitor
and presently is pending against eight distributors, three
> exhibitors and one producer .2/ Plaintiff alleges that
10 defendants, in violation of Section 1 of the Sherman Act,
11 have conspired to discriminate against plaintiff and to
12 favor the exhibitor defendants by: (1) allotting first
C run motion pictures to the exhibitor defendants, and refusing14 to deal with the plaintiff pursuant to splitting agreements
15 among the exhibitor defendants; (2) granting unlawful and
unreasonable clearances (the contractual periods between
te "runs" of a film) over the plaintiff in favor of the exhibitor
17 defendants; (3) refusing to allow plaintiff to exhibit
18 motion pictures on any run, or demanding exorbitant prices
19 or imposing unreasonable conditions on plaintiff; (4) engaging
20 in blind, discriminatory or illegal bidding, or prearranged
21
22
5/ Three additional distributors and four other exhibitors
23 originally were defendants but have settled the claims
against them in this action.
¢ i
|
PRIMAR—3.27-78.5M.1781

Case MDL No. 366 Document 2 Filed 05/04/15 Page 26 of 43 ) .
- 10 =
1 negotiation; and (5) engaging in conduct violative of the
2 Paramount decrees.’
3 At least one distributor defendant has filed a counter-
4 claim charging that plaintiff and other exhibitors in the
Miami, Florida area have entered into splitting agreements
° in that area.
6 Substantial discovery has been conducted in this action,
7 and in April, 1979, the court restricted discovery to the
8 years 1974 through and including 1978, and to the Miami
9 area. On May 20, 1979, the court granted a motion by plaintiff
10 to stay all discovery in this action pending the Panel's
11 ruling. At least one defendant moved for reconsideration
of the order, and in late May, 1979, the court modified
- the stay to provide that all discovery previously ordered
13 and all discovery noticed or requested prior to the entry
14 of the stay order was to be completed.
15 5. National Amusements, Inc. v. Columbia Pictures
Industries Inc., et al., D. Massachusetts
te This action was filed in early 1977 by a multi-state
17 exhibitor against Columbia Pictures Industries, Inc., a
18 distributor; and ITC Entertainment, a producer and/or dis-
19 tributor of motion pictures. Plaintiff alleges that Columbia
20 and various unnamed distributors and some named and some
21 unnamed exhibitors have conspired:
22
23
24 > The Panel earlier discussed the Paramount decreesin In re Motion Picture Licensing Antitrust Litigation, supra,
25 B F. Supp. at 839. FP-MAR—2.27.79.6M.1781

5 } Case MDL No. 366 Document 2 Filed 05/04/15 Page 27 of 43
1 in cities throughout the United States in which [plaintiff] |
owns and operates theatres, to restrain the trade of |
[plaintiff] in and from the right to compete in the
= licensing and exhibition of motion pictures, and to
3 restrain and/or exclude [plaintiff] from the licensing |
and exhibition of motion pictures, all in violation of
4 Sections 1 and 2 of the Sherman Act [and the Paramount
decrees] ....
5
The complaint further alleges that Columbia and unnamed distributors
6
|and some named and unnamed exhibitors have engaged in somewhat5
similar activities in, specifically, the "greater New York
8
metropolitan area"; that Columbia and unnamed distributors have
9
conspired to fix the terms and conditions upon which motion pictures
10
are licensed throughtout the United States; and that Columbia, ITC
11
|onsorsatmmant and General Cinema Corporation have entered into12
an agreement whereby "motion pictures produced or to be produced
® by ITC and distributed by Columbia have been preempted by General14
Cinema in every city in the United States in which General Cinema
15
operates motion picture theatres, including those cities in which	16
| the plaintiff also operates motion picture theatres." |17 | :
: Columbia has filed counterclaims against the plaintiff |
18 t |
(alleging that (1) plaintiff and other exhibitors have enteredi
19 | into splitting agreements in certain local areas; (2) plaintiff
20 > underreported its gross receipts for theater admissions21 » certain other miscellaneous charges; and (3) plaintiff	il
22 has consistently failed to pay film rentals owed to Columbia.
23 The parties have engaged in extensive discovery in |
. | |
| ||
| |i |
FRI-MAR—3.27.73.6M.178!

Case MDL No. 366 Document 2 Filed 05/04/15 Page 28 of 43 . .
| \
1 this action, and Columbia represents in its papers before |
2 us that plaintiff "has concluded its examination of Columbia's @3 chief distribution executives and has completed discovery
on all issues relating to Columbia's general distribution
4
policies." A motion by Columbia to schedule all remaining
5
discovery in this action presently is pending.
6 6. Quad Cinema Corporation v. Twentieth Century Fox
. Film Corporation, et al., S.D. New York
This action was commenced in late 1978 py an exhibitor
8
which operates a theater in New York City against a number
9
of distributors and exhibitors. The complaint alleges
10 that, in violation of the federal antitrust laws, defendants
11 conspired to deprive plaintiff and other independent theaters
12 in the New York area of the opportunity "to exhibit, and
13 to compete for the right to exhibit on earlier runs and
14 availabilities, the feature pictures of superior quality
and those having the greatest box office potential.” Since
15
this action was filed, however, the parties, with the court's
16
active participation and approval, have engaged in focusing
17 | the issues in this action. All parties before the Panel
i !
18 in this action generally agree that: |l
19 the issue in this case, distilled from the broad
allegations of the complaint, is whether with respect
20 to the licensing in lower Manhattan of approximately
125 complained of runs of 93 motion pictures, on runs
21 other than first run, during the period November 1972
through November 1976, the defendant exhibitors and
22 | distributors entered into a conspiracy, whose object itwas to favor the theatres owned or operated by the :
23 | exhibitor-defendants.| ;
24 | |
| |
i
FRi-MAR—7.27.73.6M-i7a1

i i Case MDL No. 366 Document2 Filed 05/04/15 Page 29 of 43
- 13 -
1 The parties have engaged in extensive discovery in
] this action, and the court has made various rulings confining
3 the scope of discovery to limited areas of lower Manhatten,
4 and requiring the production of a limited variety of documents
5 relating to specific runs at certain theaters located in
seven counties in the New York City area. Although the
© parties in this action were unable to meet a "target date"
7 of June 30, 1979, for the completion of discovery, the
8 plaintiff and the distributor defendants estimate in their
9 papers before us that discovery can be completed "in a
10 number of months." The New York court, however, has stayed
11 all discovery pending the Panel's determination in this
action.
12
7. Lyell Theatre Corporation, et al. v. Loews Corpor-
14 and
Lyell Theatre Corporation, et al. v. Columbia
15 Pictures Industries, Inc., W.D. New York
16 These two actions were commenced in, respectively,
17 1971 and 1974 by the same exhibitor (and a related entity)
18 against many of the same distributors and exhibitors.
19 The complaints are virtually identical except for the geo-
graphic area involved, and allege that defendants conspired,
20 in violation of Sections 1 and 2 of the Sherman Act, to
21 discriminate against plaintiffs and in favor of the exhibitor
22 defendants concerning the licensing of motion pictures
23 in, respectively, the Rochester and the Buffalo, New York
po areas.
| FPI-MAR——3-27-79-6M-1781

Case MDL No. 366 Document 2 Filed 05/04/15 Page 30 of 43 . .
- 14 =
1 | |
| The parties before the Panel agree that the Buffalo
2 | ction has been informally stayed pending resolution of
3 [ the Rochester action. The parties are in disagreement,
4 | rovever. concerning the status of pretrial proceedings5 in the Rochester action. Counsel for certain defendants
who havé moved for Section 1407 transfer in these actions,6
see note 2, supra, assert in their papers before us that |	5
discovery is "far from complete in that action." Plaintiffs
8 and the remaining defendants before the Panel contend in
9 their papers that the moving parties’ local counsel and
10 counsel for all other parties have agreed with the magistrate
11 handling discovery in the Rochester action that discovery has |12 | nearly been completed in this action. |I 8. American International Pictures, Inc., et al.
13 i v. Price Enterprises, Inc., et al., E.D. Virginiafi
14 | This action was commenced in December, 1978, by several
15 [distributors against eight exhibitors, each of which operates
16 » least one theater in the Norfolk-Virginia Beach, virginia	larea, and an individual stockholder in these exhibitors.
17
fre exhibitors have counterclaimed against the distributor |	18 |
‘plaintiffs, and also named as defendants on the counterclaim
19 lon additional distributors, two exhibitors, Sargoy (see
. 1/
20 ‘note 3, supra) and a partner in Sarcoy. On May 25, 1979, |
21 —_—
7/7 This counterclaim is the third of three relatively
29 recent antitrust actions by Norfolk area exhibitors against
| any of the same distributors and exhibitors named as defen- ||dants in the counterclaim. The same attorney has represented
23 Ithe exhibitor plaintiffs (or counterclaimants) in each
of the three proceedings. The first of these proceedings
24 (was commenced in 1975 and settled prior to trial in July,
11976. In the second action, defendants recently obtained
55 ia directed verdict from the same judge before whom the
‘Virginia action now before us is pending.
i
Fo. - dAZ=3. 27 .79.64.173"

} . Case MDL No. 366 Document 2 Filed 05/04/15 Page 31 of 43	-— D-
1 f
| 7	i note 3, supra) and a partner in Sargoy.~’ On May 25, 1979,
3 | the district judge in this action granted a motion by plaintiffsfor severance and separate trial of the complaint and the
4 :
| counterclaim. In his opinion and order granting severance, :
5
the judge described the allegations of the complaint and
6 the counterclaim as follows:
7 | The complaint and counterclaim in the present
dispute involve both separate legal and factual issues.
8 The original complaint essentially alleges that defendants
have fraudulently underreported the gross receipts
9 of their theatres during the exhibition of motion
pictures licensed from the plaintiffs. The license :
10 fees for such pictures are based upon a percentageof box office receipts. Thus, the complaint alleges |
defendants have not paid the full amounts properly
11 payable under the licensing contracts. Accordingly,
the substantive law of contracts and fraud of the
12 State of Virginia will apply.
| On the other hand, the counterclaim contains
| no allegations sounding in contract or fraud. Theallegations of the counterclaim advance causes under
14 the federal antitrust acts. Count I of the counterclaim
alleges violations of Section 1 of the Sherman Act, |
15 including price-fixing, refusals to deal, bid rigging :
| and other unlawful restraints of trade. Count II |	16 alleges an attempt to monopolize under Section 2 of
| the Sherman Act. Count III basically alleges a combinati-n
17 and conspiracy to restrain trade unlawfully and to i
injure defendants in the operation of their businesses.
| Count IV and two paragraphs of Count III allege the
18 | plaintiff distributors wrongfully combined and conspired| to institute the underreporting complaint. :	19
The claims raised in the complaint recently were tried,
20
and on October 24, 1979, we vacated our order to show cause
21 as moot and denied the Section 1407 motion for transfer :
22 as moot concerning those claims. No trial date has yet
23 | been established for the counterclaim.|
® |	5 | |
!

Case MDL No. 366 Document 2 Filed 05/04/15 Page 32 of 43 . .
- 16 -
1 9. Paramount Pictures Corp., et al. v. Heritage Theatres,
Inc., w.p. oklahoma
? This action was commenced in October, 1978, by nine
; distributors against an exhibitor (Heritage) that operates
4 several theaters in Oklahoma City, Oklahoma. The distributors,
5 in a complaint very similar to that in the Virginia action,
6 supra, allege that Heritage fraudulently underreported
7 its box office receipts to the distributors and, accordingly,
8 has not paid the distributors the full amount of rent due
5 on motion pictures licensed from the distributors under
their licensing agreements with Heritage. The distributors
10 seek an accounting, compensatory and punitive damages,
11 and attorneys' fees.
12 Heritage has filed an extensive counterclaim against
13 the distributor plaintiffs, Sargoy, and a partner in Sargoy.
14 Heritage's counterclaim alleges, inter alia, that since
15 November, 1972, the defendants and various co-conspirators
16 "have entered into an unlawful combination and conspiracy
to unreasonably restrain and to monopolize interstate trade
7 and commerce in motion picture films, and particularly
18 [Heritage's] right ... to contract for and to exhibit 'first
19 run' feature films in the City of Oklahoma City, Oklahoma."
20 Many of the counts of the counterclaim also focus seriatim
21 on a distributor defendant's allegedly discriminatory conduct
22 in denying Heritage the opportunity to license certain
23 motion pictures, and on an alleged conspiracy among the
distributors and Sargoy regarding an audit of Heritage
24 that was conducted by Sargoy.
25
FPI—HAR—3.27.73.6M.1781

Case MDL No. 366 Document2 Filed 05/04/15 Page 33 of 43
- 17 =
On August 8, 1979, the judge before whom this action |¢® is pending granted the distributors' motion to sever the
3 counterclaim and to order separate trials of the complaint
and counterclaim. No trial dates have vet been established.
4
ITI. POSITIONS OF THE PARTIES
5
Most parties that have responded before the Panel
6 (including all responding distributors) oppose transfer
7 of any of the actions presently before us. The parties
8 that favor transfer of one or more actions are as follows:
9 (1) ten exhibitors®/ who are parties in Stein, General
10 Cinema, the Southern District of New York action or the
two Western District of New York actions favor transfer
11
of those actions;2/ (2) plaintiffs in the Western District
12
of New York action that focuses on the Buffalo market area
C favor transfer of that action, since little or no discovery
14 has taken place in that action; (3) plaintiffs’ steering
15 committee in the transferee district favors transfer of
16 AMC and General Cinema, "conditioned upon a finding by
17
8/ Some of these parties describe themselves in their
18 papers before us as "exhibitor-affiliated former distributors."
9/ Five of these exhibitors are defendants in Stein;
19 two are defendants in the Southern District of New York
action; two are defendants in each of the two Western District
20 of New York actions; and one is the plaintiff-counterclaim
defendant in General Cinema.
21 These ten exhibitors, along with five additional ex-
ibitors that are plaintiffs in AMC, originally favored
22 ransfer of AMC. These exhibitors recently withdrew their
upport of transfer in AMC because of "the possibility
f conflict if ... AMC ... were transferred...." It should
23 e noted that each of these fifteen exhibitors is represented
y the same counsel. This counsel also represents some |f these exhibitors as defendants in the transferee district,
s well as two additional exhibitors that are named as
5 efendants in some of the previously transferred actions.
FPI—MAR—~3.27.79-6M.1781

Case MDL No. 366 Document 2 Filed 05/04/15 Page 34 of 43 i .
- 18 =
1 the Panel that the parties, after [transfer], can be properly |
2 aligned to reflect their true interests in the litigation":
3 (4) the defendants-counterclaimants in the Virginia action
a favor transfer of the counterclaim in that action, but
. have offered no arguments in support of this position;
and (5) the defendant-counterclaimant in the Oklahoma
© action favors transfer of that action.
’ Iv. HOLDING
8 On the basis of the papers filed and the hearing held
9 concerning these ten actions, we recognize that at least
10 some of the actions before us and the actions in the transferee
11 district share questions of fact on the economic and conspir-
12 atorial issues, particularly regarding the manner in which
film distribution decisions are made in the motion picture
L3 industry. Nevertheless, we are persuaded that transfer
14 of the actions before us under Section 1407 would not neces-
15 sarily serve the convenience of the parties and witnesses
16 or promote the just and efficient conduct of these actions
17 and/or the previously transferred actions. Accordingly,
18 we deny the motion to transfer the Western District of
19 New York actions, and vacate our orders to show cause in
0 the remaining eight actions.
V. THE QUESTION OF TRANSFER
21 The ten exhibitors that favor transfer of five of
22 the actions now under consideration argue that the alle-
23 gations of the complaints and the pretrial status of these
24 five actions render these actions clearly appropriate for
25 | under the guidelines established by the Panel	| |

} i Case MDL No. 366 Document2 Filed 05/04/15 Page 35 of 43
- 19 -
in this litigation. See In re Motion Picture Licensing
5 Antitrust Litigation, supra, 468 F. Supp. 837. These exhib-
3 itors urge the Panel to dismiss the objections to transfer of
4 the five actions that have been made to the Panel by numerous
parties based on (1) the fact that the complaints in many
° of the actions focus on a limited geographic area, and
© (2) the status of discovery and other pretrial proceedings
7 in these actions. In response to these objections, these
8 exhibitors argue that (1) the Panel has already expressly
9 held that many of the previously transferred actions, which
10 also alleged or eventually focused on local conspiracies,
11 were appropriate for transfer, see id. at 839-42; and (2)
10 the record before the Panel, as well as status reports
C submitted to Judge Singleton in the transferee district,	reflect that pretrial proceedings in many of the previously
14 transferred actions are at least as advanced as pretrial
: 15 proceedings in the potential tag-along actions in which
16 these exhibitors are involved.
17 These exhibitors point out that the Panel, in ordering
18 transfer, stressed that "[tlhe national conspiracy alleged...
10 in the Utah action necessarily encompasses many aspects
of the somewhat more limited conspiracies alleged in many
20 of the other actions before us." Id. at 841. Similarly,
21 these exhibitors contend, the nationwide allegations of
22 the complaint in General Cinema, see supra at 6-7, supply
23 a further unifying theme to this litigation. These exhibitors
C argue that the allegations in General Cinema concerning55 the alleged fixing of theater admission prices will necessitate
!
FPI~MAR—3.27-79.6M-1781

Case MDL No. 366 Documenpg Filed 05/04/15 Page 36 of 43 .
1 | discovery concerning practices and activities undertaken |
2 either throughout, or in a substantial number of competitive
3 market areas in, the United States, and that this type |
4 of national discovery could easily be encompassed by the
national discovery program ordered by Judge Singleton in
° the transferee district.
® The counterclaimant in the Oklahoma action contends
7 that the complaint in this action, although brought by
8 distributors under the guise of an action seeking to recover
9 for the underreporting of theater admission receipts, is
10 simply one invidious but integral aspect of a conspiracy
11 between, primarily, the distributors and Sargoy to fix
12 and control the terms, prices and conditions of the licensing
of motion picture films and to monopolize the market in
13 the distribution and exhibition of first run films. The
14 i notes that similar allegations already15 |are involved in at least one action in the transferee district |
16 (tne Tennessee action previously transferred by the Panel),
17 | and that plaintiffs in the transferee district presently
18 are seeking leave to add Sargoy as a defendant.
19 | Thus, this counterclaimant argues, transfer of the
|Ok1anoma action would prevent duplicative discovery, eliminate
20 | the possibility of conflicting pretrial rulings, and conserve
21 time and effort of the parties, the witnesses and the judiciary.
22 | We find these arguments unconvincing. Initially,
23 ve note that in our earlier opinion and order in this liti- |
24 | gation we excluded two actions from transfer because of |
®25 3 |
| |
i

. , Case MDL No. 366 Document2 Filed 05/04/15 Page 37 of 43
- 21 -
the advanced status of pretrial proceedings in those actions.
¢® In re Motion Picture Licensing Antitrust Litigation, supra,
3 468 F. Supp. at 838 n.l, 842. We have concluded that some
4 or all claims raised in many of the actions now before
us are also inappropriate for transfer, either because
> discovery and other pretrial proceedings are well advanced
6 in those actions, and/or because the parties in those actions
7 have expressed before us their lack of interest in the
8 "national" or "common" discovery that Judge Singleton has
9 determined should presently serve as the focus of the consoli-
10 dated pretrial proceedings in the transferee district.
11 The purposes of Section 1407 would clearly not be accomplished
by transferring actions which are nearly resolved, or by
12 requiring parties who have no interest in the consolidated
® pretrial proceedings to reap only delay and other inconvenience
14 as a result of transfer.
15 Discovery in the Southern District of New York action
16 and in the Florida action has been restricted by court
17 order to a limited geographic area and is extremely well
18 along. In addition, all responding parties in the Florida
19 action have disclaimed any interest in conducting any of
the remaining discovery on other than a purely local level.
20 Similarly discovery in the Massachusetts action is, on
21 the basis of the record before us, nearing completion.
22 In addition, we have been advised by Columbia, one of the
23 two defendants in this action, that any potentially relevant
discovery concerning Columbia's distribution policies and
] and practices has been completed, and that the remaining
FPI=MAR—3.27.79.6M.1781

Case MDL No. 366 Document 2 Filed 05/04/15 Page 38 of 43 . .- 22 -
1 discovery relates exclusively to local issues and local |
2 market areas. No other party in the Massachusetts action
3 has disputed this representation. Finally, although there
4 is some dispute on the record before us with regard to
the amount of discovery yet to be accomplished in the Western
° District of New York action concerning the Rochester market
6 area, we are persuaded that the remaining discovery will
7 be concluded shortly and is of a local nature. We note
8 that this action has been pending for eight years.
9 Although the status of pretrial proceedings concerning
10 the counterclaim in the Virginia action is not, on the
11 basis of the record before us, sufficiently advanced alone
to support a denial of transfer of the counterclaim, we
12 are convinced that the counterclaim can be resolved most
13 expeditiously in the Eastern District of Virginia. As
14 we have already noted, see note 7, supra, the judge who
15 severed the complaint and the counterclaim in the Virginia
16 action has had a unique opportunity from previous litigation
17 to become thoroughly familiar not only with the allegations
18 of the counterclaim and with the motion picture industry
19 as it pertains to the Norfolk, Virginia area, but also
with many of the parties and counsel involved in the Virginia
20 counterclaim. Under these circumstances, we are confident
21 that the Virginia court will quickly and efficiently dispose
22 of the counterclaim.
23 We also find that neither the convenience of the parties
24 and witnesses nor the just and efficient conduct of the
55 Western District of New York action that focuses on the
FPI—MAR~—3-27.79.6M.1781

. . Case MDL No. 366 Document2 Filed 05/04/15 Page 39 of 43
- 23 -
1 Buffalo market would be enhanced by Section 1407 transfer.
C Some of the defendants have represented in their papers
3 before us, and no party has disputed before us, the following:
[I]t has been the understanding of all parties that
4 further discovery in the Buffalo action is to await
final determination in the Rochester action. The |	5 legal and factual issues raised in the Buffalo action
are similar to those in the Rochester action, and |
6 it has been decided upon by counsel to both actions |that discovery in the Rochester action should be completed
5 and the action tried before any further proceedings
are conducted in the Buffalo action. The basis for
this agreement has been that a determination of the
8 Rochester action may be dispositive of the issues
raised in the Buffalo action and, therefore, would
9 possibly vitiate any further proceedings in that action.
10 We are of the view that it would be: counterproductive to
11 disturb the course of conduct allegedly agreed upon by
all parties concerning the Buffalo action. This conclusion
12 :
is strengthened by the fact that both Western District
C of New York actions presently are assigned to the same
14 judge who, from his familiarity with the nearly completed
15 Rochester action, is in the best position to ensure the
16 expeditious disposition of the Buffalo action.
17 We find that the claims raised in the complaints in
18 General Cinema and the Oklahoma action are inappropriate
19 for Section 1407 transfer because the complaints in those
two actions and the pleadings in the previously transferred
20
actions raise fundamentally different factual questions.
21
Buena Vista is the sole defendant in General Cinema, and
22 none of the actions in the transferee district involves
23 the minimum per capita royalty provision allegedly used
é j
FPI-MAR-—3.27.79-6M.178!

Case MDL No. 366 Document 2, Filed 05/04/15 Page 40 of 43 . .
1 in Buena Vista's license agreements with exhibitors.’
2 Similarly the complaint in the Oklahoma action focuses
3 on unique issues involving Heritage's allegedly fraudulent
4 underreporting of its gross receipts concerning particular
films exhibited in the Oklahoma City, Oklahoma area. Thus
5
we conclude that individual, rather than common, factual
6
issues predominate in General Cinema and in the complaint
7 in the Oklahoma action vis-a-vis the previously transferred
8 actions.
9 Remaining before us for disposition are AMC, Stein,
10 and the counterclaims in General Cinema and the Oklahoma
11 action. While AMC, Stein and the counterclaims in the
other two actions raise some unique factual issues, we
12
recognize that AMC, Stein and these counterclaims share
13
: questions of fact with the previously transferred actions.
4
1 We find the following thoughts from the concurring opinion
15 in In re "East of the Rockies" Concrete Pipe Antitrust
16 Cases, 302 F. Supp. 244, 254 (J.P.M.L. 1969), however,
17 to be particularly instructive here:
18 The statutory objectives are not necessarily served
by requiring joint pretrial whenever some -- even
many -- questions of fact are common to a large number
19 of cases. In some such cases, if not in these at
hand, coordination and consolidation may impair, not
20 further, convenience, justice and efficiency. To
put it in other words, neither the convenience of
21 witnesses and parties nor the just and efficient conduct
of actions are served, ipso facto, by transfer just
292 because there are common questions of fact in the .civil actions involved.
23
4 10/ We also note that even the proposed unified and consoli-2 dated complaint in seven of the previously transferred
actions does not specifically challenge the legality of
25 this aspect of Buena Vista's licensing agreements. |FPI~MAR—3-27.79-6M.1781

. . Case MDL No. 366 Document 2 Filed 05/04/15 Page 41 of 43	- 25 _
1 In our earlier opinion and order in this litigation, |
C we noted that each action then before us involved some |
3 unique, localized issues, In re Motion Picture Licensing
Antitrust Litigation, supra, 468 F. Supp. at 841, and we
* expressed our concern that Section 1407 transfer might
> cause some parties to suffer a degree of inconvenience,
6 id. at 842. Nevertheless, we concluded that transfer was
7 warranted so that the parties would be given an opportunity
8 to engage in centralized discovery and other pretrial pro-
9 ceedings concerning whether, inter alia, as the proponents
10 of transfer then before us argued, "'regional decisions
are made or approved (tacitly or overtly) on a national
H level' ... [and] particular minimum terms and licensing
12 policies for any given film are 'inaugurated and substantially
C controlled’ by supervisory and headquarters personnel."
14 Id. at 841. This opportunity is now set in force under
15 the close supervision of Judge Singleton, and the fruits
16 of that process will become a matter of record, regardless
17 of our decision today. Thus, we are convinced that the
18 inclusion at this time in the consolidated pretrial proceedings
in the transferee district of additional actions or claims,
19 with, in significant part, their attendant unique legal
20 and factual nuances, would serve only to add further layers
21 of complexity to those proceedings, without providing any
22 overriding benefit.
23 Finally, we note the following argument of the opponents
¢é of transfer:
| FPI—MAR—3.27.79.6M.1781

Case MDL No. 366 Document 2 Filed 05/04/15 Page 42 of 43 B .
- 26 -—
1 Unlike lawsuits arising out of a common disaster or
a group of nearly identical antitrust class actions
2 filed at one point in time, the motion picture distri-
bution cases,propresent a continuing stream of commercial
disputes....=— [We fear] that a high percentage
3 of this continuing series of unrelated disputes will
be transferred for 'coordinated' or 'consolidated'
4 pre-trial proceedings in the Southern District of
Texas to the great inconvenience of all parties involved
5 and to the great burden of that District.... The
frequency with which cases of this sort are filed
6 makes it difficult to foresee that there will ever
come a time when pre-trial discovery in all of the
. transferred and 'tag-along' cases will be concluded....
We, of course, are vitally concerned that pretrial proceedings8
in the transferee district remain manageable, and that
9
those proceedings move expeditiously toward conclusion.
10 In light of the special circumstances of this docket, we
11 are convinced that at present the most efficacious manner
12 in which the parties in the transferee district can resolve,
13 at least for purposes of pretrial proceedings, the common
14 questions of fact on the economic and conspiratorial issues
is to allow those parties to proceed, unencumbered by the15
addition of new issues in additional actions or claims,
16
along the course established, and to be further refined,
17 .
by Judge Singleton.
18 IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C.
19 §1407, the Panel's orders to show cause filed with respect
20 to the actions entitled
21 American Multi-Cinema, Inc., et al. v. Motion Picture
Association of America, Inc., et al., C.D. California,
22 C.A. No. CV-79-1703-DWW
23 -—
11/ Some of these parties state that since 1969 at least
24 96 antitrust actions have been commenced that involved
motion picture distribution practices and named three or
25 more distributors as defendants.
FPI~MAR—3-27.79.6M.178!

’ e Case MDL No. 366 Document2 Filed 05/04/15 Page 43 of 43- 27 =
| |
Fred Stein, et al. v. United Artists Corporation, et
al., C.D. California, C.A. No. CV79-2137-WPG,
2 General Cinema Corp. v. Buena Vista Distribution Co.,
Inc., C.D. California, C.A. No.CV78-3284-LTL(KxX);
3 Holiday Theatres, Inc. v. Wometco Enterprises, Inc.,
et al., S.D. Florida, C.A. No. CV78-2420-Civ-JAG;
4 Quad Cinema Corp. v. Twentieth Century Fox Film Corp.,
et al., S.D. New York, C.A. No. 76 Civ 4452;
5 National Amusements, Inc. Vv. Columbia Pictures Industries,
Inc., et al., D. Massachusetts, C.A. No. 77-155-Z;
Paramount Pictures Corp., et al. v. Heritage Theatres,
6 Inc., W.D. Oklahoma, C.A. No. Civ-78-01115-D; and
American International Pictures, Inc., et al. v. Price
7 Enterprises, Inc., et al., E.D. Virginia, C.A. No.
78-651-N,
8
‘It be, and the same hereby are, VACATED.
9 IT IS FURTHER ORDERED that the motion pursuant to
10 Section 1407 to transfer the actions entitled Lyell Theatre
11 Corp., et al. v. Loews Corporation, et al., W.D. New York,
12 C.A. No. 1871-571; and Lyell Theatre Corp. v. Columbia
C Pictures Industries, Inc., et al., W.D. New York, C.A.No. 1974-132, to the Southern District of Texas be, and
14
the same hereby 1s, DENIED.
15
16
17
18
19
20
21
22
23
25
FEI—MAR—3-27-79.6M-1781