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

Citation988 F.2d 386
Decision Date17 February 1993
Docket NumberCOCA-COLA,91-3498,Nos. 91-3496,s. 91-3496
PartiesBOTTLING COMPANY OF ELIZABETHTOWN, INC.; Jackson Coca-Cola Bottling Company; Dixie Coca-Cola Bottling Company, Incorporated; New Bern Coca-Cola Bottling Works, Inc.; Plymouth Coca-Cola Bottling Company, Incorporated; Owensboro Coca-Cola Bottling Company, Inc.; Sacramento Coca-Cola Bottling Co., Inc.; Coca-Cola Bottling Company of Shelbyville, Inc.; Beaver Coca-Cola Bottling Co.; Quaker State Coca-Cola Bottling Company; The Cleveland Coca-Cola Bottling Company, Inc.; Keystone Coca-Cola Bottling Company; Central Coca-Cola Bottling Company, Inc.; Reading Coca-Cola Bottling Works; Coca-Cola Bottling Company of Shreveport, Inc. (formerly Star Bottling Works, Ltd.); The Coca-Cola Bottling Company of Fort Smith, a partnership; Texarkana Coca-Cola Bottling Company; Coca-Cola Bottling Company; Las Cruces Coca-Cola Bottling Company; West Plains Coca-Cola Bottling Company; The Coca-Cola Bottling Company of Tucson, Inc.; Hattiesburg Coca-Cola Bottling Company; Magnolia Coca-Cola Bottling Company, Inc.; Coca-Cola Bottling Company of Tulsa, Inc.; Ouachita Coca-Cola Bottling Company, Inc.; Natchez Coca-Cola Bottling Co., Inc.; Wichita Coca-Cola Bottling Co.; Coca-Cola Bottling Co. (North Dakota); Marshall Coca-Cola Bottling Co. Liquidating Trust; Permian Coca-Cola Bottling Co.; Scioto Coca-Cola Bottling Co.; Richmond Coca-Cola Bottling Co.; Coca-Cola Bottling Co. of Kennett (a partnership); Coca-Cola Bottling Co. of Jamestown; Streator Coca-Cola Bottling Co.; Texas Coca-Cola Bottling Co.; Jefferson City Coca-Cola Bottling Co.; Coca-Cola Bottling Co., Inc., Alexandria, MN; Deming Coca-Cola Bottling Co.; Trenton Coca-Cola Bottling Co.; Macon Coca-Cola Bottling Co.; Mary Louise Goodrich; Mary Louise Kay Robinson, individually and as trustee of the Kendall family inter vivos trust; Ann Kay Hobson Haack, individually and as trustee of the Kendall family inter vivos trust; John K. Hobson; Margaret Dodge Hobson, individually and as trustee of the Kendall family inter vivos trust (Subst.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Roger N. Nanovic, Nanovic Law Offices, Jim Thorpe, PA, for Coca-Cola Bottling Co. of Elizabethtown, Inc.

Jesse A. Finkelstein, Richards, Layton & Finger, Wilmington, DE, and Emmet J. Bondurant II, (Argued), Jane E. Fahey, (Argued), Jeffrey D. Horst, Bondurant, Mixson & Elmore, Atlanta, GA, for Coca-Cola Bottling Co. of Magnolia, et al.

Richard D. Allen, Morris, Nichols, Arsht & Tunnell, Wilmington, DE, and Frank C. Jones (Argued), Chilton Davis Varner, Dwight J. Davis (Argued), King & Spalding, Atlanta, GA, for The Coca-Cola Bottling Company, a Delaware corp.

Before HUTCHINSON, ALITO and HIGGINBOTHAM, Circuit Judges.

OPINION OF THE COURT

HUTCHINSON, Circuit Judge.

These consolidated appeals are from orders the United States District Court for the District of Delaware entered in one of three related actions 1 concerning the contracts between The Coca-Cola Company (the Company) and some of its bottlers who have persisted in refusing the Company's proposed amendments to its agreements to supply the bottlers' requirements of Coca- Cola bottling syrup. 2 In the appeal at our Docket No. 91-3496, eighteen bottlers of the soft drink known as Coca-Cola appealed an order of the United States District Court for the District of Delaware dismissing their amended Count Two claim for declaratory and injunctive relief. 3 The relief sought would have required the Company to supply them with Coca-Cola syrup (herein the syrup) sweetened with high-fructose corn syrup (HFCS) under contracts that license them to market bottled Coca-Cola in a particular territory. Their licenses had their roots in the terms of an 1899 national franchise the Company had granted the predecessor of the bottlers' licensors. That franchise was, however, amended from time to time and ultimately modified by agreements incorporated into two 1921 Consent Decrees (herein Consent Decrees) which settled a 1920 dispute between the Company and the bottlers' licensors.

In its cross-appeal at Docket No. 91-3498, the Company challenges the order of the district court awarding a total of $20,742,398.20 in compensatory damages and prejudgment interest for breach of contracts to the eighteen bottlers who continue to seek injunctive relief in No. 91-3496 and twelve other bottlers who formerly bottled and distributed Coca-Cola (herein the "former bottlers"). These thirty bottlers claimed in Count One of their complaint that the Company had breached its contractual obligations to them when it unilaterally substituted syrup sweetened with the cheaper HFCS for syrup sweetened with the more expensive cane or beet sugar they claim that the Consent Decrees require. The Consent Decrees followed a 1920 law suit the bottlers' licensors brought against the Company, after World War I fluctuations in the supply and price of cane sugar, then the exclusive sweetener used for the syrup, ignited a heated dispute between the parties. The bottlers' individual contracts are similar in all material respects and their terms derive their meaning from the 1899 contract, as ultimately modified by the Consent Decrees.

The primary issue in the appeal of the bottlers at No. 91-3496 and the Company's cross-appeal at No. 91-3498, as well as the companion appeal at No. 91-3497 of another somewhat overlapping set of bottlers who claim entitlement to diet Coke syrup, is what type of syrup the Company is contractually obligated to provide its bottlers under the bottling contracts derived from the 1899 franchise, as amended and...

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