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Suit Against Blockbuster Denied

January 11, 2002|From Reuters

Blockbuster Inc. Thursday said it scored a key legal victory when a Los Angeles court denied class-action status to independent video retailers who allege the Viacom Inc. movie-rental chain made illegal agreements with movie studios.

The ruling, issued on Wednesday by Los Angeles County Superior Court Judge Victoria Chaney, follows a similar setback in March for a group of independent retailers in Texas who sought class certification against the giant video chain owner.

At the heart of the dispute are agreements made in 1997 and 1998 between Blockbuster and several studios including Walt Disney Co., AOL Time Warner Inc. and Sony Corp.'s Columbia TriStar.

Under these pacts, the parties share video rental income, enabling Blockbuster to purchase larger quantities of movies at discounted prices and advertise their large quantities of new releases to consumers.

The plaintiffs claimed the arrangements violate antitrust and price-fixing laws.

The California ruling held that any action would "proceed only as to the individual claims by the individual plaintiffs," and not as a class action.

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