Beacon Theatres, Inc. v. Westover

Plaintiff asked for declaratory relief against Defendant alleging a controversy arising under the Sherman Antitrust Act and under the Clayton Act, which authorizes suits for treble damages under the Sherman Act. Fox operates movie theatres in California and has been showing films under contracts with movie distributors. These contracts granted it the exclusive right to show first run pictures. After Defendant built a drive-in theatre near Plaintiff’s theaters, Defendant notified him that it considered contracts barring simultaneous exhibitions of first run films to be violations of the antitrust laws. Plaintiff’s complaint alleged that notification and threat of treble damages constituted duress and coercion which deprived Plaintiff of a valuable property right, the right to negotiate. Unless the Defendant was restrained, the complaint alleged irreparable harm. Plaintiff plead for declaratory relief that clearance between Plaintiff and Defendant is reasonable, and for injunctive relief preventing Defendant from instituting any action under the antitrust laws against Plaintiff out of the controversy alleged in the complaint. Defendant filed an answer, a counterclaim against Plaintiff, and a cross-claim against an exhibitor who had intervened. These denied the threats and asserted there was no substantial competition between the two theatres, the clearances granted were unreasonable, and that a conspiracy existed between Plaintiff and its distributors to manipulate contracts and clearances so as to monopolize first-run pictures in violation of antitrust laws. Defendant demanded a jury trial of the factual issue in the case, but the district court viewed the issues as equitable. The court of appeals stated that the effect of the district court decision was to limit Defendant’s opportunity to fully try every issue before a jury. The right to a jury trial applies to treble damage suits under antitrust laws.