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Wycoff Co. v. Public Service Commission of

Rehearing Denied March 19 1952.: December 19, 1951.



Before PHILLIPS, Chief Judge, and HUXMAN and MURRAH, Circuit Judges.

HUXMAN, Circuit Judge.

Wycoff Company, Inc., is a Utah corporation engaged in the transportation of property as a common carrier by motor vehicle. Its business consists of transporting motion picture films and news reels between various picture exchanges in Salt Lake City and between individual exhibitors, both within and without the State of Utah. It holds a certificate of convenience and necessity as to its interstate transportations from the Interstate Commerce Commission, but has refused to acknowledge the jurisdiction of the Public Service Commission, of Utah as to its transportation activities beginning and ending wholly within the State of Utah. When the Public Service Commission of Utah sought to exercise jurisdiction over such last named activities, Wycoff brought a declaratory judgment action in the United States District Court for the District of Utah for a judgment declaring that all of its activities were interstate and enjoining the State Commission from interfering with its transportation of motion picture film and news reels over its routes within Utah, as authorized by the Interstate Commerce Commission. The trial court concluded that all transportation of film from the branch distributing offices of distributing companies located in Salt Lake City, Utah, to theatre exhibitors within the State of Utah and transportation of film from one theatre to another within the State was intrastate transportation, subject to the jurisdiction of the State Commission. The court entered an appropriate judgment that the State Commission was not interfering unlawfully with such operations and denied appellant the relief prayed for. The sole question on appeal is whether the intrastate transportations are nonetheless integral parts of interstate transportations.

Most picture films originate in the laboratories of national distributors in New York, New Jersy and Los Angeles. The distributors have set up a system of exchanges in various sections of the country, to which they send all motion picture film for exhibitors in a designated area. Such exchanges are maintained in Salt Lake City, Utah.

All motion picture houses (exhibitors) obtain their films from the national distributors under contract with them. Under such contract an exhibitor may designate the film he desires. He is, however, not entitled to any particular picture at any specified date. The contract is generally executed before a picture is released to the public. It provides that after a picture is released for public exhibition and becomes available for exhibition by the exhibitors, the distributor agrees to deliver a print of the motion picture to the exhibitor. The film is then sent to the exchange, in this case Salt Lake City, where it is processed and readied for exhibition. In the contract the distributor agrees to make delivery of the film contracted for "to the Exhibitor or to the Exhibitor's authorized agent, by delivery at the Distributor's exchange, or to a common carrier, or to the United States Postal authorities, as the Distributor may elect."*fn1 The exhibitor agrees to show the film at the designated date and, at the conclusion of such showing, transport it to the next exhibitor at his expense. Thus in rotation each exhibitor agrees to transport the film at his own expense until it reaches the last exhibitor, who then is obligated to deliver it at his cost back to the exchange, from where it is returned to the distributor for final disposal. No film is sold to the exhibitor. The distributor merely licenses the right to exhibit the film. The title at all times remains in the distributor. The inspection and processing of these films in the exchanges are necessary steps before the films can be reshipped to exhibitors' theatres for showing therein.

The legal principles which guide us in determining whether an intrastate shipment is in fact such or is a continuing part of an interstate shipment are clear and well defined. The difficulty as always comes when we seek to apply them to a given state of facts. As stated by the Supreme Court in United States v. Erie R. Co., 280 U.S. 98, 50 S. Ct. 51, 53, 74 L. Ed. 187, "the nature of the shipment is not dependent upon the question when or to whom the title passes * * *" or whether "the transaction is initiated or completed under a local bill of lading which is wholly intrastate, * * *" nor yet "by the fact that there may be a detention before or after the shipment on the local bill of lading". If there is a continuing intent that the goods shall be transported until they reach a designated place, the entire transportation is a continuing one, notwithstanding that there may be a temporary stoppage enroute for a particular purpose.*fn2 In Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S. Ct. 332, 335, 87 L. Ed. 460, the Supreme Court reaffirmed these principles in the following language: "If the halt in the movement of the goods is a convenient intermediate step in the process of getting them to their final destinations, they remain 'in commerce' until they reach those points."

Tested by these principles, we think the judgment must be reversed. The distributor did not lose interest in the continued transportation of a film when it reached the exchange. Under the contract, both it and the exhibitor contemplated and understood that the film should continue in transportation until it reached the exhibitor's theatre. The distributor had a continuing interest in the transportation of the film beyond the exchange. While the distributor agreed to make delivery of the film to the exhibitor "at the exchange, or to a common carrier, or to the United States Postal authorities," it retained the right to select the agency to which delivery should be made, for the purpose of continuing the transportation to the exhibitor's theatre. Elliott S. Windward, Manager of R.K.O. Pictures, Inc., testified that it exercised control over the shipper employed to transport the film from the exchange to the exhibitor. He testified that such a shipper "must have the proper credentials involving insurance and protection of the prints while in his possession; he must be a licensed carrier, and he must also be approved by the Home Office." As long as this control was exercised over the entire journey, it cannot be said that the film "came to rest" at the exchange, as that term is understood, in order to end interstate transportation. We conclude the parties to these contracts contemplated and obligated themselves to a continuous transportation of the film from the distributor to the various exhibitors and back to the exchange, interrupted only temporarily at the exchange for processing of the film and for allocation to the various exhibitors, and that the entire transportation constituted interstate commerce. This conclusion finds support in Republic Pictures Corporation v. Kappler, 8 Cir., 151 F.2d 543, 162 A.L.R. 228, Beggs v. Kroger Co., 8 Cir., 167 F.2d 700, and Transway, Inc., v. Exhibitors Delivery Service, Inc., 51 M.C.C. 263 (1950), upon facts similar to those before us.


Supplemental Opinion.

Appellees have filed a petition for rehearing on the ground as alleged therein that the opinion of the court misconstrues and ignores fundamental and controlling facts and that the opinion presumes and is predicated in part on the presumption "that the film is neither within the State of Utah nor released for exhibition to the public at the time the contract is executed." An opinion speaks for itself and the fact that it may be misconstrued does not ordinarily require an opinion in support of an order denying a petition for rehearing, but in this case we feel that a statement is warranted, not only because we feel that the basis of the opinion is misconstrued, but also because the petition for rehearing in setting out evidence, which it is claimed we ignored, perhaps in advertently omits a part of the testimony of some witnesses which is essential to place such testimony in proper focus. To overcome the statement in the opinion that the distributors exercise control over the transporting agencies selected by the exhibitor to transport the film from the exchange to the theatre, petitioners quote the following from the testimony of Elliott S. Windward of R.K.O. Pictures, Incorporated:

"Q. Who determines which method of transportation will be employed? A. The Exhibitor."

For some reason petitioners overlooked the questions and answers which immediately follow the above question and answer, as follows:

"Q. Can you state whether or not your office exerts any control over what shipper will be employed? Must certain requirements be met by carriers for you to release films to it? A. He must have the proper credentials involving insurance and protection of the prints while in his possession; he ...

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