Beacon Theatres, Inc. v. Westover

Brief Fact Summary. Beacon Theatres, Inc. (Plaintiff) sought by writ of mandamus to review a district court decision to vacate certain orders alleged to deprive it of a jury trial of issues arising out of case brought against it by Fox West Coast Theatres, Inc. (Plaintiff). The United States Court of Appeals for the Ninth Circuit refused the writ, holding that the trial court acted with proper discretion in denying Defendant’s request for a jury trial. The Supreme Court of the United States granted certiorari.
Synopsis of Rule of Law. Only under the most imperative circumstances can the right to a jury trial of legal issues be lost through prior determination of equitable claims.

Facts. Plaintiff asked for declaratory relief against Defendant alleging a controversy arising under the Sherman Antitrust Act and under the Clayton Act, which authorizes suits for treble damages under the Sherman Act. Fox operates movie theatres in California and has been showing films under contracts with movie distributors. These contracts granted it the exclusive right to show first run pictures. After Defendant built a drive-in theatre near Plaintiff’s theaters, Defendant notified him that it considered contracts barring simultaneous exhibitions of first run films to be violations of the antitrust laws. Plaintiff’s complaint alleged that notification and threat of treble damages constituted duress and coercion which deprived Plaintiff of a valuable property right, the right to negotiate. Unless the Defendant was restrained, the complaint alleged irreparable harm. Plaintiff plead for declaratory relief that clearance between Plaintiff and Defendant is reasonable, and for injunctive relief preventing Defendant from instituting any action under the antitrust laws against Plaintiff out of the controversy alleged in the complaint. Defendant filed an answer, a counterclaim against Plaintiff, and a cross-claim against an exhibitor who had intervened. These denied the threats and asserted there was no substantial competition between the two theatres, the clearances granted were unreasonable, and that a conspiracy existed between Plaintiff and its distributors to manipulate contracts and clearances so as to monopolize first-run pictures in violation of antitrust laws. Defendant demanded a jury trial of the factual issue in the case, but the district court viewed the issues as equitable. The court of appeals stated that the effect of the district court decision was to limit Defendant’s opportunity to fully try every issue before a jury. The right to a jury trial applies to treble damage suits under antitrust laws.

Issue. Whether a Defendant who seeks both treble damages and equitable relief is entitled to a jury trial?

Held. Yes. Judgment of the United States Court of Appeals for the Ninth Circuit is affirmed. A party who is entitled to injunctive relief may have all issues in their case determined by the judge without a jury regardless of whether legal rights are involved. However, a suit in equity cannot justify denying the Defendant a trial by jury of all the issues in the antitrust controversy. After the jury rendered the verdict, the judge could have granted permanent injunctive relief. The right to a jury trial is a constitutional one and that discretion is very narrowly limited and must be exercised in such a way as to preserve the jury trial. Therefore, the right to a jury trial of legal issues cannot be lost through prior determination of equitable claims.

Dissent. A litigant is entitled to a writ of mandamus to protect a clear constitutional or statutory relief to a jury trial. However, there was no such denial of a right here. When declaratory relief is sought, the right to a jury trial depends upon the basic context in which the issues are presented. The court’s opinion does not hold that a court of equity may not determine legal rights. The Federal Rules of Civil Procedure permit the trial of legal and equitable claims in the same proceeding, but expressly affirm the power of a trial judge to determine the order in which claims shall be heard.

Discussion. The Seventh Amendment of the United States Constitution provides that the right of trial by jury shall be preserved and no fact tried by a jury shall be otherwise re- examined in any court of the United States. There are two parts to the Amendment. The first provides the circumstances under which a litigant has a right to a jury trial and the other indicates what controls the court may impose upon a jury in a case, which the right is guaranteed.