The legal skirmish between small movie theaters chains and larger exhibitors over alleged anti-competitive practices shows no signs of abating.
On Tuesday, IPic-Gold Class Entertainment sued Regal Entertainment and AMC Entertainment in a Texas district court, alleging the nation’s two largest theater chains were using their “market power” to “squeeze out” iPic’s new theater in Houston and one planned in the Dallas area.
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IPic alleges that in July 2014 Regal and AMC told studios that any film they licensed to the IPic theaters in Texas would not play at nearby theaters operated by the larger chains.
“They have threatened film studios with an illegal boycott: studios must license top first-run films to defendants, but not to IPic,” the lawsuit states.
In today’s world every theater needs all the product it can get.
— Hamid Hashemi, chief executive of iPic
As a result, IPic alleges, the new Houston theater has been unable to get licenses to screen such first-run movies as “The Martian,” “Bridge of Spies” and “Steve Jobs,” threatening its its viability as a business. The planned theater in the Dallas area faces a similar obstacle, IPic states.
“It’s a predatory action,” said Hamid Hashemi, chief executive of IPic, a Boca Raton, Fla., company that operates 12 luxury theaters in Florida, California and several other states. “In today’s world every theater needs all the product it can get.”
The lawsuit centers on an industry practice known as clearances, which are license agreements in which theaters obtain permission from studios to exclusively show first-run movies in their theaters within certain zones, thereby blocking nearby rivals from playing the same movie at the same time.
The courts have allowed limited use of clearances in cases in which theaters are in substantial competition with one another.
But IPic maintains that its theaters do not compete with the AMC and Regal theaters because they are smaller, sell higher-priced tickets and offer premium services such as luxury dining and beverage services. IPic is seeking an injunction to remove the clearances on its theaters.
In a statement, AMC defended its actions.
“Allocated film zones are a long-standing, well-established industry practice,” a spokesman for AMC said. They have “demonstrated benefit to all stakeholders – moviegoers, studios and exhibitors.”
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Zac Barnett of American Authors is seen on set for a video shoot on Oct. 26, 2014, in Dickson, Tenn. (Rick Diamond / Getty Images)
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Extras acting in the HBO series “Game of Thrones” leave the bullring on Oct. 22, 2014, as film crews began shooting part of the fifth season in the southern Spanish city of Osuna. (CRISTINA QUICLER / AFP/Getty Images)
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Indira Varma is on the set of “Game of Thrones” at Real Alcazar on Oct. 19, 2014, in Seville, Spain. (Europa Press / Europa Press via Getty Images)
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Actors film “Game of Thrones” at Real Alcazar on Oct. 19, 2014, in Seville, Spain. (Europa Press / Europa Press via Getty Images)
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Nikolaj Coster-Waldau is on the set of “Game of Thrones” at Real Alcazar on Oct. 19 in Seville, Spain. (Europa Press / Europa Press via Getty Images)
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Sylvester Stallone poses with his puppet as he takes part in the TV show “Le Grand Journal” at the Cannes Film Festival. (LOIC VENANCE / AFP/Getty Images)
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Jamie Foxx filming “The Amazing Spider-Man 2” on April 21, 2013, in New York City. (Aby Baker/Getty Images)
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Actor Andrew Garfield, center left, is seen on the set of “The Amazing Spider-Man 2” in New York City with his stunt double William Spencer, right, and a second stunt double. (Raymond Hall/ WireImage/Getty Images)
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Actor Andrew Garfield, right, rehearses a scene with his stunt double William Spencer on the “The Amazing Spiderman 2” movie set in Madison Square Park in New York.
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Actor Andrew Garfield, right, his stunt double William Spencer, center, and a second stunt double are seen on the set of “The Amazing Spider-Man 2” in New York City. (Raymond Hall/ WireImage/Getty Images)
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Jamie Foxx filming on location for “The Amazing Spider-Man 2” on April 21, 2013, in New York City. (Bobby Bank/WireImage/Getty Images)
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Andrew Garfield and Emma Stone filming “The Amazing Spider-Man 2” on location in New York City. (Aby Baker/Getty Images)
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Jamie Foxx as Electro/Max Dillon in “The Amazing Spider-Man 2” on location in New York City. (Bobby Bank/WireImage/Getty Images)
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Actor Andrew Garfield, right, his stunt double William Spencer, center, and a second stunt double are seen on the set of “The Amazing Spider-Man 2” in New York City. (Raymond Hall/WireImage/Getty Images)
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Actor Paul Giamatti films a scene at the “The Amazing Spiderman 2” movie set in Madison Square Park on June 22, 2013, in New York City. (Ray Tamarra/Getty Images)
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Actor Andrew Garfield is seen on the set of “The Amazing Spider-Man 2” in New York City. (Raymond Hall/WireImage/Getty Images)
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Actor Paul Giamatti is seen on the set of “The Amazing Spider-Man 2” in New York City. (Raymond Hall/WireImage/Getty Images)
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Actor Paul Giamatti on the set of “The Amazing Spiderman 2” in New York City’s Madison Square Park. (Ray Tamarra/Getty Images)
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Jamie Foxx on location for “The Amazing Spider-Man 2” in New York City. (Bobby Bank/ WireImage/Getty Images)
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Julianne Moore and Kristen Stewart play mother and daughter filming on location for “Still Alice” on March 21, 2014, at Lido Beach, N.Y. (Steve Sands/Getty Images)
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Richard Gere on the set of “Time Out Of Mind” on March 26, 2014, in New York City. (Bobby Bank/WireImages/Getty Images)
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Jeremy Renner films an action scene in Aoasta, Italy, for “Avengers: Age of Ultron.”. (Photopix/Getty Images)
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Elizabeth Olsen and Aaron Taylor-Johnson film on location in Pont-Saint-Martin in Aosta, Italy, for “Avengers: Age of Ultron.” (Photopix/Getty Images)
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Actors are suited up for special effects on the set of “Avengers: Age of Ultron” in Aosta, Italy. (Photopix/Getty Images)
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Richard Gere and Ben Vereen on the set of “Time Out Of Mind” on March 26, 2014, in New York City. (Bobby Bank/WireImage/Getty Images)
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Arnold Schwarzenegger performs on the set of “Despierta America” with Joe Manganiello at Univision Headquarters in Miami. (Gustavo Caballero/Getty Images)
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Donal Logue, left, and Ben McKenzie on the set of “Gotham” on March 20, 2014, in New York City. (Bobby Bank/WireImage/Getty Images)
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Kevin McHale, left, Chord Overstreet, Chris Colfer and Darren Chris on the set of “Glee” at Washington Square Park on March 14, 2014, in New York City. (Bobby Bank/WireImage/Getty Images)
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Lea Michele and Michael Lerner on the set of “Glee” on March 16, 2014, in New York City. (Bobby Bank/WireImage/Getty Images)
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Louie CK on the set of “Louie” on Jan. 31, 2014, in New York City. (Bobby Bank/WireImage/Getty Images)
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Wil Estes and Vanessa Ray on the set of “Blue Bloods” on Jan. 31, 2014, in New York City. (Bobby Bank/WireImage/Getty Images)
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Skyler Gisondo and Ben Stiller on the set of “Night at the Museum 3” on Feb. 6, 2014, in New York City. (Bobby Bank/WireImage/Getty Images)
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George Clooney, second from left, filming “Tomorrowland” at Ciudad de las Artes y las Ciencias on Jan. 21, 2014, in Valencia, Spain. (Europa Press/Europa Press via Getty Images)
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Kevin Bacon and Sprague Grayden on the set of “The Following” on Dec. 10, 2013, in New York City. (Bobby Bank/WireImage/Getty Images)
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Mark Wahlberg is seen on set filming the movie ‘Transfomers 4: Age of Extinction’ on Sunday October 27,2013 in Hong Kong,China. (TPG/Getty Images)
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Mark Wahlberg performs on the set of “Transformers: Age of Extinction” in Hong Kong on Oct. 26, 2013. (Aaron Tam/ AFP/Getty Images)
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Scarlett Johansson filming a scene for her new movie, “Lucy” on Oct. 21, 2013, in Taipei, China. (TPG/Getty Images)
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Director Clint Eastwood, right, and actor John Lloyd Young as Frankie Valli on the set of “Jersey Boys” in Kearny, N.J. (Bobby Bank/WireImage/Getty Images)
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Edie Falco, left, and Julie White on the set of “Nurse Jackie” in New York City. (Bobby Bank/WireImage/Getty Images)
A spokesman for Regal could not be reached.
The lawsuit is the latest of several cases filed by independent and regional theater chains over alleged anti-competitive business practices by larger circuits.
Last year, Cobb Theatres sued AMC in U.S. District Court in Georgia. Cobb, which operates 20 theaters, accused AMC of using its “monopoly power” to block some first-run movies from being screened at an upscale cinema and dining complex in Brookhaven, a suburb of Atlanta. The suit alleges that AMC persuaded studios to give two nearby AMC theaters in Buckhead preferential treatment.
AMC denied the allegations and moved to dismiss the case. A federal judge in March allowed it to proceed.
The complaints from IPic and others have prompted a wide-ranging probe by the Department of Justice, which this summer ordered Regal Entertainment Group, AMC Entertainment Holdings Inc. and Cinemark Holdings Inc. to supply documents as part of a widening investigation into whether the largest theater chains violated federal antitrust laws. The government also has assembled a task force of attorneys and economists to examine the issue.
Twitter: @rverrier
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