Boxoffice-October.01.1955

TEXT OF INDUSTRY ARBITRATION PLAN
DRAFT
VOLUNTARY ARBITRATION
AGREEMENT
Including the rules and procedure under
which the arbitration system shall operate.
THIS AGREEMENT was entered into on
the date shown in the concluding paragraph
by and among the defendant distributors
in the case of United States v.
Paramount Pictures, Inc. et al. and certain
non-defendant motion picture distributors
(parties of the first parti and certain associations
of motion picture exhibitors
'parties of the second part) for the purpose
of establishing and maintaining a
voluntary system of arbitration to serve as
an expeditious and inexpensive means of
settling controversies of the kirid hereinafter
specifically described between motion
picture distributors and exhibitors.
This agreement shall not become effective
unless or until it is consented to by
the attorney general of the United States.
If. at the end of the 12 months' test period,
this agreement is not renewed, the arbitration
system herein provided for shall nevertheless
continue in effect and the obligations
of the parties hereto shall continue until all
arbitration proceedings Instituted prior to the
expiration of the test period have been finally
dispo.sed of. but in no event longer than three
months after the expiration of the .said 12
months' test period provided for herein. Any
(1) Whenever the word "distributor," exhibitor" or
"rcsDondent" is followed by on asterisk, the singular
shall include the plural consistent with the context.
if
Unless otherwise stated, the word "distributor,"
when used to dcsionoto a respondent, may include
not only a distributor defendant but any distributor
signing this agreement.
Whenever the term "respondent*" Is used hereinafter,
it shall be understood to Include the distributor*
comptoined ogainst, and ony intervening
distributor*
or exhibitor*, depending upon the context.
complaint filed prior to the expiration date
of the test period may proceed to hearing
during three months following the expiration
of the test period. Any complaint in which
there is no award in the regional arbitration
tribunal prior to the expiration of three
months after the expiration of the test period,
shall be dismissed without prejudice in the
same manner as though the complaint had
never been filed. All appeals to be heard by
the National Appeals Board, whether pending
at the expiration of the test period or arising
from awards made during the three
months' period after the expiration of the
test period as above provided, shall continue
to be heard until all .such appeals have been
heard and determined by the National
Appeals Board. It is of course understood
and agreed that no new proceedings nor proceedings
for a modification of an award upon
the ground of changed conditions shall be instituted
after the expiration of the test period.
The provisions of all arbitration awards and
judgments entered thereon, except those
denying or awarding damages and judgments
entered thereon which are unsatisfied, .shall
terminate and cease to be effective and binding
on a date 12 months fhereinafter called
the final date) after the expiration of the
test period. Such termination shall be without
prejudice to the rights of any party to
prosecute at law or in equity any claim for
violation of an award occurring prior to the
final date or to prosecute at law or in equity
any claim for relief in regard to the subject
of the award predicated upon changed conditions
arising diu-ing the period between the
expiration of the test period and the final
date. The rights of any .such party shall,
however, be subject to the provisions of subdivision
(c) Section 7 of Article V hereof.
Except as otherwise specifically provided in
this agreement, the burden of proof with
respect to the complaint and the damages
thereunder .shall be upon the complainant
exhibitor.
ARTICLE II
SCOPE OF ARBITRATION
SECTION 1—CLEARANCE
Controversies arising upon the complaint of
ARTICLE I
Availability of Arbitration
A system of Regional Arbitration Tribunals
land a National Appeals Board) as hereinafter
more particularly described shall be
organized, maintained, and operated by the
joint action of the motion picture distributors
and motion picture exhibitor organizations
signing this Agreement.
The work of organizing the system shall be
completed within three months after the entry
of an order by the United States District
Court approving the Voluntary Arbitration
Agreement. The system shall remain in operation
for a test period of 12 months beginning
on the day that the National Administrative
Committee shall proclaim that the Regional
Tribunals land the National Appeals Board:
are open and ready to function.
The Regional Arbitration Tribunals shall
hear and determine complaints of the kind
described in Article II when any such complaint
is filed by a qualified exhibitor against
any distributor* that is a party to this agreement:
and any other distributor' or qualified
exhibitor' may intervene in the proceeding
as an additional respondent* upon a showing
that its business or property may be affected
by the award (1).
an exhibitor that at the time of the filing of
the complaint
A "qualified exhibitor" is a person, firm, or A. cleai-ance is being granted by the
corporation who has a theatre or theatres distributor* against complainant's theatre
and in favor of a theatre or theatres
which may be affected by the award and
which, at the time he files his complaint or
seeks to intervene (a) he is actually operating,
not in substantial competition w-ith complainant's
theatre; or that
or ib> is temporarily clo.sed, or (c) is a new B. clearance is being granted by the
theatre about to open.
distributor* against the complainant's
The Regional Arbitration Tribunals (and theatre and in favor of a theatre or theatres
the National Appeals Board) shall have only
in substantial competition there-
the powers and shall perform only the duties with in excess of what is reasonably
granted to or imposed upon them by this necessary to protect the licensed competitor
agreement and the rules and procedure
theatre on the run or runs
herein prescribed, and in rendering decisions
and making awards, they shall comply strictly
with this agreement and -said rules and procedure.
granted to It
shall be subject to arbitration.
Claims in re.spect of clearance arising after
the inauguration of this arbitration .system
shall be evidenced by a written request for
a change in clearance, or the elimination
thereof, addressed to the distributor's home
office or exchange and such requests for a
change in or an elimination of clearance will
be deemed to have been refused
fa) when the exhibitor has received a
written refusal; or
(b) if not granted within 21 days after
receipt by the distributor of such request.
Clearance, as u.sed in this acrcemcnt. means
the neriod of time stipulated in license contractus
between rims of the same feature
within a particular area or in specified theatres.
Clearance rea-sonable as to time and
area, is essential, in the distribution and
exhibition of motion pictures, and arbitrators
In deciding clearance complaints shall give
effect to this principle.
In any proceeding under this section the
burden of sustaining the reasonableness of
the clearance complained of shall be upon
the distributor who granted the clearance.
In determining whether any clearance
complained of is reasonable, the arbitrators
shall take into consideration the following
factors, according to them the importance
and weight to which each is entitled, regardless
of the order in which they are listed
li) The admission prices of the theatres
involved as set by the exhibitor*;
(ii) The character and location of the theatres
involved including the size, type of entertainment,
appointments, transit facilities,
etc.;
The policy of operation of the theatres
fill)
involved, such as the show-ing of double
featiu-es. gift nights, giveaways, premiums,
cut-rate tickets, lotteries, etc.;
liv) The rental terms and license fees paid
by the theatres involved and the revenues
derived by the distributor* from such theatres;
IV) The extent to which the theatres involved
compete with each other for patronage;
ivi) The fact that a theatre involved is
affiliated with a circuit of theatres shall be
disregarded;
iviii All other business considerations.
The power of the arbitrators in deciding
any such controversy shall be as follows:
lai If the arbitrators find in favor of the
distributor*, they shall make an award dismissing
the complaint:
ibi If the arbitrators find in favor of the
complainant under sub-division A of this section
that the theatres involved are not in
substantial competition, they shall make an
award directing the distributor* to cease and
desist from granting clearance between them;
if the arbitrators find in favor of the complainant
under sub-division B of this section,
they shall make an award fixing the maximum
clearance between the theatres involved
which may thereafter be granted by the distributor';
(ci If the complainant asked for damages
and the arbitrators find in his favor, they may
also award him damages from the date of a
written demand for a change of the clearance
complained of but only for the period
of time during which the clearance complained
of was in force, and subject to the
provisions of Article III.
Any distributor, the complaining exhibitor
or any intervening exhibitor affected by such
an award may institute a further arbitration
proceeding for a modification thereof upon
the ground that, since the making of the
award, conditions with respect to the theatres
involved therein have so changed as to
warrant modification. In the event that the
arbitrators find there has been such a change
they shall make a new award fixing the
maximum clearance, if any. which may be
granted thereafter between the theatres involved,
but no damages shall be awarded
The burden of proving such change shall be
upon the party asserting it. A proceeding
to modify an award upon the ground of
changed conditions shall follow the rules of
practice and procedure prescribed in
Article V.
SECTION 2—RUNS
Controversies arising upon the complaint
of an exhibitor that, either prior to or after
the inauguration of this arljitration system
the distributor* has, after request, refused,
otherwi.sc than on the merits, to afford the
complainant a fair opportunity to license
feature motion pictures for exhibition in his
theatre on a desired run equal to the opportunity
afforded by the distributor* to another
exhibitor who then is exhibiting pictures of
the distributor* on said run in a competinj
theatre, shall be subject to arbitration.
A claim involving an alleged refusal t(
afford such opportunity to license thai
occurred subsequent to the inauguration Ol
34
BOXOFFICE
:
: October 1, 1951
: