Dissent

This case was ruled 7-1 in favor of the government. Mr. Justice Jackson took no part in the consideration or decision of the case. Mr. Justice Frankfurter dissented on the case. Frankfurter agreed with the studios that the District Court had not adequately explored the facts in the consent decree. "The framing of decrees should take place in the District rather than Appellate Courts. They are invested with large discretion to model their judgments to fit the exigencies of the particular case." He pointed to the Court decision, International Salt Co. v. United States that the lower courts are the proper place for such findings of fact, to be deferred by the higher courts. He reminded the Court that the District Court had 15 months to consider the case and reviewed almost 4,000 pages of evidence. "I cannot bring myself to conclude that the product of such a painstaking process of adjudication as to a decree appropriate for such a complicated situation as this record discloses was an abuse of direction." Frankfurter was basically unhappy that the case made it to the Supreme Court in the first place. He felt that the case could have been handled by the District Court. He argued that the District Court showed a complete understanding of Sherman Law but did not use its discretion to make a decision.
(http://www.cobbles.com/simpp_archive/paramountdoc_1948supreme.htm) (http://supreme.justia.com/us/334/131/case.html)

My Own Argument

I agree with the Supreme Court decision in this case. There decision was justified by the stipulations outlined in the Sherman Anti-trust Act. The film industry should not be treated less than any other major corporation in the world. I feel that no company should be allowed to monopolize their particular industry, yet it still seems to be evident within the United states today. We see this with the potential idea of the monopolization of Microsoft. I feel that all businesses should have to compete to survive. If a business is being monopolized it does not allow for other individuals in the world to start their own business in that field to compete with any of the larger corporations. We as a society should all have an opportunity to become millionaires. We should not have to draw our attention to other things just because one person is monopolizing that particular industry. Why should we have to start out at the bottom when we can start at the top. The wealth of an idea should be spread around and not held by just one individual.

Rule of Law

The main precedent to this case is the Sherman Anti-trust Act. The major film companies were in violation of sections 1 and 2 of the act. The companies were in turn found guilty of violating theses major acts. Section one has to do with restraint of illegal trade. It says that any person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony. Section two deals with the monopolizing of trade. It states that every person who shall monopolize, or attempt to monopolize, or combine or conspire with any person or persons, to monopolize any part of the trade of commerce among the several states, or with foreign nations, shall be deemed guilty of a felony. Since the movie studios were found guilty of these violations it set the precedent for independent film makers to be free of large studio interference.
(http://www.stolaf.edu/people/becker/antitrust/statutes/sherman.html)

Reasoning of the Court

There were many different rationales behind the decision of the court. The Court found that price fixing conspiracies existed between all defendants. It found that there was a conspiracy to restrain trade by imposing "unreasonable clearances". They found that exhibitor defendants had "pooling agreements" with the studios. The profits were being shared by exhibitors and the studios. These agreements eliminated competition. It found that the defendants had discriminated against small independent exhibitor and favored larger affiliated exhibitors. The court found that on the subject of monopoly that the need for divestiture are set aside in the light of the principal stated in the Unites States v. Griffith and in Schine Chain Theaters v. the united States.

Decision of the Court

The ruling By the Supreme Court was handed down May 4, 1948. The court ruled 7-1 in the government's favor. William O. Douglas delivered the Court's opinion. The court found the studios guilty of violating antitrust laws. The verdict of the court went against the studios forcing them to sell their movie theater chains. The Supreme Court abolished block booking requiring all films be sold on an individual basis. Block booking is a system of selling multiple films to a theater as a unit. Studios used block booking to force independent theater owners to take large number of studio movies sight unseen. The Court ruled that price fixing conspiracies would no longer exist and the movie studios could no longer force exhibitors to charge minimal admission prices. Consequences of the court's decision were more independent producers and studios could produce there film products free of major studio interference and the loss of studios' rights to own their own classic film libraries. The results of the case forced studios to charge higher rents to exhibitors distributing their movies. It also forced an increase in ticket prices. (http://www.cobbles.com/simpp_archive/paramountcase_6supreme1948.htm)

Issue of the Case

In 1948 the case The United States Vs. Paramount Pictures Inc came before the Supreme Court. The major issue in this case was anti-trust. Anti-trust laws prohibit agreements or practices that restrict free trading and competition between business entities, ban abusive behavior by firms dominating a market, or anti-competitive practices that lead to a dominant position, and supervise mergers and acquisitions of large corporations and some joint ventures. By 1945, major movie studios owned either partially or outright 17% of the theaters in the country, accounting for 45% of the film-rental revenue.
http://www.reference.com/browse/wiki/United_States_v._Paramount_Pictures,_Inc.
The studios basically controlled everything. The court complaint charged that the producer defendants had attempted to monopolize and had monopolized the production of motion pictures. The complaint also charged that all the defendants, as distributors, had conspired to restrain and monopolize and had restrained and monopolized interstate trade in the distribution and exhibition of films by specific practices.
http://supreme.justia.com/us/334/131/case.html.
"Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony” http://www.reference.com/browse/wiki/Sherman_Antitrust_Act

Facts of the case

I have chosen the Supreme Court case The United States vs. Paramount Pictures Inc. This legal issue originated when the Federal Trade Commission began investigating film companies for potential violation under the Sherman Antitrust Act. The Federal Trade Commission is an Independent agency of the United States government, established in 1914 by the Federal Trade Commission Act. The main purpose of the Federal Trade Commission is to eliminate and prevent anti-competitive business practices. The Sherman Antitrust Act of 1890 was the first United States Federal statute to limit cartels and monopoly. It falls under antitrust law. The Act provides: "Every contract, combination in the form of Trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal". The major film studios owned the theaters where their motion pictures were being shown, either in partnerships or outright and complete. These specific theater chains showed only the films produced by the studio that owned them. The studios created the films, had the writers, directors, producers and actors on staff ("under contract" as it was called), owned the film processing and laboratories, created the prints and distributed them through the theaters that they owned. The film studios were monopolizing theaters so they can manipulate the amount of sales that they had. (http://www.absoluteastronomy.com/topics/United_States_v._Paramount_Pictures,_Inc)