DON GEORGE, INC. v. PARAMOUNT PICTURES Civ. A. No. 3050.
145 F.Supp. 523 (1956)
DON GEORGE, Inc., et al. v. PARAMOUNT PICTURES, Inc., et al.
United States District Court W. D. Louisiana, Shreveport Division.
October 11, 1956.
LeRoy Smallenberger, Smallenberger, Eatman & Morgan, Joseph H. Jackson, Jackson, Smith, Mayer & Kennedy, Shreveport, La., Keith M. Pyburn, Washington, D. C., for plaintiffs.
W. Scott Wilkinson, John M. Madison, Wilkinson, Lewis, Wilkinson & Madison, Shreveport, La., Gibbons Burke, Chaffe, McCall, Phillips, Burke & Hopkins, New Orleans, La., for defendants.
BENJAMIN C. DAWKINS, Jr., Chief Judge.
We are called upon here to reconsider what was considered, but not decided, by the late Judge Porterie of this Court, on September 18, 1951, at 111 F.Supp. 458, as to defendants' plea of prescription. With all due respect and deference, we find ourselves unable to agree with some of the statements made in that opinion, for the reasons hereinafter noted.
This long-pending action, filed on August 18, 1950, is for treble damages, and attorneys' fees, under the Sherman and Clayton Anti-Trust laws, particularly under 15 U.S.C.A. § 15. For the greater part of the time, the attorneys have occupied themselves inconclusively with companion cases, involving the same issues, in the State Court. See, e. g., Loew's, Incorporated v. Don George, Inc.,
From May 17, 1942, until January 1, 1947, the Davis Theater, a motion picture house in Bossier City, Louisiana, was owned and operated by George Brothers Theaters, a partnership composed of Don George and Darrell George, Louisiana citizens. On the latter date, Don George, Inc., a Louisiana corporation, purchased all assets of the partnership except its part of the cause of action here sued upon, and operated the theater to the date the suit was filed. Since then, we understand, although it is not of record, the corporation has sold its theater interests, and Don George has died.
The corporation and partners claim damages for the respective terms of their ownership, on the ground that defendants, in dealing with motion picture films,
Plaintiffs allege that, because of this monopoly, they were forced to deal with defendants in procuring films for exhibition at their theater, and were damaged by defendants' unlawful conduct to the extent of $124,000, being the net loss of profits they would have realized had it not been for these monopolistic practices. Hence, they sue defendants for treble that amount, or $372,000.
Named as defendants are Paramount Pictures, Inc., Paramount Film Distributing Corporation; United Paramount Theatres, Inc.; Paramount Gulf Theatres, Inc.; Saenger-Ehrlich Enterprises, Inc.; Radio-Keith-Orpheum Corporation; RKO Radio Pictures, Inc.; Warner Brothers Pictures, Inc.; Warner Brothers Pictures Distributing Corporation; United Artists Corporation; Columbia Pictures Corporation; and Columbia Pictures of Louisiana, all corporations.
Plaintiffs further allege that all defendants except Saenger-Ehrlich, Inc., and Paramount Gulf Theatres, Inc., were adjudged in violation of the Federal antitrust laws, on a nation-wide scale, in the matter entitled United States v. Paramount Pictures, Inc., Equity No. 87-273 on the docket of the United States District Court for the Southern District of New York, 66 F.Supp. 323; affirmed in part, and reversed in part, 334 U.S. 131, 68 S.Ct. 915, 92 L.Ed. 1260. This adjudication, they claim, is prima facie evidence as to the verity of their allegations in the present action.
Before answering, defendants filed motions to dismiss on the ground that, according to the complaint, plaintiffs' cause of action has prescribed, since it shows that more than one year elapsed from the time the last damage was inflicted and the date upon which the suit was filed. Defendants stand on Arts. 3536 and 3537 of the LSA-Civil Code, relating to tort and damage actions, as being applicable. This is the motion Judge Porterie considered, but did not decide, having referred it to the merits. He thought the question ought to be "for the jury".
For their part, plaintiffs contend that their action is in quasi-contract, not in tort, and prescribes in ten years, not one, under LSA-Civil Code Article 3544. They further contend that, pursuant to Section 5 of the Clayton Act, 15 U.S.C.A. § 16, the running of the Statute of Limitations, or prescription, was suspended
We have studied the able briefs and have read all of the authorities cited, as well as others found in our own research. Unlike Judge Porterie, who could not bring himself to decide whether the one-year or ten-year prescription is applicable, we have had no difficulty in concluding, on reason and precedent, that the suit is purely delictual, the alleged damages having been occasioned by conduct which can be classified, under Louisiana law, only as offenses or quasi-offenses, subject to the one-year prescription of Civil Code Articles 3536 and 3537.
In reaching this conclusion, we also differ necessarily with Judge Porterie in our conviction that the task of ascribing proper legal characterization to the claims, and applying the pertinent period of prescription, belongs to the Court, not the jury — as a matter of law and not of fact. While, as he noted (prematurely, because answers had not been filed at that time), there are disputes in the pleadings on the basic facts, we are not concerned with those factual differences at this point. As we conceive our duty, in passing upon the question now presented, we must take as true all of the material allegations of fact contained in, and characterizing, the complaint, without regard to denials or affirmative allegations in defendants' answers. In other words, we now accept, for present purposes, the totality of plaintiffs' factual allegations.
No period of prescription, for bringing treble damage suits, is contained in the Sherman and Clayton Acts. Therefore, the State law on that subject must be followed, Chattanooga Foundry & Pipe Works v. Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241, cf. O'Sullivan v. Felix, 233 U.S. 318, 34 S.Ct. 596, 58 L.Ed. 980; Copp v. Louisville & N. Ry. Co., C.C.E.D.La.1892, 50 F. 164; Loggins v. Steel Const. Co., 5 Cir., 1942, 129 F.2d 118.
Article 3536, in pertinent part, reads as follows:
Article 3537, as here applicable, provides:
Article 3544 reads as follows:
This is the Article applicable to actions on contracts and those which are quasi ex contractu.
As far back as 1913, in American Tobacco Company v. People's Tobacco Company, 204 F. 58, 60, the Fifth Circuit Court of Appeals approved a jury charge by then District Judge Rufus E. Foster, of the Eastern District of Louisiana (later Chief Judge of the Circuit), which stated, "`It is the law of Louisiana that acts, such as these [in violation of the Sherman Act], are prescribed in one year after they occur.'" The appellate Court concluded that "* * * this charge * * * is the correct view of the question of prescription." Plaintiffs argue that the question of whether the one-year period was applicable in that case was unimportant to the position of that plaintiff, and was conceded by its counsel. We have noted, however, that the concession was made by some of the
Again, in 1917, in Caillouet v. American Sugar Refining Company, D.C., 250 F. 639, also a treble damage suit under the Sherman Act, Judge Foster held that such an action was not sui generis, did not arise in quasi-contract, and was ex delicto in its nature. Earlier in the same year, in Bluefields S. S. Company v. United Fruit Company, 243 F. 1, a case which had its origin in Louisiana and in which able counsel from the State participated, the Third Circuit reached the same conclusion. No cases are cited, or have been found, to the contrary.
Early in the Louisiana jurisprudence, its Courts spelled out the essential difference between quasi-contracts and quasi-offenses. In City of New Orleans v. Southern Bank, 1879, 31 La.Ann. 560, Chief Justice Manning, speaking for the Louisiana Supreme Court, said:
In Lagrone v. Kansas City So. Ry. Co., 1925, 157 La. 559, 102 So. 669, 670, the Court again emphasized the basic distinction between legal rights resulting from violation of a special duty, and those arising from transgression of a general duty, the former being ex contractu and the latter ex delicto. The suit was for damages for failure to furnish railroad cars, in violation of the Interstate Commerce Act. The Court held:
To the same effect are Sims v. New Orleans Railway & Light Company, 1914, 134 La. 897, 64 So. 823, and National Park Bank v. Concordia Land & Timber Company, 1925, 159 La. 86, 105 So. 234.
In Loggins v. Steel Const. Company, 5 Cir., 1942, 129 F.2d 118, 120, the Court had before it a claim that arose in Louisiana for unpaid overtime compensation, and an equal amount as liquidated damages, under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. A plea of one year's prescription, based on Articles 3534 (for unpaid wages) and 3536 (for damages), was filed. Speaking for the Court, with respect to plaintiff's contention that a quasi-contract was involved, Judge Hutcheson said:
In a concurring opinion, Judge Sibley observed:
It is clear, we believe, that these authorities are controlling and decisive of the question here, and that plaintiffs' action is in tort, not quasi-contract. They do not sue upon any special obligation created by law, or arising for their benefit from their contracts or relationships with defendants. Indeed, they claim entitlement to recovery, not because of but in spite of these contracts, which they repudiate as unlawful per se.
The Sherman and Clayton Acts, in prohibiting combinations, conspiracies or other devices for achieving monopolistic advantage, operate in favor of the general public, including plaintiffs. They do not create special rights in favor of plaintiffs, or any other specific individuals or class. They do establish general rights running to "Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws * * *." 15 U.S.C.A. § 15. It necessarily follows that actions such as this, to recover damages (trebled) resulting from violation of the Acts, are delictual, not contractual, in their nature; hence the one-year prescription of Articles 3536 and 3537 must be applied.
Plaintiffs rely chiefly on Kramer v. Freeman, 1941, 198 La. 244, 3 So.2d 609, 611. In that case certain money and jewelry had been wrongfully taken from plaintiff by his wife and mother-in-law. He sued them for the return of his property, or, alternatively, if it had been disposed of and could not be returned, for its value. Defendants pleaded the one-year prescription of Article 3536 which was overruled by the Court in the following language:
The clear distinction between that case and this one is readily apparent. There was a suit for restoration of the specific things wrongfully acquired, pursuant to Article 2301. Here, by contrast, we have an action for money damages (trebled), which does not seek the return of specific property wrongfully taken from plaintiffs. They sue, instead, for profits which would or might have been realized, had it not been for defendants' wrongful conduct. In other words, plaintiffs sue, not for the return of property which once was theirs and was wrongfully taken from them by defendants, but for profits which they say would have been theirs, but for defendants' monopolistic practices.
That this is surely the maximum reach, the entire compass, of their case is conclusively shown by the method they have used to establish and calculate their damages. Article 35 of their original complaint reads as follows:
In Iberville Land Company v. Amerada Petroleum Corporation, 5 Cir., 1944, 141 F.2d 384, 385, Judge Lee, as organ of the Court, thoroughly canvassed the Louisiana jurisprudence on this question of quasi-contracts versus offenses or quasi-offenses. There plaintiff claimed damages from defendant for conducting seismograph operations on plaintiff's lands without its knowledge and consent. The suit was filed more than one year after the allegedly wrongful acts occurred, and more than one year from the time when plaintiff knew, or should have known, of the trespass. Defendant pleaded the one-year prescription of Article 3536, which was sustained by Judge Borah of the Eastern District of Louisiana. On appeal, as in the District Court, the plaintiff-appellant relied on Article
It cannot be gainsaid, we think, that the present complaint — the cause of action it asserts and the character of the relief it prays for — constitutes an action in tort, for offenses or quasi-offenses. Therefore Articles 3536 and 3537 of the Code must be applied.
Plaintiffs also rely on Dawkins v. Mitchell, 1922, 149 La. 1038, 90 So. 396, 398. There a shareholder of an insolvent national bank brought suit against the bank's directors, upon grounds of alleged misconduct with respect to its affairs, from which he sustained damages when his stock became worthless. His cause of action arose under Section 5239 of the United States Revised Statutes, 12 U.S.C.A. § 93 which specially provided for liability on the part of bank directors "for all damages which the [banking] association, its shareholders, or any other person, shall have sustained in consequence of such violation." Some of the defendants pleaded the one-year prescription of Article 3536, more than one year having elapsed from the time the bank failed until the suit was filed. The Court, after first holding that the directors were agents of the bank, charged under the law with an implied trust to use its funds only for the purposes permitted by law, and to preserve them for its creditors and stockholders, concluded that:
Considering the language we have emphasized, we think plaintiffs can find no comfort in this decision, for the defendants here surely owed plaintiffs no special duty. Their liability arose, if at all, from the general criminal and civil prohibitions of the Sherman and Clayton Acts, creating duties which are owed to "everybody". Therefore, we find and hold that the one-year period of prescription, provided for by Articles 3536
This holding, however, does not fully resolve the problems confronting us, because we must consider the possible pertinence of 15 U.S.C.A. § 16, reading, at the time this suit was filed, as follows:
We do not have before us, in this record, the decrees, or minutes of the proceedings, in the Government injunction suit in the Southern District of New York. Until certified copies of these, and any other pertinent matters, are placed in this record, we cannot pass upon the effect, if any, of that action in "suspending" the running of the one-year period of prescription applicable here under Louisiana law. By reason of the same incompleteness of the record, we cannot determine whether the "consent" decrees entered in that case did or did not affect the question of prescription. Probably there are other matters directly or indirectly involved which have not occurred to us, and have not been brought to our attention.
Plaintiffs have not briefed this question at all, and defendants have done so only sketchily. We do not know, for example, whether plaintiffs are really serious in their allegation that during 1949 the "conspiracy had not yet run its course, and * * * defendants did not fully comply with the Supreme Court's decision * * *". Neither can we tell from the complaint whether, as the result of this, plaintiffs suffered any damage during that year.
For these reasons, therefore, we are returning the case to the calendar, without final action upon the plea of prescription, in order that these matters, and any others that are pertinent to the issue, may be settled. Accordingly, the Clerk is to place the case upon our next regular motion calendar, for further argument by counsel.
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