Coca-Cola Bottling Co. v. Coca-Cola Co.

Decision Date28 June 1991
Docket Number87-398-JJF.,Civ. A. No. 81-48
Citation769 F. Supp. 599
PartiesCOCA-COLA BOTTLING COMPANY OF ELIZABETHTOWN, INC., et al., Plaintiffs, v. The COCA-COLA COMPANY, a Delaware Corporation, Defendant.
CourtU.S. District Court — District of Delaware

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Edmund N. Carpenter, II, Charles F. Richards and Jesse A. Finkelstein of Richards, Layton & Finger, Wilmington, Del. (Emmet J. Bondurant, Jane F. Vehko and Jeffrey D. Horst of Bondurant, Mixson & Elmore, Atlanta, Ga., of counsel), for plaintiffs.

Richard D. Allen of Morris, Nichols, Arsht & Tunnell, Wilmington, Del. (Frank C. Jones, Chilton Davis Varner and Dwight J. Davis of King & Spalding, Atlanta, Ga., of counsel), for defendant.

OPINION

FARNAN, District Judge.

INTRODUCTION

This is one of three related actions involving the contracts which govern the relationship between The Coca-Cola Company (the "Company") and certain of its bottlers (the "bottlers"). This action, which for convenience will be referred to as the "Elizabethtown" case, arises out of contractual disputes between the Company and the bottlers involving the supply of syrup for the product bottled Coca-Cola. Two related actions, Coca-Cola Bottling Co. of Shreveport, Inc. v. The Coca-Cola Co., C.A. No. 83-95, and Alexandria Coca-Cola Bottling Co., Ltd. v. The Coca-Cola Co., C.A. No. 83-120 (collectively referred to as the "diet Coke cases"), 769 F.Supp. 671, arise from disputes involving introduction by the Company of its new diet product, diet Coke, in 1983.1

Litigation of these cases was conducted for eight years before Hon. Murray M. Schwartz, who became unable to see the litigation to its completion when he became ill in the Winter of 1989, after the end of trial on these matters. The cases were reassigned to me in the Spring of 1989. The parties elected to retry the cases rather than to allow decision on the then-existing record, and the Elizabethtown case was retried before me from September 1989-March 1990. This Opinion constitutes the Court's Findings of Fact and Conclusions of Law pursuant to Fed.R.Civ.P. 52(a) in the Elizabethtown case.

The Elizabethtown litigation began in 1981 and stems from the Company's decision to substitute high-fructose corn syrup ("HFCS" or "HFCS-55") for granulated sugar in the syrup for the Coca-Cola beverage drink sold by the Company to the plaintiff bottlers. The dispute centers primarily around the appropriate price of that syrup and evaluation of the Company's conduct in supplying the syrup and negotiating several issues with the bottlers. The Elizabethtown litigation also involves alleged historical overcharges by the Company to the bottlers in the sucrose component of the syrup.

Plaintiffs are profitable businesses which are presently or were formerly engaged in the bottling of Coca-Cola under contracts which conform to Consent Decrees issued by this Court in 1921. This action involves 30 plaintiffs and 30 bottling contracts. During the course of the litigation, twelve plaintiffs either amended their bottling contracts or sold their rights to bottle Coca-Cola to bottlers who operate under amended bottling contracts. These twelve plaintiffs seek only past damages and make no claims under Count II, which seeks declaratory and injunctive relief. For convenience these twelve will be referred to as the "past damages plaintiffs." The remaining plaintiffs will be known as full plaintiffs. The full plaintiffs, their principal places of business, and the dates for the beginning of their alleged damage periods are as follows:

                                       STATE OF INCORPORATION
                                       OR PRINCIPAL PLACE OF
                PLAINTIFF              BUSINESS                  BEGINNING OF DAMAGE PERIOD
                Coca-Cola Bottling     Magnolia, AK              February 2, 1976
                Co. of Magnolia
                Sacramento Coca-Cola   Sacramento, CA            February 2, 1977
                Bottling Co
                Coca-Cola Bottling     Elizabethtown, KY         January 1, 1969
                Co. of Elizabethtown
                Coca-Cola Bottling     Shelbyville, KY           January 1, 1969
                Co. of Shelbyville
                Trenton Coca-Cola      Trenton, MO               February 4, 1976
                Bottling Co
                Kelford Coca-Cola      Kelford, NC               February 4, 1971
                Bottling Co
                Plymouth Coca-Cola     Plymouth, NC              February 4, 1971
                Bottling Co
                Wilmington Coca-Cola   Wilmington, NC            February 4, 1971
                Bottling Works
                Coca-Cola Bottling     Dickinson, ND             February 4, 1975
                Co. of Dickinson
                Coca-Cola Bottling     Jamestown, ND             February 4, 1975
                Co. of Jamestown
                Coca-Cola Bottling     Williston, ND             February 4, 1975
                Co. of Williston
                Cleveland Coca-Cola    Cleveland, OH             January 1, 1969
                Bottling Co
                Coca-Cola Bottling     Bethlehem, PA             January 1, 1969
                Co. of LeHigh Valley
                Laredo Coca-Cola       Laredo, TX                February 4, 1977
                Bottling Co.
                Central Coca-Cola      Richmond, VA              February 4, 1971
                Bottling Co.
                Love Bottling Co.      Muskogee, OK              July 24, 1982
                Coca-Cola Bottling     LaCrosse, WI              July 24, 1981
                Co. of LaCrosse
                Arkansas-Georgia       Nashville, AK             July 24, 1982
                

Consolidated Pretrial Order 2-3 (Dkt. 848).

The past damages plaintiffs, their principal places of businesses, and their alleged damages periods are as follows:

                                          STATE OF INCORPORATION OR
                PLAINTIFF                 PRINCIPAL PLACE OF BUSINESS  DAMAGES PERIOD
                Coca-Cola Bottling        Streator, IL                 Feb. 2, 1971-April
                Co. of Streator                                        30, 1987
                Natchez Coca-Cola         Natchez, MS                  Feb. 4, 1975-Dec.
                Bottling Co.                                           31, 1986
                Coca-Cola Bottling        Jefferson City, MO           Feb. 4, 1976-April
                Co. of Jefferson City                                  30, 1987
                Coca-Cola Bottling        Macon, MO                    Feb. 4, 1976-April
                Co. of Macon                                           30, 1987
                Coca-Cola Bottling        Deming, NM                   Feb. 4, 1975-April
                Co. of Deming                                          30, 1987
                Coca-Cola Bottling        Tulsa, OK                    Feb. 4, 1976-Dec.
                Co. of Tulsa                                           31, 1984
                Coca-Cola Bottling        Brownsville, TX              Feb. 4, 1977-May
                Co. of Brownsville                                     31, 1984
                Coca-Cola Bottling        San Angelo, TX               Feb. 4, 1977-Dec.
                Co. of San Angelo                                      30, 1985
                Las Cruces Coca-Cola      Las Cruces, NM               Feb. 4, 1975-Dec.
                Bottling Co.                                           30, 1985
                Coca-Cola Bottling        Tucson, AZ                   Feb. 4, 1975-Dec.
                Co. of Tucson                                          30, 1985
                Coca-Cola Bottling        St. Cloud, MN                Feb. 4, 1975-July
                Co. (Alexandria)                                       31, 1984
                Coca-Cola Bottling        Marshall, TX                 Feb. 4, 1975-Oct.
                Co. of Marshall                                        1, 1987
                

Consolidated Pretrial Order at 3-4 (Dkt. 848).

The Company is a corporation organized and existing under the laws of the State of Delaware, and having its principal office and place of business in the State of Georgia. Each of the plaintiffs is a corporation that is incorporated in and has its principal place of business in a state other than Delaware or Georgia. Therefore, there is complete diversity of citizenship. The amount in controversy exceeds the sum of $10,000, exclusive of interest and costs, and therefore, the Court has subject matter jurisdiction pursuant to 28 U.S.C.A. ? 1332(a)(1).

The factual background of this case has been recited repeatedly in Judge Schwartz' published opinions and should be familiar to all who have participated; however, for the sake of completeness in this Opinion, it will be repeated generally.

As indicated, the following narrative is intended to provide background only. Specific occurrences which have bearing on the issues pending before the Court will be discussed in greater detail in the Court's findings of fact under each Count. This narrative is drawn from numerous sources, including evidence presented in the record and Judge Schwartz' prior opinions.

BACKGROUND

In 1886, Dr. John Smyth Pemberton, an Atlanta pharmacist, developed the formula for a syrup that could be mixed with carbonated water to produce a beverage. He named the beverage "Coca-Cola." The name "Coca-Cola" derives from two of the ingredients, coca leaves and cola (or kola) nuts, extracts of which were used to manufacture Merchandise No. 5, one of seven compounds or "merchandises" used by Dr. Pemberton in the original formula for Coca-Cola. United States v. Coca-Cola Co. of Atlanta, 241 U.S. 265, 271 & 272, 36 S.Ct. 573, 574 & 575, 60 L.Ed. 995 (1916).

Dr. Pemberton registered the name "Coca-Cola" written in Spencerian script as a trademark "for soda water and other beverages" on June 6, 1887. The original trademark registration dated June 6, 1887, described Coca-Cola as follows:

This "Intellectual Beverage" and Temperance Drink contains the valuable Tonic and Nerve Stimulant property of the Coca plant and Cola (or Kola) nuts and makes not only a delicious, exhilarating, refreshing and invigorating Beverage (dispensed from the soda water fountain or in other carbonated beverages), but a valuable Brain Tonic and cure for all nervous affections ?€” Sick Headaches, Neuralgia, Hysteria, Melancholy, ...
The peculiar flavor of COCA-COLA delights every pallet; it is dispensed from the soda fountain in same manner as any other fruit syrups.

PX87.

In 1888, Asa G. Candler, a pharmacist and owner of a wholesale drug company in Atlanta, acquired a partial interest in the Coca-Cola trademark and formula. He acquired complete ownership in 1891. In 1892, Asa Candler formed the...

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