Coca-Cola Bottling Co. of Elizabethtown, Inc. v. Coca-Cola Co.

98 F.R.D. 254, 1983 U.S. Dist. LEXIS 17787
CourtDistrict Court, D. Delaware
DecidedApril 12, 1983
DocketCiv. A. No. 81-48
StatusPublished
Cited by31 cases

This text of 98 F.R.D. 254 (Coca-Cola Bottling Co. of Elizabethtown, Inc. v. Coca-Cola Co.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coca-Cola Bottling Co. of Elizabethtown, Inc. v. Coca-Cola Co., 98 F.R.D. 254, 1983 U.S. Dist. LEXIS 17787 (D. Del. 1983).

Opinion

[257]*257OPINION

MURRAY M. SCHWARTZ, District Judge.

Apparently not everyone agrees that things go better with “Coke.” Plaintiff, Coca-Cola Bottling Company of Elizabeth-town (“Elizabethtown”), seeks declaratory, injunctive and monetary relief against the Coca-Cola Company (“Coca-Cola”). At issue in this lawsuit are questions arising from substantially similar Settlement Agreements entered as final judgments (hereinafter the Settlement Agreements and the final judgments will be referred to collectively as the “1921 Consent Decrees” or “Consent Decrees”) in settlement of Coca-Cola Bottling Co. v. The Coca-Cola Company, C.A. Nos. 388 & 389 (D.Del.1921) (“Case No. 388” and “Case No. 389”), and a contract between the plaintiff and Coca-Cola (the “Bottler’s Contract”) which allegedly incorporates some of the provisions of the Consent Decrees. Plaintiff seeks to resolve several issues involving the composition and pricing of Bottler’s Coca-Cola Syrup (“Bottler’s Syrup” or “syrup”) which it purchases from Coca-Cola.

Elizabethtown asserts three principal claims against Coca-Cola. First, it contends that Coca-Cola’s newly initiated practice of substituting high fructose corn syrup for fifty percent of the granulated sugar in Bottler’s Syrup while continuing to charge for syrup based on the price of granulated sugar violates the 1921 Consent Decree and its Bottler’s Contract. Second, plaintiff challenges Coca-Cola’s use of refiners’ list prices rather than the actual cost of granulated sugar to compute syrup prices. Finally, plaintiff seeks a recomputation of the price of syrup based on a $4.3 million settlement that Coca-Cola received in a sugar price-fixing case. Jurisdiction is present on the basis of diversity. 28 U.S.C. § 1332(a)(1) & (c).1

Presently before the Court is Elizabeth-town’s motion for reargument and reconsideration of this Court’s denial of plaintiff’s motion for class certification, 95 F.R.D. 168, 179 (D.Del.1982), and, in the alternative, for certification to appeal, pursuant to 28 U.S.C. § 1292(b), the ruling that plaintiff has no standing to enforce the Consent Decree entered into in 1921 by Coca-Cola and Coca-Cola Bottling Co. (the “Thomas Co.” or “Thomas”) in Case No. 388. Also before the Court are the motions of Elizabethtown and certain other bottlers2 to intervene in Case No. 388, to file an intervenors’ complaint, similar to Elizabethtown’s complaint in C.A. No. 81-48, and to proceed in that case as a class. In addition, the movants, other than Elizabethtown, seek to intervene in the present ease, C.A. No. 81-48, and to consolidate the present case and Case No. 388. Similarly, another group of bottlers3 [258]*258have moved to intervene and file a supplemental complaint in Case No. 389. These bottlers are led by Coca-Cola Bottling Co. of Shreveport, Inc.4 (“Shreveport”) — -an original intervenor in Case No. 389. These movants seek to file an intervenors’ complaint— similar to Elizabethtown’s complaint — and to proceed as a class in Case No. 389. They also seek to intervene in the present case, C.A. No. 81-48,5 and to consolidate this case, Case No. 388 and Case No. 389. The Court will deal with all motions in these cases in this opinion.

On the basis of the present factual record, the facts germane to these motions are as follows.6 The genesis of the Coca-Cola bottling system occurred in 1899. Two Chattanooga lawyers, B.F. Thomas and J.B. Whitehead, obtained the right to purchase Bottler’s Syrup at a fixed price and use Coca-Cola trademarks to sell the soft drink, Coca-Cola, throughout the United States in bottles or other receptacles.7 (Doc. 110, Ex. B). The Coca-Cola Company reserved only the right to manufacture syrup and to sell syrup to Thomas and Whitehead and their assignees and to soda fountains.8 The lawyers established bottling plants in Chattanooga and Atlanta and formed Coca-Cola Bottling Company as a Tennessee corporation in December, 1899.

Coca-Cola Bottling Company did not bottle or sell Coca-Cola itself. Rather it contracted with so-called “actual” or “first-line” bottlers who built, owned, and operated plants and bottled, promoted, and sold Coca-Cola in the exclusive territories assigned to them. The parent bottler assigned to the actual bottlers all rights to purchase Coca-Cola syrup and to bottle and sell Coca-Cola in a given territory.

In 1900, the Bottling Company divided into two parts, apparently in a business dispute over the nature of the contracts to be granted to the actual bottlers. Whitehead wanted to give them perpetual contracts, but Thomas sought to grant them only term contracts of two-year duration. With the consent of Coca-Cola, Thomas retained ownership of Coca-Cola Bottling Company, and conveyed to Whitehead and his new business partner, J.T. Lupton, all rights acquired under the 1899 contract except for distribution in fifteen states, the District of Columbia, and small parts of Georgia and Alabama. (Doc. 110, Ex. D). Coca-Cola, Thomas and Whitehead amended the 1899 Agreement to reflect the division of Coca-Cola Bottling Co. (Doc. 110, Ex. C).9 Whitehead and Lupton ultimately named their company The Coca-Cola Bottling Company (the “Whitehead Co.” or “Whitehead”). Between 1899 and 1915 there [259]*259might have been some oral modification of the 1899 agreement. In 1915, the 1899 contracts between Thomas and Coca-Cola and between Whitehead and Coca-Cola were expressly amended allegedly to conform with the 1914 enactment of the Clayton Act. (Doc. 110, Exs. E & F). At this time, the parent bottlers, the Whitehead Co. and the Thomas Co., modified their contracts with their actual bottlers to reflect the 1915 amendments. See, e.g., Doc. 111, Ex. A, at A-l.

In 1919, the Coca-Cola Company was purchased by a banking syndicate and became a Delaware corporation, assuming the obligations to the parent bottlers. The new corporation entered into an agreement with the principal parent bottlers in December of 1919 to permit the Company to pass on cost increases of sugar in excess of nine cents per pound to the parent bottlers. The Company then sought to enter into new contracts with the parent bottlers which would permit the Company to raise its syrup prices at will. When the parent bottlers strongly rejected this proposal in January 1920, the Coca-Cola Company informed them that their contracts were contracts at will and could be terminated. Efforts to avoid a confrontation proved unsuccessful, and when the parent bottlers threatened to withdraw their consent to temporary price changes unless the Company acknowledged the perpetual nature of their contracts, the Company notified them that their contracts were terminated as of May 1, 1920.

The two principal parent bottlers brought suit in the U.S. District Court for the District of Delaware on June 1, 1920, seeking to enjoin the Company from terminating their contracts. Six first-line bottlers, members of the Coca-Cola Bottlers Association, intervened in support of the parent bottlers.10 The bottlers had received an initial favorable determination from the Court on November 8, 1920. In The Coca-Cola Bottling Co. v. The Coca-Cola Co., 269 F.

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Bluebook (online)
98 F.R.D. 254, 1983 U.S. Dist. LEXIS 17787, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coca-cola-bottling-co-of-elizabethtown-inc-v-coca-cola-co-ded-1983.