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Theatre Enterprises, Inc. v. Paramount Film Distributing Corp.
United States Supreme Court
346 U.S. 537 (1954)
Theater Enterprises, Inc. (TEI) (plaintiff), owned and operated a theater in suburban Baltimore, Maryland, about six miles from downtown Baltimore. Leading up to and after opening, TEI attempted to obtain first-run films from Paramount and several competing production companies (the production companies) (defendants) to show in the suburban theater. The production companies refused on a number of different grounds and adhered to the current policy of limiting first-run films to eight theaters located in downtown Baltimore. TEI responded by bringing suit against the production companies, alleging that the policy of limiting first-run films to downtown theaters constituted an unlawful conspiracy among competitors to restrain competition in violation of the Sherman Act. In district court, the production companies provided justifications for their parallel behavior, mostly related to an individual desire by each company to maximize profits. The issue was submitted to a jury, which returned a verdict for the production companies. TEI appealed the decision, arguing that TEI was entitled to a directed verdict, but the court of appeals affirmed the decision. TEI petitioned the U.S. Supreme Court for certiorari.
Rule of Law
Holding and Reasoning (Clark, J.)
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