Cobb Theatres III, LLC v. AMC Entertainment Holdings, Inc.
101 F. Supp. 3d 1319
| N.D. Ga. | 2015Background
- Cobb Theatres operates a premium "CinéBistro" in Brookhaven, GA; AMC operates two nearby Buckhead theatres. Plaintiffs allege the three comprise the Buckhead–Brookhaven licensing zone.
- Cobb alleges AMC began seeking "clearances" (exclusive licensing in a zone) after losing a lease competition to Cobb, and that AMC sent a 2010 letter to major distributors refusing day‑and‑date play with the Brookhaven CinéBistro.
- Cobb alleges distributors (including Sony Pictures) honored AMC’s demands, reducing first‑run film availability at Cobb and diminishing theatre quality available to local consumers.
- Cobb pleads multiple federal antitrust claims (§1 exclusive dealing, §2 monopolization and attempted monopolization, circuit‑dealing) and Georgia state claims (tortious interference; contracts in restraint of trade). AMC moved to dismiss under Rule 12(b)(6).
- AMC attached a Google Maps printout; Cobb moved to strike. The court took limited judicial notice of the existence of other Atlanta theatres but declined to accept alleged driving times.
- The court denied AMC’s motion to dismiss on all counts, finding Cobb pleaded enough factual matter to make its antitrust and state‑law claims plausible and to survive a motion to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| §1 exclusive‑dealing (clearances) — existence of agreement | Cobb: AMC’s letter coerced distributors into clearance agreements that denied Cobb films | AMC: Complaint fails to identify conspirators by name and offers only opportunity to conspire | Court: Allegations (letter, distributor responses, Sony identified) suffice to plausibly infer an agreement; denial of dismissal |
| §1 exclusive‑dealing — unreasonable restraint / anticompetitive effect | Cobb: Clearances restrict intrabrand competition and reduce theatre quality for consumers in zone | AMC: Clearances are presumptively reasonable when theatres are in substantial competition and not unduly extended | Court: Whether clearances are unreasonable is fact‑intensive; Cobb pleaded facts (quality differences, diminished consumer choice) sufficient to survive dismissal |
| §2 monopolization / attempted monopolization — market definition & power | Cobb: Relevant markets are (1) licensing of films for Buckhead‑Brookhaven and (2) exhibition to patrons; AMC controls ~69% of seats and has high entry barriers via threats to landlords/distributors | AMC: Market definitions are improperly narrow; seat share is an unreliable metric and allegations show ongoing competition | Court: Complaint plausibly alleges geographic and product markets, antitrust injury, and market power sufficient at pleading stage; dismissal denied |
| Circuit dealing (per se) | Cobb: AMC used circuit buying power/leverage (nationwide circuit, closed markets) to obtain exclusives and disadvantage competitors | AMC: No specific circuit deals alleged; no showing any circuit deal was accepted/implemented | Court: Allegations (letter, nationwide leveraging theory, distributor conduct) sufficiently plead circuit dealing/leveraging claims; dismissal denied |
| Motion to strike Google map / judicial notice | Cobb: Exhibit A should be stricken; driving times unreliable | AMC: Map supports geographic proximity arguments; asks court to take judicial notice of ~15‑minute drives | Held: Court denied strike; took limited judicial notice of existence/locations of other theatres but not driving times |
| Georgia state claims (tortious interference; restraint of trade) | Cobb: Same factual predicate as antitrust claims; tortious interference via threats to distributors/landlords; Georgia law permits third‑party claims for conspiracies in restraint of trade | AMC: Restraints lawful if reasonable; tortious interference insufficiently plead (no named induced parties) | Court: Allegations suffice to plead improper, intentional interference and restraint‑of‑trade injury at pleading stage; dismissal denied |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading requires factual matter to plausibly suggest agreement)
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not accepted on motion to dismiss)
- Standard Oil Co. v. United States, 221 U.S. 1 (rule of reason framework)
- United States v. Paramount Pictures, 334 U.S. 131 (clearances/circuit deals; factors for reasonableness)
- United States v. Griffith, 334 U.S. 100 (circuit dealing and monopoly leveraging doctrine)
- Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (vertical restraints and interbrand vs intrabrand competition)
- Brunswick Corp. v. Pueblo Bowl‑O‑Mat, Inc., 429 U.S. 477 (antitrust injury requirement)
- United States v. Grinnell Corp., 384 U.S. 563 (elements of monopolization claim)
- Spanish Broad. Sys. of Fla., Inc. v. Clear Channel Commc’ns, Inc., 376 F.3d 1065 (Eleventh Circuit guidance on antitrust pleading and injury)
- Jacobs v. Tempur‑Pedic Int’l, Inc., 626 F.3d 1327 (product‑market and anticompetitive effect discussion)