Interstate Circuit, Inc. v. United States
1939 United States Supreme Court case
Interstate Circuit, Inc. v. United States, 306 U.S. 208 (1939), is a 1939 decision of the United States Supreme Court finding an antitrust price-fixing conspiracy based on what subsequently came to be known a hub-and-spoke conspiracy. This is a conspiracy in which one actor (the "hub"), such as a supplier, enters into agreements with a number of actors (the "spokes"), such as retailers, who are aware that the supplier is entering into similar agreements with other retailers and that the success of the plan agreed to depends on the retailers all performing in accordance with the agreements. In this case, the hub was Interstate (a motion picture theater chain) and the spokes were various motion picture film distributors that supplied Interstate (and other theaters) with films.
Background
The Government sued two groups of defendants for engaging in a price-fixing conspiracy. One group of eight defendants were distributors (such as Paramount Pictures) of motion picture films, that distributed about 75 percent of all first-class feature films exhibited in the United States. A second group of defendants were dominant theater owners in Texas and New Mexico, and included Interstate Circuit, which had a monopoly of first-run theaters in various Texas cities.
The manager of the defendant theater owners sent a letter to each of the distributor defendants, in which he demanded as a condition of continued dealing in the distributor's films that the distributor (1) require that second-run theaters never exhibit such films at any time or in any theater at a smaller admission price than 25¢ for adults in the evening, and (2) on such films that are exhibited at night, minimum admission of 40¢ and that they shall never be exhibited in conjunction with another feature picture (so-called double features).
Conferences discussing the matter were held between representatives of Interstate and individual distributors.
The public source identifies “Interstate Circuit, Inc. v. United States” as 1939 United States Supreme Court case. This brief keeps that definition visible, then builds a research path around Interstate, Circuit and United.
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