Beacon Theatres, Inc. v. Westover

Facts

According to its complaint, Fox West Coast Theatres, Inc. ran a movie theatre in San Bernardino, California. Under contracts with movie distributors, it had the exclusive right to show “first run” pictures in the “San Bernardino competitive area.” The contracts also gave it “clearance,” a period during which no other theatre could show the same pictures. Beacon Theatres, Inc. built a drive-in theatre about 11 miles from San Bernardino. Beacon then told Fox that it considered contracts barring simultaneous first-run showings in the two theatres to be overt acts violating the antitrust laws. Fox alleged that this notice, with threats of treble damage suits against Fox and its distributors, caused “duress and coercion” that deprived Fox of the right to negotiate for exclusive first-run contracts. Fox sued Beacon in a pleading styled a “Complaint for Declaratory Relief.” It asked for a declaration that a grant of clearance between the two theatres was reasonable and not in violation of the antitrust laws. It also asked for an injunction, pending the final outcome, to stop Beacon from suing under the antitrust laws over the controversy. Beacon denied the threats. It counterclaimed against Fox and cross-claimed against an exhibitor who had intervened. Beacon said the two theatres did not substantially compete, the clearances were unreasonable, and a conspiracy existed to restrain trade and monopolize first-run pictures. It asked for treble damages and demanded a jury trial.

Issues

1. When a complaint seeks declaratory and equitable relief and the defendant's counterclaim raises legal issues common to it, may a district court try the equitable claim to the judge first and so deprive the defendant of a jury trial on the common issues?
2. Is mandamus available to require a jury trial that a district court has improperly denied?

Holding

The district court could not use its discretion under Rule 42(b) to try Fox's equitable claims to the judge first and so cut Beacon off from a full jury trial of its counterclaim and cross-claim and of Fox's plea for declaratory relief. Even assuming the complaint stated an equitable claim, this was not a case of imperative circumstances. Mandamus lies to require a jury trial that was improperly denied.