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Paramount Famous Lasky Corp. v. United States

282 U.S. 30 (1930)

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Paramount Famous Lasky Corp. v. United States

United States Supreme Court
282 U.S. 30 (1930)

  • Written by Heather Whittemore, JD

Facts

Paramount Famous Lasky Corporation and nine other corporations (collectively, the distributors) (defendants) produced and distributed approximately 60 percent of the films shown across the United States. Movie-theater owners (collectively, the exhibitors) contracted with the distributors annually to arrange their exhibition calendars. In 1928 the distributors used a standard exhibition contract (the standard contract) that required the exhibitors to submit all their complaints to an arbitration board and forgo their rights to trials by jury. The distributors would not work with any exhibitor that refused to sign the standard contract, consequently coercing the exhibitors into signing the contract. The United States government (plaintiff) accused the distributors of violating § 1 of the Sherman Act through their use of the standard contract. The distributors defended their use of the standard contract, explaining that the contract and its arbitration rules were reasonable regulations that were developed after six years of discussion to meet the needs of the film industry. The district court held that the distributors violated § 1 by using their collective power to coerce the exhibitors into signing the contract, and the distributors appealed.

Rule of Law

Issue

Holding and Reasoning (McReynolds, J.)

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