Cine Forty-Second Street Theatre Corp. v. Allied Artists Pictures Corp

Facts

Plaintiff brought an antitrust lawsuit against the Defendant, Allied Artists Pictures Corp. and others (Defendants) claiming that these owners of a neighboring theatre, conspired with certain motion picture distributors to cut off Plaintiff’s access to first-run, quality films. Plaintiff sought $3 million in treble damages and an injunction against Defendant’s alleged anticompetitive prices. After receiving Defendants’ interrogatories in November 1975, Plaintiff secured Defendants’ consent to defer discovery on the issue of damages until Plaintiff could find an expert to review the Defendants’ box office receipts. Four months after the deadline on the damages discovery was set, Plaintiff inadequately answered the remaining interrogatories. Plaintiff then filed equally inadequate supplemental answers to the interrogatories and refused to obey two subsequent orders from the Magistrate to compel discovery. At an October 1977 hearing, the Magistrate fined Plaintiff $500 and warned that further disobedience would result in dismissal. By the summer of 1978, Plaintiff still had not retained the expert it needed to review Defendant’s box office receipts so it could answer the damages interrogatories. The Magistrate asked Plaintiff to produce a plan to answer and when it did not, she directed an answer to the damages interrogatories. Plaintiff then filed two sets of answers that were late and seriously deficient. In October 1978, the Magistrate concluded that the Plaintiff’s non-compliance was willful and recommended to the district court that Plaintiff be precluded from introducing evidence with respect to damages. Judge Goettel, the district judge who had to approve the magistrate’s order agreed that Plaintiff was grossly negligent, however, could not find Plaintiff to be “willfully” noncompliant. The court fined Plaintiff $1000, but certified an interlocutory appeal on his own motion to review his decision.