..Gary Dretzka
..Noah Forrest
..Leonard Klady
..R.J. Matson
..David Poland
..Douglas Pratt
..Ray Pride
..Michael Wilmington

November 24 , 2003

COMPLAINT
Indies Vs. MPAA
page 3

JURISDICTION AND VENUE
7. The claims set forth in Counts I and II of this Complaint arise and are brought under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2.

8. The claims set forth in Count III arise and are brought under the laws of the state of New York.

9. This Court has subject matter jurisdiction over this action: (a) pursuant to 28 U.S.C. §1331, because the case involves a federal question; (b) pursuant to 28 U.S.C. §1337(a), because this action involves violations of Sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§1, 2; and
(c) pursuant to this Court's supplemental jurisdiction under 28 U.S.C.§1367, because the federal and state law claims asserted herein are derived from a common nucleus of operative facts.

10. This Court has personal jurisdiction over defendant MPAA under 15 U.S.C. §22. The MPAA transacts business, can be found, and is causing adverse effects in the State of New York and this district.

11. Venue in this Court is proper under 28 U.S.C. §1391(b) and 15 U.S.C. §22, because defendant MPAA, by and through the activities of its members in New York, resides, is found, transacts, and/or is doing business in this judicial district, and the unlawful activities complained of herein have been and are being carried out, in whole or in part, in this judicial district.

Conduct Alleged
THE MPAA'S JOINT SCREENER BAN
12. "Screeners" are promotional copies, in DVD or videotape format, of movies that are sent out by distributors for a variety of marketing purposes. Screeners are sent as marketing tools to retail purchasing agents, to media movie critics for review in advance of release, and to various motion picture industry awards groups for viewing in preparation for the annual awards season, during which several industry groups sponsor awards events honoring motion picture quality.

13. The awards season includes not only its most prominent and culminating event, the Academy Awards, sponsored by the Academy of Motion Picture Arts and Sciences ("the Academy"), but also awards such as the SAG awards, sponsored by the Screen Actors Guild (SAG), the Golden Globes, sponsored by the Hollywood Foreign Press Association (HFPA), and awards sponsored by The Directors Guild of America (DGA), the Writers Guild of America, The British Academy of Film and Television Arts (BAFTA), The Los Angeles Film Critics Association, The Chicago Film Critics Association, The American Society of Cinematographers, The American Cinema Editors, the Art Directors Guild, the Costume Designers Guild, the Motion Picture Sound Editors, the Producers Guild, critics associations such as the National Board of Review, the National Society of Film Critics, the Online Film Critics Society, other regional and state-based film critics associations across the country, and foreign film critics associations and institutes that honor American films every year.

14. Screeners have been sent out annually for awards purposes for approximately the past 20 years, and in each of these years the number of screeners sent out increased over the previous year.

15. The use of screeners as a marketing tool for the awards season has been pivotal for independent and specialty film producers in achieving recognition in the highly-concentrated mainstream film industry. Independent and specialty films, such as Gosford Park (Sandcastle 5 Productions, USA Films (which was succeeded by Focus Features)), Boys Don't Cry (Killer Films, Fox Searchlight), In the Bedroom (GreeneStreet, Good Machine, Miramax), and The Pianist (Focus Features, Universal Studios), achieved remarkable success during the awards season in spite of limited theatrical release nationally and a limited mainstream appeal. All of these films were nominated and successful during the awards season in significant part because of their distributors' decision to utilize Screeners as a marketing tool.

16. On September 30, 2003, Jack Valenti, President and CEO of the MPAA, announced that the member companies of the MPAA and their subsidiaries (including specialty divisions), along with New Line Cinema, Inc. (which is a wholly owned subsidiary of Time-Warner's Turner Broadcasting) and DreamWorks, SKG, (collectively the "signatory" companies) agreed to a Joint Ban on the use of Screeners as marketing tools for awards consideration purposes starting this year, citing piracy concerns. They announced their agreement to jointly cease utilizing screeners and to prohibit all of their subsidiaries and specialty divisions from doing so in a press release.

17. Opposition to the Joint Screener Ban was immediate and widespread throughout the industry. Groups such as the SAG, the IFP, BAFTA, HFPA, the Writers' Guild, and countless highly-esteemed actors, directors and producers voiced their opposition to the Ban and the adverse impact it would have on independent filmmakers and specialty divisions making and distributing cutting-edge, serious, highquality independent and "art-house" films. Plaintiffs approached Mr. Valenti and mobilized opposition to urge the MPAA to repeal the Joint Screener Ban.

18. Even subsidiaries of the MPAA's signatory members and the other co-conspirators in the Ban voiced their opposition to losing such an important marketing tool. The heads of specialty divisions such as Miramax Films (Walt Disney Co.), Focus Films (Universal), Sony Pictures Classics (Sony Pictures Entertainment), and Paramount Classics (Paramount) met and sent a letter objecting to both the Ban and the lack of inclusive consultation undertaken by the MPAA members, New Line, and DreamWorks in its implementation.

19. On October 23, 2003, in a partial concession, the MPAA and the Academy made a surprising announcement. Jack Valenti and Frank Pierson, the President of the Academy, had secretly met at length to discuss and formulate a plan. The MPAA agreed that Screeners could be sent out to the members of the Academy for purposes of nominating pictures for the Academy Awards.

20. In order to receive Screeners, Academy members would be required to sign a pledge acknowledging that the Studios were retaining the right to utilize tracing technology so that any pirated Screeners could be traced back to their source. Additionally, members would be required to acknowledge that if a pirated Screener is traced to an Academy member, that member would face immediate expulsion from the Academy. The press release describing this agreement noted that the Major Studios are not bound to send Screeners to Academy members who sign the pledge, but are rather free to make an individual judgment regarding the use of Screeners for those Academy members.

21. The agreement did not make any provision to provide Screeners, with or without conditions, to members of other groups sponsoring awards during the awards season outside of the Academy. Instead, the press release describing the "partial repeal" of the Joint Screener Ban mentioned only setting up "extra" theatrical screenings of films for guild or awards organizations members voting in the other awards ceremonies.

22. The guilds and industry groups left out of the agreement between the MPAA members and the Academy, at a severe competitive disadvantage, protested the limited repeal. Many groups offered to abide by the same restrictions as were being placed on Academy members, but in spite of their willingness the MPAA remained adamant. Groups such as SAG, IFP, BAFTA, the NAACP, and the HFPA openly protested the discriminatory nature of the partial-repeal. Two critics groups, the Chicago Film Critics Association and the Los Angeles Film Critics Association have cancelled their awards this year, which compete with and build momentum for the Academy Awards, because of the Ban.

23. All of the awards--foreign, national, regional, and those sponsored by guilds, academies, and critics associations--are critically important in building momentum and industry recognition during the awards season. For example, in 1999 the highly-acclaimed American Beauty was honored by 32 awards competitions prior to its Oscar-night successes. Even nominations for earlier awards can boost the namerecognition of an independent film and induce voters for other awards shows to view their Screeners and consider it more closely.

24. The ability to adequately and efficiently promote films so they are seen by as many voters for as many awards as possible, as early as possible, is even more necessary this year because the awards season is a month shorter. Soon after last year's awards, the Academy, in an apparent attempt to increase its market share and improve its market position, announced that it would hold its awards ceremony, traditionally the culmination of the season, a month earlier.

25. IFP/LA and IFP/NY, along with the other Plaintiffs, protested the limited nature of the repeal because of the importance critical acclaim, insider word-of-mouth, and the awards have in developing momentum and gaining exposure for independent and specialty-division films. In letters and during in-person meetings, Plaintiffs attempted to educate Mr. Valenti regarding the importance of the entire awards season to independent filmmakers and the disparate impact the Ban would have; Mr. Valenti was informed regarding the barriers the Joint Screener Ban would erect and the chilling effect it would have on independent film creation and financing.

26. To date, the now-partial Ban remains in place, and no independent film that is under contract for distribution with any major studio, specialty division or major studio subsidiary will be marketed with screeners except in accordance with the MPAA-Academy agreement.

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