| United States v. Syufy Enterprises | |
|---|---|
 | |
| Court | United States Court of Appeals for the Ninth Circuit |
| Full case name | United States of America v. Syufy Enterprises; Raymond J. Syufy |
| Argued | August 14, 1989 |
| Decided | May 9, 1990 |
| Citation | 903F.2d659 |
| Case history | |
| Prior history | 712F. Supp.1386 (N.D. Cal. 1989) |
| Court membership | |
| Judges sitting | Charles E. Wiggins,Alex Kozinski,Justin Lowe Quackenbush |
| Case opinions | |
| Majority | Kozinski, joined by Wiggins (in full); Quackenbush (in part) |
| Concurrence | Quackenbush |
| Laws applied | |
| Sherman Antitrust Act,15 U.S.C. § 2; Clayton Antitrust Act,15 U.S.C. § 18 | |
United States v. Syufy Enterprises, 903F.2d 659 (9th Cir. 1990), was anantitrust case decided by the United States Court of Appeals for the Ninth Circuit.
TheUnited States Department of Justice alleged thatSyufy Enterprises hadmonopolized or attempted to monopolize themotion picture exhibition business inLas Vegas, Nevada. Raymond Syufy opened a newly built six-screenmultiplex in Las Vegas in 1981. The success of that Syufy theater ledMann Theatres andPlitt Theatres to exit the Las Vegas market, selling all of their theaters to Syufy. In 1984, Syufy bought outCragin Industries' eleven-screen Redrock Theatre; upon completion of that purchase, Syufy then owned all of thefirst-run theaters in Las Vegas, leaving Roberts Company (which exhibited mostlysecond run films) as his sole competition in the city.
The Justice Department brought a case against Syufy for antitrust violations, arguing that "you may not get monopoly power by buying out your competitors."[1]
TheUnited States District Court for the Northern District of California found in favor of Syufy,[2] holding that "Syufy's actions did not injure competition because there are no barriers to entry—others could and did enter the market—and that Syufy therefore did not have the power to control prices or exclude the competition."[3]
The Court of Appeals affirmed the district court's ruling in a decision written by JudgeAlex Kozinski which became notable[4] both for its commentary on business competition in a free enterprise system[5] and for Kozinski's incorporation of over 200movie titles into his opinion,[6][7][8] including statements such as "Roberts/UA's newly opened theatres evolved fromabsolute beginners, barelystaying alive, into abig business."
The Ninth Circuit's decision against the government and in favor of Syufy emphasized that there were no barriers to entry in the Las Vegas cinema business. In fact, competition arose almost immediately after Syufy achieved his monopoly. Within a week after becoming the sole first-run exhibitor in Las Vegas, Syufy attempted to renounce the guarantee he had previously offeredOrion Pictures Corporation for the movieThe Cotton Club. Rather than release Syufy from his guarantee, Orion sued Syufy for breach of contract and chose to licenseThe Cotton Club to Roberts instead. Orion also stopped licensing its other movies to Syufy not only in Las Vegas, but anywhere.
Roberts Company then began opening new multiplexes of its own, increasing its screen count to 28 in Las Vegas by December 1986, compared to 23 for Syufy. In 1987, Roberts sold its theaters toUnited Artists Theaters, then the largest exhibition circuit in the United States.
The judge, a movie buff, referred to about 200 films in his 25-page opinion.
[T]his is truly an amazing feat; most federal judges do not even go to the movies.