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Interstate Circuit, Inc. v. United States

United States Supreme Court
306 U.S. 208 (1939)


Facts

Interstate Circuit, Inc. (Interstate) (defendant) and Texas Consolidated Theaters (Consolidated) were movie theater companies that dominated the market for showing films in various Texas cities. Interstate and Consolidated entered into agreements with eight independent companies that distributed 75 percent of all first-run films to U.S. theaters. The agreements specified the terms on which the theaters owned by Interstate and Consolidated would show the films. A letter written by O’Donnell, Interstate’s manager, made two demands as a condition of Interstate’s continued agreement to show a particular distributor’s films, namely (1) that the distributor agree that on subsequent runs it would not permit its films to be shown in theaters charging an admission price of less than 25 cents and (2) that the distributor agree not to permit its first-run films to be shown on a double-bill with another feature film. O’Donnell’s letter to each distributor listed all of the distributors who were receiving the document. Subsequently, each distributor agreed with O’Donnell’s demands. The trial court found that the distributors had agreed and conspired with one another to take uniform action with respect to O’Donnell’s demands and thus violated § 1 of the Sherman Act. The court of appeals affirmed, and Interstate appealed.

Rule of Law

Issue

Holding and Reasoning (Stone, J.)

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