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REPUBLIC PRODUCTIONS v. AMERICAN FEDN. OF MUSICIAN

July 16, 1965

Republic Productions, Inc., Plaintiffs
v.
American Federation of Musicians Of the United States And Canada, an unincorporated association, et al., Defendants


McLean, District Judge.


The opinion of the court was delivered by: MCLEAN

MCLEAN, District Judge.

This is a private treble damage antitrust action, begun in the United States District Court for the Southern District of California, Central Division, in 1957, transferred in 1958 to this court pursuant to 28 U.S.C. § 1404(a), and tried in this court in 1964.

 Plaintiffs are employers.*a Defendants are a union, the members of its Executive Board, and the trustee of a trust created pursuant to certain labor agreements between the employers and the union. Only three members of the Executive Board, defendants Bagley, Cluesmann, and Kenin, have been served. The union was the duly recognized collective bargaining representative of all musicians employed by plaintiff. The events which gave rise to this action occurred in the years 1946 to 1956, in the heyday of the reign of James C. Petrillo as the czar of professional musicians in this country.

 The complaint charges that defendants combined and conspired to restrain and monopolize interstate commerce in the distribution and licensing of motion pictures for exhibition on television, and that defendants have restrained and monopolized such commerce, all in violation of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 and 2). The question is whether plaintiffs have proved a right to relief. The answer to the question turns upon (1) whether or not the acts of defendants are immunized from the reach of the antitrust laws by reason of Sections 6 and 20 of the Clayton Act (15 U.S.C. § 17, 29 U.S.C. § 52), and the Norris-La Guardia Act (29 U.S.C. § 101 et seq.), (2) if they are not immune, do they amount to a violation of the Sherman Act?*b

 Detailed findings of fact and conclusions of law are filed herewith. The purpose of this opinion is to set forth briefly the reasons which have led me to my conclusion. I will first consider whether the acts of the union come within the scope of the antitrust exemption afforded by the Clayton Act and the Norris-La Guardia Act.

 In the collective bargaining negotiations in 1946 between the union and the eight major producers of motion pictures, including plaintiff, the union insisted on a clause which prohibited the producers, in effect, from selling their motion pictures for exhibition on television without the union's consent.*c The prohibition applied to pictures already produced as well as to those to be produced in the future. The union's insistence on this clause was emphasized by a threat to strike if the clause were not accepted by the employers. The employers were unwilling to endure a strike. Consequently, they agreed to the clause. The collective bargaining agreements executed by the parties in subsequent years contained the clause without change.

 I have found that in making this demand the union acted in what it believed to be the best interests of its members. Television was new. No one could foresee exactly what its effect would prove to be upon employment opportunities for musicians, but it was reasonable to believe that the exhibition on television of motion pictures, both old and new, which contained recorded music, might well reduce the demand for the employment of musicians to produce "live" music for television performances.

 Shortly before this, the union had been faced with a similar problem with respect to phonograph records, another form of "canned" music. Its efforts to prevent radio stations from broadcasting records, efforts which included a strike, had resulted in a suit by the United States to enjoin the union's activities as being in violation of the Sherman Act. This litigation had terminated in 1943 in favor of the union. The courts had held that the union's activities were immune under the Clayton Act and the Norris-La Guardia Act. United States v. American Federation of Musicians, 47 F. Supp. 304 (N.D. Ill. 1942), aff'd, 318 U.S. 741, 87 L. Ed. 1120, 63 S. Ct. 665 (1943).

 In 1948 there was another strike in the phonograph record industry which finally terminated in an agreement by the record manufacturers to make certain periodic payments into a trust fund, of which defendant Rosenbaum was trustee. It was his duty to expend these moneys to hire musicians to give concerts to which the public was admitted without charge.

 Having thus found a satisfactory solution of the phonograph record problem, the union proceeded to turn its attention to television. In 1950 it entered into labor agreements with producers of new film designed expressly for exhibition on television in the first instance ("television film"). These producers also agreed to make payments into a trust fund of which defendant Rosenbaum was trustee, a fund similar in purpose and operation to the phonograph record trust fund. Having accomplished this, the union then was ready to announce the terms upon which it would permit the exhibition on television of motion pictures designed primarily for exhibition in theaters ("Hollywood film"), the type of motion pictures which plaintiff produced. In 1951 plaintiff entered into a labor agreement with the union and a trust agreement with Rosenbaum as trustee which followed the pattern previously established with respect to the phonograph record manufacturers and the producers of television film. Subsequently, the distributors, to whom the other major producers of Hollywood film had assigned television rights, made similar agreements with the union and with Rosenbaum as trustee.

 The labor agreement between plaintiff and the union and the trust agreement with Rosenbaum made in 1951 were renewed, with some changes, in subsequent years. The agreements benefitted professional musicians in general, substantially all of whom were members of the union. Musicians were compensated by Rosenbaum out of the trust fund for performing at the public concerts which the trust agreement contemplated. The benefit to the particular musicians who were currently employed by plaintiff, however, was nominal at best, and after a short period, for all practical purposes, non-existent. Although at the outset in 1951 plaintiff agreed in the labor agreement to employ musicians to make a new sound track for its old motion pictures (despite the fact that the old sound track was not only usable but in fact had to be used, since it could not be detached from the film), this practice was soon abandoned. Thereafter plaintiff agreed to make payments to the musicians whom plaintiff had originally employed in making the old motion pictures in the first instance, regardless of whether they were still in plaintiff's employ. If these musicians could not be located, as was often the case, the payments were to be made instead into the Rosenbaum trust fund.*d In addition to these payments made pursuant to the labor agreement, plaintiff also paid to Rosenbaum, pursuant to the trust agreement, a percentage of the revenue derived by plaintiff from the exhibition of its pictures on television.

 We thus have this situation: (1) the union accomplished its end without any strike, without any picketing, boycotting, violence or any other overt act. The mere implied threat of a strike was sufficient to produce an agreement on the part of plaintiff and the other employers; (2) the end that was accomplished was of benefit to union members in general but of little or no benefit to those particular members who were currently employed by plaintiff. Does this conduct fall within the labor exemption of the Clayton Act and the Norris-La Guardia Act?

 Section 6 of the Clayton Act (15 U.S.C. § 17) provides that "the labor of a human being is not a commodity or article of commerce." It provides further that:

 
"Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor . . . organizations . . . or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof . . . ."

 Section 20 of the Clayton Act (29 U.S.C. § 52) provides that no injunction shall be granted in any case growing out of "a dispute concerning terms or conditions of employment," except in certain limited circumstances inapplicable here. It provides further that no injunction shall prohibit any person from doing a number of specified acts, i.e., "terminating any relation of employment," etc., and that none of these specified acts shall "be considered or held to be violations of any law of the United States."

 Section 1 of the Norris-La Guardia Act (29 U.S.C. § 101) provides that no court shall have jurisdiction to issue any injunction "in a case involving or growing out of a labor dispute," except in circumstances not material here. "Labor dispute" is defined in Section 13 of the Act (29 U.S.C. § 113) to include "any controversy concerning terms or conditions of employment . . . ...


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