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HIVE EXCLUSIVE: Texas FAIR Filing Shows Studios Taking Different Defensive Tacks

30 Nov, 2001 By: Joan Villa

One studio's motion for partial summary judgment in a San Antonio lawsuit against Blockbuster and seven studios reveals the defendants are taking different tacks in fighting antitrust and price-fixing charges leveled by three independent retailers.

Columbia TriStar Home Entertainment's motion asks for dismissal of the charges and denies it violated the Robinson-Patman Act governing antitrust behavior on grounds it was “lawfully ‘meeting competition' when it entered into its revenue-sharing agreement with Blockbuster,” according to the filing in U.S. District Court.

“In this case, it is undisputed that Blockbuster advised CTHE on April 29, 1998, that Blockbuster had entered into revenue-sharing agreements with all other major studios,” Columbia TriStars' filing asserts. “CTHE and Blockbuster finally entered into a revenue-sharing agreement in the fall of 1998… CTHE was generally aware that revenue-sharing agreements were being reported in the trade press at the time and that Buena Vista Home Video was entering into an agreement with Blockbuster and that Warner Home Video was having conversations with Blockbuster as well… Under these circumstances, the meeting competition defense is met.”

Columbia TriStar's filing cites case law that sets four criteria for a “good faith effort” to meet a competitor's price, including acting on reports of similar discounts from other customers, “threats of termination of purchases if the discount were not met” and the seller's past experience with the particular buyer.

The public document was virtually the only studio motion not under protective order out of a slew of partial summary judgment requests filed by individual studios and Blockbuster just prior to a late October deadline. Plaintiffs were due to answer the filings last week and a judge's ruling is expected in mid-December.

Up to this point, the studio defendants generally have filed joint motions, but the fact that some may choose alternative legal defenses in addition to a joint defense is typical of antitrust cases especially as they move closer to trial, according to antitrust expert and Los Angeles attorney M. Brian McMahon.

“When someone breaks ranks it could mean nothing or it could mean that they think they really are different, that they were a latecomer to this,” McMahon says. “The point is if it was truly competitive and other folks were doing it then they'd have to meet the competition.”

If studios can get some aspects of the charges dismissed prior to trial, they may believe the case will be easier to defend, he adds. Further, the motion indicates the studios may be shifting some of the blame to Blockbuster by indicating that if they didn't comply with lower prices, the retailer would threaten “termination of purchases.”

“The typical way to proceed [in antitrust cases] is everyone has the same story, but then in trial you will see not necessarily finger pointing, but you will see some saying that in addition to other arguments, we're a special case,” he says.

Defendants have also jointly requested that the Jan. 14 trial date be pushed back 60 days to allow more time to prepare following numerous delays and extensions in other aspects of the case. In addition, delaying the trial would avoid “an enormous waste of the parties' and the court's time and resources preparing for trial” in the event the judge rules to dismiss aspects of the case based on the partial summary judgment motions, the filing states.

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