G.R. No. 197937 - Film Development Council vs. SM Prime Holdings, Inc.

The petitioner, Film Development Council of the Philippines, appeals the orders of the Regional Trial Court (RTC) of Pasig City, which dismissed its complaint against SM Prime Holdings, Inc. on the grounds of litis pendentia.
SM Prime Holdings operates cinema houses in Cebu City and is subject to amusement tax under the Local Government Code of 1991.
The Local Government Code allows provinces to levy an amusement tax of up to 30% on gross receipts from admission fees, which must be withheld and paid to the provincial treasurer before revenue distribution.

Cebu City enacted City Tax Ordinance No. LXIX, which mirrors the Local Government Code's provisions on amusement tax.
The Film Development Council was established under R.A. No. 9167, which mandates the development of an incentive system for film producers based on merit.
The Cinema Evaluation Board (CEB) grades films, and those graded "A" or "B" are entitled to amusement tax rewards, with specific percentages allocated to the producers.

On January 27, 2009, the petitioner demanded payment from the respondent for amusement tax rewards amounting to P76,836,807.08 for films shown between 2003 and 2008.
The City of Cebu filed a petition for declaratory relief against the petitioner, challenging the constitutionality of Section 14 of R.A. No. 9167, which governs the remittance of amusement tax rewards.
A temporary restraining order was issued, preventing the petitioner from collecting the amusement tax incentive awards.

The petitioner filed a collection suit against the respondent for the unpaid amusement tax incentive rewards.
The respondent moved to dismiss the case, arguing that it had already remitted the amusement taxes to the City of Cebu and that the issues were already being litigated in the Cebu City RTC.
The Pasig City RTC granted the motion to dismiss, citing the presence of litis pendentia, which refers to the existence of two pending actions between the same parties for the same cause of action.

Litis pendentia is a legal doctrine aimed at preventing multiple lawsuits regarding the same subject matter, thereby avoiding conflicting judgments and unnecessary litigation costs.
The requisites for dismissal on this ground include identity of parties, rights asserted, and the cases being so similar that a judgment in one would affect the other.

The petitioner contended that the RTC erred in dismissing the case based on litis pendentia, arguing that the two cases did not share the same cause of action.
It asserted that the Cebu City RTC's case was focused on the validity of the law, while its own case sought monetary relief.