## Facts

- The United States sued affiliated corporations operating a circuit of motion-picture theaters across Oklahoma, Texas, and New Mexico, along with two individual owners/officers.
- The theater circuit operated in many towns, including “closed” towns with no competing theater and “open” towns where competitors existed.
- Defendants negotiated film licenses on a circuit-wide basis with major distributors, often bundling closed and open towns and licensing theaters as a group.
- The government alleged defendants used their circuit buying power—reinforced by monopoly positions in closed towns—to obtain exclusive first-run or preferred-run film licenses in open towns.
- The alleged exclusivity limited rival theaters’ access to enough desirable films to compete effectively.
- The district court dismissed the complaint, finding no violation of Sherman Act §§ 1 or 2.
- The government took a direct appeal to the Supreme Court under the Expediting Act.

## Issues

1. Whether circuit-wide purchasing and exclusive film licensing that forecloses rivals in competitive towns constitutes a conspiracy in restraint of trade under Sherman Act § 1.
2. Whether using monopoly power in some markets (closed towns), even if lawfully obtained, to gain advantages or exclude rivals in other markets violates Sherman Act § 2.
3. Whether proof of specific, subjective intent to restrain trade or monopolize is required when the challenged conduct results in restraint or monopoly.

## Decision

- The Supreme Court reversed the dismissal and remanded.
- The Court held that using circuit buying power to secure exclusive film rights that prevent competitors from obtaining sufficient first- or second-run films can violate Sherman Act §§ 1 and 2.
- The Court ruled that the use of monopoly power, even if lawfully acquired, to foreclose competition, gain a competitive advantage, or destroy a competitor is unlawful.
- The Court rejected the view that specific intent is always required; where restraint or monopoly results from the conduct, liability may be established without separate proof of specific intent.
- The case was remanded for further findings on effects and for entry of an injunction tailored to undo the harm and prevent recurrence.

## Legal Principles

- The use of monopoly power, however lawfully acquired, to foreclose competition, gain a competitive advantage, or destroy a competitor violates Sherman Act § 2.
- Sherman Act liability may rest on the objective consequences of conduct; specific intent is generally required only when acts fall short of producing the prohibited restraint or monopoly.
- Circuit-wide exclusive dealing arrangements, when used to deny rivals access to necessary inputs (here, film runs) and to exclude competition, can constitute unlawful combination or conspiracy under Sherman Act §§ 1 and 2.
- Antitrust equitable relief should aim to restore competitive conditions by undoing the established wrongs and preventing their recurrence.

## Conclusion

The Court held that a theater circuit’s use of its aggregated buying power and monopoly positions to obtain exclusive film licenses that exclude rivals violates Sherman Act §§ 1 and 2, and that proof of specific intent is not required where the conduct results in anticompetitive restraint or monopoly.


United States v. Griffith, 334 U.S. 100 (1948)