A three-judge panel of state Supreme Court judges has refused to hear an appeal by MeadWestvaco Corp. regarding a $7 million lawsuit against the city of Buena Vista.

MeadWestvaco operates a paper mill in Covington and is the largest employer in the Alleghany Highlands.

The company had asked the higher court to overturn a Rockbridge County Circuit Court ruling in February and again in April dismissing the company's lawsuit against Buena Vista for backing out of a deal to locate a distribution center in a regional industrial park located in the city.

The company had been working with Buena Vista and Rockbridge County officials to acquire 44 acres of land to build a 600,000-square-foot facility in Rockbridge Regional Industrial Park.

MeadWestvaco first sued Buena Vista in August 2006, alleging that city officials agreed to give the company industrial property for a distribution center, then backed out of the deal after MeadWestvaco had spent time and money on plans for the site. The lawsuit asked that Buena Vista pay MeadWestvaco for those costs plus future costs to develop a suitable site somewhere else.

Buena Vista Mayor Todd Jones has said that although city officials welcomed MeadWestvaco in April 2005, they had a change of heart after residents complained about the truck traffic and exhaust fumes that the new facility was expected to bring.

"We're very thrilled," said Brian Kearney, city attorney for Buena Vista, regarding the panel's refusal to hear the appeal.

MeadWestvaco has 14 days from the Oct. 26 ruling to ask the full Supreme Court to reconsider the appeal. A spokeswoman said the company was "disappointed in the ruling."