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UNITED STATES v. PARAMOUNT PICTURES

March 22, 1971

United States of America, Plaintiff,
v.
Paramount Pictures, Inc., et al., Defendants


Palmieri, D. J.


The opinion of the court was delivered by: PALMIERI

PALMIERI, D. J.

These are consolidated petitions by American Broadcasting Companies, Inc. (American) seeking court approval, pursuant to Section 111A 6(b) of the Paramount Consent Judgment, of its proposed acquisition of four motion picture theatres in Sacramento, California: a dual auditorium theatre in the Country Club Shopping Center, and a second dual auditorium theatre in the Florin Shopping Center. It is common ground that pursuant to the provisions of the consent judgment by which it is bound the petitions should be granted if American sufficiently demonstrates that the proposed acquisitions will not unduly restrain competition in Sacramento, the relevant market area.

 The court hearing took place in this matter on December 10, 1970, after several months' notice by the Attorney General to prospective competitors and other putative objectors. Upon the hearing the Attorney General's position was in support of the petitions.

 A competitor, Syufy Enterprises (Syufy), presently operating four motion picture theatres in the Sacramento market, two drive-ins and two conventional theatres, moved to intervene as a party or in the alternative to appear as amicus curiae. At the outset of the hearing the motion to intervene as a party was denied, without prejudice to its renewal, and Syufy was permitted to appear as amicus. Syufy has submitted voluminous papers in opposition to the petitions and has pressed its motion to intervene.

 Syufy's Motion to Intervene as a Party

 After considerable reflection this court adheres to the views expressed as its tentative position at the outset of the hearing. Briefly put, it would be unwise and impractical for Syufy to be permitted to assume the role of a full-fledged litigant in these proceedings. It is the Attorney General who is charged with vindicating the public interest. His role should neither be impaired or diminished by way of intervention.

 Intervention by an allegedly aggrieved party would impose an intolerable burden upon the court. The Paramount judgments affect myriad relationships of a day-to-day business nature. If every person who considered himself aggrieved in the course of such business were free to come to court as an intervenor the court would be unable to keep these proceedings within reasonable compass. It is not at all surprising that the Supreme Court has consistently refused to permit intervention in the Paramount case, both during the pendency of the proceedings and after judgment was entered. St. Louis Amusement Co. v. United States, 326 U.S. 680, 90 L. Ed. 397, 66 S. Ct. 31 (1945); Ball, Trustee v. United States, 338 U.S. 802, 94 L. Ed. 486, 70 S. Ct. 61 (1949); Partmar Corp. v. United States, 338 U.S. 804, 94 L. Ed. 486, 70 S. Ct. 69 (1949); Sutphen Estates, Inc. v. United States, 342 U.S. 19, 23, 96 L. Ed. 19, 72 S. Ct. 14 (1951); Wometco Television and Theatre Company v. United States, 355 U.S. 40, 2 L. Ed. 2d 71, 78 S. Ct. 120 (1957). Indeed, there was an indication by this court at the time the Paramount judgments were being entered, that there should be no intervention. The two final decrees entered on February 8, 1950, by this court provided expressly, in the retention of jurisdiction clause, that there should not be any right of intervention in the Paramount case by those who are not parties to the cause. While the consent judgment as to the Paramount defendants, which was entered on March 3, 1949, and which preceded these decrees, does not so provide, this language is substantially incorporated in the retention of jurisdiction clause of the three Consent Judgments which followed the entry of this court's decrees of February 8, 1950 -- the consent judgments as to the Warner defendants, as to the Twentieth Century-Fox defendants, and as to Loew's Incorporated. See also, United States v. Loew's Incorporated, 136 F. Supp. 13 (1955); United States v. Loew's Incorporated, 20 F.R.D. 423 (S.D.N.Y. 1957). Syufy's reliance upon Cascade Natural Gas Corp. v. El Paso Natural Gas Co., 386 U.S. 129, 17 L. Ed. 2d 814, 87 S. Ct. 932 (1967), in no way changes the unbroken precedent against intervention in the Paramount cases. In Cascade the Supreme Court had previously held that the acquisition of Pacific Northwest Pipeline by El Paso Natural Gas Company violated Section 7 of the Clayton Act and had ordered divestiture. Three years passed and nothing was done. The State of California, among others, sought leave to intervene in the district court action, with a view to framing a divestiture plan. The district court denied the motion. In overruling the district court the Supreme Court held that "protection of California interests in a competitive system was at the heart of our mandate directing divestiture." 386 U.S. at 135.

 The facts in Cascade are clearly distinguishable from the facts here. One cannot avoid the impression that the Supreme Court was motivated by the long three-year delay following its divestiture decree. During this period nothing was accomplished. The lack of diligence in fulfilling its mandate was apparent. It was undoubtedly the cause for the grant of intervention. The unusual facts of Cascade make it sui generis. It is not available to Syufy as a precedent for intervention here. Intervention in Cascade was apparently adopted by the Supreme Court as a convenient device for preventing any further disregard of its order. Two district courts have construed the Cascade decision in much the same way. In Smuck v. Hobson, 132 U.S. App. D.C. 372, 408 F.2d 175, 179, fn. 16 (1969), the court noted that: "The majority's splenetic displeasure with the substantive provisions of the divestiture plan approved by the Government and the trial court may have been an important factor in the liberal reading given to Rule 24(a) in Cascade."

 And in Moore v. Tangipahoa Parish School Board, 298 F. Supp. 288, 291, fn. 4 (E.D. La. 1969): "There are indications that ' Cascade should not be read as a carte blanche for intervention by anyone at anytime,' Hobson v. Hansen, D.D.C., 1968, 44 F.R.D. 18, 25, as Justice Stewart feared in his stinging dissent in Cascade. The Court in Cascade was critical of the Justice Department for 'settling' with defendant and of the District Judge for ignoring the Supreme Court's earlier mandate. On remand, it ordered the District Judge removed from the case . . . ." It is of considerable interest that the Supreme Court, later in the very same term in which the Cascade decision was rendered, affirmed the denial of a motion by a competitor to intervene in an antitrust action in which a final decree had already been entered. United States v. Western Electric, 1968 Trade Cas. (CCH) 72,415 (D.N.J. 1968), aff'd sub nom. Clark Walter & Sons, Inc. v. United States, 392 U.S. 659, 20 L. Ed. 2d 1348, 88 S. Ct. 2286 (1968).

 Nor can intervention in administrative proceedings serve as a guide for intervention in litigation before the federal courts. The considerations involved in each instance are quite different. Moore's Federal Practice, vol. 3B, § 24.06 [3.-1] et seq. The decision in American Communications Association v. United States, 298 F.2d 648 (2d Cir. 1962) construed statutory provisions relating to rights of intervention in proceedings before the Federal Communications Commission. It has no applicability here. Much the same can be said of other cases cited by Syufy -- namely, Arnold Tours, Inc. v. Camp, 400 U.S. 45, 27 L. Ed. 2d 179, 91 S. Ct. 158 (1970); National Welfare Rights Organization v. Finch, 139 U.S. App. D.C. 46, 429 F.2d 725 (D.C. Cir. 1970); and Virginia Petroleum Jobbers Ass'n. v. F.P.C., 105 U.S. App. D.C. 172, 265 F.2d 364 (1959). All these cases involved the construction of relevant statutes affecting intervention in administrative proceedings. None of them dealt with intervention in proceedings before the federal courts.

 Reference must also be made to a case pending before this court. Columbia Pictures v. American Broadcasting et al., 70 Civ. 4202 ELP, a private antitrust action involving American as one of the defendants and affecting both the motion picture and television industries. Syufy suggests that any decisions with respect to the petitions presently before the court be held in abeyance pending resolution of this case because comparable issues are involved the resolution of which would dispose of the issues presented to the court by American's petitions. The Columbia Pictures action is in its initial stages and it is entirely too soon to draw any conclusions with respect to the significance it may ultimately have. To hold these petitions in suspense until the disposition of the Columbia Pictures case would be tantamount to affording Syufy, which is not a party, a stay of these proceedings, and hence a decision on the merits ad limine, upon speculative grounds. Syufy is not entitled to this relief either as a matter of procedure or for any substantive reasons.

 Notwithstanding the critical views of the Attorney General's role expressed in some of the Syufy papers, the public interest has been well served by the Attorney General. This court has had the opportunity to scrutinize the fulfillment of that role in scores of proceedings relating to the enforcement of the antitrust decrees affecting the motion picture industry. It can come to only one conclusion -- that the Attorney General has acted in every instance with a complete and conscientious dedication to his important responsibilities and with a full awareness of the letter and spirit of the decrees he was charged with enforcing. Mr. Raymond J. Syufy and Syufy Enterprises are not unknown to this court. This multi-state motion picture exhibition enterprise, an important privately owned circuit, has been built up by Mr. Syufy from the ground and under the protective wing of the antitrust decrees during the recent approximately twenty year period of enforcement. In 1969 his motion picture enterprise earned a net of one million dollars and it presently operates fifty-three theatres. Mr. Syufy has manifested an acute awareness of the meaning of these decrees and he has retained able lawyers to press for recognition of his alleged rights. He has recently initiated a treble damage suit against American in the United States District Court in San Francisco. The Syufy motion picture enterprise is a self-made, vigorous competitor in an industry where the doors would probably have remained shut against him had it not been for the very decrees the enforcement of which he so severely criticizes in these proceedings.

 The Sole Issue Before This Court Is Whether Petitioner's Proposed Acquisitions Will Unduly Restrain Competition in the Sacramento Market.

 It is necessary to emphasize and to bring into proper perspective the appropriate functions of this court with respect to the petitions before it. The objections mounted by Syufy cover a very broad spectrum. They are often irrelevant and collateral to the issue which this court must decide -- whether petitioner has shown to the satisfaction of the court that the proposed acquisitions will not unduly restrain competition in the Sacramento market. The petitioner is vigorously attacked by Syufy with respect to its alleged ...


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