People of Northwest Public Radio
Tue March 6, 2012
Michigan Man Sues Movie Theater Because Of High Price Of Concessions
Originally published on Tue March 6, 2012 8:59 am
Few would argue that the prices at movie theater concessions are a bit high: $11 for a Coke and popcorn, $6 for a box of gummy worms. Few would argue that it seems excessive.
As the Hollywood Reporter puts it, it may seem "like highway robbery, but is it actually unlawful?"
Joshua Thompson, a Michigan man in his 20s, is putting that question to the test by filing a class action lawsuit against his local AMC theater alleging the theater is price gouging.
"'He got tired of being taken advantage of,' said Thompson's lawyer, Kerry Morgan of Wyandotte. 'It's hard to justify prices that are three- and four-times higher than anywhere else.'
American Multi Cinema, which operates the AMC theater in Livonia, wouldn't comment on the suit. A staffer at the National Association of Theatre Owners in Washington, D.C., angrily hung up the phone when asked about industry snack pricing practices.
Now, a legal experts consulted by the Free Press seem to think the lawsuit is dead on arrival.
The paper reports that "state Supreme Court decisions in 1999 and 2007 exempted most regulated businesses from the Michigan Consumer Protection Act."
In an interview with The Los Angeles Times, Morgan disagreed saying they were testing "the legal boundaries of that state law."
All that aside, the Free Press had no problem finding movie-goers who supported the lawsuit.
Now, the Hollywood Reporter goes a bit deeper into movie theater finances and comes to a rather counterintuitive conclusion. Theaters make most of their money from concessions; the price of tickets goes mostly to the Hollywood studios.
The Reporter concludes:
"If this lawsuit ever did get to trial, AMC would certainly bring their own experts that could testify that charging high prices is actually in the consumers' best interest.
"As hard as that is to believe, researchers at the Stanford Graduate School of Business and the University of California, Santa Cruz, concluded in 2009 that 'by charging high prices on concessions, exhibition houses are able to keep ticket prices lower, which allows more people to enjoy the silver-screen experience.'"
AMC told the Times it could not comment on pending legislation.