16-3484
Cinema Village Cinemart, Inc. v. Regal Entertainment Group
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 21st day of September, two thousand seventeen.
PRESENT:
ROBERT A. KATZMANN,
Chief Judge,
ROBERT D. SACK,
PETER W. HALL,
Circuit Judges.
CINEMA VILLAGE CINEMART, INC.,
Plaintiff-Appellant,
v. No. 16-3484
REGAL ENTERTAINMENT GROUP, DOES, 2 THROUGH 50,
Defendants-Appellees.
For Plaintiff-Appellant: MAXWELL M. BLECHER (Howard K.
Alperin, on the brief), Blecher Collins &
Pepperman, P.C., Los Angeles, CA.
For Defendants-Appellees: LEON B. GREENFIELD (David Sapir Lesser,
Perry A. Lange, David M. Lehn, and Adam
R. Prescott, on the brief), Wilmer Cutler
Pickering Hale and Dorr LLP, Washington,
D.C., and New York, NY.
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Consolidated appeals from final judgment of the United States District Court for the
Southern District of New York (Sullivan, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
Plaintiff-appellant appeals from a judgment dismissing its complaint with prejudice
entered on September 30, 2016, by the United States District Court for the Southern District of
New York (Sullivan, J.). We assume the parties’ familiarity with the underlying facts, procedural
history, and issues on appeal.
Plaintiff-appellant Cinema Village Cinemart, Inc., (“Cinemart”) operates a five-screen
movie theater complex in the Forest Hills neighborhood of Queens, New York, while defendant-
appellee Regal Entertainment Group (“Regal”), as of the time of the filing of the amended
complaint, operates approximately 575 theaters with 7,600 screens across the country, including
the Midway Stadium 9 Theater (“Midway”) in Forest Hills. Cinemart filed suit against Regal
alleging that Regal had engaged in anti-competitive conduct by entering into a series of
exclusive-dealing contracts or arrangements with six major film distributors — Warner Bros.,
Fox, Lionsgate, Paramount, Universal, and Disney — that collectively covered the
overwhelming majority of first-run films in the Forest Hills area. Cinemart contends that Regal
has used its significant market power as the largest theater circuit in the United States, and as the
only major theater operator in many parts of the country, to coerce from the film distributors the
exclusive first-run agreements at its Midway theater, which has effectively shut Cinemart out of
the market for first-run films. Cinemart claims that such coercion constitutes an anti-competitive
combination in restraint of trade in violation of the Sherman Act, 15 U.S.C. § 1, New York
State’s Donnelly Act, N.Y. Gen. Bus. Law §§ 340 et seq., and constitutes tortious or intentional
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interference with a prospective economic advantage in violation of New York State common
law.
We review de novo a district court’s dismissal of a complaint for failure to state a claim
under Fed. R. Civ. P. 12(b)(6), “accepting as true all factual claims in the complaint and drawing
all reasonable inferences in the plaintiff’s favor.” Fink v. Time Warner Cable., 714 F.3d 739,
740-41 (2d Cir. 2013). To withstand a motion to dismiss, “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). Moreover, “a Sherman Act claim must . . . define the relevant geographic market” and
assert sufficient facts “to allege plausibly the existence of . . . [that] geographic market.”
Concord Assocs., L.P. v. Entm’t Props. Trust, 817 F.3d 46, 52–53 (2d Cir. 2016) (internal
quotation marks and citation omitted). In assessing the alleged geographic market, a court
examines “the precise geographic boundaries of effective competition in order to reach a more
informed conclusion on potential harm to the market,” id. (internal quotation marks omitted),
considering “the areas in which the seller operates and where consumers can turn, as a practical
matter, for supply of the relevant product,” including “transportation costs to a particular
location . . . as well as the relative preferences of consumers with respect to travel and price,”
Heerwagen v. Clear Channel Commc’ns, 435 F.3d 219, 227–28 (2d Cir. 2006) (internal
quotation marks and citation omitted).
We share the district court’s conclusion that Cinemart’s amended complaint fails to
define a plausible relevant geographic market as required by the Sherman Act. In its amended
complaint, Cinemart defines the relevant geographic market as the Forest Hills neighborhood of
Queens, which it states is “easily accessible by subway, rail, bus and car.” Am. Compl. ¶ 23.
However, elsewhere in its amended complaint, it seems to emphasize the borough of Queens as
the relevant market; for example, in that same paragraph Cinemart alleges that “[i]t is not
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reasonably practicable for the overwhelming majority of Queens residents to leave Queens to see
movies on a regular basis, even if prices in Queens increased significantly.” Id. The amended
complaint also shifts the scope of the market, for example claiming that “residents from other
cities or municipalities do not often come to Queens to see films,” and that “Regal has threatened
and coerced the Film Distributors into granting Regal exclusive clearances in Queens,” rather
than Forest Hills. Am. Compl. ¶¶ 23, 44. However, the Court takes judicial notice of the fact that
a number of other theaters operate in the Queens neighborhoods surrounding Forest Hills, see
United States v. Hernandez-Fundora, 58 F.3d 802, 811 (2d Cir. 1995), rendering Cinemart’s
conclusory claims implausible. Moreover, if Forest Hills is easily accessible by subway, rail, bus,
and car from surrounding neighborhoods (as per Cinemart’s own allegation), then presumably
the reverse must be true as well, and many (if not all) individuals in Forest Hills can “easily
access” other neighborhoods and their theaters. Given these deficiencies and its repeated
assertions, even on appeal, that Forest Hills – and not Queens – is the relevant geographic
market, Cinemart’s amended complaint does not plausibly allege that Forest Hills is a relevant
geographic market susceptible to antitrust analysis under the Sherman Act.
Turning to Cinemart’s state law claims, as under the Sherman Act, a plaintiff stating a
claim under New York’s Donnelly Act “must allege a plausible relevant market in which
competition will be impaired.” City of New York v. Grp. Health Inc., 649 F.3d 151, 155 (2d Cir.
2011); see also Benjamin of Forest Hills Realty, Inc. v. Austin Sheppard Realty, Inc., 823 N.Y.S.
2d 79, 82 (2d Dep’t 2006). For the same reasons as explained above, we conclude that
Cinemart’s amended complaint also fails to allege a plausible relevant geographic market for the
purposes of its Donnelly Act claim.
Cinemart’s New York intentional interference with a prospective economic advantage
claim also fails, for related reasons. To succeed on such a claim, a plaintiff must allege, among
other things, that “the defendant acted solely out of malice, or used dishonest, unfair, or improper
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means.” Kirch v. Liberty Media Corp., 449 F.3d 388, 400 (2d Cir. 2006) (quoting Carvel Corp.
v. Noonan, 350 F.3d 6, 17 (2d Cir.2003)). At best, the amended complaint can be understood to
allege unfair or improper means, specifically “Regal’s intentional anticompetitive conduct as
alleged herein.” Am. Compl. ¶ 73. As explained above, however, Cinemart has not made out a
plausible claim of anticompetitive conduct under either the Sherman Act or Donnelly Act, and
Cinemart has alleged no other intentional conduct on Regal’s part.
Finally, we need not address whether the district court improperly dismissed Cinemart’s
claim with prejudice because it has not shown how further amendments to its complaint could
cure the deficiencies with respect to its assertion of the relevant geographic market. Cinemart’s
reply brief does not propose reclassifying the relevant geographic market, and its contemplated
amendments do nothing to establish Forest Hills as the plausible scope of a geographic market
for the purposes of its antitrust claim. As a result, “granting leave to file a second amended
complaint would have been futile.” Concord Assocs., 817 F.3d at 55.
We have considered all of plaintiff’s contentions on appeal and have found in them no
basis for reversal. For the reasons stated herein, the judgment of the district court is
AFFIRMED.1
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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Pursuant to this summary order, Cinemart’s motion to take judicial notice of certain documents,
dated December 29, 2016, is hereby granted.
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