The Supreme Court yesterday refused to revive an antitrust lawsuit by the nation's largest maker of plastic soft drink bottles against Coca-Cola Co. and bottlers in Virginia and five other states.
Coca-Cola and bottlers in Virginia, North and South Carolina, Georgia, Tennessee and Alabama were sued for $17 million by Sewell Plastics Inc., a firm based in Atlanta that pioneered development of plastic two-liter bottles for soft drinks.
Sewell Plastics was told in 1981 that unless it cut prices and agreed to sell the two-liter containers for $200 per thousand, the bottlers would form a cooperative and make their own bottles.
When Sewell refused to lower its price, the bottlers joined in 1982 to form Southeastern Container Inc.
Coca-Cola was instrumental in the cooperative's formation and success. The soft drink company guaranteed debts incurred by the cooperative and provided its Atlanta headquarters for the group's board meetings to discourage bottlers from buying the containers outside the cooperative.
Sewell said the bottling cooperative means that independent bottle makers such as itself are barred from competing for as much as 40 percent of the market for the plastic containers.
But a federal judge rejected the company's claims that such an arrangement violates federal antitrust law, and threw out Sewell's suit. The Supreme Court's action yesterday essentially confirmed that decision.
The court also rejected a steel industry challenge to air pollution control standards adopted by the Environmental Protection Agency in 1987. Without comment, the justices let stand a ruling that said the standards are a reasonable attempt to protect public health.
The U.S. Circuit Court of Appeals here last April threw out a challenge by the American Iron and Steel Institute, saying the new standards, the outgrowth of studies begun in the late 1970s to correct earlier scientific errors, were neither arbitrary nor capricious.
The iron and steel institute had argued that the EPA rules threaten American industrial competitiveness and will force the steel industry to spend $200 million to comply.
The court said states have the power to impose so-called value-added taxes on out-of-state companies doing business within their borders.
By a 6-2 vote, the justices upheld a Michigan levy based on the value added to merchandise by business activities in the state.
While the Michigan tax is believed to be unique, yesterday's ruling gives a green light to other financially strapped states contemplating similar revenue-raising measures.
An Ohio company doing business in Michigan had challenged the value-added tax law, saying it unfairly discriminates against out-of-state firms. The court ruled that the company failed to prove there is no rational relationship between the tax paid to Michigan and the company's business activity there.