A/EW ANTITRUST BATTLE LOOMS I AS DofJ ASKS EXPANSION STAY \^ Company Lawyers Ready To Oppose This Move In New York Court NEW YORK—A new battle in the antitrust suit strategy is expected within a few days before the expediting court which heard the case here. The Department of Justice intends to apply for an injunction to prevent the theatre-owning defendants from buying or selling theatres while the case is pending. Lawyers for the three companies are preparing to oppose this move. HEARING SET FOR JUNE 15 The Paramount case officially returned to the New York court upon receipt of the supreme court mandate June 3. The next step. scheduled for the weekend, is for the court to notify counsel for the government and defendants that the case has been remanded. The government will then file its proposed order for carrying out the supreme court decision. This order has already been drawn up and submitted to the defendants. Lawyers for the defendant probably will meet within the next week to draw up their own version of the order. The New York court will decide which order to accept after studying both proposals and hearing oral arguments scheduled for June 15. Justice Augustus N. Hand of the original three-judge court .said he will be available for hearings that day. Att'y Gen'l Tom Clark has pointed out that the supreme court eliminated all stays on expansion. He contends that the case cannot end in an effective divestiture judgment unless the lower court controls the theatre holdings of the defendants. Clark says the Schine and Paramount cases when read together requires that the majors should at least be equally restricted with respect to theatre purchases pending a new decree. BAN ON FRANCHISES SEEN The government also will ask for a temporary order against film franchises for affiliated theatres. Clark predicted that the final decree will bar franchises with any theatre retaining ties with a major. This prediction is based on the language of the supreme court opinion. The elimination of competitive bidding also makes it necessary, according to Clark, to prohibit discrimination against theatres competing with affiliated houses. The government has asked that the defendants submit a list of situations which they think involves an investor who is not "an actual or potential theatre operator." This list must be submitted 60 days after the government files its order with the lower court. These situations will be those regarded by the defendants as outside the supreme court definitions of monopoly. The government hopes to speed the formulation of a new decree by this method. Industry 'Monopoly' Probe Is Launched by House WASHINGTON—An inquiry into the motion picture industry from the antitrust angle was launched this week by the house small business committee. Starting on the basis of questionnaires to various segments of the industry, it will swing into hearings both in Hollywood and Washington within a few months, according to Chairman Walter C. Ploeser iR., Mo.i. Legislation to end blockbooking and to provide complete divorcement may result from the investigation, it was disclosed by Willis J. Ballinger, economic counsel for the committee. This would be in the next Congress, convening in January. Allied States Exhibitors and the Society of Independent Motion Picture Producers have promised their support of the probe, in reply to the questionnaire which was sent to thousands of businessmen. Specifically, it asked them to outline their competitive problems, and to suggest means of strengthening the antitrust laws. Gunther Lessing, vice-president of SIMPP, pledged the .society's cooperation by phone, informing the committee that the SIMPP lawyers in Washington would be glad to give any information that was needed. Allied's reply came in the form of a telegram signed by General Counsel Abram F. Myers in Denver, where the Allied board was in session. It read: "Board of directors of this association, meeting here May 15. unanimously agreed survey by select committee on small business of effectiveness of antitrust laws would be in the public interest and of benefit to the independent motion picture theatres. "Board especially feels committee should inquire into need for strengthening these laws in their application to vertical integrations and to amending Robinson-Patman act to prevent discrimination in royalties and rentals under copyrights and patents. We will assist in every way we can." Myers wants a study of the possibOity of prohibiting ownership by one firm of production, distribution and retailing setups. "While this may not be necessary in the motion picture industry if the supreme court's Paramount decision is carried out in good faith," he stated, "it might still be necessary in other fields." Sullivan in Debut as TOA Director Calls on Theatres for Leadership LA SALLE, ILL.— Gael Sullivan in his first address as executive director of Theatre Owners of America told the United Theatre Owners of Illinois convention that "the motion 'picture theatre is one of the vital classrooms of the nation's communities." Stressing the need of all-out unity and sound planning in meeting problems of an atomic age, he said: "To have validity, motion pictures must have a cultural as well as a pleasure value. They must be aimed at the head as well as the heart." Quality production, he said, .sells on any market. It does not know a depression. "In depicting our history, in pointing up our political and social shortcomings, in stressing hygiene and health, in helping our youngsters toward better citizenship, in showing the futility of war, in screening the dangers of our failure to learn how to live with our fellow men, the films have a mighty task to face," he said. He pledged that theatre owners will not try to escape the rightful demands of filmgoers in regard to the types of pictures they want to see. and he enumerated coming films as examples of the new reali.stic trend. He cited the theatre-sponsored "Youth Month" as an example of an ever widening participation in the public service endeavors. Sullivan spoke at the opening session. Others scheduled to speak later in the week were Herman Levy, TOA general counsel; Sam Shain, of 20th Century-Fox; Dave Jones. Springfield, state youth chairman; Dave Palfreyman of MPAA; Edwin Levin. Chicago member of the youth committee; Ed Zorn. UTO president; and Frank Stewart, convention chairman. Minor Victory for Schine WASHINGTON—The Schme Chain Theatres, Inc.. won a minor victory this week as the U.S. supreme court rejected a government appeal for clarification of its recent decision in the case. The government's petition asked the court to make plain whether the "further proceedings" ordered in the decision on May 3 unsold under applied to the five theatres still the 1942 consent decree. Schine had contended in its reply to the petition that there was no question the five houses were to be included in the district court proceedings. 10 BOXOFFICE :: June 5, 1948
M^ t Storm Over Hollywood? ..... Who says so? The Official Forecast is: "The Greatest Motion Pictures in Years Are Coming from ^//Studios." And the Most Persuasive Proof of All Is Coming From the Pannnount Studio on the Crest of
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