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Presidio Enterprises, Inc. v. Warner Bros. Distributing Corp.

United States Court of Appeals for the Fifth Circuit
784 F.2d 674 (1986)

Written by Sharon Feldman, JD

Facts

Presidio Enterprises, Inc., and others (collectively, Presidio) (plaintiffs) were film exhibitors that owned and operated movie theaters. Warner Bros. Distributing Corporation (Warner) (defendant) was a major motion-picture distributor. Warner shot a star-studded film called The Swarm about an invasion of Texas by South American killer bees. Before the release date, Warner advertised the film to potential exhibitors. Warner sent Presidio a brochure stating that Warner had started shooting the exhibitors’ summer “blockbuster” that Warner hoped would “be the greatest adventure-survival movie of all time” and “the most ‘want-to-see’ movie of the year.” Warner sent Presidio a bid letter and another brochure describing The Swarm as a “chilling, riveting, harrowing, cinematic experience” that promised to be director Irwin Allen’s “biggest and best to date.” Before Presidio bid for exhibition rights to The Swarm, a paid Hollywood consultant advised Presidio not to “go out on it.” Presidio submitted a “medium range bid.” The Swarm was a box-office failure. Presidio sued Warner for common-law fraud and negligent misrepresentation. A jury found for Presidio. Warner appealed.

Rule of Law

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Holding and Reasoning (Goldberg, J.)

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