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Arnold, Et Al., Vs. United Artists Theatre Circuit, Inc

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Arnold, Et Al., Vs. United Artists Theatre Circuit, Inc 1 JOHN L. WODATCH, Chief L. IRENE BOWEN, Deputy Chief 2 Disability Rights Section Civil Rights Division 3 PHYLLIS M. COHEN WENDY S. TIEN 4 Trial Attorney Attorney, Civil Division Disability Rights Section United States Department of Justice 5 Civil Rights Division P.O. Box 875 U.S. Department of Justice Ben Franklin Station 6 1425 New York Avenue, N.W. Washington, DC 20044-0874 Room 4039 (202) 305-1479 7 Post Office Box 66738 Washington, D.C. 20035-6738 8 Telephone: (202) 514-3882 Facsimile: (202) 307-1198 9 Attorneys for Intervenor 10 United States of America 11 UNITED STATES DISTRICT COURT 12 FOR THE NORTHERN DISTRICT OF CALIFORNIA 13 CONNIE ARNOLD, et al., ) 14 ) Plaintiffs, ) Case No. C 93 0079 TEH 15 ) vs. ) 16 ) UNITED STATES’ OPPOSITION TO ) DEFENDANT UNITED ARTISTS THEATRE 17 UNITED ARTISTS THEATRE ) CIRCUIT, INC. MOTION TO AMEND THE CIRCUIT, INC. ) AUGUST 14, 1996 SETTLEMENT AND 18 Defendant. ) INJUNCTIVE ORDERS ) 19 ) Date: January 17, 2001 ) Time: 10:00 a.m. 20 ____________________________________) Place: Courtroom 12 21 UNITED STATES’ OPPOSITION TO DEFENDANT UNITED ARTISTS THEATRE CIRCUIT, 22 INC. MOTION TO AMEND THE AUGUST 14, 1996 SETTLEMENT AND INJUNCTIVE ORDERS 23 24 The United States hereby files its Opposition to Defendant United Artists Theatre Circuit, Inc.’s 25 (“UATC”) Motion to Amend the August 14, 1996 Settlement Agreement and Injunctive Order (“Motion 26 to Amend”). The United States opposes UATC’s request for a blanket “minimum” extension of five 27 years of the deadline to complete its barrier removal obligations under the existing Settlement 28 Agreement and Injunctive Order (“Settlement”) for the reasons set forth below. The United States asks UNITED STATES’ OPPOSITION TO DEFENDANT UATC’S MOTION TO AMEND THE AUGUST 14, 1996 SETTLEMENT AGREEMENT AND INJUNCTIVE ORDER — CASE NO. C 93 0079 TEH 1 that, if the Court grants UATC’s request for an extension of time to complete its barrier removal 2 obligations, it: (1) order UATC to meet interim progress goals to insure that all obligations are met by 3 the end of any extension period; (2) order UATC to update the Court and the Parties regarding its 4 financial condition and progress towards fulfilling its remaining obligations at status hearings at least 5 every six months; and (3) modify the Settlement Agreement and Injunctive Order to specify standards 6 for the placement of wheelchair seating locations in its stadium-style movie theaters.1 7 I. INTRODUCTION 8 On October 27, 2000, UATC filed a Motion for a Limited Transfer of Venue (“Motion to 9 Transfer Venue”). UATC stated that, due to its recent bankruptcy, it needed an extension of time to 10 complete its barrier removal obligations under the Settlement Agreement and Injunctive Order. On 11 November 27, 2000, at the hearing on that Motion, and Plaintiffs’ and the Department’s Opposition to 12 UATC’s Motion, Plaintiffs and the Department raised several issues regarding UATC’s compliance with 13 the Settlement Agreement and Injunctive Order. This Court’s Order of December 1, 2000, denying 14 UATC’s Motion, indicated that an “extension hearing will [likely] bring into play a number of issues 15 regarding UATC’s compliance with the Injunctive Order.” Order at 4. 16 II. UATC HAS NOT MADE SUFFICIENT PROGRESS TOWARDS COMPLYING WITH 17 ALL OF ITS OBLIGATIONS UNDER THE SETTLEMENT AGREEMENT AND INJUNCTIVE ORDER TO WARRANT A BLANKET EXTENSION OF TIME 18 19 In its Motion to Amend, UATC alleges it has spent over $6 million on “barrier removal for new 20 construction, additions, renovations, concession renovations, specific barrier removal projects, and 21 removal of specific barriers at all theatres...” Motion to Amend at 4 (emphasis added). UATC misleads 22 the Court regarding its compliance with its barrier removal obligations set forth in the Settlement 23 Agreement and Injunctive Order by aggregating its costs from its barrier removal projects required by 24 the Settlement with other expenditures not required by the Settlement Agreement and Injunctive Order, 25 26 1 “Stadium-style movie theater(s)” or “stadium-style theater(s)”refers to movie theaters or motion picture theaters where some or all of the seating is placed on level tiers with each row/tier 27 elevated above the row/tier immediately ahead. Stadium-style tiers are accessed by stepped, rather than 28 sloped, aisles. UNITED STATES’ OPPOSITION TO DEFENDANT UATC’S MOTION TO AMEND THE AUGUST 14, 1996 SETTLEMENT AGREEMENT AND INJUNCTIVE ORDER — CASE NO. C 93 0079 TEH - 2 - 1 including significant costs associated with its construction of new stadium-style movie theaters and new 2 additions to its theaters. 3 Further, UATC seems to suggest that its construction of 35 new stadium-style movie theaters 4 somehow has contributed to its compliance with this Court’s Orders to remove barriers to access at its 5 existing, traditional movie theaters.2 Id. Similarly, UATC lists barrier removal projects it completed 6 prior to the entry of the Settlement. In reality, and hidden among other misleading figures, UATC has 7 completed Court-ordered barrier removal projects at only 24 locations in the past five years, or 8 approximately 22% of the locations required to have barriers removed. Id. 9 UATC acknowledges additional non-compliance with the Settlement Agreement and Injunctive 10 Order by its failure to complete barrier removal modifications to two theaters in Grass Valley, California 11 (ordered to be completed by July 6, 1998 but still not completed). See Second Supplemental 12 Declaration of David Giesler in Support of UATC’s Motion to Transfer Venue at 2; Second 13 Supplemental Declaration of Douglas A. Wolkin in Support of UATC’s Motion to Transfer Venue at 2. 14 III. UATC’S PLAN FOR REORGANIZATION UNNECESSARILY RESTRICTS UATC’S 15 COMPLIANCE WITH THIS COURT’S ORDER 16 It appears from UATC’s Motion to Amend that as early as 1997 UATC was experiencing 17 financial problems serious enough to “limit[] UATC’s ability to complete the barrier removal 18 modifications contained in the Injunctive Order,” yet UATC did not notify the Department that it was 19 experiencing difficulties in meeting its obligations under the Settlement Agreement and Injunctive Order 20 until January 31, 2000. See Declaration of Phyllis M. Cohen in Support of United States’ Memorandum 21 of Points and Authorities in Opposition to Motion of Defendant United Artist Theatre Circuit, Inc., to 22 Transfer Venue (“U.S. Opposition to Motion to Transfer Venue”). 23 Pursuant to this Court’s Order Granting Injunctive Relief entered August 14, 1996, approving the 24 parties’ Settlement Order, UATC was to complete barrier removal projects at certain of its theaters on or 25 26 2 Unless a new stadium-style theater serves the same community as one of UATC’s traditional, sloped floor theaters scheduled for barrier removal work, a new stadium-style theater should 27 not be considered part of UATC’s compliance with its barrier removal obligations under the Settlement 28 Agreement and Injunctive Order. UNITED STATES’ OPPOSITION TO DEFENDANT UATC’S MOTION TO AMEND THE AUGUST 14, 1996 SETTLEMENT AGREEMENT AND INJUNCTIVE ORDER — CASE NO. C 93 0079 TEH - 3 - 1 before July 6, 2001. UATC has not completed those obligations during the past five years at 2 approximately 77 of its theaters while at the same time building approximately 35 brand new stadium- 3 style movie theaters. UATC argues inter alia that it needs at least another five years to complete these 4 obligations in order to maintain the support of its creditors for its Joint Plan for Reorganization. UATC 5 further argues that, even if its Joint Plan for Reorganization is confirmed, it will have “significant 6 obligations to creditors under the Plan and be under capital and budgetary restrictions imposed by the 7 Plan.” UATC’s Motion to Amend at 2 (need full cite). See also Giesler Declaration ¶¶ 13-14 in Support 8 of UATC’s Motion to Amend. 9 UATC states that its obligations to its creditors under the Plan, with its “capital and budgetary 10 restrictions”, Motion to Amend at 2, will ”hamper its ability to make barrier removal modifications.” 11 Id. at 3. These financial obligations and restrictions in the Plan were not negotiated with Plaintiffs’ 12 class counsel or the Department, nor were they apparently negotiated with an eye towards fulfilling 13 UATC’s existing legal obligations under the Settlement Agreement and Injunctive Order. Further, 14 UATC states that “[i]nitially, in order to maintain its viability, UATC will have to commit its funds to 15 revenue-generating projects.” Motion to Amend at 3. While these “revenue-generating projects” are 16 unspecified, and in spite of its financial difficulties, UATC has indicated to the Department that it 17 intends to renovate many of its existing traditional, sloped floor theaters into stadium-style theaters and 18 possibly build one or more new stadium-style theaters, all within the next several years.3 UATC has 19 cited its building of new stadium-style movie theaters as a contributing factor to its current financial 20 situation.4 21 3 22 “‘The plan is to ... defend our core markets’ in part by refurbishing theaters in important markets, such as by adding stadium seats.” The Wall Street Journal, Paul M. Sherer, “Deals & Deal 23 Makers: United Artists Theatre Makes Chapter 11 Filing, Proposing a Plan That Gives Control to Anschutz”, September 6, 2000, 2000 WL-WSJ 26608750, attached as Appendix A. See also Disclosure 24 Statement for Plan of Reorganization of United Artists Theatre Company, et al., Article IV, B.2.d.-e. 25 attached to UATC’s Motion to Transfer Venue, Giesler Declaration Exhibit F (implementing “Project Clean-Up, a theatre divestiture program”and “investing capital, in the form of screen expansions and 26 upgrades”).
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