1948 Paramount Decision

The 1948 Paramount Decision is a landmark Supreme Court ruling that came out of the 1948 court case, United States v. Paramount Pictures, Inc. The case was argued on February 9-11, 1948 and was decided on May 3, 1948. In a 7-1 decision, the Court sided with the United States government stating that the practice of vertical integration by film studios in Hollywood is a monopolistic process, making it therefore unconstitutional and illegal.

In front of the SCOTUS, Attorney General Clark and Assistant Attorney General Sonnett argued for the United States (SCOTUS, 1948). John W. Davis argued for the defendant, Loew’s Incorporation (SCOTUS, 1948). William J. Donovan argued for the case of Radio-Keith-Orpheum Corp. (SCOTUS, 1948). Joseph M. Proskauer argued on behalf of Warner Bros. Pictures, Inc. (SCOTUS, 1948). James F. Byrnes argued the case of Twentieth Century-Fox Film Corp. (SCOTUS, 1948). Whitney North Seymour argued the cause for Paramount Pictures, Inc. (SCOTUS, 1948). Louis D. Frohlich argued for Columbia Pictures Corp. (SCOTUS, 1948). George A. Raftery argued for the United States Artists Corp. (SCOTUS, 1948). Thomas Turner Cooke argued for Universal Pictures Co. (SCOTUS, 1948). Thurman Arnold argued for Universal Pictures Co. (SCOTUS, 1948). Finally, John G. Jackson and Robert Barton, Jr. argued for Allred.

Before reaching the Supreme Court, the complaint had charged the defendants with monopolizing the production of films. When the District Court denied the government’s plea, the government then charged the studios for monopolizing on distribution. Once again, the District Court did not believe there was a case here. Finally, the complaint charged the defendants with vertical integration of producing, distributing, and exhibiting major motion pictures. The case eventually moved up to the Supreme Court of the United States.

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Justice William O. Douglas wrote the majority opinion of the 1948 Supreme Court case United States v. Paramount Pictures, Inc

The majority opinion was given by Justice William O. Douglas (SCOTUS, 1948). The Court charged the defendants with violations against the Sherman Act, which is an antitrust law passed in 1890 (SCOTUS, 1948). The defendants were divided into three groups. This first group was made up of Paramount Pictures, Inc., Loew’s, Incorporated, Radio-Keith-Orpheum Corporation, Warner Bros. Pictures, Inc., and Twentieth Century-Fox Film Corporation. This group was known as the five major defendants because they produced, distributed, and owned/controlled theaters (SCOTUS, 1948). The second group was made up of Columbia Pictures and Universal Corporation. These two companies only produced movies and distributed films (SCOTUS, 1948). Finally, the third party was United Artists Corporations who only distributed films (SCOTUS, 1948).

While writing the majority opinion, Justice Douglas considered five different practices that were addressed in the arguments: clearance and runs, pooling agreements, formula deals/master arguments/franchises, block booking, and discrimination (SCOTUS, 1948). Within these five parts of the majority opinion, Justice Douglas revisited past cases and rulings to determine how each defendant had violated one of these categories. After reviewing these facts and going over what the District Court had to say, Justice Douglas decided to let the District Court’s decision stand for a restraint of trade (SCOTUS, 1948). He believed that what the companies were doing was monopolizing and against the law. On formula deals, master arguments, and franchises, Justice Douglas let the District Courts decided a resolution (SCOTUS, 1948). For block booking, Justice Douglas said that this went against copy right law (SCOTUS, 1948). Overall, the majority decision decided that vertical integration was illegal and Hollywood had to change its process by which it did production, exhibition, and distribution.

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Justice Felix Frankfurter wrote the dissenting opinion of the 1948 Paramount Pictures Decision

The dissenting opinion of the SCOTUS was written by Justice Felix Frankfurter. Justice Frankfurter argued that the Court could not rule on the case as they had not examined all the facts provided to them to make an appropriate decision (SCOTUS, 1948). Based on prior court decisions, Justice Frankfurter thought this case should not have been decided by the SCOTUS but by the District Courts. Justice Frankfurter believed that the appropriate venue for this case was the District Court (SCOTUS, 1948).

After the decision was decided, movie studios had to sell their movie theaters, making rent charges increase (SCOTUS, 1948). Paramount Pictures, Inc. was divided into two different companies (SCOTUS, 1948). The movie studio, RKO, was closed (Campbell & Fabos, 2017). Independent producers and studios were able to make more movies (Campbell & Fabos, 2017). This decision effectively brought an end to the “Golden Age of Hollywood” (Campbell & Fabos, 2017).

References

Campbell, R., Martin, C. R., & Fabos, B. (2017). Movies and the Impact of Images. In Media & Culture: Mass Communications in a Digital Age (Eleventh ed., pp. 215-244). Boston, MA: Bedford/St. Martin’s.

U.S. v. Paramount Pictures, Inc. 334 U.S. 131 (1948).

Image Attribution: Images used are from the Harris & Ewing collection at the Library of Congress’s Prints and Photographs division and are in the Public Domain.

Written by Jillian Horaneck, 2017