Case: Beacon Theatres v. Westover (1959, US) [App.

121-124]

Facts: Fox owned a theatre and had "first-run" contracts with Beacon, where they
would be the first in the area to show a movie, and be the only ones for a
specific time. Beacon then told Fox that the contracts violated antitrust laws.
Fox asked for declaratory relief that the contracts Fox wants with Beacon is not
in violation of antitrust laws, and for an injunction against Beacon from filing
suit against Fox regarding these antitrust claims, until this issue was resolved
in this dispute. Beacon answered and filed a counterclaim against Fox, on the
issue of the antitrust violations, and Beacon requested treble damages. Beacon
demanded a jury trial for the factual issues as provided by FRCP 38(b). District
court said the question involved here was equitable so no jury.

Issue: Whether Beacon is entitled to a jury trial for the factual issues. -Yes.

Holding: The court held that where legal and equitable claims are joined in the
same action, the legal claims must be tried by a jury before the equitable claims
can be resolved.

Reasoning: Court says doesn’t matter that equitable claims were filed first and
that the law counterclaims involved issues common in equitable claims.
○ Court of appeals (which denied jury trial) says it was not an abuse of
discretion for court (through Rule 42(b))to try the equitable cause first, even
though it might prevent the jury trial of the other claims if it were stopped by
an equity injunction to not pursue claims.
§ But here, court disagrees. The right to a jury trial is a
constitutional one, and no similar requirement protects trials by the courts.
Therefore, court's discretion on whether to decide the law or equity case first is
narrow in scope. Most importantly is to preserve the right to a jury trial.
□ Jury trial cannot be dispensed with, unless the parties agree
to.

• The declaratory judgment statute says that since Beacon would have had the right
to a jury trial if they sued, the fact that instead Fox brought it as a
declaratory judgment action does not change the jury trial right.
• The court of appeals said they're gonna affirm the denial of jury trial, b/c its
equally the case that no one doubts b/c the claim by fox is equitable and should
be tried by a judge.

Notes and problems [App 123]

• Dairy Queen Case (note 5)
○ Pl owner of Dairy Queen trademark, and licensed Df to use trademark
(franchise). Df didn’t pay, and Pl terminated the K, and canceled the right to Df
to use the trademark. But Df kept using it. Pl brought suit and sought:
§ Temporary and permanent injunctions to restrain Df from using the
trademark
§ An accounting to determine how much Df owed Pl, and judgment for that
amount
○ Df demanded a jury trial. District court said no, this is a purely
equitable claim, and if not, then the legal issues were merely "incidental" to the
equitable ones.
○ But, the court reversed that, holding that Df had a right to a jury trial.
§ They are asking for money damages. Just because they are asking for
the accounting (which would be specific performance), doesn’t negate the fact
that really they are doing that to get money in the end.
□ Equitable remedy only given if no other adequate remedy at law
- the legal remedy cannot be characterized as inadequate merely b/c the measure of
damages necessitates specific performance.