Secretary's mistake turns into $1.26 billion judgment against PepsiCo
Filed under: Pepsico
A busy secretary at PepsiCo who neglected to turn over legal documents to her boss has caused a $1.26 billion default judgment to be levied against the company.
The Honorable Jacqueline R. Erwin, a judge in the Circuit Court of the Third Judicial Circuit, Jefferson County, Wisconsin, awarded the billion dollar default judgment to Charles A. Joyce and James R. Voigt. The suit, which was filed in late April and sought a jury trial, alleged breach of contract against bottlers Carolina Canners, Inc. and Wis-Pak, Inc. It also alleged trade secret misappropriation against PepsiCo and the bottlers.
According to court documents, entrepreneurs Joyce and Voigt developed the idea to purify water and sell it to the public for personal consumption. The concept, including specifics of the purification process and eventual marketing of the product, was presented to bottlers Carolina Canners and Wis-Pak. A confidentiality agreement was executed between the parties in 1981. The bottlers later declined the opportunity to proceed with the project. PepsiCo later introduced bottled water named Aquafina to its product line. Carolina Canners and Wis-Pak manufacture and distribute Pepsi products.
The plaintiffs allege that the PepsiCo product was being produced using the same purification process protected under the executed confidentiality agreement. "The law suit was brought within the appropriate statute of limitations allowed by Wisconsin law," says David C. Van Dyke an attorney and partner at Cassiday Schade LLP, who is representing the plaintiffs.
"This judgment is important on many levels," adds Van Dyke. "We believe that in the end, Wisconsin courts will uphold the judgment and award our clients the damages that they deserve."
According to the motion to vacate filed by PepsiCo, the company claims the Wisconsin suit was improperly served on its registered agent in North Carolina in June. The corporate legal department at PepsiCo's headquarters in New York claims it didn't receive notice of the suit until Sept. 15 when a co-defendant's letter arrived. According to court documents, a legal secretary who was busy preparing for a corporate board meeting set the letter aside. PepsiCo claims the letter from the co-defendant wasn't brought to the attention of its general counsel until early October when a copy of the default motion was received.
"This case is completely without merit," says Joe Jacuzzi, vice president for beverage communications at PepsiCo. "The plaintiff's claim that in 1981, they gave someone other than PepsiCo an idea for a soft drink. Somehow 15 years later, PepsiCo used that alleged information to develop the Aquafina water products. The suit is completely dubious and without merit."
PepsiCo acknowledges there was an internal process issue, but the merits of the case were not examined before the whopping default judgment was made.
PepsiCo has filed two motions with the Circuit Court of the Third Judicial Circuit, Jefferson County, Wisconsin; one a to vacate the default judgment and another to dismiss the claim. A hearing is scheduled for November 6th.
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Reader Comments (Page 1 of 4)
10-28-2009 @ 8:53PM
Bob said...
DIDN'T SHE USED TO WORK FOR ENRON???
Reply
10-30-2009 @ 8:24AM
Lisa said...
Kill the secretary
10-30-2009 @ 9:13AM
Chuck said...
All I want to know ...did our "Secretary of Year" make the corporate Board meeting :)
10-28-2009 @ 8:55PM
andy said...
that was dirty of them!
Reply
10-28-2009 @ 9:37PM
Bobby said...
Judges are delusional. They have no concept of the amount of money they award. Even if Pepsi is totally at fault, an award of a billion $$'s is out of touch. If they loved the concept so much,, why didn't the plaintiffs do it themselves?
Reply
10-29-2009 @ 2:12PM
Kumar said...
What kind of comment is that? Which planet are you from? and what are you doing on this site / article?
If they had the resources to do it themselves, they would not have gone to the bottlers now, would they?
BTW, this happens all the time check out winnie the pooh, the inventors are still collecting royalties
Just open your eyes and smell the roses :)
10-28-2009 @ 9:38PM
Jim Fedullo said...
Well guess who got caught w/ their hand in the cookie jar. All of these co's are crooked. They knew what they were doing , they just got caught. Co's are so evil & crooked anymore. I worled for a coup;e of them. They tie you up for years and hope w/ time they will just wear you out. This country is a sorry digrace anymore.
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10-29-2009 @ 10:03AM
Brian said...
If you do not like this country MOVE OUT. Those companys
that you bad mouth are what makes this country great and will continue to do so. In capitalism people can get hurt. Right or wrong it will happen but there is a greater good than you or I will ever understand. Look to the man who developed the intermitant wiperblade.
10-28-2009 @ 10:14PM
Gypsy said...
The Court most likely will not care why or who - notice was given. If it sat on someone's desk and not given to the appropriate people/departments of a company - it was still notice that was received.
As a paralegal, I understand how easy it is to put something aside and oops, forget it about it. I know the amount of work that paralegals/legal secretaries are responsible for and they are often under major deadlines and case/file work. It still is not an excuse. The lawyers/companies are the ones that are ultimately held responsible and if this were a law firm representing the company - the company could sue the firm. I don't think there' much chance of this. ALSO - attorneys need to remember to check on their staff regularly - it's their liability insurance afterall. Paralegals/legal secretaries can get fired and in rare circumumstances sued for misconduct or illegal behavior - but it still falls on the attorneys head.
Reply
10-29-2009 @ 8:30PM
zoe devereux said...
Excuse me? You are a paralegal? You need your employer to look over your shoulder so you don't forget something? Whoever hired you, FIRE HER!
10-28-2009 @ 10:26PM
wdmurphy said...
About time one of the big corporations takes it in the a$$.
Reply
10-30-2009 @ 8:24AM
JollyRogers said...
Apparently you haven't been watching the news for the last couple of years have you?
10-28-2009 @ 10:45PM
phil said...
Who will pay he money? Not the ones who screwed up, not the company executives, not the board of directors,not the employees, and not the stockholders. We customers will pay higher prices for their products to provide the money (as with any monetary award or fine against a corporation.)
Reply
10-29-2009 @ 4:22PM
Jason said...
Maybe higher prices for Pepsi products, but not higher prices for Coke, or smaller competitor products due to this judgement. Maybe since Pepsi will have less money to reinvest, then prices for raw materials involved in the beverage industry, purchased on long term contracts will fall, lowering prices for everyone. Less money for advertising, which pepsi does quite a bit of, will lower the cost of advertising for all businesses, lowering the cost of all products...just saying
10-30-2009 @ 7:16AM
MIke said...
Now, we will drink Coke!
10-28-2009 @ 10:51PM
Shelly said...
I'm so sick of corrupt judges. This is just another example of how ridicules our judicial system is. The amount of money is absurd and the ruling shows how stupid and crazy the judges we have really are. I could use a few billion dollars right about now. Maybe I should sue someone. No doubt I'll get the money I want.
Reply
11-15-2009 @ 5:46AM
Bev said...
The amount of money won't seem so absurd when you take a look at PepsiCo's profits on Aquafina over the years. They should pay it; they're thieves.
10-28-2009 @ 11:36PM
Frank said...
If the facts are as presented and Pepsi-Co used their process after signing a confidentiality agreement, then Pepsi-Co should be liable for a part of their ill-gotten gains. What that should be would require further scrutiny. If this were Bank of America or AIG we would all be calling for their heads. If Pepsi is guilty then they must pony up their share of the profits.
Reply
10-28-2009 @ 11:58PM
jusmemn said...
LoL, that's like myself, I don't make many little mistakes, I just make big one once in a great while. LOL
Reply
10-29-2009 @ 12:02AM
kidcat4 said...
Seems the fat cats world is being turned upside down.
Reply