## Facts

- A 1951 antitrust consent judgment barred Warner from engaging in motion picture exhibition absent court permission under a decree provision allowing later approval.
- Warner sought authorization to acquire a 50% partnership interest in Cinamerica Theatres, L.P., a joint venture with Paramount’s parent company.
- Cinamerica owned and operated about 119 theaters in 43 localities, representing a small share of theaters nationwide (about 2%).
- Warner argued that since entry of the decree, distribution outlets expanded (e.g., television, cable, home video) and concentration in distribution and exhibition declined, reducing risks that theater ownership would enable exclusionary practices.
- The district court granted permission but imposed conditions requiring separation of ownership and management, prohibiting Warner’s involvement in internal affairs, mandating arm’s-length dealings, and subjecting Warner’s interest to continuing court supervision.
- Warner appealed the conditions; the United States supported removal of the restrictions on appeal.

## Issues

1. Whether Warner’s proposed 50% ownership interest in Cinamerica would unreasonably restrain competition in motion picture distribution and exhibition under the consent judgment’s competitive standard.
2. Whether the district court abused its discretion by conditioning approval on structural and behavioral restrictions rather than granting permission without conditions.

## Decision

- The Second Circuit concluded Warner’s proposed acquisition would not unreasonably restrain competition.
- The court held the district court’s restrictions were unnecessary on the record presented.
- The court remanded with instructions to enter an order granting Warner’s motion unconditionally, allowing Warner to own and conduct Cinamerica’s operations as a one-half owner without the imposed conditions.

## Legal Principles

- Modification or implementation of an antitrust consent decree turns on whether the requested relief would unreasonably restrain competition in light of the decree’s purposes.
- Courts may relax decree restrictions when changed market conditions undercut the original competitive concerns that justified the restraint.
- Conditions that substantially strip an approved owner of ordinary ownership and governance rights require a demonstrated competitive need; absent such a showing, imposing them exceeds proper decree administration.

## Conclusion

The Second Circuit ordered unconditional approval of Warner’s partial acquisition of a theater partnership because modern market conditions and the record evidence did not support a finding that the investment posed a meaningful risk of anticompetitive harm, making the district court’s restrictive conditions unwarranted.


United States v. Loew's Inc., 882 F.2d 29 (2d Cir. 1989)