On February 7, 1952, plaintiff, owner and operator of the Wheaton Theatre, Wheaton, Illinois, brought suit against defendants RKO Radio Pictures, Inc., Paramount Pictures, Inc., Paramount Film Distributing Corporation and Balaban & Katz Corporation, hereinafter referred to as defendants or as RKO, the Paramount defendants and B & K respectively, and others, under Section 4 of the Clayton Act, 15 U.S.C.A. § 15, to recover damages for injuries allegedly sustained by reason of defendants’ violation of the antitrust laws, 15 U.S.C. § 1 et seq., during the period from April, 1941 to January 1, 1948.
The complaint was in four counts. Counts I and II charged monopolistic practices by defendants in restricting first and subsequent runs
1
of motion pictures to certain favored theatres located in Chicago, averred that defendants had conspired to establish a system of unreasonable clearances to the injury of plaintiff and prayed for treble damages. To avoid the consequences of our decisions in Hoskins Coal & Dock Co. v. Truax Traer Coal Co., 7 Cir.,
Thereafter, defendants moved for summary judgment on all counts, aver *286 ring the statutory bar, and, alternatively, as to counts III and IV, for judgment on the pleadings on the ground that they failed to state a cause of action under the Act. On March 25, 1953, the court entered final judgment in favor of defendants. Thereafter, on April 23, 1953, on plaintiff’s motion, the judgments were vacated as to all defendants except B & K, and the motions of defendants REO and the Paramount defendants continued to permit the introduction in evidence of consent decrees entered against said defendants and certain other documents from the record of United States v. Paramount Pictures, Inc., Equity No. 87-273, pending as to certain parties other than defendants in the District Court for the Southern District of New York when the action at bar was filed. After further hearing and receipt of the documents in evidence, the trial court again granted defendants’ motions and entered final judgment in their favor on July 3, 1953.
Errors assigned go to the questions of whether an action for single damages will lie and whether plaintiff’s claim is barred by the two year statute. Plaintiff contends, also, that the Hoskins and Schiffman cases were erroneously decided and should be reconsidered.
We turn first to plaintiff’s contention that it is entitled to sue for single or actual damages under Section 4 of the Act and thus escape the bar of the two year statute of limitations applicable to actions for treble damages. Our inquiry in this respect, therefore, is whether the remedy afforded by the Act is damages, which may be trebled by way of penalty, or treble damages, with the damage actually sustained being merely the yardstick by which the remedy is to be measured. It is well to note, at the outset, as bearing not only on this issue but on arguments addressed throughout plaintiff’s brief to public policy considerations as affecting the question of limitation of actions, the decades of silence by Congress as to limitations as indicative of its intention that a plaintiff, to prevail, must satisfy the requirements of. the applicable state statute.
We find no persuasive authority which has considered this question. The court, in Haskell v. Perkins, D.C.,
We are constrained, then, to treat the question as one of first impression. Whatever plaintiff’s rights may be, they exist solely by virtue of the statute, as no right to recover treble damages was known to the common law. Decorative Stone Co. v. Building Trades Council, 2 Cir.,
*287 Keeping this guiding principle in mind, can we say that the remedy afforded by Section 4 is damages, with a super-added trebling penalty? Unless we can, plaintiff’s contention must fail. Plaintiff argues that its remedy is damages; that the extent of the recovery permissible is threefold the damages, and that, in suing for single damages, it is merely foregoing a portion of the recovery. This apparently conforms to the basic assumption by the court which formed the foundation for the decision in the Haskell case. However inviting the prospect of assuming that which we are called upon to decide, we must follow the more difficult course which requires something deeper than a play on words which divorces the remedy from the recovery and, in essence, reduces the issue to that of remittitur.
The statute is explicit; the only remedy provided therein is “threefold the damages” sustained. Giving to this language its plain meaning, we think the only permissible interpretation is that the remedy afforded is treble damages, penal in nature and susceptible therefore to all restrictions surrounding an action of such nature. The remedy has been so treated by this court in Bigelow v. RKO Radio Pictures, Inc., 7 Cir.,
Thus the amount of actual damage is a fact, which, when proved, becomes the yardstick on which the judgment is measured. See also-, McKean v. Hillman,
Plaintiff contends, with support in briefs filed by
amici curiae,
that we should reconsider our decisions in the Hoskins and Schiffman cases, that an action under Section 4 of the Act is governed by the Illinois two year statute. It is urged that we overlooked the postulate announced in Bell v. Farwell,
This argument is premised on a misapprehension of what was decided inHoskins and Schiffman. As we said in Hie latter, “We pointed out [in Hoskins] that the real question facing us * * 'l:' was not whether the action was one to recover a statutory penalty within the
*288
meaning of any federal statute but whether actions such as this are limited to a period of two years under the Illinois statutes,
i. e.,
whether actions to recover treble damages must be commenced in Illinois within two years. It is of no significance that the cause of action arises under federal statutes.”
Extended discussion of the cases relied on is unnecessary. The basic issue in Bell v. Farwell, supra, was one of public policy,
i. e.,
whether an Illinois court would entertain the cause, viz., whether the applicable statute of the State of Kansas was penal or remedial. This question was resolved in accord with applicable decisions of the Supreme Court of Kansas, and, applying the familiar doctrine of comity, the court held that the action would lie. In Emerson v. North American Transp. & Trading Co.,
Plaintiff refers to several recent cases which are said to criticize Hoskins and Schiffman. However, the courts, in Electric Theater Co. v. Twentieth Century-Fox Film Corp., D.C.,
Plaintiff insists, however, that defendants may not, under the circumstances of this case, rely on the statute of limitations. It argues that, under the provisions of the second paragraph of Section 5 of the Clayton Act, the pendency of the Paramount case, an antitrust action brought by the United States against the major figures in the motion picture industry, suspended the running of the statute against plaintiff’s claim until a date within two years prior to February 7, 1952 when its complaint was filed. Because of facts subsequently related, plaintiff’s positions with respect to RKO and the Paramount defendants on the one hand and B & K on the other are quite divergently different. There is, however, an underlying public policy argument which is generally ap *289 plicable to each argument advanced on the suspension issue. Due to the highly technical nature of the subject matter, we have thought it advisable to examine the provisions of Section 5 in their entirety before proceeding to consider arguments addressed to the effect of that Section on plaintiff’s cause against the individual defendants.
Section 5 provides that:
“A final judgment or decree rendered in any criminal prosecution or in any suit or proceeding in equity brought by or on behalf of the United States under the antitrust laws to the effect that a defendant has violated said laws shall be prima facie evidence against such defendant in any suit or proceeding brought by any other party against such defendant under said laws as to all matters respecting which said judgment or decree would be an es-toppel as between the parties thereto * * *.
“Whenever any suit or proceeding in equity or criminal prosecution is instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws, the running of the statute of limitations in respect of each and every private right of action arising under said laws and based in whole or in part on any matter complained of in said suit or proceeding shall be suspended during the pendency thereof.” 15 U.S.C.A. § 16.
Reduced to essentials, we construe the premises underlying plaintiff’s argument as follows: 1. Section 4 of the Clayton Act, providing a right of action for damages to private persons injured by a combination in violation of the antitrust laws, was designed by Congress to be a means of enforcing those laws; Bruce’s Juices, Inc., v. American Can Co.,
A hypothetical examination of the facts of the case at bar, carried to its logical conclusion in the light of the provisions of those sections and the judicial authority construing them, will illustrate the fallacy of the conclusion. In 1938 the United States filed a civil action, U. S. v. Paramount, et al., against the major companies of the picture industry. The complaint charged A, B, C and D with conspiring together to eliminate competition in the exhibition of pictures in violation of the antitrust laws, 15 U.S.C.A. § 1 et seq., by establishing a nationwide system of unreasonable runs and clearances governing the licensing of films for exhibition. This litigation, which resulted in a decree against all defendants, was finally terminated as to all on February 7, 1952, when a decree was entered against Loew’s Incorporated.
A complaint filed by P, the owner of a suburban theatre, alleges that he was injured by a conspiracy of A, B, C, D and E, the latter being the local exhibitor who controls all first run theatres in the downtown section of the metropolitan area in which P’s theatre is located. It is averred that under the system of classification of theatres adopted *290 by the local conspirators^ P was denied access to new films until -some two months after termination of the downtown first- run and, even then, was forced, by reason of unreasonably delayed clearances, to charge a severely restricted admission pr-ice. Section .4 gives him a right of action against every person who participated in the conspiracy to his-injury.
The impact of. Section 5 on this right of action must be determined with reference to what action, if any, the United States has’ taken to punish- or enjoin the unreasonable combination. Although that section inures to P’s benefit when the government has acted, no restraint is imposed on his conduct; he may file his action for damages at will without regárd to what the government •has done. If however his cause is heard before the government’s case was filed, .or before that action has been- determined in favor of the government, -P has the burden of proving every element of his case. Thus he must prove the • existence of the combination in violation of the Act and how and to what extent he has been injured. Insofar as the injury is occasioned by the national conspiracy, as. contrasted with activities of the local combine, this too is an element of P’s burden of proof. He can derive no benefit fro,m the -pendency of the government’s suit until a final decree has been entered therein. Fifth & Walnut, Inc., v. Loew’s Incorporated, D.C.,
If, however, P awaits the "outcome of the government suit before filing his action, he will receive the evidentiary benefits provided by Section 5. While we are concerned with the tolling provisions of the second paragraph of that Section only, the two paragraphs are complementary and must be construed together, Fifth & Walnut, Inc., v. Loew’s Incorporated, supra, and it is well, therefore, to spell out the. benefit provided by the first paragraph. This provision makes a judgment against a defendant admissible against “such defendant”, in a private -action for damages, as prima facie evidence of such matters only as are necessarily decided in a government suit. Emich Motors Corp. v. General Motors Corp.,
Thus, in the Theatre Enterprises case, the trial court instructed-the jury,
inter alia,
with respect to the- effect of -the decree in U. S. v. Paramount, “ ‘There was not before the Court (in the Paramount case) the- present factual situation which, is before you now with respect to Baltimore theatres. Therefore, it is still necessary in the present case, in order for plaintiff, to recover, for it to prove to your- satisfaction by the weight of the credible evidence, that these defendants, or some of them, have conspired in an unreasonable manner to keep first run exhibitions from the plaintiff * * *.’ ”
. In other words, the decisive issues in the government’s suit and in P’s case are different. The decree in the former merely lays the cornerstone on which P’s case must be built. Though he may •enjoy the benefit of Section 5, P still must prove the impact, of the national conspiracy on his locality, the conspiracy of A, B, C, D and E to eliminate, competition locally and how and to what extent he has been injured thereby. The *291 decree is not prima facie evidence, or even probative, of E’s complicity in the unlawful combination. This result is in keeping with the plain language of that Section which restricts the prima facie effect to defendants in the government suit.
The second paragraph of that Section is designed to insure to injured parties the full fruits of the government’s case by suspending during pendency thereof, the running of the statute against a right of action in favor of parties injured by the same acts. Although this paragraph does not speak in terms of defendants in a suit brought by the government, it suspends the running of limitations during pendency thereof “in respect of each and every private right of action * * * based in whole or in part on any matter complained of” therein. Neither logic nor public policy considerations demand, or even permit, us to say that the pendency of a government antitrust suit operates to suspend the running of the statute as to every, party who participated, either locally or nationally, in the nationwide combination condemned thereby without regard to whether or not he was named therein as a defendant. Rather, the suspension provisions must be construed in the light of what can be accomplished thereby. Our hypothetical complaint charges and our hypothetical decree finds that A, B, C and D conspired together to eliminate competition on a national scale. The decree is prima facie evidence as to this question only. P reaps the full benefit of Section 5 if the statute is suspended as to the parties named. If a different result is desirable, provision for its promulgation is a function of the Congress, not of the courts.
What has been said should dispose of plaintiff’s contention that pendency of the Paramount case suspended the running of the statute as to B & K, who was not a party to that cause. B & K, a former subsidiary of defendant Paramount, was, during the period when plaintiff’s injury allegedly was incurred, the local exhibitor circuit which controlled first run theatres in the Chicago Loop. Almost without exception, the tolling provisions of Section 5 have been held inapplicable to parties not defendants in the government antitrust suit. Momand v. Universal Film Exchanges, D.C.,
It is necessary, however, to consider briefly plaintiff’s first alternative proposition. Plaintiff relies on Homewood Theatre, Inc., v. Loew’s Incorporated, D.C.,
We are of the opinion that Section 5 operates to toll the running of limitations during pendency of a government antitrust suit only as to named defendants, and that in the present case running of the Illinois statute was never tolled as to B & K by pendency of U. S. v. Paramount.
A question is presented as to whether the statute of limitations was tolled as to RKO and the Paramount defendants until U. S. v. Paramount was finally determined in 1952. Both were named defendants therein; consent decrees were entered therein against each; and each was severed from the cause more than two years before the complaint was filed in the case at bar. Defendants contend that the statute of limitations commenced running as to each of them when the respective consent decrees were entered. Plaintiff’s position is twofold. Thus we must determine, 1. whether the Paramount case continued to pend against these defendants, thus tolling the statute of limitations as to them, until the cause was determined as to all defendants, notwithstanding the prior entry of the consent decrees; and 2. whether, if the consent decrees are held to be final, that action was nevertheless pending against said defendants within the meaning of Section 5 in view of the various orders entered subsequently thereto modifying those decrees in certain respects.
The first contention has been urged and rejected by the courts in at least three well considered decisions' by district courts. Barnett v. Warner Bros. Pictures Distributing Corp., D.C.,
We think these decisions embody the correct interpretation of the Act. Plaintiff concedes that the two paragraphs of Section 5 are complementary. As previously demonstrated, no public policy considerations require that the tolling provisions be more extensive than the evidentiary provisions which they are designed to protect. The consent decrees against the RKO and the Paramount defendants were essentially final in character. From the date of their entry the complaints of the government against the respective defendants were terminated. At that time the purpose of the tolling provisions had been served, and, logically, the statute of limitations commenced to run. To hold that the statute is tolled as to all defendants in a government suit until that suit is terminated as to every defendant would result only in placing a premium on dilatoriness and stale litigation.
No authority is cited, and we have found none, which militates against this. In pertinent part the decision in Twentieth Century-Fox Film Corp. v. Brookside Theatre Corp., 8 Cir.,
The conclusion we reach does not impinge upon the salutary role which self-interest, through private litigation, is designed to play in enforcing the antitrust laws. Bruce’s Juices, Inc., v. American Can Co.,
Plaintiff’s reliance on modifying orders entered subsequent to entry of these consent decrees to support its contention that the Paramount case continued to pend against RKO and the Paramount defendants after decrees were entered as to them is, we think, misplaced. We think it unnecessary to consider those decrees in detail. Suffice it to say defendants were continuously enjoined from certain concerted practices relative to imposition of unreasonable runs and clearances and were required to divest themselves of certain exhibition properties, thus divorcing exclusive control of motion picture exhibition activities from production and distribution. Each decree reserved jurisdiction to enforce, and, to that end, to modify it as changing conditions might require. Pursuant to this reservation, orders as recent as January 2, 1951, were entered from time to time modifying the judgments in certain respects.
Irrespective of pendency of the cause, and of the reservation of jurisdiction, no one will dispute the inherent power of a court of equity to enforce its decree. In the language of Mr. Justice Cardozo, in United States v. Swift & Co.,
If we should adopt the rule for which plaintiff contends, pendency of the Paramount case as to consenting defendants would be coextensive with the power of the court to enforce its decree, encompassing an indefinite period of time with no foreseeable limits. So construed, Section 5 might, as defendants suggest, suspend the running of statutes of limitations forever. The mere statement of this proposition illustrates, its fallacy. Had Congress intended to deny the benefit of limitation statutes to violators of the antitrust laws, that intention would have been clearly expressed. If we cannot imply that general intent, we should not presume that Congress intended that limitations be forever suspended as to the wrongdoer who is caught while the violator who evades detection may invoke their protection. The court’s decree of injunction is no less final merely because from time to time expediting orders are necessary to effect its enforcement.
We conclude that the two year statute of limitations, although suspended originally as to RKO and the Paramount defendants by the pendency of U. S. v. Paramount, began to run in favor of these defendants when consent decrees were entered against them in *294 that' case on November 8, 1948 and March 3, 1949 respectively." Plaintiff’claim is now barred.
The judgments are
Affirmed.
Notes
. Defined, United States v. Paramount Pictures, Inc.,
. Plaintiff’s cause of action depended on. proof of the existence of a contract between himself and one Duke. The Court of Appeals held that plaintiff had not sustained the basic burden of proof and had no cause of action under any theory. Perkins v. Haskell (Haskell v. Perkins), 3 Cir.,