Affirms Ruling That Banned Owners From Dividing Up Films : Court Bars ‘Splitting’ by Theaters

Stepping into the fray of a movie industry battle, the Supreme Court on Monday effectively prohibited theater owners from trying to eliminate competition among them for particular films.

The court left intact a 1983 ruling in a case from Milwaukee that set a nationwide ban on “splitting,” a practice that the U.S. Justice Department had challenged on antitrust grounds.

Although the decision means much to the motion picture business, there is little evidence that the price or selection of movies for the general public is affected by the legal dispute.

In 1980, the Justice Department sued four companies that operate 90% of the first-run movie houses in Milwaukee, contending that they violated federal antitrust laws.

The suit challenged an arrangement begun in 1977 in which the theater owners divided up, or split, among themselves the negotiating rights to show movies in the city. Certain films were assigned to particular theaters, and nearby theaters did not show the same movies simultaneously.

Government lawyers argued that the practice interfered with competition. To support that argument, they said there were no competitively bid films in Milwaukee in 1981, while in 1977 there were 377.

Major motion picture distributors, including Columbia Pictures, Paramount Pictures and 20 Century Fox, joined with the Justice Department in supporting the 1983 decision.

In other action affecting the business community, the Supreme Court:

- Gave the secretary of labor broad power to drop safety complaints against employers after investigations into those complaints have begun.

The court agreed with a Reagan Administration appeal and by a 6-3 decision overturned a ruling that limited the secretary’s authority to withdraw a complaint against a railroad in Ohio.

- Agreed to decide whether a state may require foreign airlines to pay taxes on all fuel purchases within the state. The court will study a Florida airline fuel tax challenged by domestic and foreign air carriers and denounced by about two dozen foreign nations.

- Ruled that a California Indian tribe must give the state any taxes collected on cigarettes sold on the tribe’s reservation to non-Indians.

By a 5-4 vote, the court used an unsigned opinion to overturn a federal appeals court ruling that had freed the Chemehuevi Indian tribe from such an obligation.

- Asked the Reagan Administration for its view of South Dakota’s bid to sue Nebraska, Iowa and Missouri in the Supreme Court over the use of water from the Missouri River. The court wants to hear from Justice Department lawyers in a water-use feud that dates back to 1982.

- Also asked the Administration’s view on whether states must pay unemployment benefits to women who are not reinstated in their jobs after taking maternity leaves. The court invited reinstatement of a Kansas City department store cashier.

- Agreed to decide whether Maine may prohibit the importing of live bait fish into the state. The court said it will review a ruling that invalidated such a law.

The Maine Legislature enacted its ban on out-of-state bait fish in 1959. State officials said the law is designed to protect state waters against parasites and exotic species of fish.