Rel: December 15, 2023

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern 

Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 

300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other 

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SUPREME COURT OF ALABAMA

OCTOBER TERM, 2023-2024

_________________________

SC-2022-0881

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Ex parte BTC Wholesale Distributors, Inc.; Arhaan, LLC; 

Birmingham Wholesale, LLC; City Wholesale, Inc.; and The H.T. 

Hackney Co. 

PETITION FOR WRIT OF MANDAMUS 

(In re: Buffalo Rock Company, Inc.

v. 

PepsiCo, Inc., et al.) 

(Jefferson Circuit Court: CV-19-900217)

COOK, Justice.
SC-2022-0881

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For many years, Buffalo Rock Company, Inc., has contracted with 

PepsiCo, Inc., for the exclusive bottling and distribution rights for 

PepsiCo's soft-drink products in certain territories, including Alabama. 

Despite Buffalo Rock's contracts with PepsiCo, there are a number of 

wholesalers that purchase PepsiCo's soft-drink products in other states 

and then sell them to stores in Alabama. Among those wholesalers are 

the petitioners, BTC Wholesale Distributors, Inc.; Birmingham 

Wholesale, LLC; Arhaan, LLC; City Wholesale, Inc.; and The H.T. 

Hackney Co. ("the defendants").

Frustrated with this activity, Buffalo Rock commenced the present 

action against the defendants, among others, in the Jefferson Circuit 

Court, alleging claims of tortious interference with a business 

relationship, tortious interference with a contract, and conspiracy. It 

sought damages for lost profits and punitive damages, as well as an 

injunction prohibiting the defendants from continuing to sell PepsiCo's 

products in its exclusive territories. 

Before trial, Buffalo Rock filed three motions in limine. Two of those 

motions sought to prohibit any evidence, testimony, or arguments in 

support of what the defendants contend are their central defenses in this 
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case -- (1) the justification and competitor's privilege defenses and (2) the 

"antitrust" or illegality defense. The third motion sought to bar evidence,

testimony, or arguments related to a PepsiCo program that provides 

credits to bottlers, like Buffalo Rock, when they identify instances when

some other entity is selling PepsiCo's soft-drink products in their 

exclusive territories. The trial court granted each of those motions. 

The defendants jointly petitioned this Court for a writ of mandamus 

directing the trial court to vacate its orders granting the three motions 

in limine. For the reasons stated below, we grant the petition in part, 

deny the petition in part, and issue the writ. 

Facts and Procedural History

In 1951, Buffalo Rock entered into an exclusive bottling agreement 

("EBA") with PepsiCo in which PepsiCo gave Buffalo Rock the exclusive 

rights to manufacture, distribute, and sell its soft-drink products within

certain designated territories, principally, in Alabama. As one of 

PepsiCo's exclusive bottlers and distributers, Buffalo Rock would sell in 

its exclusive territories PepsiCo's soft-drink products to retailers, who 

would then, in turn, sell those products directly to the consuming public. 

In exchange for those exclusive bottling and distribution rights, Buffalo 
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Rock agreed that it would bottle and sell only PepsiCo soft-drink products 

in its designated territories.1 Since 1951, Buffalo Rock has routinely 

renewed its EBAs with PepsiCo.

The defendants sell a variety of products to convenience stores and 

other small stores ("C-stores") in and around Alabama.2 Among those 

products are soft-drink products, including PepsiCo's soft-drinks

products. The materials before us indicate that the defendants purchase 

their soft-drink products from multiple sources, including larger 

wholesalers located outside Alabama, but they do not purchase those 

1According to the defendants "almost all [of the alleged] 

transshipped Pepsi drink products in this action originate with former 

defendant Bottling Group, LLC (also known as Pepsi Beverages 

Company or PBC)." The materials before us indicate that PBC bottles 

80% of PepsiCo's soft-drink products in the United States. In addition to 

PBC, PepsiCo also has other regional bottlers with which it has EBAs 

which are allegedly similar to its EBA with Buffalo Rock. PBC and the 

other bottlers sell PepsiCo soft-drink products to many wholesalers and 

retailers in other parts of the United States, including the states

surrounding Alabama.

2Although the defendants' primary customers are convenience 

stores, they also sell to pharmacies, discount stores, and small grocery 

stores.
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products directly from either PepsiCo or Buffalo Rock.3 Buffalo Rock

contends that, after the defendants buy their soft-drink products from 

larger out-of-state wholesalers, they then ship them into Buffalo Rock's 

exclusive territories and sell them to C-stores in those territories. This 

practice is referred to by the parties as "transshipping."4

In its most recent amended complaint, Buffalo Rock contended that 

third-party transshippers, like the defendants, are "free-riders" who 

"reap the benefits of hundreds of millions of dollars invested by the 

independent bottlers[ -- like Buffalo Rock --] to increase local demand for 

PepsiCo brands." Buffalo Rock further contended that transshippers "do 

3It is undisputed that there is neither a contractual nor a business 

relationship between PepsiCo and the defendants. It is also undisputed 

that there is neither a contractual nor a business relationship between 

Buffalo Rock and the defendants. The defendants are also not a party to 

Buffalo Rock's EBA with PepsiCo.

4The defendants define "transshipping" as the "shipment of a soft 

drink from one bottler's assigned territory to another bottler's assigned 

territory for resale." Buffalo Rock, however, defines that term more 

broadly and asserts that anyone who purchases PepsiCo soft-drink

products from a source other than from Buffalo Rock and then resells

those products in its exclusive territories is engaging in transshipping, 

even if those PepsiCo soft-drink products were first purchased from a 

retailer who initially purchased its PepsiCo soft-drink products from 

Buffalo Rock inside its exclusive territories. 
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not pay for the merchandising, inventory rotation, and sales 

management operations necessary to ensure the sale of PepsiCo [softdrink products] that meet the standards and specifications that PepsiCo 

contractually requires of its independent bottler[s]" and that 

transshippers "frequently sell expired and outdated PepsiCo [soft-drink 

products] to the public, which causes loss of reputation and market share 

to the independent bottlers and PepsiCo." Buffalo Rock contends that 

preventing this type of activity is the whole reason for its exclusive EBAs 

with PepsiCo and is the only way to make its investments in bottling, 

distributing, and marketing PepsiCo's soft-drink products under those 

agreements worthwhile.

Buffalo Rock's EBA states that Buffalo Rock may "bottle and 

distribute" PepsiCo's soft-drink products in Buffalo Rock's exclusive

territories and "nowhere else." However, the EBA does not expressly 

require Buffalo Rock or PepsiCo to do anything to prevent third parties, 

like the defendants, from engaging in transshipping. After Congress 

passed the Soft Drink Interbrand Competition Act of 1980 ("the Soft 
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Drink Act"), 15 U.S.C. § 3501 et seq., in July 1980,5 PepsiCo announced 

its commitment to making sure that none of its exclusive bottlers 

engaged in transshipping activity and that any such activity occurring in 

its bottlers' exclusive territories would be reported and put to an end. 

To assist its exclusive bottlers, like Buffalo Rock, who might 

otherwise be impacted by transshipping, PepsiCo established a program 

called the "Transshipment Enforcement Program" ("the TEP") in 1984. 

PepsiCo announced that, under the TEP, it would fine bottlers whose 

products are identified as being for sale in the wrong territory and that 

it would also provide credits to its bottlers when transshipping practices 

were identified in their exclusive territories. For years, PepsiCo has 

operated the TEP. In some instances, PepsiCo has even filed suit against 

bottlers who had transshipped products into one of its bottler's exclusive 

territories.

According to Buffalo Rock, over time, the TEP, as designed and 

enforced, proved not to be sufficiently effective to combat transshipping 

5According to Buffalo Rock, the Soft Drink Act specifically exempted 

from the United States' antitrust laws the inclusion and enforcement of 

territorial restrictions in bottling and distribution agreements and was 

enacted to assist in combatting both bottlers or distributors and third 

parties who engaged in transshipping. 
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practices. It claims that the program is costly and time-consuming, 

especially because Buffalo Rock must identify and report specific 

incidents of transshipping that must then be investigated by PepsiCo, 

with the possibility that Buffalo Rock might bear some costs if the report 

proves inaccurate. According to Buffalo Rock, despite the TEP program, 

a significant amount of transshipping activity goes unchecked and has 

resulted in its loss of millions of dollars' worth of sales.

In 2010, Buffalo Rock and PepsiCo attempted to address this issue 

by sending the defendants written notice of their transshipping 

violations and demanding that they cease that activity. After the 

defendants continued to transship PepsiCo products into Buffalo Rock's 

exclusive territories, Buffalo Rock commenced the present action against 

them in 2019.6

 In its most recent amended complaint, filed in 2020, Buffalo Rock 

alleged, among others, claims of tortious interference with a business 

relationship and prospective business relationships, tortious interference 

with a contract, and conspiracy. As to its tortious-interference claims, 

6Buffalo Rock also sued PepsiCo in this action but voluntarily 

dismissed it before the filing of this mandamus petition.
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Buffalo Rock specifically alleged that the defendants intentionally 

interfered with two of its business relationships: (1) its contractual

relationship with PepsiCo and (2) its current and prospective business

relationships with C-stores in its exclusive territories. It alleged that it 

had "a clear, specific, legal right to its exclusive territories and for 

Defendants ... not to transship PepsiCo products, directly or indirectly 

into [its] exclusive territories."7 Buffalo Rock sought damages for lost 

profits and punitive damages, as well as an injunction prohibiting the 

defendants from continuing to engage in transshipping in its exclusive 

territories to prevent "loss of customers and reputation."

In their answer to Buffalo Rock's complaint, the defendants 

asserted a variety of affirmative defenses to the claims against them, 

including the justification defense, the competitor's privilege defense, 

and the "antitrust" or illegality defense. 

Following additional filings and proceedings, the defendants filed a 

joint summary-judgment motion. In that motion, they argued that, 

because they were not parties to Buffalo Rock's EBAs with PepsiCo, those

7Buffalo Rock did not bring a trademark-infringement claim or any 

type of intellectual-property claim. Buffalo Rock also did not bring any 

claim under the Soft Drink Act. 
SC-2022-0881

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contracts could not prohibit them from purchasing PepsiCo soft-drink

products from out-of-state wholesalers and then reselling those products 

to their C-store clients in Alabama even if those clients happened to be 

located in Buffalo Rock's exclusive territories. The defendants further 

argued that an order enjoining them from continuing to buy PepsiCo 

products from out-of-state wholesalers and from selling those products to 

their respective C-store clients, even ones that may be located in Buffalo 

Rock's exclusive territories, would amount to an "illegal restraint of 

trade" or "illegal antitrust activity" in violation of the Sherman Antitrust 

Act, see 15 U.S.C. § 1-2. Following a hearing, the trial court denied the 

defendants' joint summary-judgment motion and set the case for a jury 

trial. 

Shortly after the denial of the defendants' summary-judgment

motion, Buffalo Rock filed three motions in limine in which it sought (1) 

to "exclude all evidence, testimony and arguments by Defendants at trial 

of a competitor's privilege or justification defense to Buffalo Rock's 

intentional interference claims"; (2) to "exclude all evidence, testimony 

and arguments by Defendants at trial of an affirmative 'antitrust' or 

'illegality' defense to Buffalo Rock's intentional interference claims and 
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Buffalo Rock's request for permanent injunction"; and (3) to "exclude any 

testimony, evidence, argument, or reference at trial relating to the 

Transshipment Enforcement Program ('TEP') established by PepsiCo 

and any payments or credits to Buffalo Rock thereunder."

After the defendants filed their responses to Buffalo Rock's motions, 

the trial court held a lengthy hearing on those motions. It later entered 

three separate, brief orders granting each of those motions.8

Shortly thereafter, the defendants jointly petitioned this Court for 

a writ of mandamus in which they asked this Court to direct the trial 

court to vacate all three of its orders. We ordered answers and briefs. 

Standard of Review

It is well settled that "[a] trial court's disallowance of a party's 

affirmative defense[s] is reviewable by a petition for a writ of 

mandamus." Ex parte Buffalo Rock Co., 941 So. 2d 273, 277 (Ala. 2006).9

8In those orders, the trial court did not state its reasons as to why 

it was granting those motions. 

9See also Ex parte Teal, 336 So. 3d 165, 168, 171 & n.3 (Ala. 2021) 

(granting petition for writ of mandamus) (citing and quoting Ex parte 

Buffalo Rock Co., 941 So. 3d 273, 277 (Ala. 2006)); Ex parte Gadsden 

Country Club, 14 So. 3d 830 (Ala. 2009); and Ex parte Tahsin Indus.

Corp., U.S.A., 4 So. 3d 1121 (Ala. 2008). 
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This Court has stated:

"'Mandamus is an extraordinary remedy and will be 

granted only where there is "(1) a clear legal right in the 

petitioner to the order sought; (2) an imperative duty upon the 

respondent to perform, accompanied by a refusal to do so; (3) 

the lack of another adequate remedy; and (4) properly invoked 

jurisdiction of the court."'"

Id. (citations omitted).

Discussion

In their mandamus petition, the defendants argue that, by granting 

Buffalo Rock's motions in limine and excluding all evidence, testimony, 

and arguments related to their affirmative defenses and the TEP, the

trial court improperly deprived them of the ability to rebut the evidence 

that Buffalo Rock will present in support of its tortious-interference 

claims when this case proceeds to trial. We will address each motion in 

limine in turn.

Motion In Limine to Exclude the Defendants'

Justification and Competitor's Privilege Defenses

The defendants first contend that the trial court erred in granting 

Buffalo Rock's motion in limine requesting that they be prevented from 

presenting any evidence, testimony, or arguments in support of their 

justification and competitor's privilege defenses. In addressing this 
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contention, we begin with an overview of the tort of intentional 

interference.

It is well settled that the elements of a tortious-interference claim 

are: "(1) the existence of a protectable business relationship; (2) of which 

the defendant knew; (3) to which the defendant was a stranger; (4) with 

which the defendant intentionally interfered; and (5) damage." White 

Sands Grp., L.L.C. v. PRS II, LLC, 32 So. 3d 5, 14 (Ala. 2009) ("White 

Sands II"). Although this Court has previously explained that "[i]t is 

widely recognized that tortious interference with a contractual 

relationship is a claim separate and distinct from interference with a 

business relationship or expectancy," we have nevertheless also 

recognized that they are related torts and should be viewed on a 

spectrum. White Sands Grp., LLC v. PRS II, LLC, 998 So. 2d 1042, 1054

(Ala. 2008) ("White Sands I"). Specifically, we have explained: "'The two 

torts are initially distinguished by their primary elements -- one tort 

deals with the interference with a fixed-term contract that is already in 

existence; the other tort deals with "mere expectancies." The latter 

element determines which interests along the continuum of business 

dealings are protected.'" Id. (quoting Orrin K. Ames III, Tortious 
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Interference with Business Relationships: The Changing Contours of this 

Commercial Tort, 35 Cumb. L. Rev. 317, 330 (2004-2005)) (emphasis in 

White Sands I). In other words, the relevant difference between these 

torts is the object of the interference -- i.e., the contract vs. the business 

relationship.

This Court, moreover, has previously held that justification is an 

affirmative defense to a tortious-interference claim, see White Sands II,

32 So. 3d at 12, and that the competitor's privilege defense is a "special 

application" of the justification defense. See id. at 18. As relevant here,

we have also recognized that a defendant can assert both justification 

and competitor's privilege as affirmative defenses to a tortiousinterference claim in the same action. See Soap Co. v. Ecolab, Inc., 646 

So. 2d 1366, 1371 (Ala. 1994), overruled on other grounds by White Sands

II.

A. The Justification Defense 

With regard to the justification defense, in Gross v. Lowder Realty 

Better Homes & Gardens, 494 So. 2d 590 (Ala. 1986), this Court reviewed 

the law of intentional interference with contractual relations and the law 

of intentional interference with business relations and adopted the 
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following "rule":

"[The] tort of intentional interference with business or 

contractual relations, to be actionable, requires:

"(1) The existence of a contract or business 

relation;

"(2) Defendant's knowledge of the contract or 

business relation;

"(3) Intentional interference by the 

defendant with the contract or business relation;

"(4) Absence of justification for the 

defendant's interference; and

"(5) Damage to the plaintiff as a result of 

defendant's interference."

494 So. 2d at 597 (footnotes omitted). As to the element of "[a]bsence of 

justification for the defendant's interference," this Court explained that 

whether a defendant's interference is justified is generally a question to 

be resolved by the trier of fact and "depends upon a balancing of the 

importance of the objective of the interference against the importance of 

the interest interfered with, taking into account the surrounding 

circumstances." Id. at 597 n.3.

Adopting Restatement (Second) of Torts (Am. Law Inst. 1979) 

("Restatement"), this Court in Gross noted that the following are among 
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the factors to be "consider[ed]" when determining whether a defendant's 

interference with a contractual or business relationship is justified: 

"'(a) the nature of the actor's conduct,

"'(b) the actor's motive,

"'(c) the interests of the other with which the actor's 

conduct interferes,

"'(d) the interests sought to be advanced by the actor,

"'(e) the social interests in protecting the freedom of 

action of the actor and the contractual interests of the other,

"'(f) the proximity or remoteness of the actor's conduct 

to the interference, and

"'(g) the relations between the parties.'"

Id. (quoting Restatement (Second) of Torts § 767 (Am. Law Inst. 1979)). 

Years later, in White Sands II, this Court revisited Gross and its 

progeny because of what we perceived as years of ambiguity concerning 

the exact elements of a tortious-interference claim. After noting that 

many cases, including Gross, have deemed the "absence of justification" 

to be a prima facie element of a tortious-interference claim, we concluded 

that such a requirement was illogical. Specifically, this Court held that 

"the absence of justification is no part of a plaintiff's prima facie case in 
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proving wrongful interference with a business or contractual 

relationship" but is, instead, "an affirmative defense to be pleaded and 

proved by the defendant." 32 So. 3d at 12 (emphasis added). This Court

overruled those cases to the extent that they held to the contrary. Id. at 

14 (overruling Ex parte Awtrey Realty Co., 827 So. 2d 104 (Ala. 2001), 

Colonial Bank v. Patterson, 788 So. 2d 134 (Ala. 2000), Folmar & Assocs. 

LLP v. Holberg, 776 So. 2d 112 (Ala. 2000), Mutual Sav. Life Ins. Co. v. 

James River Corp. of Virginia, 716 So. 2d 1172 (Ala. 1998), Sevier Ins. 

Agency, Inc. v. Willis Corroon Corp. of Birmingham, 711 So. 2d 995 (Ala. 

1998), Soap Co. v. Ecolab, Inc., 646 So. 2d 1366 (Ala. 1994), Underwood 

v. South Cent. Bell Tel. Co., 590 So. 2d 170 (Ala. 1991), Betts v. 

McDonald's Corp., 567 So. 2d 1252 (Ala. 1990), Valley Props., Inc. v. 

Stahan, 565 So. 2d 571 (Ala. 1990), and Gross v. Lowder Realty Better 

Homes & Gardens, 494 So. 2d 590 (Ala. 1986)).

However, we upheld the portions of those decisions applying § 767 

of the Restatement and the comments thereto and again emphasized that 

"'[w]hether a defendant's interference is justified depends upon a 

balancing of the importance of the objective of the interference against 

the importance of the interest interfered with, taking into account the 
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surrounding circumstances.'" White Sands II, 32 So. 3d at 12 (quoting

Gross, 494 So. 2d at 597 n.3, quoting in turn the Restatement § 767)

(emphasis added). Accordingly, this Court explained: 

"'Under the same circumstances interference by some means 

is not improper while interference by other means is 

improper; and, likewise, the same means may be permissible 

under some circumstances while wrongful in others. The issue 

is not simply whether the actor is justified in causing the 

harm, but rather whether he is justified in causing it in the 

manner in which he does cause it.'"

Id. at 13 (quoting cmt. c to the Restatement § 767 (some emphasis added; 

some emphasis in White Sands II).

We also reiterated that the question whether a defendant's 

interference is justified is "generally a jury question." Id. at 18 (citing 

Specialty Container Mfg., Inc. v. Rusken Packaging, Inc., 572 So. 2d 403, 

408 (Ala. 1990), and Gross, 494 So. 2d at 597 n.3). Thus, although absence 

of justification is not a prima facie element of a tortious-interference 

claim, justification is an affirmative defense to a tortious-interference

claim, and this Court continues (1) to apply the "justification factors" set 

forth in § 767 of the Restatement to cases in which a justification defense 

has been raised and (2) to recognize that justification as a defense to a 

tortious-interference claim is ordinarily a question for the jury. See, e.g.,
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Cobbs, Allen & Hall, Inc. v. EPIC Holdings, Inc., 335 So. 3d 1115, 1131

(Ala. 2021) ("'We retain the principle that justification is an affirmative 

defense to be pleaded and proved by the defendant. Whether the 

defendant is justified in his interference is generally a question to be 

resolved by the trier of fact.'" (quoting Gross, 494 So. 2d at 597 n.3)).

Buffalo Rock contends that because it had exclusive license 

agreements with PepsiCo, the fact-finder (in this case, the jury) cannot 

consider the justification defense. According to Buffalo Rock, (1) because 

it had the exclusive rights to bottle and to distribute PepsiCo's soft-drink 

products in the territories designated in its EBAs with PepsiCo and (2) 

because there was no dispute that the defendants knew about this 

contractual relationship but proceeded to sell PepsiCo soft-drink 

products to C-stores within Buffalo Rock's exclusive territories anyway, 

the trial court's exclusion of any evidence, testimony, or arguments in 

support of the defendants' justification defense was merited.

Buffalo Rock does not argue that the defendants failed to present 

evidence regarding any of the justification factors or that there was no 

genuine issue of material fact as to any of the justification factors; 

instead, it argues merely that the justification factors are simply 
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irrelevant given its exclusive contracts. 

In contrast, the defendants argue that they have substantial 

evidence that shows that any interference was justified under the 

justification factors set forth in the Restatement and that the jury is 

entitled to consider the justification factors in light of that evidence. In 

fact, they spend 10 pages of their mandamus petition arguing about the 

application of the 7 justification factors. For instance, the defendants 

argue that they have secured much of the business of various C-stores in 

Buffalo Rock's exclusive territories because, they say, they provide better 

and more efficient customer service. The defendants also contend that 

they have evidence showing that they are selling PepsiCo soft-drink 

products when Buffalo Rock is unwilling or unable to fill orders. 

Specifically, according to the defendants, they have evidence showing

that they normally sell products to C-stores in smaller quantities than 

Buffalo Rock sells its PepsiCo products because, they say, C-stores need 

smaller lot sizes. They also claim that they have evidence showing that 

they visit the C-stores more frequently because they market a wide 

variety of products beyond soft drinks and are therefore able to adjust 
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when particular soft-drink products have been sold out.10

The defendants also insist that they have evidence showing that 

Buffalo Rock has no existing business relationship with many of their Cstore clients and that Buffalo Rock did not even know who some of their 

customers were before discovery. They further argue that there is no 

Alabama caselaw allowing a tortious-interference-with-a-businessrelationship claim when the plaintiff has never done business with a 

party with whom the defendant is allegedly interfering and may not even 

know that party exists. See Petition at 26 (citing Glennon v. Rosenblum, 

325 F. Supp. 3d 1255, 1267 (N.D. Ala. 2018) (recognizing that a business 

"does not have a legally protectable relationship with every potential 

participant in their local market"); McCreight v. AuburnBank, 611 F.

Supp. 3d 1336, 1343 (M.D. Ala. 2020) (same)). 

Finally, according to the defendants, they have no contractual 

relationship with either Buffalo Rock or PepsiCo and, as a result, are not

10Buffalo Rock strongly disputes all of those assertions, including 

that it has been "unable" or "unwilling" to fill orders. It also contends, as 

noted earlier, that the defendants do not adhere to PepsiCo's qualitycontrol requirements by, for example, not selling PepsiCo soft-drink

products within a certain number of days of their expiration dates. 
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bound by the terms of the EBAs between those parties -- including any 

provisions of those agreements that grant Buffalo Rock exclusive rights 

to distribute PepsiCo soft-drink products in its exclusive territories. 

Instead, they claim they had a lawful right to buy and sell PepsiCo softdrink products.

In support of its contention that this justification evidence is 

irrelevant, Buffalo Rock relies on this Court's prior decision in Alcazar 

Amusement Co. v. Mudd & Colley Amusement Co., 204 Ala. 509, 86 So. 

209 (1920). In that case, the plaintiff, an operator of a Birmingham movie 

theater, had a contract with a film distributor that granted the plaintiff

an exclusive right to show a new film. The defendant, an operator of a 

competing movie theater in Birmingham, nevertheless reached an 

agreement with that same film distributor to show the new film in 

violation of the plaintiff's exclusive contract rights. The plaintiff filed suit 

to enjoin the defendant from showing the movie on the basis that the 

plaintiff had the exclusive right to show the movie. The trial court 

granted the plaintiff's request for an injunction, and the defendant 

appealed.

On appeal, this Court addressed whether the trial court could grant 
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an injunction that "sought to prevent a third party ... from enjoying the 

benefit ... of a conscious aiding of a party to an existing contract to breach 

it," 204 Ala. at 513, 86 So. at 211, and held that the third party in that 

case, namely, the defendant, could be enjoined from showing a film in 

violation of the plaintiff's exclusive contract with the distributor. In 

support of that conclusion, this Court explained: 

"A third party who, with knowledge of the existence of a 

valid contract between others, interferes with its performance 

or consciously contributes to the impairment of the rights of a 

party thereto to avail of its obligations (especially wherefrom 

a selfish advantage or benefit may accrue to such third party), 

... commits a tort and is liable for the consummated wrong

...."

204 Ala. at 513, 86 So. at 212.

Relying on Alcazar and Alabama Power Co. v. Thompson, 278 Ala. 

367, 178 So. 2d 525 (1965), Buffalo Rock argues that a per se rule exists 

establishing liability in tortious-interference cases when the defendant

"'knowingly interferes with the performance of a valid contract between 

others, or ... contributes to the impairment of the rights of a party 

thereto.'" Answer at 12 (quoting Thompson, 278 Ala. at 370, 178 So. 2d 

at 528 (emphasis added)). According to Buffalo Rock, in such 

circumstances, any evidence of justification becomes irrelevant. Because 
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the defendants knowingly distribute PepsiCo soft-drink products inside

the exclusive territories granted to Buffalo Rock under its contracts with 

PepsiCo, Buffalo Rock contends that, under Alcazar, they are liable for 

tortious interference and, thus, were appropriately prohibited by the trial 

court from presenting evidence in support of their justification defense. 

The defendants correctly note, however, that this Court, in 

Louisiana Oil Corp. v. Green, 230 Ala. 470, 161 So. 479 (1935), expressly 

held that the language quoted above from Alcazar is dicta. See 230 Ala. 

at 473, 161 So. at 481 (noting that "[b]y way of argument, not essential 

to the conclusion, the court [in Alcazar] referred to certain foreign cases 

holding that an action in tort exists against one who consciously 

interferes with the performance of a contract. This is not authoritative

on the subject, since it is only stated by way of argument, and was not 

controlling in determining the equity jurisdiction of that case." (emphasis 

added)); Gross, 494 So. 2d at 595 (recognizing that "[t]he Green court 

stated the broader rule announced in Alcazar, supra, was 'not 

authoritative'").11

11Indeed, this Court's decision in Alcazar determined only whether 

the injunction at issue was within the scope of the trial court's equity 
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Moreover, our Court has significantly changed the law on tortious 

interference since Alcazar was decided. This court has adopted and 

expressly reaffirmed repeatedly the Restatement test originally set forth 

in Gross and modified in White Sands II. Crucially, nothing in the

Restatement test endorses Buffalo Rock's contention that selling 

products within a plaintiff's territory gives rise to liability for tortious 

interference whenever the plaintiff has exclusive distribution rights

pursuant to a contract with the manufacturer of the products. Buffalo 

Rock never attempts to grapple with the Restatement test. We also said 

nothing in Gross or its progeny to indicate that we were adopting the 

powers. However, even if the language in Alcazar were authoritative, it 

does not stand for the proposition that the defendants' sale of PepsiCo 

soft-drink products to C-stores within Buffalo Rock's exclusive territories 

gives rise to liability for tortious interference. In Alcazar, this Court

upheld an injunction that "sought to prevent a third party ... from 

enjoying the benefit ... of a conscious aiding of a party to an existing 

contract to breach it." 204 Ala. at 513, 86 So. at 211. In other words, the 

language in Alcazar pertained to circumstances in which the defendant 

knowingly caused the film distributor to breach the terms of the 

distributor's own exclusive contract with the plaintiff by allowing the 

defendant to show the film. Here, in contrast, Buffalo Rock does not

allege that PepsiCo has breached its contracts with Buffalo Rock, much 

less argue that the defendants have caused PepsiCo to breach its 

contracts by allowing the defendants to distribute PepsiCo soft-drink 

products in Buffalo Rock's exclusive territories.
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dicta from Alcazar. 

In further support of its contention, Buffalo Rock cites several 

decisions from other jurisdictions regarding similar EBAs and argues 

that the defendants have not cited a single case holding that selling "gray 

market" goods is bona fide competition. However, none of the decisions 

cited by Buffalo Rock involved preventing a defendant from presenting a 

defense and are thus clearly distinguishable.12 

12For instance, Buffalo Rock cites Wyoming Beverages, Inc. v. CoreMark International, Inc., Case No. 17-CV-116-F, Jan. 4, 2018 (D. Wy. 

2018) (not reported in Federal Supplement), in which several bottling 

companies sued a wholesaler based upon legal theories similar to the 

ones in this case. The United States District Court of Wyoming dismissed 

a claim asserting that the Soft Drink Act created a private cause of action 

and a portion of a tortious-interference claim but otherwise denied the 

motion to dismiss. Refusing to dismiss a plaintiff's claim is a far cry from 

granting a motion in limine preventing the presentation of evidence, 

testimony, and arguments in support of an affirmative defense. 

Buffalo Rock then cites Commonwealth of Pennsylvania ex rel. 

Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 177 (3d Cir. 1988), in which 

the State of Pennsylvania brought an action against PepsiCo for 

violations of antitrust laws after PepsiCo took actions against a bottler 

to prevent transshipping. The Zimmerman court found that the Soft 

Drink Act permitted PepsiCo to enforce its EBAs with bottlers by taking 

actions against bottlers who were involved in transshipping in violation 

of the EBAs; however, it was not asked to address whether wholesalers 

who transshipped were interfering in a contract and certainly did not 

grant a motion in limine preventing the presentation of evidence, 

testimony, and arguments in support of an affirmative defense. 
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27

In sum, we need not decide if the defendants are correct that their 

actions were justified. We need only decide whether the jury is entitled 

to hear their evidence of justification and consider the justification 

factors. Because our caselaw in Gross, White Sands II, and Cobbs, supra, 

is clear, we hold that the jury is entitled to hear this evidence and to 

determine whether the defendants should not be held liable based on a 

balancing of the justification factors set forth in § 767 of the 

Buffalo Rock also cites Owens v. Pepsi Cola Bottling Co. of Hickory, 

N.C., 330 N.C. 666, 412 S.E.2d 636 (1992). There, a wholesaler sued a 

bottling company for sharply curtailing its supply because the bottling 

company determined that the wholesaler was transshipping. The 

Supreme Court of North Carolina held that the bottling company could 

take such action (that is, curtailing supply) pursuant to certain 

provisions of the Soft Drink Act but did not even consider a tortiousinterference claim on behalf of the defendant bottling company. 

Finally, Buffalo Rock cites Brown Bottling Group, Inc. v. Imperial 

Trading Co., Civil Action No. 3:19-CV-142-HTW-LGI, Mar. 4, 2022 (S.D. 

Miss. 2022) (not reported in Federal Supplement), in which a bottling 

company brought similar tortious-interference claims against a 

wholesaler, and Bama ICEE LLC v. J & J Snack Foods Corp., Case No.

7:18-cv-01327-LSC, May 8, 2019 (N.D. Ala. 2019) (not reported in Federal 

Supplement), in which Bama ICEE LLC brought similar tortiousinterference claims against a wholesaler. Both of those cases are 

distinguishable, however, because the trial court in those cases merely 

denied motions to dismiss.
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Restatement.13 Accordingly, the trial court's decision to exclude any 

evidence, testimony, or arguments related to the defendants' justification 

defense was improper, and the petition is due to be granted on this 

ground. 

B. The Competitor's Privilege Defense

In addition, the trial court granted Buffalo Rock's motion in limine 

seeking to exclude any evidence, testimony, or arguments related to the 

defendants' competitor's privilege affirmative defense. As stated 

previously, this defense is a "special application" of the justification 

defense and can be asserted in conjunction with a justification 

affirmative defense. See White Sands II, 32 So. 3d at 18. 

The competitor's privilege defense originated in § 768 of the

Restatement and was first adopted by this Court in Soap Co. v. Ecolab, 

Inc., 646 So. 2d 1366, 1370 (Ala. 1994), overruled on other grounds by 

White Sands II, supra. It applies "'when the contract involved is 

terminable at will or when the defendant causes a third person not to 

13Moreover, it would seem that evidence relating to the justification 

factors would also be relevant to Buffalo Rock's claim for punitive 

damages.
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enter into a prospective contract with another who is his competitor.'"

Tom's Foods, Inc. v. Carn, 896 So. 2d 443, 457 (Ala. 2004) (quoting Soap 

Co., 646 So. 2d at 1369). 

Under that defense:

"'(1) One who intentionally causes a third person not to 

enter into a prospective contractual relation with another who 

is his competitor or not to continue in an existing contract 

terminable at will does not interfere improperly with the 

other's relation if

"'(a) the relation concerns a matter involved 

in the competition between the actor and the other 

and

"'(b) the actor does not employ wrongful 

means and

"'(c) his action does not create or continue an 

unlawful restraint of trade and

"'(d) his purpose is at least in part to advance 

his interest in competing with the other.

"'(2) The fact that one is a competitor of another for the 

business of a third person does not prevent his causing a 

breach of an existing contract with the other from being an 

improper interference if the contract is not terminable at 

will.'"

Tom's Foods, 896 So. 2d at 457-58 (quoting the Restatement § 768 

(emphasis added). Comment b to § 768 states in relevant part:

"The rule stated in this Section is a special application of the 
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30

factors determining whether an interference is improper or 

not, as stated in § 767. One's privilege to engage in business 

and to compete with others implies a privilege to induce third 

persons to do their business with him rather than with his 

competitors. In order not to hamper competition unduly, the 

rule stated in this Section entitles one not only to seek to 

divert business from his competitors generally but also from 

a particular competitor. And he may seek to do so directly by 

express inducement as well as indirectly by attractive offers 

of his own goods or services."

(Emphasis added.) Comment e to § 768, in relevant part, discusses the 

"wrongful means" element of the competitor's privilege:

"If the actor employs wrongful means, he is not justified under 

the rule stated in this Section. The predatory means discussed 

in § 767, Comment c, physical violence, fraud, civil suits and 

criminal prosecutions, are all wrongful in the situation 

covered by this Section. On the other hand, the actor may use 

persuasion and he may exert limited economic pressure. ...

"The rule stated in this Section rests on the belief that 

competition is a necessary or desirable incident of free 

enterprise. Superiority of power in the matters relating to 

competition is believed to flow from superiority in efficiency 

and service. If the actor succeeds in diverting business from 

his competitor by virtue of superiority in matters relating to 

their competition, he serves the purpose for which competition 

is encouraged."

(Emphasis added.) This Court has quoted with approval the following 

interpretation of the "wrongful means" required to establish either 

tortious interference with existing at-will contracts or tortious 
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31

interference with prospective contracts:

"'"Competitors and their allies are not necessarily gentlemen

-- or even scholars. Competition may be rough and tumble and 

even -- within reasonable bounds -- involve economic factors 

extraneous to the main competition itself. We do not believe a 

searching analysis only of motive is in most instances enough 

to send these cases to the jury. There must still ... be 

something 'illegal' about the means employed."'"

Tom's Foods, 896 So. 2d at 458 (quoting Soap Co., 646 So. 2d at 1370,

quoting in turn, with approval, Great Escape, Inc. v. Union City Body 

Co., 791 F.2d 532, 543 (7th Cir. 1986)).

"'"[C]ompetition in business, even though carried to the extent of 

ruining a rival, constitutes justifiable interference in another's business 

relations, and is not actionable, so long as it is carried on in furtherance 

of one's own interests."'" Soap Co., 646 So. 2d at 1371 (quoting Bridgeway 

Commc'ns, Inc. v. Trio Broad., Inc., 562 So. 2d 222, 223 (Ala. 1990),

quoting in turn Beasley-Bennett Elec. Co. v. Gulf Coast Chapter of the 

Nat'l Elec. Contractors Ass'n, 273 Ala. 32, 35, 134 So. 2d 427, 428 (1961)).

As relevant here, this Court has previously recognized that the

applicability of the competitor's privilege affirmative defense is also a 

question for the trier of fact. White Sands II, 32 So. 3d at 18.
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32

Buffalo Rock makes the same argument in support of the exclusion 

of the competitor's privilege defense as it did in support of the exclusion 

of the justification defense -- that because its EBA with PepsiCo is an 

exclusive contract, "there is no privilege to compete." Answer at 16. It 

argues that the justification and competitor's privilege defenses are 

"inseparable in this case" and "rise and fall together" and "require the 

same quantum of proof." Id. at 17, 18. Thus, it explains that the 

competitor's privilege defense is simply irrelevant and cannot apply in 

this case. Further explaining this argument, Buffalo Rock claims that in 

order for a party to establish the applicability of the competitor's privilege

defense, that party must show that it did not employ "'wrongful means.'"

Id. at 17 (quoting White Sands II, 32 So. 3d at 18). That determination, 

Buffalo Rock says, "'directly involves at least six of [the] seven 

[justification] factors,'" thereby rendering the justification and 

competitor's privilege defenses inseparable. Id.

At least in this case, Buffalo Rock is correct that those defenses "rise 

and fall together." Its competitor's privilege argument fails for the same 

reasons that its justification argument fails. As explained above, whether 

the justification defense applies involves a balancing test based upon 
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33

multiple justification factors listed in § 767 of the Restatement. The 

"interests of the other with which the actor's conduct interferes" is only 

one factor in the Restatement justification test. Buffalo Rock also makes 

no attempt to argue that the evidence does (or does not) satisfy either of 

the relevant tests set forth in § 767 and § 768 of the Restatement. Buffalo 

Rock does mention the "wrongful means" element of the competitor's 

privilege defense discussed in § 768 of the Restatement, but it does so in 

only one sentence and does not cite any supporting law applying this 

element.14 In fact, the comments to § 768 refer to "wrongful means" as 

(among other similar things): "physical violence, fraud, civil suits and 

criminal prosecutions," and there is no evidence of any of those "wrongful 

means" in the materials before us. 

Buffalo Rock also contends that the competitor's privilege defense 

does not apply in this case because, it says, "under Alabama law, there is 

14We note briefly that Buffalo Rock does cite, in a string citation, 

the Restatement (Third) of Torts: Liability for Economic Harm § 17 

(2020), and contends that this Restatement states that "conduct is 

'wrongful' where 'defendant acted for the purpose of appropriating the 

benefits of the plaintiff's contract.'" Answer at 12 n.6. Our Court has 

never adopted or even cited this Restatement, much less any section 

within § 17 of this Restatement. Buffalo Rock does not ask us to adopt it 

today and does not attempt to explain how it is consistent with our 

existing caselaw. We therefore see no reason to address it further here.
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34

no competitor's privilege to interfere with a contract that is not 

terminable at will," which, Buffalo Rock notes, is "[a] contract of 

indefinite duration containing defined events of termination ...." Answer

at 16 (citing White Sands II, 32 So. 3d at 18; Soap Co., 646 So. 2d at 1369;

Southern Housing P'ships, Inc. v. Stowers Mgmt. Co., 494 So. 2d 44, 46, 

48 (Ala. 1986); and Phenix City v. Alabama Power Co., 239 Ala. 547, 195 

So. 894 (1940)) (emphasis added). Because its EBAs with PepsiCo are 

"indefinite contracts containing defined events of termination," Buffalo 

Rock contends that they are not "terminable at will" and, thus, that the 

competitor's privilege defense cannot apply in this case. 

In making this argument, Buffalo Rock fails to recognize that it has 

made two tortious-interference claims, including a claim of tortious 

interference with its business relationships (or prospective business 

relationships) with the defendants' C-store clients. As explained 

previously, the competitor's privilege defense can apply "'when the 

contract involved is terminable at will or when the defendant causes a 

third person not to enter into a prospective contract with another who is 

his competitor.'" Tom's Foods, 896 So. 2d at 457 (quoting Soap Co., 646 

So. 2d at 1369) (emphasis added). The arguments and materials
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35

submitted to this Court do not indicate that Buffalo Rock had contracts 

with any of the defendants' C-store clients -- much less any contracts 

which were indefinite or not terminable at will. The defendants also 

correctly note that they have not caused PepsiCo to either breach or 

abandon its contracts with Buffalo Rock and note that the EBAs are still 

in place.15 Under these circumstances, the competitor's privilege defense 

remains applicable here. The defendants should be permitted to present 

evidence in support of that defense because, as noted above, whether the 

competitor's privilege defense applies in a particular case is a question 

for the trier of fact -- in this case, the jury. Accordingly, we hold that the 

defendants can present testimony, evidence, and arguments in support 

of their competitor's privilege affirmative defense. 

Motion in Limine Regarding

PepsiCo's Transshipment Enforcement Program

15Buffalo Rock, apparently responding to this argument, claims 

that "Alabama law aligns with the Restatement (Second) of Torts § 766A 

(1979), that a party who makes performance more difficult or 

burdensome commits a tort." Answer at 12 n.6. In other words, Buffalo 

Rock argues that it can bring a tortious-interference claim even if its 

contracts with PepsiCo remain in place. Our Court has not expressly 

adopted this section of the Restatement; however, given our discussion 

above, we need not (and do not) reach the questions whether we should 

adopt it (or some variation on it) and whether it should apply to this case.
SC-2022-0881

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Next, the defendants contend that the trial court erred in granting 

Buffalo Rock's motion in limine seeking to bar evidence, testimony, or 

arguments related to PepsiCo's TEP when, they say, Buffalo Rock has 

repeatedly made clear throughout this litigation that the TEP was an 

integral part of its business relationship with PepsiCo with which they 

have allegedly interfered. Therefore, the defendants argue that the TEP 

is directly relevant to the seventh justification factor -- "relations between 

the parties." They further argue that the fact that the TEP was 

established to mitigate any lost profits that PepsiCo's exclusive bottlers

and distributors, including Buffalo Rock, may incur means that any 

credits or payments received through that program must be presented to 

and considered by the jury as part of its calculation of any damages it 

may choose to award Buffalo Rock should it enter a judgment in its favor. 

In response, Buffalo Rock argues that Alabama's collateral-source 

rule bars any evidence of payments or credits it may have received 

through the TEP. Buffalo Rock further argues that, even if the collateralsource rule did not apply, given the considerable amount of 

transshipment activity that it believes has been occurring in its exclusive 

territories over the last 10 years, it would be very difficult to verify if any 
SC-2022-0881

37

payments or credits that it has received from the TEP during that period 

were the result of the defendants' transshipping activities in its exclusive 

territories.

As an initial matter, we note that Alabama courts have historically 

applied the collateral-source rule to personal injury cases. See, e.g., 

McCormick v. Bunting, 99 So. 3d 1248, 1250 n.3 (Ala. Civ. App. 2012) 

(explaining that the "common-law collateral-source rule prevented 

reduction of the amount of damages recoverable in a personal-injury 

action based on a plaintiff's receipt of benefits 'from a source wholly 

collateral to and independent of the wrongdoer' and rendered any 

evidence of the receipt of such benefits irrelevant and inadmissible."

(quoting Williston v. Ard, 611 So. 2d 274, 278 (Ala. 1992))). See also

Washington v. United States, 17 F. Supp. 3d 1154, 1157 (S.D. Ala. 2014)

("In its classic formulation, Alabama's collateral source rule meant that 

a defendant in a personal injury case could not obtain a reduction in a 

plaintiff's damages award based on that plaintiff's receipt of medical 

benefits from a collateral source." (emphasis added)). Despite insisting 

that this legal principle prevents the introduction of any evidence 

concerning the TEP in this case, Buffalo Rock does not cite a single case 
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38

applying the collateral-source rule in cases involving a claim of tortious 

interference with business relations. 

Even if the collateral-source rule could apply to a tortiousinterference claim, for the reasons explained below, the defendants 

should be allowed to present evidence concerning the TEP and any 

payments or credits that Buffalo Rock may have received as a result of 

that program.

 First, we agree with the defendants that evidence regarding the

TEP is relevant to the seventh justification factor concerning the 

"relations between the parties." Buffalo Rock cannot sue the defendants 

for allegedly interfering with its business relationship with PepsiCo 

under the EBAs while simultaneously seeking to exclude any evidence of 

the other key component of its business relationship with PepsiCo that 

appears to provide a remedy for that purported interference -- the TEP. 

This alone is a sufficient basis on which to grant the petition as to this 

motion in limine.

Second, the TEP is also relevant to the calculation of damages in 

this case. The materials before us appear to indicate that Buffalo Rock 

alleged in its most recent amended complaint that it was entitled to 
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39

damages for lost profits and punitive damages. Under Alabama law, "jury 

verdicts awarding lost profits will be affirmed if the plaintiff provides a 

'basis upon which the jury could, with reasonable certainty, calculate the 

amount of profits which were lost as a result of' defendant's wrongful 

actions." Super Valu Stores, Inc. v. Peterson, 506 So. 2d 317, 327 (Ala. 

1987) (quoting Morgan v. South Cent. Bell Tel. Co., 466 So. 2d 107, 116 

(Ala. 1985)). Lost-profit damages are generally calculated by determining

"the difference between the price agreed upon in the contract and the cost 

of performance or, in other words, the profit." Cobbs v. Fred Burgos 

Constr. Co., 477 So. 2d 335, 338 (Ala. 1985). 

Buffalo Rock does not dispute that, in seeking damages, it intends 

to offer at trial a calculation of lost profits through the testimony of its 

damages expert, Dr. Hank Fishkind. According to the materials before 

us, during his deposition, Dr. Fishkind appeared to concede that the TEP 

credits Buffalo Rock received from PepsiCo compensated Buffalo Rock for 

transshipped products and that those credits should be used, at least in 

part, to offset the amount of lost-profit damages that Buffalo Rock is

seeking in this action. Likewise, the defendants' experts, Robert G. 

Hammond, Ph.D., and Jason B. Wells, a certified public accountant, 
SC-2022-0881

40

agree with Dr. Fishkind that calculating Buffalo Rock's claimed lost 

profits requires subtracting the TEP credits.

Although Buffalo Rock strongly disputes that its expert has made a 

concession, the materials before us also indicate that the TEP credits 

reduce the "cost of performance" of Buffalo Rock. In fact, the evidence 

submitted by the parties indicates that the TEP payments from PepsiCo 

to Buffalo Rock exceeded $3 million from 2016-2019. Because those 

payments are actually part of the relationship/contract that Buffalo Rock 

had with PepsiCo, they are relevant both to the justification factors and 

to damages in this case. We acknowledge the argument by Buffalo Rock 

that the TEP payments may only cover a fraction of its alleged losses;

however, that argument raises a question of the extent of its damages 

and is for the jury to decide. 

Moreover, the materials before us also indicate that, between 

December 2020 and April 2021, Buffalo Rock failed to submit TEP claims 

to PepsiCo. It has offered this Court no explanation for why it failed to do 

so other than to allege that the TEP is "inefficient" and "fails to identify 

all transshipped product[s]." Answer at 24. 
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41

Under Alabama law, a plaintiff has a duty to mitigate its damages. 

See, e.g., CSX Transp., Inc. v. Miller, 46 So. 3d 434, 454 (Ala. 2010) 

(recognizing that "[t]he duty to mitigate damages arises after a party has 

suffered injury, loss, or damage"); Avco Fin. Servs., Inc. v. Ramsey, 631 

So. 2d 940, 942 (Ala. 1994) (same); Equilease Corp. v. McKinney, 52 Ala. 

App. 109, 113-14, 289 So. 2d 809, 812 (Civ. 1974) (recognizing that "[t]he 

law in Alabama is clear that the injured party has a duty to minimize his 

damages and may not recover for damages which might have been 

avoided"). Moreover, this Court has also stated that "'the injured party 

is not to be put in a better position by a recovery of damages for the breach 

than he would have been in if there had been performance.'" Burch v. 

Lake Forest Prop. Owners' Ass'n, Inc., 565 So. 2d 611, 612 (Ala. 1990) 

(quoting Curacave, Inc. v. Pollack, 501 So. 2d 470, 472 (Ala. Civ. App. 

1986), citing in turn 25 C.J.S. Damages § 74 (1955)) (emphasis added). 

Buffalo Rock does not dispute that it had a duty to mitigate its 

damages. The evidence presented thus far indicates that the TEP, even 

if it is inefficient, provides Buffalo Rock an avenue for doing so. 

Furthermore, the defendants are entitled to present evidence related to 

Buffalo Rock's decision not to mitigate its damages through the TEP to
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42

argue for a reduction the amount of any damages that the jury may 

choose to award to Buffalo Rock should it prevail below. 

For all the foregoing reasons, we hold that the defendants are 

entitled to present evidence, testimony, and arguments concerning the 

TEP, including evidence of any payments or credits received by Buffalo 

Rock as a result of that program.

Motion In Limine Concerning the Defendants' 

"Antitrust" or "Illegality" Defense

Finally, with regard to the trial court's decision to grant Buffalo 

Rock's motion in limine excluding evidence, testimony, or arguments

related to the defendants' "antitrust" or "illegality" defense, the 

defendants argue that their ability to assert that defense is critical 

because, they say, Buffalo Rock is attempting to use federal law -- here, 

the Soft Drink Act -- to create a monopoly in the soft-drink industry by 

illegally going after third-party distributors like them and using its EBAs 

with PepsiCo as a "sword" against them. According to the defendants, 

Buffalo Rock is attempting to do so primarily by seeking an injunction 

prohibiting them from selling PepsiCo's soft-drink products in Buffalo 

Rock's exclusive territories.

Buffalo Rock contends, however, that seeking an injunction to 
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43

prevent the defendants from selling PepsiCo soft-drink products in its 

exclusive territories and to protect its contractual rights and its 

legitimate business relationships and business expectancies from 

interference by third parties is not unlawful. According to Buffalo Rock, 

the Soft Drink Act expressly permits its exclusive-territory licenses with 

PepsiCo and would preempt any Alabama state law to the contrary. 

Therefore, it contends that its contracts with PepsiCo and the relief it is 

seeking in the present case are not an "antitrust" violations and are not

otherwise "illegal" and that the trial court properly struck that

affirmative defense.

Section 3501 of the Soft Drink Act states, in relevant part:

"Nothing contained in any antitrust law shall render 

unlawful the inclusion and enforcement in any trademark 

licensing contract ..., pursuant to which the licensee engages 

in the ... sale of a trademarked soft drink product, of 

provisions granting the licensee the ... exclusive right to ... 

sell such product in a defined geographic area or limiting the 

licensee, directly or indirectly to the ... sale of such product 

only for ... resale to consumers ... within a defined geographic 

area ...."

15 U.S.C. § 3501 (emphasis added). Buffalo Rock contends that the intent 

behind this section of the Soft Drink Act was to "'exempt from the 

antitrust laws agreements which essentially forbid transshipping of soft 
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44

drinks by resellers.'" Answer at 22-23 (quoting O'Neill v. Coca-Cola Co., 

669 F. Supp. 217, 225 (N.D. Ill. 1987)). According to Buffalo Rock, the 

EBAs in this case merely restrict "intrabrand" competition and therefore 

actually "'foster interbrand competition.'" Answer at 6, 22 (quoting

Commonwealth of Pennsylvania ex rel. Zimmerman v. PepsiCo, Inc., 836 

F.2d 173, 176 (3d Cir. 1988)) (emphasis added). 

The defendants contend, however, that a different portion of the

Soft Drink Act -- 15 U.S.C. § 3502 -- makes clear that the Soft Drink Act 

does not legalize "horizontal" restraints of trade. That section of the Soft 

Drink Act states, in relevant part:

"Nothing in this chapter shall be construed to legalize 

the enforcement of provisions described in [§] 3501 of this title 

in trademark licensing contracts ... by means of price fixing 

agreements, horizontal restraints of trade, or group boycotts, 

if such agreements, restraints or boycotts would otherwise be 

unlawful."

(Emphasis added.) According to the defendants, Buffalo Rock's proposed 

injunction seeking to foreclose them from selling PepsiCo's soft-drink 

products to their C-store clients in its exclusive territories would violate 

both federal and Alabama antitrust law because such action would 

constitute a "horizontal restraint[] of trade." The defendants further 

argue that the Soft Drink Act, at most, merely creates a shield against 
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45

enforcement of antitrust laws when vertical license agreements between 

a manufacturer and a bottler have certain terms like the EBAs in this 

case; it does not provide a sword for bottlers like Buffalo Rock to use 

against third parties who are not part of those agreements. The 

defendants contend that, had Congress wanted to do so, it could have 

provided for a cause of action against third parties in the Soft Drink Act, 

which it chose not to do. 

At oral argument before this Court, the defendants conceded that 

their antitrust/illegality affirmative defense was relevant only to the 

request for injunctive relief. An injunction is an equitable remedy. This 

Court has previously recognized that when legal and equitable claims are 

presented in one action, the trial court must resolve the equitable claims 

in a way that does not impinge on a party's right to a jury trial as to the 

legal claims. See Ex parte Taylor, 828 So. 2d 883 (Ala. 2001), and Ex 

parte Thorn, 788 So. 2d 140 (Ala. 2000). Purely legal claims, as well as 

factual issues common to the legal and equitable claims, must be 

determined by a jury; the remaining issues are then to be decided by the 

trial court. See Ex parte Taylor, 828 So. 2d at 883, and Ex parte Thorn, 

788 So. 2d at 140. Specifically, this Court has explained:
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46

"'[W]hen both legal and equitable claims are 

joined in one action, then, the trial judge must 

arrange the order of trial so that the judge's 

decision on the equitable issues does not operate to 

deny a trial by the jury of the legal issues. See

Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 

510-11, 79 S. Ct. 948, 3 L. Ed. 2d 988 (1959) 

(stating that "only under the most imperative 

circumstances, ... can the right to a jury trial of 

legal issues be lost through prior determination of 

equitable claims"); accord Crommelin v. Fain, 403 

So. 2d 177, 185 (Ala. 1981). A jury first must decide 

any factual issues that are purely legal in nature, 

along with any factual issues common to the legal 

and equitable claims. See Dairy Queen, Inc. v. 

Wood, 369 U.S. 469, 479, 82 S. Ct. 894, 8 L. Ed. 2d 

44 (1962) (holding that because the factual issues 

relating to the petitioner's breach of contract claim 

"[were] common with those upon which [the] 

respondents' claim to equitable relief [was] based, 

the legal claims involved in the action [had to] be 

determined prior to any final court determination 

of respondents' equitable claims"); see also 9 

Charles Alan Wright & Arthur R. Miller, Federal 

Practice and Procedure § 2302.1, at 29 (2d ed.

1995); 1 Champ Lyons, Jr., Alabama Rules of Civil 

Procedure Annotated § 2.2 at 24 (3d ed. 1996) 

("[Beacon Theatres] held that the questions of fact 

common to the legal and equitable [claims] must 

be decided first by the jury, for to permit the court 

to make findings on these common issues of fact 

would deprive the litigant of his right to [a] jury 

trial."). Once those factual findings are made, the 

trial judge must determine the remaining 

equitable issues. See Dairy Queen, 369 U.S. at 

470, 82 S.Ct. 894.

"'... In addition, those factual questions that 
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47

are purely legal in nature, as well as those common 

to the legal and equitable issues, must first be 

decided by the jury. Dairy Queen, Inc., supra.'"

Wootten v. Ivey, 877 So. 2d 585, 589 (Ala. 2003) (quoting Ex parte Thorn, 

788 So. 2d at 144-45) (emphasis in Wootten).

All the parties agreed at oral argument that the injunction issue 

will be decided by the trial court after the jury trial. The antitrust issues 

are complicated and, as Buffalo Rock points out, have a great potential 

to mislead and confuse the jury, unduly prejudice it, and waste the time 

and resources of all the trial participants. The trial court was within its

discretion to exclude evidence, testimony, and arguments regarding such 

a defense during the jury-trial portion of this action. To the extent that 

any such evidence, testimony or argument is relevant to the justification 

factors, it would be admissible on that limited basis. As to any 

proceedings before the trial court on whether an injunction should issue, 

we do not decide at this time what evidence would be admissible and 

relevant, and we leave that decision to the sound discretion of the trial 

court at the appropriate time. It is for these reasons that we presently 

see no reason to grant mandamus relief to the defendants on this issue.

Conclusion
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Based on the foregoing, we grant the defendants' petition for a writ 

of mandamus in part and direct the trial court to vacate its orders 

excluding any evidence, testimony, and arguments related to the 

defendants' justification and competitor's privilege affirmative defenses,

as well as the TEP. However, we deny the petition in part as to the trial 

court's decision to exclude any evidence, testimony, or arguments related 

to their antitrust/illegality affirmative defense. 

PETITION GRANTED IN PART AND DENIED IN PART; WRIT 

ISSUED.

Shaw, Bryan, and Mitchell, JJ., concur. 

Mendheim, J., concurs in part, concurs in the result in part, and 

dissents in part, with opinion.

Parker, C.J., and Stewart, J., concur in part and dissent in part, 

with opinions.

Sellers, J., concurs in part and dissents in part, with opinion, which 

Wise, J., joins. 
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MENDHEIM, Justice (concurring in part, concurring in the result in 

part, and dissenting in part).

I concur with the portion of the main opinion entitled "Motion In 

Limine to Exclude the Defendants' Justification and Competitor's 

Privilege Defenses"; I concur in the result with the portion of the main 

opinion entitled "Motion In Limine Regarding PepsiCo's Transshipment 

Enforcement Program"; and I dissent from the portion of the main 

opinion entitled "Motion In Limine Concerning the Defendants' 

'Antitrust' or 'Illegality' Defense."
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PARKER, Chief Justice (concurring in part and dissenting in part).

I concur with the Court's decision to issue a writ of mandamus 

directing the trial court to allow the consideration of evidence related to 

the "Transshipment Enforcement Program." I also concur with the 

Court's decision to deny the petition for a writ of mandamus directing the 

trial court to allow the consideration of evidence related to the 

petitioners' antitrust defense. 

I respectfully dissent from the Court's decision to issue a writ of 

mandamus directing the trial court to allow the consideration of evidence 

relating to the petitioners' defenses of justification and competitor's 

privilege. I do not think that the petitioners have established a "clear 

legal right" to the consideration of these defenses by the trial court, nor 

have they demonstrated that they "lack ... another adequate remedy." 

Therefore, they have not met the requirements of this Court's test for 

mandamus relief. See, e.g. Ex parte Gulf Health Hosps., Inc., 321 So. 3d 

629, 632 (Ala. 2020). 

In my view, the main opinion fails to distinguish adequately 

between interbrand and intrabrand competition. The justification and 

competitor's privilege defenses clearly apply to interbrand competition 
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(for instance, if the petitioners were selling Coke products). However, 

Alabama law does not clarify whether a justification or competitor's

privilege defense applies to intrabrand competition within an exclusively 

licensed territory. If the petitioners had no legal right to compete with 

Buffalo Rock Company, Inc., within its exclusive territory, they have no 

valid justification or competitor's privilege defense, and the circuit court 

was right to disallow evidence relating to those defenses. As this is 

essentially a question of first impression for Alabama, I find the 

authorities cited by Buffalo Rock persuasive to establish the proposition 

that, as a matter of law, there is no justification for intrabrand 

competition within an exclusively licensed territory. See, e.g., Mannion 

v. Stallings & Co., 204 Ill. App. 3d 179, 188, 561 N.E.2d 1134, 1139, 149 

Ill. Dec. 438, 443 (1990) (cited approvingly by this Court in Soap Co. v. 

Ecolab, Inc., 646 So. 2d 1366, 1370 (Ala. 1994)); Bonelli v. Volkswagen of 

Am., Inc., 166 Mich. App. 483, 498-99, 421 N.W.2d 213, 221 (1988); 

Metropolitan Opera Ass'n v. Wagner-Nichols Recorder Corp., 199 Misc. 

786, 802-05, 101 N.Y.S. 2d 483, 497-500 (1950); Ride the Ducks of Phila., 

LLC v. Duck Boat Tours, Inc., 138 F. App'x 431, 433-34 (3d Cir. 2005).
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The petitioners have also failed to show that they lack an adequate 

remedy besides mandamus relief. They may have recourse to a motion to 

alter, amend, or vacate under Rule 59(e), Ala. R. Civ. P., within 30 days 

after the entry of the circuit court's final judgment, or, failing that, they 

may appeal after trial. State v. Zimlich, 796 So. 2d 399, 403 (Ala. 2000) 

(citing Ex parte Fowler, 574 So. 2d 745, 747 (Ala. 1990)). Thus, the 

petitioners have failed to satisfy two parts of this Court's four-part 

mandamus test. 

For these reasons, I respectfully dissent to the Court's providing 

mandamus relief regarding evidence supporting the defenses of 

justification and competitor's privilege.
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SELLERS, Justice (concurring in part and dissenting in part).

I agree with the Court's decision to issue a writ of mandamus 

directing the trial court to allow evidence and argument regarding the 

"Transshipment Enforcement Program" and the Court's decision to deny 

the petition for a writ of mandamus directing the trial court to allow 

evidence and argument supporting an assertion that the business 

relationship between Buffalo Rock Company, Inc., and PepsiCo, Inc., 

violates antitrust law. I respectfully dissent, however, from the Court's 

decision to issue a writ of mandamus directing the trial court to allow 

evidence and argument in support of a justification/competitor's privilege 

defense.

Businesses in Alabama are free to contract with others to obtain 

mutual advantages for their respective economic well being. While 

restraints and limitations on free trading and association are 

discouraged, we balance the conflicting concepts by allowing businesses 

in competitive markets to limit who will sell and distribute their 

products. We do this to allow companies to develop standards to obtain 

uniform market integrity, which creates a valuable franchise for the 

mutual benefit of both parties. An exclusive license "guarantee[s] the 
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economic advantage of operating without fear of competing businesses 

diluting the market." Bassett Seamless Guttering, Inc. v. GutterGuard, 

LLC, 501 F. Supp. 2d 738, 743 (M.D.N.C. 2007). The availability of the 

sort of arrangement existing between PepsiCo and Buffalo Rock 

encourages bottlers like Buffalo Rock to invest in and to promote products 

that otherwise might not reach consumers in sufficient quantities, fosters 

increased consumer choices, and helps maintain the quality of soft 

drinks. See Commonwealth of Pennsylvania ex rel. Zimmerman v. 

PepsiCo, Inc., 836 F.2d 173, 176 (3d Cir. 1988) ("Such restraints 

encourage each bottler to invest and promote in his own territory, and 

prevent 'free riding' by sellers from outside the territory on the bottler's 

investment and effort."). This type of "vertical market allocation" has 

been blessed by Congress via the Soft Drink Interbrand Competition Act, 

15 U.S.C. § 3501 et seq. ("the Act"). See Owens v. Pepsi Cola Bottling Co. 

of Hickory, N.C., 330 N.C. 666, 673, 412 S.E.2d 636, 640 (1992) 

(indicating that the purpose of the Act was "to preserve territorial 

exclusivity" in the soft-drink industry). As Buffalo Rock points out, 

"transshippers" like the defendants in the present case opposed passage 

of the Act, but they lost that political battle. Zimmerman, 836 F.2d at 
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177 ("A number of transshippers testified against the Act, but the record 

shows that Congress unequivocally rejected their position."). That the 

Act allows the suppression of "competition" that would otherwise take 

place between businesses in the position of Buffalo Rock and the 

defendants in this case is precisely what the Act intended. But the clear 

rationale behind the Act was to foster competition between the makers of 

different brands of soft drinks by legally creating restricted territories 

that granted exclusive rights to sell the products of one brand in a very 

competitive market among other brands. Thus, justification or a 

competitor's privilege defense under state law should not be available, 

because those defenses would undermine the very purpose of the Act. Id.

at 176 ("In passing the Act, Congress determined that the exclusive 

territorial distribution agreements common to the soft drink industry 

warranted protection because that industry was a prototype of industries 

in which territorial restraints foster interbrand competition."). It is 

undisputed that Buffalo Rock contractually has an exclusive territory to 

market and distribute Pepsi products. Likewise, there is no dispute that 

the defendants sell Pepsi products in Buffalo Rock's territory. To assert 

a defense that the defendants are justified or have a privilege to compete 
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is wholly contradicted by the Act. The exclusivity here is a legal 

limitation on competition, which benefits rather than harms consumers. 

And while the parties may be competitors, the competition for a 

competitive advantage to sell an exclusive product in a territory subject 

to legal restrictions constitutes an illegal interference that cannot be 

justified or defended. To prohibit such a defense is not an abuse of 

discretion by the trial court, but is a means of case management to 

prevent needless consideration of issues that ultimately could be 

confusing to a jury and are unfounded because of the nature of the case. 

The trial court acted properly to exclude evidence, testimony, and 

argument of justification and competitive privilege. Accordingly, I 

respectfully dissent from the Court's decision to grant a writ of 

mandamus allowing the defendants to assert a justification/competitor's 

privilege defense.

Wise, J., concurs.
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STEWART, Justice (concurring in part and dissenting in part).

I concur with the main opinion except for the portion entitled 

"Motion in Limine Concerning the Defendants' 'Antitrust' or 'Illegality' 

Defense," as to which I dissent.