Suit vs. Cinemark reinstated

Indie theater has been fighting exhib since 2006

A legal appeal by Palm Desert, Calif.’s Cinemas Palme d’Or arthouse theater has the potential to open bookings by independent theaters … if the desert plex prevails.

Cinemas Palme d’Or is a 10-plex owned by radio host Steve Mason, actor Bryan Cranston, producer Alise Benjamin-Mauritzson and theater operator Brian Tabor. The cinemas sued Century Theaters (later purchased by Cinemark) in 2006, saying the large circuit was denying bookings to the arthouse — a practice known as circuit dealing — through Century’s threats to retaliate against distribs by denying them critical runs in other markets.

Though the initial suit was dismissed in state superior court in 2008, the California State Court of Appeals recently ruled to reinstate the suit, overturning the lower court’s decision. Last week, the court denied a motion by Cinemark for a rehearing, opening the door to resume the discovery process so the trial can proceed in Los Angeles Superior Court.

“I believe this case has a chance to really impact our industry and help to preserve independent theaters all over the country,” co-owner Steve Mason said in a statement.

Although Cinemas Palme d’Or said bookings became somewhat easier after the suit was filed, the partners said it continues to be an issue. The multiplex is currently showing studio releases such as “Contagion” and “The Help.”

Mason said the cinemas have been able to book only very small releases, with Cinemark booking most commercial releases into the nearby River multiplex.

Cinemark, meanwhile, has claimed its business practices are lawful and that the appellate court ruling is contrary to modern antitrust law.

Distribution executives may be called to testify during the next round in court. Other independent theater owners, who likewise feel at a disadvantage to the major theater chains, are following the case, a favorable ruling in which could help level the playing field for smaller exhibs.

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