United States v. Syufy Enterprises Raymond J. Syufy

903 F.2d 659 58 USLW 2677 , 1990-1 Trade Cases 69,018 UNITED STATES of America, Plaintiff-Appellant, v. SYUFY ENTERPRISES; Raymond J. Syufy, Defendants-Appellees. No. 89-15475. United States Court of Appeals, Ninth Circuit. Argued and Submitted Aug. 14, 1989. Decided May 9, 1990. Robert B. Nicholson, Dept. of Justice, Washington, D.C., for plaintiff-appellant. Maxwell M Blecher, Blecher & Collins, Los Angeles, Cal., for defendants-appellees. Appeal from the United States District Court for the Northern District of California. Before WIGGINS and KOZINSKI, Circuit Judges, and QUACKENBUSH, District Judge. * KOZINSKI, Circuit Judge: Suspect that giant film distributors like Columbia, Paramount and Twentieth Century-Fox had fallen prey to Raymond Syufy, the canny operator of a chain of Las Vegas, Nevada, movie theatres, the United States Department of Justice brought this civil antitrust action to force Syufy to disgorge the theatres he had purchased in 1982-84 from his former competitors. The case is unusual in a number of respects: The Department of Justice concedes that moviegoers in Las Vegas suffered no direct injury as a result of the allegedly illegal transactions; nor does…

Suspect that giant film distributors like Columbia, Paramount and Twentieth Century-Fox had fallen prey to Raymond Syufy, the canny operator of a chain of Las Vegas, Nevada, movie theatres, the United States Department of Justice brought this civil antitrust action to force Syufy to disgorge the theatres he had purchased in 1982-84 from his former competitors. The case is unusual in a number of respects: The Department of Justice concedes that moviegoers in Las Vegas suffered no direct injury as a result of the allegedly illegal transactions; nor does the record reflect complaints from Syufy’s bought-out competitors, as the sales were made at fair prices and not precipitated by any monkey business; and the supposedly oppressed movie companies have weighed in on Syufy’s side. The Justice Department nevertheless remains intent on rescuing this platoon of Goliaths from a single David.

After extensive discovery and an 8V2 day trial, the learned district judge entered comprehensive findings of fact and conclusions of law, holding for Syufy. He found, inter alia, that Syufy’s actions did not injure competition because there are no barriers to entry — others could and did enter the…

concurring:

I concur in the result reached in Parts 1 and 2 of the opinion since I agree that the district court’s findings were supported by the record and were not clearly erroneous. I further agree that the district court did not err in its conclusion that Syufy did not have monopoly power over the first-run movie distributors.

I do not agree with those portions of Parts 1 and 2 which state that if there are no significant barriers to entry, there can be no monopoly as a matter of law. I believe that the issue of barriers to entry is just one of the factors which should be considered by the court in determining whether monopoly power exists.

The offense of monopolization under Section 2 of the Sherman Act has two elements: “(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.” United States v. Grinnell Corp., 384 U.S. 563, 570-71 , 86 S.Ct. 1698, 1704 , 16 L.Ed.2d 778 (1966). In the instant case, there is no contention that Syufy did not willfully acquire 100 percent of the first-run…