Case 4:15-cv-01015 Document 109 Filed in TXSD on 08/21/18 Page 1 of 5
United States District Court
Southern District of Texas

ENTERED
August 21, 2018
David J. Bradley, Clerk

 Case 4:15-cv-01015 Document 109 Filed in TXSD on 08/21/18 Page 2 of 5

a single case in which such a ruling was made or applied.1 Accordingly, the Court concludes
that a rule of reason analysis is required in the clearance context, absent evidence of horizontal
agreements between movie producers. See Texaco Inc. v. Dagher, 547 U.S. l, 5 (2006) (?this
Court presumptively applies rule of reason analysis?). As such, the crucial questions before the
Court in this Motion for Summary Judgement are: (1) whether Viva has presented sufficient
evidence to survive summary judgment regarding the required elements in a rule of reason
analysis, and, alternatively, (2) whether Viva has presented suf?cient evidence of horizontal
agreements between movie producers to survive summary judgment on its claim that the actions
here were per se illegal.2 The Court will address each of these in turn.
II. Analysis
A. The Rule of Reason

When a restraint does not fall into one of the categories that are per se illegal, courts use
the ?rule of reason? to determine if a practice restrains trade in violation of the Sherman Act.
Leegz'n Creative Leather Prod, Inc. v. PSKS, Inc., 551 U.S. 877, 885?86 (2007). To prevail on a
Sherman Act claim under Section 1,3 Viva must show: (1) that AMC and the studios engaged in
a conspiracy, (2) that the conspiracy had the effect of restraining trade, and (3) that trade was

restrained in the relevant market. Spectators? Comm. Network, Inc. V. Colonial Country Club,

 

1 The Court acknowledges that overbroad clearances are illegal under Paramount, however,
determination of whether a clearance is overbroad is appropriately decided under the rule of
reason.
2 Additionally, AMC urges Viva is not entitled to lost profits as a matter of law. However, Viva
has identified suf?cient evidence to bring its claim for lost pro?ts over the speculative level and
survive summary judgment.
3 Viva also brings a Section 2 claim; however, AMC only challenges this claim under the same
reasoning it challenges the Section 1 claim, i.e. Viva failed to establish appropriate markets. As
the Court has found that Viva has suf?ciently defined the relevant markets to survive summary
judgment, the Court also denies Motion as to Viva?s Section 2 claim.

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253 F.3d 215, 220 (5th Cir. 2001); Johnson Hosp. Corp. ofAm., 95 F.3d 383, 392 (5th Cir.
1996). In order to maintain a claim under the rule of reason, the ?relevant market? must be
de?ned. See Apcmi Sw., Inc. v. Coca-Cola Inc., 300 F.3d 620, 626?27 (5th Cir. 2002).
The relevant market is broken into two parts, (1) the geographic market and (2) the product
market. Id. Here, AMC urges that Viva?s claims fail as a matter of law because it lacks
suf?cient evidence to properly de?ne the product market and/or the geographic market. As such,
AMC argues that Viva has failed to show an anti?competitive affect based on the alleged
conspiracy.

As to geographic market, AMC argues that because Viva?s expert, Roy Weinstein,
formed his opinion solely based on data and not an economic analysis focusing on
consumers, his opinions are legally insuf?cient to establish the geographic market. As laid out
in Viva?s Response and the arguments made by counsel, Mr. Weinstein based his de?nition of
the geographic market on the following factors: (1) the nature of the product, (2) the size and
density of the area surrounding the theaters, (3) the population?s access to transportation, and (4)
data re?ecting who it believed it was competing against (as a proxy for where consumers
would turn if AMC raised prices). As Brown Shoe allows the use of practical indicia to de?ne
markets in the antitrust context, and AMC fails to cite a case establishing that an economic
analysis is required to survive summary judgment, the Court ?nds that Mr. Weinstein?s expert
opinion regarding geographic market and the evidence this expert opinion is based on is
suf?cient to survive summary judgment. See Brown Shoe Co. v. United States, 370 US. 295,
325 (1962) (identifying seven ?practical indicia? to consider in de?ning a product submarket). It
should be noted that this case is distinct from cases which have indicated that geographic

markets cannot be solely de?ned by competitor data because those cases dealt with a plaintiff

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using its own data to try and de?ne the market. See, 9.3., Ginzburg v. Mem ?1 Healthcare Syn,
Inc, 993 F. Supp. 998, 1006 (SD. Tex. 1997) (rejecting expert?s proposed geographic market
when the expert?s opinion de?ned the market from the plaintiff?s viewpoint). It is undisputed
that the area Viva viewed as its customer base or market footprint would not be relevant to
de?ning the geographic market. However, the area AMC, the second largest movie theater chain
in the United States at the time, viewed as its competitive zone is clearly relevant to de?ning the
geographic market. Further, as described above, Mr. Weinstein?s geographic market de?nition
was not made solely on data. But, even if the evidence of a three-mile geographic
market was lacking, AMC itself pushes the idea of a ?ve-mile geographic market. Such a
de?nition of the market would also be suf?cient to survive summary judgment. Therefore,
Motion for Summary Judgment on this issue is inappropriate.

other summary judgment arguments also fail. Mr. Weinstein?s opinions
regarding a product market of first run films with more than 2,000 runs and a product submarket
of ?rst run, wide release English ?lms with Spanish sub?titles or dubbing are legally suf?cient to
survive summary judgment. The arguments made against this opinion/evidence are more suited
for the rigors of cross examination at trial than requiring a ruling as a matter of law. Viva has
also provided suf?cient evidence to survive summary judgment on the issue of harm to
competition by showing the availability of ?rst run, wide release English films with Spanish sub?
titles or dubbing has been reduced to almost zero in the de?ned geographic market (even within
the potentially larger ?ve-mile geographic market). Thus, summary judgment based on these
arguments is also inappropriate.

B. Per Sex?Horizontal Agreements

Finally, AMC argues Viva fails to present suf?cient evidence of horizontal agreements

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between suppliers (movie producers) and therefore Viva?s claim based on such an
argument fails as a matter of law. Viva points to four things to support an inference that such
agreements existed: the fact that all the suppliers uniformly refused to license first-run
movies to Viva, (2) evidence that the suppliers knew AMC requested a clearance from all the
other suppliers at issue, (3) evidence that the suppliers? uniform compliance with request
was publically available knowledge, and (4) that such action was against each individual
supplier?s self?interest (absent request) unless they all acted uniformly as any individual
supplier would want their movie in as many theaters as possible and would not want to lose any
market space to the other suppliers. Though the Court agrees with AMC that such evidence of
horizontal agreements is precarious, screening out marginal cases is not an appropriate use of
this Court?s summary judgment function. Based on this evidence, the Court cannot say a
reasonable juror could not ?nd the existence of horizontal agreements between the suppliers.
Conclusion

For the foregoing reasons, Motion for Summary Judgment (Doc. #81) is
DENIED.

It is so ORDERED.

AUEE 2 1 EMS

 

 

 

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