# Brief for Respondents — Lawlor v. National Screen Service Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA04386408_0128%3A6 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for Respondents - **Published:** January 1, 1955 - **Citation:** 349 U.S. 322 ## Text i j IN THE crak Supreme Court of the United States October Term, 1954. No. 163. CHARLES LAWLOR and MITCHELL PANTZER, Co- Partners Trading as INDEPENDENT POSTER ExX- CHANGE, Petitioners, NATIONAL SCREEN SERVICE CORPORATION, et al., Respondents. On Writ of Certiorari to the United States Court of Appeals for the Third Circuit. BRIEF FOR RESPONDENTS. Lous NIZER, WaLter S. Beck, Attorneys for Respondent, National Screen Service Corporation, Wa. A. SCHNADER, Kart G. Harrison, Epwarp W. MULLINIX, Attorneys for Respondents, ( olum- Ina Pictures Corporation, Locw's Incorporated, Paramount — Film Mistributing Corporation, RKO Radio Pictures, Inc., T C F Film C erporation (formerly Twen- tieth Century-Fox Film ( orpora- ton), United Artists Corporation and Universal Film Exchanges, Inc., Lovis J. GorrmMan, Mitcuenrt, EL Panzer, Ittorneys for Respondent, Warner Bros. Pretures Distributing Cer- poration INDEX TO BRIEF. Page I er lta ae Ss ie eu ee ie ova eae 1] IND MN 6 oes i Nes oun ieee endo enesesaweees ] Leena CII. s,s yn y's ceueeen kan eneabeuebeo 2 een OO WHOS ond i nk eee wkanse cue Veekeetsiees 3 Pr OP PIED, o.oo ko cane aces nb ese esaseaneee et 8 a Ee a ee nny ney 1] I. The Dismissal With Prejudice of the Prior Action Is Res Judicata and a Bar to This One ............. 1] II. The Alleged Co-Conspirators Who Were Not Made Parties to the Prior Action May Also Rely on the i eS 8 ee errr 16 II]. Petitioners Are Estopped From Maintaining the Pres- ent Action by Their Acceptance, Renewal and Re- tention of the Benefits of Their Sublicense From a feet eter yer cere res eee a #2 Re ee ee oie er ee ee ei 25 TABLE OF CASES CITED. Adriaanse v. United States, 184 F.2d 96% (2d Cir. 1950) .. Bernhard v. Bank of America, 19 Cal. 2d 807, 122 P. 24 892 SOE sda ace hal cae a ere e eee tenths seek Bigelow vy. Old Dominion Copper Mining and Smelting Co., 225 ai Wao IRE -F'o i'e sho oviad is ee eee hae eu alee wae ee Bruszewski v. United States, 181 F. 2d 419 (3d Cir. 1950), cert. dented, 340 U. 8. 865 (1950) ......5....5525055- 17, Buckeye Powder Co. v. E. 1. Du Pont De Nemours Powder Co., Ok Whe a AD hoi Savarese Pause re eadeb ewan eee Chipman v. Montgomery, 63 N. Y. 221 (1875) ............. Coca Cola Co. v. Pepsi Cola Co., 36 Del. 124, 172 Atl. 260 Bn OE Pe Ee PES eer aay an Onn ear Connecticut Importing Co. v. Frankford Distilleries, 101 I. 2d Pee ee NY WEEE ols oc di a pee 2s Siac e erate arene ueek Dickerson v. Colgrove, 100 U. S. 578 (1879) .. ............ Emery v. Fowler, 99 Me. 326 (1885) ....... ccc cc ccecese Good Health Dairy Products Corp. v. Emery, 275 N.Y. 14, 9 ee Be Fh gg rere rr errr eT Tee rrr Insurance Co. v. Mowry, 96 U. S. 544 (1877) ............. Jones v. Valisi, 111 Vt. 481, 18 A. 2d 179 (1941) 2.0.02... Lawieeg w. Lowwe, Z5o U.S. 322 (0918) oo ce ccc csccacekeness Mahoning Investment Co. v. United States, 3 F. Supp. 622 (Ct. Ci. 1933), cert. denied, Z91 U. S. 675 (1934) ........4.. ; pecicom v. Clapp, 141 U.S. 429 C1G91) occ ncccceteceveiens Portland Gold Mining Co. v. Stratton’s Independence, 158 Fed. gi fe fg Brey Per oe Pee ee ee Ryerson v. United States, 312 U.S. 405 (1941) 22.02.0202... Silva v. Brown, 319 Mass. 466, 66 N. FE. 2d 349 (1940) 2.2... Suckow Borax Mines Consolidated, Inc. v. Borax Consolidated Ltd., 185 F. 2d 196 (°%h Cir. 1950), cert. denied, 340 U. S. DE ED 065 x5 6 45 oo 000567 thea R Kee Leta Oke dae United States v. Bausch & Lomb Optical Co., 321 U. S. 707 ERPEOE Soba es on 5 FUNC Od aD NEES REP SRRE RK) anewhee United States v. International Building Co., 345 U. S. 502 EE -5Win'ans soa 6a dk bd achawer ae ieeweeneens United States ex rel. The International Contracting Co. v. Sa. Tae U). e COED 6 onc oun ti cr cde sas ceedas Page 18 United States v. Parker, 120 U.S. 89 (1887) ............... 13,14 AUTHORITIES CITED. 2 Freeman, Judgments § 757 (5th ed. 1925) ....... Restatement, Contracts § 516(e) (1932) ......... Restatement, Judgments § 46, comments a, b (1942) ‘tegen ene Baer ne =f IN THE Supreme Court of the United States. October Term, 1954. No. 163. CHARLES LAWLOR axpn MITCHELL PANTZER, Co- Partners Trapinc as INDEPENDENT POSTER EXCHANGE, Petitioners, Vv. NATIONAL SCREEN SERVICE CORPORATION, et au., Respondents. On Writ or CERTIORARI TO THE United States Court or APPEALS FOR THE THIRD CIRCUIT. BRIEF FOR RESPONDENTS. OPINIONS BELOW. The opinion of the district court (R. 76) is not re- ported officially but is reported in CCH Trade Cases [1952- 1953] § 67,619. The opinion of the court of appeals (R. 153) is reported at 211 F. 2d 934. STATUTES INVOLVED. The claim asserted by petitioners in their prior suit and here is a claim purporting to arise under the antitrust laws, but the questions presented do not involve the inter- pretation or application of those laws. 2 Questions Presented QUESTIONS PRESENTED. 1. Where petitioners earlier sued for injunction and damages under the antitrust laws, charging that certain exclusive contracts between National Sereen and the pro- ducer respondents constituted a conspiracy violative of the Sherman Act, and then settled their claim by entering judg- ment of dismissal with prejudice and accepting a sublicense to distribute National Sereen’s products manufactured by it under then-existing as well as subsequent exclusive con- tracts,—is their second action, asserting the same basie claim of :nvalidity of National Sereen’s exclusive contracts, barred as res judicata or may they relitigate the same con- tention? And does not res judicata apply to those whose participation in the alleged conspiracy was pleaded in the prior complaint though they were net named as parties? 2. Where the prior antitrust suit attacked certain ex- clusive contracts between respondents coneerning the manufacture and distribution of copyrighted advertising poster materials, contending that they constituted a con- spiracy in violation of the Sherman Act, and the settle- ment of the suit was based on a sublicense under which petitioners acquired the materials, are petitioners estopped to sue again and question the validity of the same exclusive contracts between respondents in view of their (a) entering into the sublicense under which they were to acquire not only the materials then being produced under respondents’ existing exelusive contracts, but also those as to which additional exclusive contracts might be made by respond- ents in the future, and (b) voluntarily renewing the license at its expiration, under which license they have been carry- ing on their business for 12 vears to the present time in competition with National Sereen,—thus aecepting the full benefit of National Sereen’s business arrangements? Statement of the Case “8 STATEMENT OF THE CASE. In April 1942, the petitioners and other poster renters brought an antitrust suit for injunetion and damages in the District Court for the Eastern District of Pennsyl- vania against respondent National Sereen Service Corpo- ‘ration (National Sereen) and three motion picture pro- ducers (respondents or affiliates of respondents in the present ease) (R. S86 ef seg.). The gravamen of their com- plaint was that National Sereen had embarked on an ‘illegal scheme’? to monopolize trade in the distribution of certain motion picture poster advertising materials re- lating to the defendant producers’ motion pictures (R. 98-99), At one time, each of the respondent producers it..-f manufactured and distributed these copyrighted advertis- ing materials to exhibitors (R. 44). In 1939, Paramount Pictures, Ine.’ licensed to National Sereen the exclusive right to make and distribute for it, its advertising materials (R. 46, 52). In 1940, RKO Radio Pictures, Inc. (a respondent here) also made an agree- ment, solely for its material (R. 46,52). In effect, these two motion picture companies discontinued their own manu- facture and distribution of the materials and turned this function over to National Sereen.? 1. The then parent of the respendent Paramount Film Distribut- ing Corporation (R. 19). 2. The reasons underlying these decisions by Paramount and RKO Radio appear in the opinion of Judg> MeGranery in the district court (R. 61). Judge MeGranery pointed out that the undisputed facts presented to bim showed that the reasons (not only with respect to these producers but also as tu those who k, licensed National Screen) were legitimate business reasons, that the producers acted independently (R. 69-70), ard that National Screen was the only existing concern qualified to undertake the services which the pro- ducers required (R. 61). Petitioners have conceded that they “have never manufactured nor do they desire to manufacture any acces- sorties” (R. Ol n. 2). 4 Statement of the Case In December 1940, petitioners started their poster rent: ing business in Philadelphia (R. 43, 47). Karly in 1942, Loew’s Incorporated (also a respondent here) entered into an exclusive license agreement with Na- tional Screen to manufacture and distribute its advertising material. Thereafter petitioners brought their 1942 antitrust suit against National Screen, Paramount Pictures, Inc., RKO Radio Pictures, Ine. and Loew’s Incorporated. The complaint in that case (R. 87 et seq.) charged that the exclusive licenses from Paramount, RKO Radio and Loew’s were illegal and steps in National Sereen’s pro- gram to monopolize the distribution of advertising ma- terials (R. 94, 98) and that by entering into those license agreements the producer defendants had conspired to aid in the establishment of such a monopoly (R34, 98-99). The complaint further charged that National Screen was then negotiating with other motion picture producers, specifically naming Universal Pictures Company, Ince., Columbia Pictures Corporation, Twentieth Century-Fox Film Corporation and Warner Bros. Pictures, Ine. (all respondents or affiliates of respondents here) (R. 94-95, 19, 20), and that it was National Sereen’s declared pur- pose to obtain exclusive licenses from «all producers of motion pictures (R. 95). The complaint concluded with the allegation that the defendants were continuing their ‘“illegal acts and practices’’, and that unless such aets and practices were restrained, the petitioners would suffer fur- ther damage (R. 103). The complaint therefore sought injunctive relief, both preliminary and permanent (R. 103-105), as well as treble damages. Specifically, petitioners asked that National Screen and the producers which had already licensed Na- tional Screen be enjoined from continuing the exelusive license arrangements under attack, and that the court re- strain National Screen from consummating any further Statement of the Case v exclusive agreements ‘‘similar to those alleged herein to be illegal’? (R. 104). One year later, in April 1942, the suit was settled, The settlement contract (R. 18, 28 ef seq.), or sub- license agreement as it has been called, recited that National Screen was the licensee under exclusive licenses from mo- tion picture producers for the manufacture and distribution of copyrighted material owned by the motion picture pro- ducers (R. 23), that it was anticipated National Screen might in the future enter into exclusive license agreements with other motion picture producers (R. 24), and that the parties desired to enter into a license for distribution by the petitioners of advertising materials manufactured by Na- tional Sereen under its then-existing exclusive licenses as well as under any exclusive ‘icenses which it might acquire in the future (R. 24). The sublicense provided that National Sereen would supply the advertising materials to the petitioners (R. 25, 26), at prices specified therein (R. 27, 39),—which were lower than the prices poster renters paid when they ac- quired such materials from motion picture producers which were distributing them (R. 110-113, 130-137). The peti- tioners covenanted that they would not thereafter contest the validity or scope of the licenses then or thereafter held by National Sereen for distribution of advertising materials (R. 26). The sublicense was for a term of three years, to April 30, 1946 (R. 37). Pursuant to the settlement of the litigation, the case was dismissed by stipulation and order of the court dated April 26, 1943 (R. 84). The dismissal, as provided not only in the stipulation but also in the district court’s order, was with prejudice (R. 84). As had been alleged in the complaint in the prior case and anticipated by the sublicense agreement settling the case, and as petitioners expected and desired (R. 24, 143), National Sereen subsequently, and at different times over a peried of years, entered into exclusive license agree- 6 Statement of the Case ments with the other producer respondents (or affiliates): Universal in 1944 (R. 53), Columbia in 1945 (R. 91), United Artists and Warner Bros. in 1946 (R. 52), and Twentieth Century-Fox in 1947 (R.52).) When each new license agree ment was male, petitioners, as provided in their sublicense agreement, were supplied with materials relating to the pictures of these companies (R. 117). The sublicense agreement, originaily for a term of three years (R. 37), was voluntarily renewed in 1946 by Nauioual Sereen and petitioners for a further period of five years extending to April 30, 1951 (R. 107, 151), and it will net be disputed that petitioners have been supplied with materials to this date. More than six vears later, in August 1949, while the sublicense agreement was in full force, petitioners com- meneced their second action under the antitrust laws, the present suit charging the same conspiracy to monopolize by means of the same exclusive agreements which were the subject of their first action. Their amended complaint (R. 6 et seq.) alleges that National Sereen has now acquired exclusive licenses from ail of the producer respondents (R. 11). and repeats the claim that the exelusive agreements between National Screen and the preducers constitute a conspiracy to monop- olize (R. 16, 18-20). As in the prior case, the present amended complaint seeks to enjoin continuance of the exclusive contracts be- tween National Sereen and the producers and asks for treble damages (R. 20-22). The amended complaint pleads the prior action and its settlement, but asserts that petitioners entered into the sublicense agreement ‘‘against their will and only because they believed that if they refused to enter into the agree- ment they would be forced to abandon their business alto- gether’’, and that the sublicense was not a fair or equitable settlement of the litigation but was intended to be a means Statement of the Case ‘ of perpetuating and extending National Screen‘s alleged scheme of monopolizetion (R. 18). But in depositions both petitioners hove admitted, eon trary to the allegation in their amended co aplaint, that they chose to accept the settlement of their ‘town free will’ CR. 122), *‘voluntarily after considering the matter carefully” (R. 114-115, 129), that the settlement was a business choice made under the guidance of their counsei (R. 116), and that they ‘‘were in complete agreement with respect to the settlement that was executed and the release which was given pursuant to it and the stipulation discontinuing the action with prejudice in the Federal Court’? (2. 127-128). Moreover, petitioners conceded that most of their co- plaintiffs wanted the settlement (R. 121-122) and that their own counsel had indicated to them that they had no ease and that he would withdraw if they did not aecept the settlement (R. 147, 122, 140-142). Petitioners have admitted that from the date of the settlement their business has progressed, earning larger profits as the years went on (R. 116, 149-151). The record shows that their annual gross more than doubled between 1942, the vear before petitioners obtained the sublicense, and 1949, the vear the present action was commenced (R. 150). And, of course, the profits increased as well (Ro 151). Petitioners have never sought cancellation of the settlement agreement (R. 123), nor have they ever taken any legal steps to set aside the settlement (R. 116). On the contrary, they testified that they expected National Sereen to live up to the sublicense contract (R. 128, 158). On respondents’ motion to dismiss, Chief Judge Kirkpatrick (R. 76 et seq.) held the prior action res judicata of this one on the ground that the same cause of action was asserted in both suits sinee both were ‘* based upon anti-trust violations by means of the same exclusive license contracts to National Sereen’’ (R. 76-77). The Court of Appeals for the Third Cireuit (Judges Goodrich, M-Laughlin and Hastie), in an opinion by Judge Goodrich, affirmed unanimously (R. 153 et seq.). s Summary of Argument SUMMARY OF ARGUMENT. I. This case does not involve any question of collateral teppel. Since petitioners’ suit is direeted against the same alleged conspiracy claimed to have been effectuated by the same exclusive agreements as Was their prior suit for injunctive relief, the Judgment of dismissal with, preju- dice of the prier suit is res judicata and a complete bar. The identity of the present claim with the prior one has been found by both courts below and has been conceded by petitioners in the courts below. The sole distinction asserted by petitioners is that they are seeking damages for a period subsequent to the dismissal of the prior action. Petitioners’ present and prior cause of action is and always has been premised upon National Screen’s exclusive contracts which petitioners asserted and now again assert constitute an illegal conspiracy violative of the Sherman Act.* The consent dismissal with prejudice of the prior claim for injunctive relief would have no meaning at all, if not- withstanding such dismissal petitioners are permitted to reassert the same contention as to the alleged invalidity of the exelusive contracts and to seek damages for con- tinuation of the very arrangements which petitioners par- ticipated in under the license agreement accepted in settle- ment and in which it was expressly provided that peti- tioners’ sublicense would automatieally embrace all future exclusive arrangements procured by National Sereen. A holding that dismissal with prejudice of a claim for in- junctive relief against an allegedly invalid business ar- rangement has no effect, would create a serious obstacle to the settlement of litigation and frustrate the policy of 3. Petitioners’ claim was never valid. Among other reasons, exclusive contracts are not illegal per se United States v. Bausch & Lomb Optical Co., 321 U.S. 707 (1944) ; Restatement, Contracts § 516(e) (1932). Since the only questions involved on this appeal are res judicata and estoppel in pais. we shall not pursue the merits further. Summary of Argument i) terminating litigation and encouraging settlements. On the other hand, the decisions below, barring these _peti- tioners, are in no way inconsistent with the policy of the antitrust laws because this is an action asserting a mere private right on their part. There is no effect on the rights of other private plaintiffs or on the rights of the United States. II. Petitioners’ claim is and always has been based on the same ground, namely the alleged illegality of ex- clusive license agreements between National Sereen and each of the producer respondents. That claim having been resolved against petitioners and in favor of National Screen by the 1943 judgment, petitioners may not renew the claim of illegality on the ground that some of the pro- ducer respondents which are parties to the contracts were not formally named as defendants in the prior action. This is especially so where, as here, the alleged illegal exclusive contracts of the respondents were all specifically charged by the prior action. Reliance on res judicata by the new defendants is fully justified either (1) under modern doc- trines which have liberalized the requirement of mutuality or (2) under the traditional exception to that requirement where ihe liability of the prior defendants is determinative of the liability of the subsequent defendants as it is here inasmuch as the lability of all the respondents is dependent upon their icentical relationship with National Screen. III. Independent]; of res judicata, petitioners are estopped from maintaining this action. The applicable principle of estoppel is that aeceptance of the benefits of a transaction precludes a party ‘com challenging the valid- itv of that transaction. Here, the estoppel arises out of petitioners’ sublicense and their voluntary renewal of it in 1946. By the express provisions of the sublicense, peti- tioners (a) recognized the validity of, and covenanted not to challenge either National Sereen’s existing exclusive 10 Summary of Argument licenses or any exclusive licenses which it might thereafter aequire, (b) obtained a supply of materials manufactured under the existing exclusive licenses, and (¢c) aequired the right to obtain, and did obtain a supply of materials manu- factured under exclusive licenses thereafter entered into by National Sereen with other producer respondents. Having voluntarily, and under the advice of their own counsel, entered into the 1943 settlement and accepted its benefits, petitiuners may not now attack the very same exclusive licenses on which that settlement was premise’. The respondents may not thus be punished for buying their peace. Argument 1] Argument. I. THE DISMISSAL WITH PREJUDICE OF THE PRIOR ACTION IS RFS JUDICATA AND A BAR TO THIS ONE. The judgment below, and its unanimous affirmance by the court of appeals, rested solely and firmly on the identity of the present cause of action with that in the prior ease and the consequent effect of the 1943 dismissal with preju- dice as res judicata of the present action.* The identity of the cause of action was cogently de- scribed by the trial judge. He said (R. 78-79): ‘*The cause of action asserted in the present case is, to all intent and purposes, identical with that of the 1942 action. The conspiracy charged is the same con- spiracy. The contracts by which it was alleged to have been accomplished are the same contracts; and the same evidence, the same witnesses and the same documents would be necessary in the trial in both cases. The fact that additional defendants have been added does not change it. The unlawful acts charged against the de- fendants in the 1942 action were not merely the making of the consummated and then existing license contracts with three of the present defendants, but the complaint also charged that those licenses were a step in a general illegal scheme of monopolization and that the defend- ants were at that time engaged in the process of ex- tending the monopoly by negotiating similar contracts with other major producers, by which National Screen would acquire the exclusive distribution of all motion 4. There is no question of collateral estoppel in this case,---as beth of the courts below readily recognized (R. 78, 154). 12 Argument picture advertising matter. The additional defendants sued in the present action are, admittedly, the other major producers referred to. * * *’’5 The court of appeals not only agreed but, supplementing Judge Kirkpatrick’s view, said (R. 157): ce * * But we think in substance the complaint is the same and that what plaintiffs object to is an alleged combination of the defendants to do illegal things harm- ful to the plaintiffs’ business and acts done pursuant to that combination. Since plaintiffs by their consent judgment in 1942 had an adjudication against their claim at that time we do not think they improve their position by reiterating essentially the same complaint in 1949.”’ In light of the foregoing statement, petitioners are in error when they assert (p. 7) that the court of appeals failed to answer in direct terms the question whether the cause of action is the same. Indeed, in the courts below, petitioners themselves econ- ceded the identity of the basie claim asserted in the prior and present actions. Thus, in their court of appeals brief, petitioners admitted (p. 6 n. 6):* ‘‘Plaintiffs concede that the exclusive license agreements on which this [prior] action was based were substantially the same as the contracts on which the instant action is based. In fact, in the case of Loew’s the same contract appears in both actions.’’ Moreover, one of the petitioners himself testified that he understood the grievances which he was asserting in the 5. Wherever boldface type is used in this brief, the emphasis is ours. 6. Copies of petitioners’ brief to the court of appeals have been lodged with the clerk of this Court. Argument 13 prior action and that he knows the same grievances are asserted in the present action (R. 126). In an effort to create the appearance of different causes of action, petitioners speciously argue (p. 7) that sinee the damages they now seek for a period subsequent in time to the prior judgment could not have been ineluded in the first action, ‘‘therefore the causes of action could not have been the same’’, But petitioners disregard the crucial fact that a con- sent judgment with prejudice is the “equivalent of a re- traxit at common law’’ [2 Freeman, Judgments 6757 (5th ed. 1925)] and amounts ‘‘to such an adjustment of the merits of the controversy * * * as will constitute a defence to another action brought upon the same cause of action.’ United States v. Parker, 120 U. S. 89, 95 (1887). Conse- quently, the prior judgment judicially established between the parties that the exclusive agreements between National Sereen and the producer respondents did not constitute an actionable conspiracy against petitioners. Accordingly, there can be no alleged damages for any subsequent period arising out of agreements which the prior consent judgment adjudicated were not wrongful or actionable. Petitioners’ only contention in seeking reversal of the judgment below is that the district court and the court of appeals were wrong in holding that petitioners’ present suit is on the same cause of action as their prior one. The only cases cited by petitioners as supporting the contention that there is a new cause of action are Lawlor v. Loewe, 235 U.S. 522, 536 (1915), and Connecticut Importing Co. v. Frankford Distilleries, 101 F’. 2d 79, 81 (2d Cir. 1939). But neither case dealt even remotely with identity of causes of action. The sole question in both cases was the right of a plaintiff, who had established a violation of the antitrust laws, to recover damages accruing after commencement of the action. In the instant case, petitioners are attempting to maintain an action based on the same exclusive contracts 14 Argument which the judgment in the prior action established were not tortious as against them. Where a wrong has been established, its continuance remains actionable. Where the status of certain contracts has been held lawful, their eon- tinuance cannot become actionable (see Judge Kirkpatrick’s analysis, R. 79-80). United States v. International Building Co., 345 U. S. 5902 (1953), upon which petitioners rely, involves the doe- trine of collateral estoppel arising out of a prior determina- tion of a fact in a trial of a different cause of action. In the present action, the courts below correctly con- cluded that the causes of action being identical it was un- necessary to inquire whether collateral estoppel could be invoked since the more comprehensive principle of res judicata was clearly applicable. It was because res judicata applied,—and not collateral estoppel,—that both courts be- low relied upon United States v. Parker, 120 U.S. 89 (1887), and deemed United States v. International Building Co., 345 U.S. 502 (1953), inapplicable (R. 78, 155). In contending that there are different causes of ac- tion, petitioners also ignore the fact that their prior action sought injunctive relief which, if granted, would have restrained the very same exclusive agreements of which they complain in their present action. It is the accepted general rule that a judgment for the defendant in a suit seeking injunctive relief is a bar to relitigation of the same claim. Restatement, Judgments ‘46, comments a, b (1942). Significantly, petitioners fail to cite a single case involving a claim for injunctive relief. If petitioners were permitted to maintain their present action, it would necessarily mean that the dismissal with prejudice of the prior action for injunctive relief was withi- out significance. Petitioners could have accepted the sub- license agreement, gone through the motions of the dis- missal with prejudice, and the very next day started a new Argument 15 antitrust suit for the identical injunctive relief which they had abandoned with prejudice the day before. Such conduct would shock the conscience of equity. And a rule of law permitting it would have far-reaching consequences. If this Court should hold that a voluntary dismissal with prejudice of a claim for injunctive relief does not bar reassertion of the same claim at a later date and har recovery of damages thereafter accruing, it will be impossible to settle many cases, private antitrust cases in particular. There are many situations in which a plaintiff who challenges the lawfulness of a course of conduct is willing that it continue insofar as he is concerned if he obtains sifficient concessions from a defendant desirous of avoiding burdensome litigation, But incentive for buying one’s peace would be destroyed if settlement were merely entrap- ment, and the grievance survived the mutual intention of the parties to terminate the quarrel. Such a rule would be contrary to public policy which encourages settlement of litigation. Respect for the doctrine of res judicata does not vio- late the policy of the antitrust laws, nor is it inimical to their enforcement, as petitioners suggest (p. 8). This is purely a private suit in the business and pecuniary interest of these petitioners, barred by the rulings of the courts below solely because of these petitioners’ own deliberate conduct, their own voluntary agreement in 1943 that it should be barred. Others who think themselves aggrieved are free to sue.”. The United States is free to sue. In this case we are concerned solely with the uneonscionable in- sistence of the present petitioners,—who voluntarily settled 7. This is a particularly significant consideration in the present case because there are four companion cases, brought by poster renters, pending in the district court, in which no res judicata de- fense has been or can be asserted (Civil Action Nos. 11,138, 11,376, 11,597, 11,678). 16 Argument their claim, entered judgment dismissing the complaint with prejudice, accepted the benefits of a setth ment contract, and renewed their sublicense agreement three years later,— that they may at the same time disregard judgment and settlement benefits and sue again on the same grievance. II. THE ALLEGED CO-CONSPIRATORS WHO WERE NOT MADE PARTIES TO THE PRIOR ACTION MAY ALSO RELY ON THE DEFENSE OF RES JUDI. CATA. Three of the producer respondents (or affiliates) were named as parties to the prior action. The claim there, for injunction against producers’ continued use of National Screen to perform their former functions in the production and distribution of advertising materials, was dismissed with prejudice in exchange for an agreement that National Screen would thereafter supply the materials to petitioners. Stated differently, petitioners dismissed with prejudice their action to enjoin continuation of an alleged conspiracy to permit National Screen to monopolize the distribution of the advertising poster materials by obtaining exclusive licenses from all motion picture producers. Had petitioners been able to establish their claim, not only would the three then-existing licenses have been en- joined, but National Screen would have been enjoined also from entering into the later exclusive contracts with the other five producer respondents. .But the consent judgment of dismissal judicially established that the later contracts could not be enjoined by these petitioners. The mere cireum- stance that petitioners failed to name some of the pro- ducers as formal parties defendant in the prior action can- not vitiate the legal effect of the judgment to which peti- tioners consented. Argument 17 Petitioners, realizing the force of these facts, did not even raise or argue this question in the court of appeals.* That court nevertheless did discuss and approve the dis- trict court’s holding. The district court and the court of appeals, in holding petitioners barred as against all respondents, adopted and followed the reasoning of Judge Hastie in the case of Bruszewski v. United States, 181 F. 2d 419 (3d Cir. 1950), cert. denied, 340 U. S. 865 (1950). In that ease, Judge Hastie rejected the technical requirement of mutual- ity as a condition to use of res judicata as a bar.