Binderup v. Pathe Exchange, Inc.

Background

A Nebraska theater owner who also supplied films to a circuit of other theaters sued several New York film manufacturers and their local agents. He said they manufactured and shipped films from New York, used Omaha branch offices for delivery, and then combined through a Film Board of Trade to blacklist him, pressure his customers, cancel his contracts, and stop supplying films. He sought treble damages under the federal antitrust law for being shut out of the market.

Reasoning

The central question was whether the film leases and deliveries were interstate commerce and whether a coordinated refusal to deal could unlawfully restrain that commerce. The Court explained that manufacturing in one State and shipping films to agencies for delivery to out-of-state users keeps the transaction interstate. The judges said an intermediate stop at a local agency does not erase the interstate nature. The Court further held that if many distributors combine to deny supply to one exhibitor, that conspiracy can restrain interstate trade and fall under the antitrust law. Because the complaint pleaded these facts, the case could not be dismissed for lack of a federal claim.

Real world impact

The decision sends the case back for trial so the exhibitor’s blacklist and refusal-to-deal claims can be proved in court. It means local theaters alleging nationwide concerted boycotts may survive early dismissal when they plausibly plead interstate distribution and coordinated refusal to deal. This ruling is procedural, not a final finding on liability or damages.