Archives for posts with tag: 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.

On February 28, 1992 the US Court of Appeals for the Fifth Circuit decided the case of Charlene Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit (“TCNICU”). On further appeal, the Leatherman family tragedy was heard at the US Supreme Court in 1993.

Judge Goldberg writing for the Fifth Circuit, described the horror:

This civil rights case arose out of two separate incidents involving the execution of search warrants by law enforcement officers with the Tarrant County Narcotics Intelligence and Coordination Unit. One incident involved Charlene Leatherman, her son Travis, and her two dogs, Shakespeare and Ninja. Ms. Leatherman and Travis were driving in Fort Worth when they were suddenly stopped by police cars. Police officers surrounded the two of them, shouting instructions and threatening to shoot them. The officers informed Ms. Leatherman that other law enforcement officers were in the process of searching her residence. The officers also informed her that the search team had shot and killed their two dogs. Ms. Leatherman and Travis returned to their home to find Shakespeare lying dead some twenty-five feet from the front door. He had been shot three times, once in the stomach, once in the leg, and once in the head. Ninja was lying in a pool of blood on the bed in the master bedroom. He had been shot in the head at close range, evidently with a shotgun, and brain matter was splattered across the bed, against the wall, and on the floor around the bed. The officers found nothing in the home relevant to their investigation. Rather than departing with dispatch, they proceeded to lounge on the front lawn of the Leatherman home for over an hour, drinking, smoking, talking, and laughing, apparently celebrating their seemingly unbridled power.

This story is horrific. Not only are the dogs killed but note that “Ninja” was on the bed. And then the police “apparently celebrating” in the front lawn. Just horrible.

But alas, Judge Goldberg writes that he is “constrained” and “must politely decline” to hear this case because of so-called “heightened pleading requirement” rules. Judge Goldberg writes the opinion but also files a special concurrence of his own, almost begging the Supreme Court to examine this case and review the “heightened pleading” law. And so these dogs do get their day in Supreme Court. Though not mentioned by name in the Supreme Court opinion, the Leatherman’s dogs win at SCOTUS and the cases is reversed and remanded for further proceedings.

Justice Rehnquist wrote the Supreme Court opinion:

This action arose out of two separate incidents involving the execution of search warrants by local law enforcement officers. Each involved the forcible entry into a home based on the detection of odors associated with the manufacture of narcotics. One homeowner claimed that he was assaulted by the officers after they had entered; another claimed that the police had entered her home in her absence and killed her two dogs. Plaintiffs sued several local officials in their official capacity and the county and two municipal corporations that employed the police officers involved in the incidents, asserting that the police conduct had violated the Fourth Amendment to the United States Constitution. The stated basis for municipal liability under Monell v. New York City Dept. of Social Services, 436 U.S. 658 (1978), was the failure of these bodies adequately to train the police officers involved. See Canton v. Harris, 489 U.S. 378 (1989).

The United States District Court for the Northern District of Texas ordered the complaints dismissed, because they failed to meet the “heightened pleading standard” required by the decisional law of the Court of Appeals for the Fifth Circuit. 755 F. Supp. 726 (1991). The Fifth Circuit, in turn, affirmed the judgment of dismissal, 954 F. 2d 1054 (1992), and we granted certiorari, 505 U. S. —- (1992), to resolve a conflict among the Courts of Appeals concerning the applicability of a heightened pleading standard to ยง 1983 actions alleging municipal liability. Compare, e. g., Karim Panahi v. Los Angeles Police Dept., 839 F. 2d 621, 624 (CA9 1988) (“a claim of municipal liability under section 1983 is sufficient to withstand a motion to dismiss even if the claim is based on nothing more than a bare allegation that the individual officers’ conduct conformed to official policy, custom, or practice”) (internal quotation marks omitted). We now reverse.

Hooray for the dogs. Hooray for the rights of people invaded by search warrants. But unfortunately, that’s as far as the win would go. After the Supreme Court win, the Leatherman’s case was dismissed again at the District Court level on a motion for summary judgement and that dismissal was affirmed again by the Fifth Circuit in 1994, thus ending the Leatherman’s legal saga. Leatherman could not prove that the officers had not been sufficiently trained in how to execute search warrants or that the search warrant had been issued with prejudice. Specific odors associated to drugs were the basis of the search warrant and despite no evidence being found in the search, the warrant was issued properly. There were no material issues of fact and insufficient evidence to proceed and without specific discovery requests the court deemed the case a “fishing expedition”.

It was an anti-climactic end to a long legal fight that had successfully made Supreme Court law. We can thank the dogs, Shakespeare and Ninja, for eliminating the Fifth Circuit’s heightened pleading requirement on civil suits against municipalities. It was a big win and at least the dogs’ deaths were not completely in vain. Still, the issue of heightened pleading requirements remains a hot topic and actively debated – See 2007 case, Bell Atlantic v. Twombly, upholding heightened pleading on Sherman Act anti-trust claims. And in 2011, a Federal Court ruled that heightened pleading applies to false marking claims of false advertising.

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.