United States Supreme Court Cases & Opinions

U.S. Supreme Court

Sutphen Estates, Inc. v. United States, 342 U.S. 19 (1951)

Sutphen Estates, Inc. v. United States

No. 25

Argued October 11, 1951

Decided November 5, 1951

342 U.S. 19

Syllabus

Pursuant to a decree in Sherman Act proceedings against certain motion picture companies, a plan for the reorganization of Warner Bros. provided for the separation of Warner's theater business from its production and distribution business. Two new companies were to be formed, one to receive the theater assets, the other to receive the production and distribution assets, and Warner Bros. was to be dissolved. Warner was guarantor of a long-term lease of theater properties made by appellant to a Warner subsidiary, and, under the plan of reorganization, the guaranty was to be assumed only by the new theater company. Appellant sought to intervene in the Sherman Act proceedings to protect its guaranty, but the District Court denied leave.

Held:

1. If appellant was entitled to intervene as of right, the order denying leave is appealable. P. 20.

2. The decree in the Sherman Act proceedings is not res judicata of the rights which appellant sought to protect through intervention, and appellant was therefore not entitled to intervene as of right under Rule 24(a)(2) of the Federal Rules of Civil Procedure. P. 342 U. S. 21.

3. On the record in this case, appellant has not shown that it will be "adversely affected" by the reorganization, and hence may not intervene as of right under Rule 24(a)(3). P. 342 U. S. 22.

4. The claim of injury to appellant is too speculative and too contingent on unknown factors to conclude that the court's denial of leave to intervene was an abuse of its discretion under Rule 24(b). P. 342 U. S. 23.

Appeal dismissed.

In proceedings under the Sherman Antitrust Act, the District Court entered a consent decree against Warner Bros. and certain of its subsidiaries, and entered an order denying appellant's motion for leave to intervene. On

Page 342 U. S. 20

a direct appeal to this Court from this order and from the consent decree, the appeal is dismissed, p. 342 U. S. 23.