Archives for category: antitrust

In 1992, El Cajon Cinemas sued AMC (American Multi-Cinema) alleging unfair trade practices preventing it from competing in the first-run movie business. “El Cajon alleges that it was injured by several different forms of defendants’ anticompetitive conduct.” Including: “Horizontal conspiracy, Circuit-Wide Deals, Leverages, Clearances and other Discriminatory allocations”

EL CAJON CINEMAS, INC., a California corporation, Plaintiff, v. AMERICAN MULTI-CINEMA, INC.
No. 90 0710 IEG (POR), 90 1408 IEG (POR), 92 0012 IEG (POR) (Consolidated)
1992 U.S. Dist. LEXIS 19290; 1992-2 Trade Cas. (CCH) P70,038
Decided – October 23, 1992

Explaining the allegations of Circuit-Wide Deals, Judge Gonzales writes:

El Cajon alleges that AMC and Pacific abused the buying power of their large circuits by persuading distributors to license to their theatres nationally rather than on a film by film or theatre by theatre basis in each geographic market. El Cajon cites the Court to the deposition of its film buyer who states that all of the films by all distributors are really licensed in this manner. El Cajon also references another section in its film buyer’s deposition in which the film buyer says that, although he is not sure, he thinks that NINJA TURTLES and WILD AT HEART were distributed on a circuit-wide basis. This alone is not enough to withstand a motion for summary judgment. At the request of El Cajon, the Court will review other evidence submitted by El Cajon relating to alleged circuit-wide deals between Pacific and Orion, and will take this matter under advisement.

Wild at Heart was a 1990 movie by director David Lynch starring Nicolas Cage, Laura Dern and Willem Dafoe. The original Teenage Mutant Ninja Turtle movie was also a 1990 release.

But the Court refused El Cajon’s arguments:

While the Unfair Practices Act makes it unlawful for any person engaged in the production, manufacture, distribution or sale of any article or product for general use or consumption to perform certain acts which the state has determined are anticompetitive, Section 17024 of the Unfair Practices Act provides that the motion picture films when licensed for exhibition to motion picture houses are not articles or products under this chapter. As a matter of law, none of the defendants can be held in violation of the Unfair Practices Act for engaging in the alleged conduct.

El Cajon failed again on a motion for reconsideration decided in 1993. And right now on the internet (google), I can’t find any “El Cajon Cinemas” chain in existence.

Finally, note a recent article, Jan 3, 2012, posted in the Atlantic by Derek Thompson, entitled “Why Do All Movie Tickets Cost the Same?” about movie price fixing. It’s not exactly the same issue as El Cajon faced (Thompson is referring to each movie having the same admit cost, whereas El Cajon was fighting being forced to buy who sets of the distributor’s movies in order to get access to the hot new movies), but it’s all related to the big business takeover of independent cinema in the early 1990’s.

Ninja again being coincidentally(?) being a character of big business racketeering style takeovers. It is humorous to see the ninja turles involvement in this early media war and again recall their involvement in the cola wars.

Teenage Mutant Ninja Turtles will appear in at least ten Federal Court opinions. The first is in 1991, in a seemingly irrelevant mention of the TMNT Cowabunga Cooler in a case about soft drink bottlers. Sun Dun sued Coca-Cola and PepsiCo alleging violations of antitrust laws.

sun dun vending

SUN DUN, INC. OF WASHINGTON, Plaintiff, v. THE COCA-COLA COMPANY, et al., Defendants
Civil No. S 88-2540
770 F. Supp. 285

Decided – August 15, 1991

In discussing summary judgment based on The Soft Drink Interbrand Competition Act, the Court says:

In addition to the fierce competition between the Coke and Pepsi brands, which cannot be gainsaid on this or any other terrestrial record (cf. the 1961 Billy Wilder movie “One, Two, Three”), there is overwhelming evidence that the Washington Metropolitan area is awash with hundreds of effectively competing soft drinks, fruit juices, and other liquid concoctions. Indeed, the range of brands competing for the soft drink buyer’s quarters boggles the lay mind, which seldom focuses on the array of such products; it includes (as so aptly put in PepsiCo’s supporting memorandum) everything from Pennsylvania Dutch Birch Beer to Teenage Mutant Ninja Turtle Cowabunga Cooler.

Recall this is the height of the cola wars.