Mark Cuban's Landmark Theatres Must Face Antitrust Lawsuit

A judge refuses to dismiss a complaint alleging distributors were coerced into exclusive licenses for specialty films.
Courtesy of Landmark Atlantic Plumbing Theatre/ Facebook

A federal judge in the District of Columbia won't dismiss a lawsuit accusing Mark Cuban-owned Landmark Theatres of using its nationwide footprint to coerce film studios into exclusive licenses for speciality films.

The lawsuit came a year ago from smaller exhibition outfits operating in D.C., Detroit and Denver. It also arrived in court after Landmark struck a settlement in its own antitrust lawsuit against Regal over so-called "clearance pacts" between studios and exhibitors in the movie industry.

"Just as Landmark sought relief from Regal’s anticompetitive clearances with respect to Commercial Films (and succeeded), Plaintiffs seek relief from Landmark’s exploitation of its circuit power to demand and obtain clearances from distributors against Plaintiffs for Specialty Films," stated the complaint.

On Friday, U.S. District Court Judge Emmet Sullivan ruled that plaintiffs had sufficiently alleged circuit dealing and monopolization.

Landmark contended that a series of theater-by-theater, city-by-city agreements was lawful and didn't add up to any conspiracy to lock down art films from being played by Landmark's competitors.

Sullivan points to allegations of Landmark's "considerable influence over distributors," its majority market share in several metropolitan regions and finally how Landmark used power to deny plaintiffs access to the market.

"Despite Landmark’s arguments to the contrary, plaintiffs allege that distributors must agree to Landmark’s clearance demands or risk damaging their relationship with the largest specialty film exhibitor," writes the judge. "Here, plaintiffs allege that distributors frequently booked specialty film showings with plaintiffs and later cancelled the bookings, often at the last minute, 'due to Landmark’s clearance demands.' Landmark’s plausibly coercive conduct is also reflected in the favorable clearances and the advantageous terms that Landmark allegedly obtained from distributors across the three markets at issue."

The judge adds that the plaintiffs need not specifically allege Landmark actually threatened distributors at this stage of the litigation. It's enough that anticompetitive behavior is plausibly put forward. The judge also accepts allegations with regard to injury from Landmark's actions.

2929 Entertainment, parent company of Landmark which vertically controls production content, is dismissed from the proceeding although the judge says plaintiffs may include 2929 in a future amended complaint should discovery warrant it.