Travelers who want to crash on their hotel beds and watch a movie may have a lot more choice, thanks to a green light just given by a federal judge in Los Angeles to an innovative in-room entertainment scheme being promoted by the owner of a Palm Springs resort. But because most of the major motion picture studios oppose the plan, further litigation is likely.
The dispute is one of a number that have developed as lawyers and judges try to mould the old concepts of copyright to the newest in electronic technology.
What Ken Irwin, the owner of La Macha Villas, did was to hook up the television set in each guest unit at the resort to a videodisc player. Customers could rent discs from the gift shop in the lobby, picking from far more titles than are offered on typical pay-per-view hotel room system and gaining total control over when they could view a film. They could stop a showing when the phone rang and start it again later, or play key scenes a second time. Irwin planned to market the concept to other resorts around the world.
The problem is that the motion picture studios consider the setup unlawful. Videodiscs -- and the much more popular prerecorded videotapes -- are sold for private home viewing, they contend. If they are to be shown in a public place, the studios are entitled to royalties for each showing -- and a hotel is a public place, the studios insist. They currently do get royalties from each showing of a film in the usual pay system in hotel rooms.
Eight studios, including Disney, Universal and Columbia, sued Irwin. Stephen Kroft, their attorney, called the room viewing part of the total entertainment package being marketed by La Mancha. Unquestionably, the studios would be due royalties if the videos were shown on a large screen in a hotel auditorium, and Kroft insisted that there was little legal difference between that and the showings in the room.
Judge William P. Gray, however, bought the argument of Washington lawyer Jeffrey W. King, representing Irwin, that there is a world of difference. Criminal-law precedents have established that when a patron closes the door on his hotel room, he is entitled to the same sort of privacy that he is in his own home. And that means that a showing in that room is a private showing. "A viewing in a hotel room is not open to the public, and, therefore, tapes shown in a hotel room are not views by the public," he ruled from the bench on Dec. 16, deciding Columbia v. Professional Real Estate summarily in favor of Irwin.
In other cases, courts ruled that:
*Companies cannot find out who supplied information about them to federal regulators. Under the Freedom of Information Act, government agencies can refuse to release any part of an investigatory file that would "disclose the identity of a confidential source." But some courts have held that tipsters cannot be "confidential" sources if they are likely to be called as witnesses at a hearing, where their identity would be public. Using that reasoning, a major manufacturer tried to find out who had leaked inside information to the National Labor Relations Board in support of a union charge of unfair labor practices. But the U.S. Court of Appeals in New York told the NLRB to keep the identity secret. The reasoning: It would severely undercut a regulatory agency's ability to find violations if investigators could not promise sources that their identity would be kept secret -- at least until they had to testify. (United Technologies v. NLRB, Nov. 18)
*Bank directors can be ordered to pay back out of their own pockets losses the institution incurs on some loans. Such personal liability would be imposed only in rare situations, but the U.S. Court of Appeals in Chicago agrees that it is a penalty available to the Comptroller of the Currency. The judges okayed the Comptroller's use of the sanction in a case in which the directors okayed loans that put a borrower over federal lending limits for the bank, and the loans then went sour. Even though the directors did not know that the loans put the borrower over the legal limit, they were liable because they should have asked, the Comptroller reasoned. (Larimore v. Conover, Nov. 1)
*The owner of a commercial property cannot refuse to let tenants sublease without having a good reason for turning them down -- and a desire to get higher rent is not a good reason. Most of the courts that have looked at the issue have said that when the commercial space lease says -- as most do -- that there can be no subletting or assignment of the lease without the landlord's approval, the owner can say "no" for any reason at all, no matter how capricious. But the important California Supreme Court has now come down on the other side. Regardless of the lease language, the justices ruled, the lessor can turn down a change in tenants only because of worries about the financial soundness or suitability of the new tenant. Using the consent clause to take advantage of changed market conditions that would support a rent hike -- or to exercise personal taste -- is unlawful. (Kendall v. Ernest Pestana, Dec. 5)
*City traffic police may not apply a boot to the wheel of a car simply because it is listed as having a large number of unpaid parking tickets. The constitutional guarantee of due process of law, the Louisiana Supreme Court decided, means that car owners have to be told that their vehicles are on the list for immobilization and then given some time to argue that they should not be there. It isn't enough simply to print on each ticket that a failure to pay may lead to booting, the justices ruled. (Wilson v. New Orleans, Dec. 2)