HOUSTON -- In a legal battle between popular movie theater chains, a Texas appeals court has sided with iPic-Gold Class Entertainment LLC in its allegations that two of its competitors conspired to block iPic from showing popular films in two of its Texas markets, Houston and Frisco.
Although Harris County District Court ultimately granted AMC summary judgment in iPic’s case, the Court of Appeals for the First District of Texas reversed the decision Dec. 5.
Justice Peter Kelly wrote the opinion, and justices Russell Lloyd and Richard Hightower concurred. All three determined there was a genuine issue of material fact for conspiracy that stopped them from affirming the summary judgment for AMC.
“We consider a plaintiff’s evidence of contract, combination or conspiracy as a whole,” Kelly wrote.
iPic also presented summary-judgment evidence to back its claims that AMC and Regal teamed up against it. Even though iPic has the responsibility of showing more than any typical conduct from AMC and Regal, the evidence that it did present was duly noted by the judges. iPic provided evidence that displayed that clearances aren’t a short-term cash cow, but it could help theaters steer clear of any deficits in the long haul.
“Thus, AMC was acting against its short-term economic interest by seeking a clearance of the proposed iPic Frisco, and it was jointly motivated with Regal to attempt to prevent iPic’s entry into the market.,” Kelly wrote.
The judges also pointed out that both Regal and AMC had the chance to devise a plan via their joint film distribution, Open Road. AMC said that communication between Open Road officers, who were also CEOs of Regal and AMC, were for unrelated matters, but the judges ruled that simply the presence of the communication was enough to hint at a conspiracy.
Kelly wrote, “Examining iPic’s summary-judgment evidence as a whole, we conclude that the circumstantial evidence supports plus factors of motive, opportunity, actions against self-interest, a pretextual explanation for anticompetitve conduct, the sharing of information through Open Road, and other facts consistent with the existence of a traditional conspiracy.”
The judges also ruled that there’s still a question of if and how AMC and Regal caused damages to iPic.
In its lawsuit iPic alleged AMC and Regal joined forces along with third parties in an effort to stop iPic from playing certain films in Houston and Frisco. iPic alleges that AMC and Regal used their powerful market positions to persuade distributors to get certain clearances for them, blocking iPic from getting licensing for certain movies for the Texas movie theater locations. The lower court first green-lighted a temporary restraining order for iPic, and the current appeals court affirmed. But when AMC was granted summary judgment in the lower court, iPic appealed, and the appeals court reversed the judgment in favor of AMC.