United States v. Coca-Cola Bottling Company of Los Angeles and Arrowhead Puritas Waters, Inc., and Aqua Media, Ltd., and A. M. Liquidating Co.

These are consolidated interlocutory appeals from a preliminary injunction and from an order denying appellants’ motion to dissolve the same injunction. The injunction arose in a suit by the United States against both the buyers and the sellers in a corporate acquisition which is alleged to violate Section 7 of the Clayton Act, 15 U.S.C. § 18 . The complaint sought divestiture or rescission of the acquisition as alternative remedies. To preserve the possibility of a decree of rescission at the conclusion of trial, the district court; on motion of the government, issued a preliminary injunction maintaining the status quo pendente lite. The sellers contend on appeal: (1) the remedy of rescission is not legally available to redress violations of Section 7 of the Clayton Act, and (2) even if legally permissible, rescission is precluded by the particular facts of this case. We AFFIRM.

I. FACTS.

A. Background and Parties.

The buyer-defendants below are Coca-Cola Bottling Company of Los Angeles (CCLA) and its wholly-owned subsidiary, Arrowhead Puritas Waters, Inc. (Arrowhead). The seller-defendants, appellants herein, are A. M. Liquidating Company, a closely held California…