A federal judge Monday rebuffed an effort by independent video retailers to launch a class-action lawsuit against Blockbuster Inc., the world's largest video-store chain, over its revenue-sharing agreement with movie studios.
U.S. District Judge Edward Prado in San Antonio found the retailers' lawsuits--which contend that Blockbuster's studio agreements stifle competition in the video rental market--didn't eserve class-action status because they involved dissimilar claims, according to court papers.
The ruling may make it easier for Blockbuster, a unit of media conglomerate Viacom Inc., to fend off independent video retailers' claims that the chain is attempting to drive them out of business with the revenue-sharing arrangement. Single-store owners had sought to bring together the claims of more than 27,000 independent retailers in one suit, according to court documents.
Blockbuster began setting up revenue-sharing agreements with Hollywood studios in 1997 to cut video costs. The Dallas-based company now gives studios a share of its rental revenue in exchange for a lower price for movie titles. That means it can afford to buy more copies of hit films to draw people into its stores, Blockbuster officials say.