Ring v. Spina

The Dramatists’ Guild of the Authors’ League of America, Inc. (Guild) (defendant) required a producer to sign the Guild’s Minimum Basic Agreement (Basic Agreement) before such producer could acquire or license work from a member of the Guild. Among other things, the Basic Agreement limited contracts to those made between producers and members who were both in good standing with the Guild, set forth the minimum compensation to be paid to members, as well as included an arbitration clause. Gaumont entered into a production contract with three authors (defendants) to produce a theatrical play called “Stovepipe Hat.” Ring (plaintiff) later acquired the production through assignment and invested $50,000 in the play. Ring sought to enter into a contract with the authors directly as a means to safeguard his investment, but, as each author was a member of the Guild, Ring had to first sign the Basic Agreement. Ring invested an additional $75,000 in the play, which eventually opened in several metropolitan cities. When Ring made changes to the play without the authors’ consent, the authors terminated the production contract and claimed breach of the Basic Agreement. The play closed, and the authors requested arbitration of the dispute pursuant to the Basic Agreement. Ring then filed a motion for a temporary injunction pending trial to enjoin the authors from proceeding with arbitration or otherwise enforcing the Basic Agreement, and from interfering with the play’s run. Ring also challenged the Basic Agreement as a violation of the Sherman Act. The district court denied the motion on the ground that relief should be denied because Ring, by signing the Basic Agreement, was himself participating in the alleged illegal combination and the parties were therefore in pari delicto. Ring appealed.