General Cinema Corporation v. Buena Vista Distribution Co., Inc.

Appellant, General Cinema Corporation, complains that appellee Buena Vista Distribution Company’s system for determining rental rates of films distributed by Buena Vista constitutes vertical price fixing. The district court found that General Cinema’s complaint failed to present either “a competitive injury, a clear causal connection, [or] an antitrust violation,” granted Buena Vista’s motion for judgment on the pleadings, and later denied General Cinema leave to file an amended complaint. We agree that General Cinema has failed to allege an antitrust violation and, accordingly, affirm.

FACTUAL BACKGROUND

General Cinema is an exhibitor of motion pictures to the public; Buena Vista distributes motion pictures to exhibitors like General Cinema, and is the exclusive distributor of films produced by Walt Disney Productions. Buena Vista earns its revenues by renting motion pictures to exhibitors under a license agreement.

General Cinema’s complaint focuses on a system used by Buena Vista to determine the amount of rent paid it. The contested system requires an exhibitor to pay either (i) a stated percentage (say, 70%) of each-ticket sold, or (ii) the same percentage of a “minimum…