Opposition Brief — Royal Crown Cola Co. v. Coca-Cola Co.

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MAY 25 1999

No. 89-1756 : JOSEPH F. SPANIOL, :

CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

ROYAL CROWN COLA Co.,

Petitioner,

THE CocA-CoLA COMPANY, DR PEPPER Co.,

and PEPSICO, INC.,

Respondents.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Eleventh Circuit

BRIEF FOR THE RESPONDENTS IN OPPOSITION

GORDON B. SPIVACK

CAROLYN T. ELLIS

JAMES R. EISZNER, JR.

COUDERT BROTHERS

200 Park Avenue

New York, New York 10166

(212) 880-4400

FRANK C. JONES

KING & SPALDING

2500 Trust Company Tower

Atlanta, Georgia 30303

(404) 572-4600

WILLIAM M. DREYER

THE Coca-CoLa COMPANY

One Coca-Cola Plaza

Atlanta, Georgia 30301

(404) 676-2121

Counsel for Respondent

The Coca-Cola Company

May 25, 1990

RICHARD T. COLMAN

Counsel of Record

RAYMOND A. JACOBSEN, JR.

JERROLD J. GANZFRIED

HOWREY & SIMON

1730 Pennsylvania Avenue, N.W.

Washington, DC 20006

(202) 783-0800

Counsel for Respondent

PepsiCo, Inc.

RONALD G. CARR

JONATHAN BAND

MORRISON & FOERSTER

2000 Pennsylvania Avenue, N.W.

Washington, DC 20006

(202) 887-1500

Counsel for Respondent

Dr Pepper Company

WILSON - EPES PRINTING Co., INc.

—————_

- 789-0096 - WASHINGTON, D.C. 20001

me BEST AVAILABLE COPY ue

QUESTION PRESENTED

Whether an antitrust plaintiff who fails to obtain

either a ruling on the merits or a favorable settlement,

and who fails to submit evidence showing that its law-

suit was a substantial factor or catalyst for defendants’

voluntary change of behavior, is nonetheless entitled to

recover attorney’s fees as a substantially prevailing party

under Section 16 of the Clayton Act, 15 U.S.C. § 26.

(i)

ii

RULE 29.1 STATEMENT

Respondent PepsiCo, Ine. has an ownership interest,

excluding one hundred percent ownership, in each of the

following companies: ALPAC Corporation; American

Business Computer Corp.; Arnott’s Snack Foods: Beijing

Pepsi-Cola Beverage Company Ltd.; Blanchard, S.A.;

Britvic Holdings Limited; Cal-Pepsi, Ine.; Channel

Island Beverage Co., Ine.; Chia Tai-KFC Investment Co.

Ltd.; Chicago & Rush; CP-KFC Development Company

(Thailand) Limited; Delta Beverage Group, Inc.; |

Equipos y Deportes Exclusivos, 8.A. de C.V.; Guangzhou |

Flavours Development Corp.; Guangzhou Hua Chang Toy

Co. Ltd.; International Process Foods; Kentucky Fried

Chicken Beijing Limited; Kentucky Fried Chicken Es-

pana, S.A.; Kentucky Fried Chicken (Great Britain) :

Limited; Kentucky Fried Chicken Japan Ltd.; Kentucky |

Fried Chicken Management Pte. Ltd.; Kentucky S.A.

S.A.; Lindsey Bottling Company, Inc.; Lindsey Holding

Company, Inec.; Orion Frito-Lay Corporation; PAI

S.p.A.; Penn-Chesapeake Associates, Inc.; PepsiCo

(U.K.) Pension Trust Limited; Pepsi-Cola Allied Bott-

lers, Inc.; Pepsi-Cola Bottling Co. of Bend; Pepsi-Cola

Bottling of Northern California; Pepsi-Cola Bottling of

Roseburg; Pepsi-Cola General Bottlers, Ine.; Pizza Hut

G.m.b.H.; Pizza Hut G.m.b.H. & Co. K.G.; Pizza Hut

Management, Inc.; Pizza Hut Restauration G.m.b.H.;

Pizza Hut 8.N.C.; Pizza Hut del Distrito, S.A. de C.V.;

Pizza Hut (U.K.) Limited; Presco Corporation; Presi-

dent Enterprises; Serm Suk Co. Ltd.; Seven-Up Andino

S.A.; Shanghai Kentucky Fried Chicken Co. Ltd.; Shang-

hai McCormick Seasoning & Foodstuffs Company; Siam

Snack Company, Ltd.; Sportmex Internacional S.A. de

C.V.; Taiwan Pepsi-Cola, Ine. Bottling Company; The

Hostess-Frito-Lay Company; Uzay Gida Sanayive Picaret

A.S.; Willamette Beverage Co.; Bebidas Purificadas del

Norte, S.A.; Corina Snacks; Laurel Packaging, Inc.

Respondent The Coca-Cola Company has an ownership

interest, excluding one hundred percent ownership, in

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each of the following domestic and Canadian companies:

The Coca-Cola Bottling Company of New York, Inc.;

Brucephil, Inc.; Coca-Cola Bottling Company Consoli-

dated; Coca-Cola Enterprises, Inc.; Johnston Coca-Cola

Bottling Group, Inc.; T.C.C. Beverages Lt.!; Sunbelt

Coca-Cola Bottling Company, Inc.; Rutgers Minority In-

vestment Company; Dallas Minority Enterprise Small

Business Investment Corporation; Albev Trading, Inc.;

China Ventures, L.P.

Respondent Dr Pepper Company: Dr Pepper/Seven-

Up Companies, Inc.; The Seven-Up Company.

TABLE OF CONTENTS

Page

eI IIT aida tisessenternecescthecnsearensateubabeeinouinianuion 1

IIT Diaisicsincinecssrcranemtacecdsonaiocctnsancamesse 1

SEITE os since cncarcekcccaaviiemdeendsshmcsaduonncenisbanelsieatattonl 2

F_UN A Mae era ae OTN EO REC PRIN 7 7

Ra ELDER en OTL he 15

(v)

vi

TABLE OF AUTHORITIES

Cases: Page

Anderson v. City of Bessemer City, 470 U.S. 564

De SEE SOE Ce One en 14

Blim v. Stetson, 465 U.S. 886 (1984) 200... 7

Braajladt v. Board of Governors, 778 F.2d 1442

I TERE... ocsvnsinbscersorsseeoussnioesesevevesveerseavens 11

Cargill, Inc. v. Monfort of Colo., Ine., 479 U.S.

104 (1986) . BE 9

Coen v. Herrison County School Ba.., 638 F.2d

24 (5th Cir. Unit A Feb. 1981), cert. denied,

455 U.S. 938 (1982) salacencapenninabanieowenmesnaiiens 12

Disabled in Action v. Pierce, 789 F. 2d 1016 ad

a | . 11,13

Doe v. Busbee, 684 F.2d 1: 375 (11th Cir. 1982) .. 11

Hensley v. Eckerhart, 161 U.S. 424 (1983). 7

Hewitt v. Helms, 482 U.S. 755 (1987)... ; 11

Iranian Students Ass'n v. Sawyer, 639 F.2d 1160

(5th Cir. Unit A Mar. 1981) 2.000. 11

Leroy v. City of Houston, 831 F.2d 576 (5th Cir.

1987), cert. denied, 486 U.S. 1008 (1988)... 12

Loudermill », Cleveland Bd. of Educ., 844 F.2d

304 (6th Cir.), cert. denied, 109 S. Ct. 377

a0 6. seus isaciutelvinhpeebnitenentasoniivsbeadethaecdios 11

Maloney v. City of Marietta, 822 F.2d 1023 (iith

ID a. cccccecsiussecsorsnenaseaessvenacesenrvsaseveessexseugeucenen 11

MeQuillen v. Wisconsin Edue. Ass’n Council, 830

F.2d 659 (7th Cir. 1987), cert. denied, 485 U.S.

a) vi winsisudaskceunsdacasszeane 11

Morrison v. Ayoob, 627 F.2d 669 (3d Cir. 1980),

cert. denied, 449 U.S. 1102 (1981) 13

NAACP v. Wilmington Medical Center, Inc., 689

F.2d 1161 (3d Cir. 1982), cert. denied, 460 U.S.

1052 (1983) 0... seb euadoueeunsensuabuarvecessadudeedsiscideuss 13

Nadeau v. Helgemoe, 581 F.2d 275 (ist Cir.

SIT ices cccvcuveenueceveceseesororerecereeseceunenenvsssndodetesseceoce 12

Norman v. Housing Auth., 8365 F, 2d 1292 (11th

SNEED | scccscceeiecccnassesevevsoryssencusveccesenestantonesseoseveuses 10

North Carolina Dep’t of Transp. v. C rest St. Com-

munity Council, Inc., 479 U.S. 6 (1986)... 10

|

vii

TABLE OF AUTHORITIES—Continued

Ortiz DeArroyo v. Barcelo, 765 F.2d 275 (1st Cir.

| SEM DRRS oie cS Is MAy meron Ae EAST ent

Phototron Corp. v. Eastman Kodak Co., 842 F.2d

95 (Sth Cir.), cert. denied, 426 U.S. 1023

RIUIIED scicetsachessneamabnedinc cement nas aaa

Posada v. Lamb County, 716 F.2d 1066 (5th Cir.

| ETRE Bei CTR ro, fae Heenan re RET! NONE

Robinson v. Kimbrough, 652 F.2d 458 (5th Cir.

Tee TE re eoiccncock acicdeas debate eden aia aie

Sullivan v. Pennsylvania Dep’t of Labor & Indus.,

663 F.2d 443 (3d Cir. 1981), cert. denied, 455

Rye ET Ue EE icc cocmnsoopiocencabenceiatiaiinaeiaaE ats

Taylor v. City of Fort Lauderdale, 810 F.2d 1551

ee es SE arieocinseetce cats cncechtenccemattanieaadencie

United States v. Terminal Transport Co., 653 F.2d

1016 (5th Cir. Unit B Aug. 1981), cert. denied,

ae Se i. Pe

Williams v. Miller, 620 F.2d 199 (8th Cir. 1980)...

Statutes:

OO es ae I ii i eae

15 U.S.C, < AES Ser Nees Wet bm ak Mba

15 U.S.C. § 26 (1988)

15 U.S.C. § 53(b) (1988)

28 U.S.C. § 1254(1) (1988)

Page

11

12

11

mw kr Dw w

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

No. 89-1756

ROYAL CROWN COLA Co.,

Petitioner,

V.

THE Coca-CoLA COMPANY, DR PEPPER Co.,

and PEPSICO, INC.,

Respondents.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Eleventh Circuit

BRIEF FOR THE RESPONDENTS IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. Al-

A30) is reported at 887 F.2d 1480. The opinion of the

district court on entitlement (Pet. App. A31-A38) is not

reported; the district court’s opinion on valuation (Pet.

App. A39-A53) is reported at 678 F. Supp. 875.

JURISDICTION

The judgment of the court of appeals was entered on

November 13, 1989. A petition for rehearing was denied

2

on February 10, 1990 (Pet. App. A54-A55). The peti-

tion for a writ of certiorari was filed on May 10, 1990.

The jurisdiction of this Court is invoked under 28 U.S.C.

§$ 1254(1).

STATEMENT

1. In January 1986, PepsiCo, Inc. announced that it

planned to acquire the soft drink franchise business of

the Seven-Up Company. One month later, The Coca-Cola

Company announced that it planned to acquire the Dr

Pepper Company (Pet. App. A3). The premerger wait-

ing periods under the Hart-Scott-Rodino Act, 15 U.S.C.

S$ 18a, as extended at the request of the Federal Trade

Commission (FTC), prevented consummation of either

proposed transaction until midnight on June 24, 1986

(Pet. App. A3-A4). During this period, the FTC con-

ducted extensive investigations of the proposed transac-

tions, which required the principals to produce millions

of pages of documents and thousands of pages of inter-

rogatory answers in response to the FTC’s requests for

additional information and documents. The FTC also

took investigational depositions of dozens of executives of

the parties to the proposed transactions as well as of

third parties.

At about 5 p.m. on Friday, June 20, 1986, the FTC

voted (4-0, with one Commissioner recused) to oppose

both proposed transactions and directed the FTC staff

to file a complaint for a preliminary injunction pursuant

to 15 U.S.C. $ 53(b). On Monday, June 23, 1986, the

PepsiCo Seven-Up transaction was voluntarily aban-

doned in response to the Commission’s vote.!

1 Corporate acquisitions are ordinarily time-sensitive and that was

particularly true of the proposed sale of Seven-Up. When the

PepsiCo Seven-Up agreement was made, Seven-Up’s competitive and

financial positions were so weak that its future existence was

threatened. For this reason, Seven-Up’s parent company obtained

the contractual right to cancel the agreement if the transaction did

not close by June 1, 1986. Between January and June 1986, Seven-

3

Also on June 23, the FTC filed suit in the United

States District Court for the District of Columbia, seek-

ing to block the proposed Coca-Cola/Dr Pepper acquisi-

tion. At a hearing on June 24, the parties agreed that

Coca-Cola would not consummate the transaction until

after the court ruled on the FTC’s application for a pre-

liminary injunetion. Pet. App. A4-A5. On July 31, 1986,

the district court in Washington granted the FTC’s mo-

tion for a preliminary injunction. On August 5, 1986,

Coca-Cola and Dr Pepper announced that they had aban-

doned the proposed acquisition (id. at A5).

2. During the extended Hart-Scott-Rodino waiting

period, petitioner Royal Crown Cola Co., a competitor

in the soft drink industry, attacked the proposed acquisi-

tions. Royal Crown’s efforts included intensive lobbying

at the Commission “urg[ing] the FTC to act” (Pet. App.

A24); Royal Crown also lobbied Congress and _ issued

press releases criticizing the transactions (id. at A49).

Although it claimed to be in a state of “ ‘trial readiness’

for some four or five months,” Royal Crown elected to

postpone litigation in favor of pursuing its lobbying cam-

paign against the proposed acquisitions (id. at A23).

Royal Crown did not file the present lawsuit in the

United States District Court for the Middle District of

Georgia until June 19, 1986, some five months after the

PepsiCo/Seven-Up transaction was announced, and on

the eve of the publicly-announced FTC vote scheduled for

the following afternoon. Royal Crown sought to enjoin

both transactions, contending that they would violate Sec-

tion 7 of the Clayton Act, 15 U.S.C. § 18.

Royal Crown also moved for entry of a temporary re-

straining order (TRO). On Friday, June 20, 1986—the

Up’s financial position continued to decline (R2-62-Exh. 1). “R.”

refers to the record in the courts below.

The Coca-Cola/Dr Pepper contract had a comparable provision,

permitting either party to terminate the agreement if the transac-

tion did not close by August 29, 1986 (R2-63-Exh. B { 4).

4

day of the FTC vote—the district court in Georgia heard

arguments from counsel and entered a TRO “just for the

purpose of maintaining the status quo until the Court

can look into the matter in some depth” (R4-22-75). The

court expressly stated that the TRO did not constitute a

disposition on any substantive issue in the case (id.).

Following the announcement that the PepsiCo /Seven-

Up transaction had been abandoned, the district court on

June 26, dismissed Royal Crown’s complaint and va-

cated the TRO as to all parties to that proposed transac-

tion (R2-21). On August 25, 1986, following the an-

nouncement that the Coca-Cola/Dr Pepper transaction

has been abandoned, the district court dismissed Royal

Crown’s complaint against Coca-Cola and Dr Pepper, the

only defendants then remaining in the case, and vacated

all provisional orders directed against those defendants

(R2-60).

3. Although it had not obtained any substantive relief

or interlocutory ruling on the merits against any de-

fendant, or even a settlement, Royal Crown moved to re-

cover its costs of suit, including attorney’s fees, under

Section 16 of the Clayton Act, 15 U.S.C. § 26. Royal

Crown sought a total of $1,733,879 as reimbursement for

its costs in hiring three law firms in connection with this

matter and the various extrajudicial efforts in which

counsel had engaged (R3-100-3). Royal Crown submitted

no evidence to show that its lawsuit was causally con-

nected to the abandonment of the transactions, nor did

it request an evidentiary hearing. The only evidence on

the issue of causation consisted of affidavits and docu-

ments submitted by respondents showing that the deci-

sions to terminate the transactions were made solely in

response to the FTC’s determinations and were not in-

fluenced by Royal Crown’s litigation. See R2-63-Exhs.

A, B; R2-62-Exhs. 1-3.*

~ As the court of appeals commented, Royal Crown “‘did not attempt

to depose, cross-examine or impeach any officers, directors or attor-

5

The district court ruled that even though the case had

become moot, “making an ultimate determination on the

merits unnecessary” (Pet. App. A31), Royal Crown was

entitled to recover attorney’s fees simply because ‘“‘the

proposed acquisitions were moving forward toward im-

minent consummation before Royal Crown filed its action

in this court and now they are terminated” (id. at A837).

The court subsequently entered a separate opinion quan-

tifying the amount of fees and costs to be awarded

against each defendant. Without calculating a lodestar

amount, or engaging in an analysis that could lead to a

lodestar figure, the court concluded (Pet. App. A52) that

Royal Crown was entitled to recover fees and costs of

suit aggregating $1,359,374 for a lawsuit that was su-

perfluous from the moment it was filed until it became

moot and was dismissed; a lawsuit that, with respect to

PepsiCo, lasted less than one week, and, with respect to

Coca-Cola and Dr Pepper, was stayed for all but two

weeks of its existence.

4. The United States Court of Appeals for the Elev-

enth Circuit unanimously reversed (Pet. App. A1l-A30).

The court held that Royal Crown had failed to meet its

burden of proving that its litigation was ‘a substantial

factor or catalyst in motivating the [respondents’| to

abandon their transactions” (id. at Al2). The court re-

lied on the settled principle that in the absence of any

relief on the merits, a plaintiff may still be entitled to a

statutory award of attorney’s fees if it can show that the

lawsuit “was a causal link prompting some remedial ac-

tion” (id. at Al3). Relying on the Fifth Circuit’s deci-

sion in Posada v. Lamb County, 716 F.2d 1066, 1072

(5th Cir. 1983), the court explained that causation is

established “by evidence that the lawsuit was a substan-

tial factor or a significant catalyst in motivating” de-

neys of the [respondents] on the issue of causation; it did not offer

any documents or other material on the causation issue; and it did

not respond to the [respondents’] affidavits” (Pet. App. Al4).

6

fendants’ behavior (Pet. App. A138). Here, as the court

noted, the record showed that Royal Crown failed to sub-

mit any evidence on the issue whether its lawsuit caused

or was a catalyst for the abandonment of the transac-

tions (id. at Al6).

In assessing the “intensely factual’ question of causa-

tion, the court considered “all of the surrounding cir-

cumstances” (Pet. App. Al7). The court held that “the

totality of the circumstances surrounding the proposed

acquisitions does not support the district court’s findings

regarding the role of the Royal Crown litigation in the

failure of the acquisitions” (id. at A18). In reaching

this conclusion, the court of appeals emphasized that the

lawsuit provided no substantive or controlling relief to

Royal Crown, that the TRO was wholly redundant and

“did not forbid the parties from doing anything that they

could have otherwise done” (Pet. App. A19), and that

Royal Crown had itself elected “to postpone litigation and

‘to maintain trial readiness’” for some four or five

months” while pursuing its lobbying efforts at the FTC

(id. at A23).

Rejecting Royal Crown’s effort to rely on “speculation

and argument,” rather than evidence, the court of ap-

peals held that on the facts of this case, Royal Crown

failed to satisfy its burden of proving its entitlement to

an award of attorney’s fees. (Pet. App. A28-A29).°

“In light of its holding, the court of appeals had no occasion to

address respondents’ additional grounds for reversal, including the

district court’s failure to employ lodestar analysis, the excessiveness

of the award as a matter of law, the error in certain components of

the fee award, and Dr Pepper’s contention that as the target of a

proposed acquisition, it could not be held liable for a violation of

Section 7 and, therefore, should not be liable for an award of fees.

See Pet. App. Al1-A12.

7

ARGUMENT

The decision below is correct and presents no issue that

warrants review by this Court. The Eleventh Circuit

applied settled principles of law to the particular facts

of this case, and reached a plainly correct result that

does not conflict with any decision of this Court or of any

other court of appeals.

The opinion of the Eleventh Circuit stands for the

wholly unexceptional proposition that where a plaintiff

who has obtained neither judicial relief on the merits

nor a settlement of its lawsuit, seeks a statutory award

of fees based on a voluntary change in defendants’ con-

duct, the plaintiff must show that its lawsuit was a

causal link prompting such remedial action (Pet. App.

A12). Petitioner does not challenge the legal standard

actually enunciated and applied by the Eleventh Circuit:

rather, petitioner disputes only the result that obtains

from the application of that standard to a factual record

in which petitioner made no submission of evidence to

satisfy its burden of proof. See Hensley v. Eckerhart,

461 U.S. 424, 437 (1983) (reciting well-settled principle

that the party seeking an award of fees “bears the bur-

den of establishing entitlement to an award”); Blum v.

Stetson, 465 U.S. 886, 898 (1984) (same).

1. Petitioner misreads the decision below. Conse-

quently, the questions stated in the petition are not prop-

erly presented on the record in this ease.

In petitioner’s view, the court of appeals “demanded

that a private plaintiff show that it was more than just

a ‘substantial factor’ or ‘catalyst’... in motivating de-

fendants to abandon their Transactions” (Pet. 9). This

contention is without merit. The court of appeals re-

peatedly recited that a plaintiff who receives no relief

on the merits may nonetheless be deemed to be a sub-

stantially prevailing party under Section 16 of the Clay-

ton Act, if it can show that the lawsuit “was a signifi-

8

eant factor or a significant catalyst” (Pet. App. A13).

See id. at Al4 (Royal Crown may be a prevailing party

“if it establishes that its litigation was a substantial fac-

tor in causing the abandonment of the acquisitions’) ;

ibid. (“Royal Crown must only prove that its litigation

was itself a substantial cause in bringing about the |[re-

spondents’] decisions to abort the challenged transac-

tions”).

Similarly, there 1s no merit to Royal Crown’s conten-

tion that the court of appeals “refus[ed] to apply the

‘chronology and circumstances’ test” to this case (Pet.

11). The court of appeals applied precisely the test

Royal Crown advocates. The court repeatedly emphasized

that in assessing causation it ‘must look to the totality

of the circumstances” (Pet. App. A16), that it “must

evaluate the chronology of events in the context of the

role that the Royal Crown litigation played in the aban-

donment of the acquisition” (id. at A17-A18), and that

its holding is grounded in “the chronology of events

viewed in the context of the surrounding circumstances”

(id. at A29).

As the court of appeals stated, the record in this case

establishes that Royal Crown, bereft of any evidence to

show causation, relied exclusively on a truncated chron-

ology that ignored the full factual context in which the

role of the lawsuit must be assessed. The district court

awarded fees to Royal Crown based on the simplistic and

incorrect proposition that fees could be awarded merely

because “the proposed acquisitions were moving forward

toward imminent consummation before Royal Crown filed

its action in this Court and now they are terminated”’

(Pet. App. A37).* The court of appeals rejected this

post hoc ergo propter hoc fallacy (id. at A17), correctly

4 Of course, the transactions were not “moving forward” at all, but

were statutorily barred from consummation by the extended Hart-

Scott-Rodino waiting period.

9

holding that a court must include “all of the surrounding

circumstances in its causation determination” (ibid.).

Nor is there any foundation for petitioner’s contention

(Pet. 8, 9, 10, 17) that the court of appeals imposed a

“virtually impossible” evidentiary burden or higher legal

standard on petitioner simply because of the contempo-

raneous FTC action. The court expressly stated that “the

fact that the FTC also challenged the [respondents’ |

transactions is not fatal’ to the fee petition because

“Royal Crown need not establish that its litigation was

the sole cause of the [respondents’] ultimate actions”

(Pet. App. Al4). The FTC vote and litigation were sim-

ply part of the totality of circumstances to be consid-

ered.*

There is similarly no basis in the opinion below for

Royal Crown’s contention that the court required a plain-

tiff to show that “its litigation in comparison to that of

the Government, was both necessary and the controlling

relief.” In its assessment of the totality of circumstances,

the court simply found that the litigation was inconse-

quential and that the district court was clearly erroneous

5In discussing the reasons why Royal Crown’s litigation was

redundant and inconsequential in light of the FTC action, the court

explained that in order te obtain an injunction the Commission, un-

like a private plaintiff, does not have to establish standing and anti-

trust injury; rather, the Commission need only show a likelihood of

success on the merits and that the public equities justify such relief

(Pet. App. A21). In this Section 7 case brought by a competitor,

Royal Crown had substantial hurdles to overcome in establishing

standing and antitrust injury. See, e.g., Cargiil, Inc. v. Monfort of

Colo., Inc., 479 U.S. 104 (1986) ; Phototron Corp. v. Eastman Kodak

Co., 842 F.2d 95 (5th Cir.), cert. denied, 486 U.S. 1023 (1988). The

FTC posed a greater threat to the acquisitions than did Royal

Crown’s litigation for the further reason that the Commission had

almost six months to prepare its case during which it took discovery

of the parties and numerous third parties and collected millions of

documents. The FTC also had substantial economic resources at its

disposal.

10

in finding that its TRO was the controlling relief (Pet.

App. A18-A26).*®

Finally, there is no merit to Royal Crown’s contention

(Pet. 21-22) that the court of appeals fashioned a rule

requiring direct evidence of a defendant’s subjective

motivation. The court of appeals did no such thing. The

court expressly acknowledged that in some cases a plain-

tiff seeking a fee award “may be both sufficient and justi-

fied” in relying solely on the chronology of events (Pet.

App. Al4-A15). It is only where, as on the particular

factual record in this case, a plaintiff “never received

relief on the merits and . . . other events completely ob-

secure any inference to be drawn from the chronology of

events, we believe something more is needed” (id. at Al5).

Again, the decision below turns on Royal Crown’s total

failure of proof on a factual issue for which it bore the

burden. The court did not, as Royal Crown contends ( Pet.

23), require an evidentiary hearing in every case nor did

it require “the submission of admissions as a condition

of receiving a fee award.” Rather, the Eleventh Circuit

recognized in this case, as it has in others (e.g., Norman

v. Housing Auth., 836 F.2d 1292, 1303 (11th Cir. 1988),

that an evidentiary hearing is not an essential predicate

to a fee award where a plaintiff can otherwise satisfy its

burden of proving its entitlement to recover attorney’s

fees.

2. Royal Crown’s mischaracterizations of the decision

below expose the error of its attempt to conjure up a con-

flict among the circuits. The “substantial factor or

catalyst” standard employed by the Eleventh Circuit con-

forms to the standard applied by other courts of appeals

in determining whether a plaintiff who has obtained no

final adjudication in its favor and has obtained no judi-

6 See also North Carolina Dep't of Transp. v. Crest St. Community

Council, Inc., 479 U.S. 6, 14 (fee awards are reasonably limited “to

those parties who, in order to obtain relief, found it necessary to file

a complaint in court’’).

11

cial relief on the merits may be entitled to an award of

fees as a substantially prevailing party. See Braafladt v.

Board of Governors, 778 F.2d 1442, 1444 (9th Cir. 1985)

(“The lawsuit must be a catalyst motivating the defend-

ant to provide the relief sought”); Loudermill v. Cleve-

land Bd. of Educ., 844 F.2d 304, 312-13 (6th Cir.), cert.

denied, 109 S. Ct. 377 (1988). (“catalyst which causes

the defendant to make significant changes”); Ortiz

DeArroyo v. Barcelo, 765 F.2d 275, 282 (1st Cir. 1985)

(“lawsuit act[ed| as a ‘catalyst’ in prompting [the de-

fendants to take action ‘to meet the plaintiffs’ claims’ ”’)

(citation omitted); Jranian Students Ass’n v. Sawyer,

639 F.2d 1160, 1163 (5th Cir. Unit A Mar. 1981)

(whether “lawsuit was a significant catalytic factor in

achieving the primary relief sought through litigation’’)

(citation omitted); McQuillen v. Wisconsin Educ. Ass’n

Council, 830 F.2d 659 (7th Cir. 1987), cert. denied, 485

U.S. 914 (1988) (plaintiff not entitled to attorney’s fees

as prevailing party where no causal connection existed

between lawsuit and affirmative action plan) ; Disabled in

Action v. Pierce, 789 F.2d 1016, 1019 {3d Cir. 1986)

(lawsuit must be “material factor in prompting the de-

fendant to afford relief”) ; Sullivan v. Pennsylvania Dep’t

of Labor & Indus., 663 F.2d 448, 448 (3d Cir. 1981)

(whether lawsuit “acted as a ‘catalyst’ for the vindication

of her constitutional rights’) (citation omitted), cert. de-

nied, 455 U.S. 1020 (1982); Williams v. Miller, 620 F.2d

199, 202 (8th Cir. 1980) (“whether the suit was the

‘catalyst’ that brought about compliance’). See also

Hewitt v. Helms, 482 U.S. 755, 763 (1987) (need to show

“a clear causal link between [a] lawsuit’? and the defend-

ants’ changed conduct) .’

? This standard has been uniformly applied by the Eleventh Cir-

cuit. See Taylor v. City of Fort Lauderdale, 810 F.2d 1551, 1560

(11th Cir. 1987) (quoting Robinson v. Kimbrough, 652 F.2d 458, 466

(5th Cir. Aug. 1981)); Doe v. Busbee, 684 F.2d 1375, 1380 (11th

Cir. 1982); Maloney v. City of Marietta, 822 F.2d 1023 (11th Cir.

1987).

12

Royal Crown’s contention (Pet. 12-13) that the deci-

sion below is in conflict with the Fifth Circuit is flatly

wrong. The case on which Royal Crown relies, United

States v. Terminal Transport Co., 653 F.2d 1016 (5th

Cir. Unit B Aug. 1981), cert. denied, 455 U.S. 989

(1982), was expressly distinguished on its facts in the

opinion below (Pet. App. A26-A27). Indeed, the panel in

this case was peculiarly well-suited to comment on the

differences between the cases, since two members of the

panel below (including the author of the court’s opinion )

also sat on the panel in Terminal Transport. In any

event, the long line of more recent Fifth Circuit cases

employing the same standard as the opinion in this case

dispels any possibility of a conflict. E.g., Iranian Stu-

dents; Posada; Leroy v. City of Houston, 831 F.2d 576,

579-81 (5th Cir. 1987), cert. denied, 486 U.S. 1088

(1988). See also Coen v. Harrison County School Bd.,

638 F.2d 24, 26 (5th Cir. Unit A. Feb. 1981) (lawsuit

must be “if not the sole reason for [plaintiff’s] success,

at least a major factor in bringing it about” because

“lal civil rights plaintiff may not collect attorney’s fees

for demanding that a state officer do what he would have

done in any case”), cert. denied, 455 U.S. 938 (1982).

Royal Crown’s other claims of conflict (Pet. 14-16)

are equally far-fetched. In Nadeau v. Helgemoe, 581 F.2d

275 (1st Cir. 1978), the court stated that entitlement to

a fee award requires a showing that plaintiff’s lawsuit

was a catalyst in prompting defendants’ remedial action.

Id. at 279. The court in Nadeau also cautioned that

chronology was “clearly not [the] definitive factor” on

the catalyst issue (id. at 281), and observed that a fee

award is not justified if the lawsuit was “completely

superfluous” (ibid.). These views are clearly echoed in

the opinion below (e.g., Pet. App. A17, A19, A21), where

Royal Crown’s lawsuit was indeed superfluous. In enter-

ing the TRO, the district court explicitly stated that it

was not ruling on the merits (R4-22-75). Since the TRO

was entered during the Hart-Scott-Rodino waiting period

13

when the respondents were already precluded from con-

summating the transactions, the court of appeals cor-

rectly noted that the TRO “did not forbid the parties

from doing anything they could have otherwise done”

(Pet. App. A19). Consistent with the analysis in Nadeau,

the court below concluded that a “plaintiff may not collect

attorneys’ fees for demanding of the defendant that which

the defendant would have done in any case” (id. at A21-

A22).

There is similarly no merit to Royal Crown’s conten-

tion of a conflict with the Third Cireuit (Pet. 15-16).

The cited Third Circuit cases* employed the “catalyst”

standard applied by the Eleventh Circuit; the result in

each case turned on the application of that standard to

the factual record. For example, unlike Royal Crown’s

total absence of proof, the plaintiffs in Morrison v.

Ayoob presented evidence on causation. 627 F.2d at 672.

In any -event, Third Circuit cases not cited by Royal

Crown show plainly that the catalyst test is controlling

in that court; each case turns on whether causation is

established as a factual matter. E.g., Disabled in Action

v. Pierce, 789 F.2d at 1019; Sullivan v. Pennsylvania

Dep’t of Labor, 663 F.2d at 448-49, 451.

In short, there is no basis for Royal Crown’s argument

(Pet. 16) that a conflict exists between the decision be-

low and “the broad reading of this statute” by other

courts of appeals. None of the cited cases conflict in

their holdings or governing legal principles; indeed, none

of the allegedly conflicting cases even arose under Section

16 of the Clayton Act.

3. Finally, there is no merit to Royal Crown’s conten-

tion (Pet. 25-28) that this Court should grant review to

8 NAACP v. Wilmington Medical Center, Inc., 689 F.2d 1161 (3d

Cir. 1980), cert. denied, 460 U.S. 1052 (19883); Morrison v. Ayoob,

627 F.2d 669 (3d Cir. 1980), cert. denied, 449 U.S. 1102 (1981).

14

consider whether the court of appeals should have re-

manded the case for further proceedings.

Royal Crown’s argument is founded on the false prem-

ise that the court of appeals erected a previously un-

known legal standard. As discussed above, this is a mis-

reading of the opinion below. The court of appeals ap-

plied a well-established, unexceptional standard to the

particular facts of this case.

Royal Crown is also incorrect in arguing that the

court of appeals “simply drew different inferences from

the same set of facts” (Pet. 27). Rather, as the court

explicitly set forth, it subjected the district court’s find-

ings of fact to the appropriate “clearly erroneous” stand-

ard of review (see Pet. App. All, A18), and concluded

that “[ijn light of the chronology of events viewed in the

context of the surrounding circumstances, we are left

with a ‘definite and firm conviction’ that the District

Court made a mistake in finding that the Royal Crown

litigation played a significant role in the abandonment of

the acquisitions.” Jd. at A29, quoting Anderson v. City

of Bessemer City, 470 U.S. 564, 573 (1985).

Where petitioner, despite a full and fair opportunity,

offered no evidence to satisfy its burden of proof, there is

no occasion for this Court to review the court of appeals’

well-considered judgment.

CONCLUSION

The petition for a writ of certiorari should be denied.

GORDON B. SPIVACK

CAROLYN T. ELLIS

JAMES R. EISZNER, JR.

COUDERT BROTHERS

200 Park Avenue

New York, New York 10166

(212) 880-4400

FRANK C. JONES

KING & SPALDING

2500 Trust Company Tower

Atlanta, Georgia 30303

(404) 572-4600

WILLIAM M. DREYER

THE Coca-CoLA COMPANY

One Coca-Cola Plaza

Atlanta, Georgia 30301

(404) 676-2121

Counsel for Respondent

The Coca-Cola Company

May 25, 1990

Respectfully submitted,

RICHARD T. COLMAN

Counsel of Record

RAYMOND A. JACOBSEN, JR.

JERROLD J. GANZFRIED

HowreEY & SIMON

1730 Pennsylvania Avenue, N.W.

Washington, DC 20006

(202) 783-0800

Counsel for Respondent

PepsiCo, Ine.

RONALD G. CARR

JONATHAN BAND

MORRISON & FOERSTER

2000 Pennsylvania Avenue, N.W.

Washington, DC 20006

(202) 887-1500

Counsel for Respondent

Dr Pepper Company