9:21am PT by Eriq Gardner
Mark Cuban's Landmark Theatres Hit With Antitrust Lawsuit
Mark Cuban-owned Landmark Theatres is being accused of "hypocritical" conduct in an antitrust lawsuit filed on Wednesday by a group of independent community movie theaters who complain about being deprived of art films.
The lawsuit, filed in Washington, D.C., federal court, alleges that Landmark is coercing agreements from film distributors. With operations in 22 major metropolises nationwide, Landmark is alleged to be using its nationwide market power to obtain exclusive licenses for specialty films.
The court action follows a lawsuit that Landmark itself brought in January 2016 against Regal Entertainment. In that case, Landmark similarly asserted that a bigger power had used its footprint to coerce film distributors like Sony, Lionsgate and Disney. The case, one of many over so-called "clearance" pacts in the movie industry, was settled in August 2016.
"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," states the newest complaint from West End Cinema, The Avalon Theatre Project, the Denver Film Society and Cinema Detroit.
Lawsuits over exclusivity between distributors and exhibitors have become more common in recent years, but have a mixed track record in court. While some lawsuits in Georgia and Texas have been allowed to move forward, none have yet to go to trial, and several lawsuits in other parts of the nation have been dismissed. Just last week, for example, the 2nd U.S. Circuit Court of Appeals affirmed the rejection of a lawsuit brought by New York's Cinema Village Cinemart against Regal. The conclusion was that Cinemart failed to define a plausible relevant geographic market as required by the Sherman Antitrust Act.
In the newest lawsuit against Landmark, the targeted markets are identified as Detroit, Denver and Washington — although Landmark's large footprints in other cities including Philadelphia, San Francisco and St. Louis are discussed as well.
This is the first legal action of its kind that specifically identifies the "product market" as "first-run Specialty Films," meaning art, independent, foreign, and documentary films.
"Landmark’s conduct violates Sections 1 and 2 of the Sherman Act because Landmark is leveraging its circuit-wide market power to squeeze Plaintiffs — smaller exhibitors that lack anywhere near the same reach and clout — out of screening popular Specialty Films in the applicable markets," continues the complaint." Landmark’s clearance practice reduces output and consumer choice; artificially inflates ticket prices; and facilitates its monopolization of the Specialty Film exhibition market in the applicable markets and in other geographic markets in which Landmark is already the dominant exhibitor of Specialty Films."
Here's the complaint being handled by attorneys at Hausfeld LLP.
The Hollywood Reporter has reached out to Landmark's parent organization 2929 Entertainment (a co-defendant) for comment and will update if anything comes.