Beacon Theatres, Inc. v. Westover

Brief Fact Summary.

Plaintiff appeals a district judge’s ruling that an issue should be heard first in front of a district judge before being submitted to a jury.

Synopsis of Rule of Law.

Legal issues must first be resolved by a jury before the equitable issues can be resolved by a judge in cases where both legal and equitable issues exist.

Facts.

Plaintiff Beacon Theatres built a drive-in movie theatre and notified Fox that its “first run” clearance contracts that gave certain theatres the exclusive rights to show new movies, violated antitrust laws. Before Plaintiff Beacon filed suit Fox filed a Complaint for Declaratory Relief asking the district court for declaratory judgement that Fox’s clearance contracts did not violate antitrust laws and for a preliminary injunction stopping Beacon from filing a lawsuit. Beacon counterclaimed, accusing Fox of violating the Sherman Antitrust Act. Beacon demanded a jury trial. The district judge, Defendant Judge Westover, found that the issues were primarily equitable, and that the issues should be tried before the district judge before proceeding to a jury. Beacon appealed, but the court of appeals upheld the order, finding that Fox’s complaint was partly making a plea for injunctive relief, which is considered an equitable remedy under the authority of a district judge to decide, and that the complaint should be read as a whole.

Beacon appealed further, and the United States Supreme Court granted certiorari.

Issue.

When a legal and equitable issue exists in the same trial, must the legal issue first be resolved by a jury before the equitable issues may be resolved by the judge?

Held.

Yes, when a legal and equitable issue exists in the same trial, the legal issue must first be resolved by a jury before the equitable issues may be resolved by the judge. Judgement below is reversed.

Dissent.

Justice Justice Stewart with Justices Harlan and Wittaker dissenting

The district judge did not abuse his discretion, he only wielded in scheduling power in deciding to resolve the equitable issue before the legal one. The Federal Rules of Civil Procedure allow equitable and legal issues to be tried in the same case and they preserve a judge’s right to determine the order in which they will be tried.

Discussion.

1. The Declaratory Judgement Act and the Federal Rules of Civil Procedure work together with the Seventh Amendment to preserve the distinction between jury and non-jury issues and protect the rights of parties to a jury trial.
2. The district judge abused his discretion in granting equitable relief that prevented Plaintiff Beacon from filing suit and having its claims heard by a jury.
3. The judgement below is reversed.