Misplaced Letter Costs PepsiCo $1.26 Billion In Bottled Water Lawsuit

It’s easy to joke about PepsiCo’s Aquafina. After all, it’s purified municipal tap water, bottled and sold at prices comparable to juices and soda. But the product is no joke to two men in Wisconsin. In 1981, they discussed their idea to bottle and sell purified tap water with some of PepsiCo’s regional bottlers. Allegedly, the idea made its way back to PepsiCo and eventually became Aquafina.

This year, they sued PepsiCo. But the paperwork was lost in layers of corporate bureaucracy, and PepsiCo failed to send a representative, winning the men a default judgment of $1.26 billion. Yes, with a B.

Pepsi is fighting the judgment, arguing that the statute of limitations surely has run out when the meetings in question occurred 28 years ago and the product has been on the market for 15 years. Oh, yeah, and they didn’t hear about the lawsuit soon enough.

In court papers, PepsiCo claims it first received a legal document related to the case from the North Carolina agent on Sept. 15 when a copy of a co-defendant’s letter was forwarded to Deputy General Counsel Tom Tamoney in PepsiCo’s law department. Tamoney’s secretary, Kathy Henry, put the letter aside and didn’t tell anyone about it because she was “so busy preparing for a board meeting,” PepsiCo said in its Oct. 13 motion to vacate.

When Henry received a forwarded copy of the plaintiff’s motion for default judgment on Oct. 5, she sent that to Yvonne Mazza, a legal assistant for Aquafina matters. Remembering that she still had the other document, Henry passed it to Mazza too. The next day Mazza sent the documents to David Wexler, a department attorney, and he “immediately” called the agent to get a copy of the complaint.

Lawyers for PepsiCo distributors Wis-Pak Inc. and Carolina Canners Inc. made court appearances in June and July. PepsiCo was at a loss to explain why it hadn’t heard about the case from them. “It’s just another unfortunate thing that didn’t come together,” Jacuzzi said.

There will be another hearing in early November. The original article does not explain why it took the men 15 years to finally sue.

Price to PepsiCo for Not Being in Court: $1.26 Billion [National Law Journal]

(Photo: marcus_in_ny)

Comments

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  1. ecwis says:

    @mythago: Yes, at this point in time, the headline is completely false.

  2. agb2000 says:

    @GitEmSteveDave_ThatChickRockingKicks: I don’t understand what you just said, but it looks funny.

  3. allknowingtomato says:

    @GitEmSteveDave_ThatChickRockingKicks: +1.

    I lol’d.

    (“Hoop-sucker!” “Hud-swinger!”)

  4. RvLeshrac says:

    @Megalomania:

    Can’t stand Pepsi. If PepsiCo went bankrupt, I think the only thing I’d miss would be Mt. Dew.

    Since Coke would have to step up manufacturing in order to meet the new demand, and would likely just buy up the Pepsi formula (or just add a few more tons of sugar to each batch of Coke), I’m sure the people working for Pepsi (other than the useless office staff) would find jobs at all the new Coca-Cola plants.

  5. Bruce says:

    @sleze69: “Do we really have any assurances that it is purified?”

    A good example would be how Anheuser Busch purifies Budweiser, they simply process it through their Clydesdale horses a few times just to be sure then bottle it.

  6. Naame says:

    @oblivious87: I’m not accusing them of false advertising. I am accusing them of deception which doesn’t need to be illegal for it to be wrong.

    The purpose of my request is to eliminate that deception and increase transparency. There is absolutely nothing wrong with my request. In general, people want to know exactly what it is that they are buying and they do not want to have to jump through hoops to find out. They want to look at a bottle of water and quickly understand in a matter of seconds exactly what they are purchasing without feeling like they are being tricked.

    Again, if you are correct and this is common knowledge already then PepsiCo has absolutely nothing to fear from my request and only has the potential to gain because people who trust a product/service/company tend to spend more money on it over time.

    However, if you are wrong then PepsiCo has the potential to lose money because people will stop buying their product in favor of a competitor because they don’t want tap water. Thus, increasing consumer friendly competition through transparency where quality + competitive prices wins.

    I assume you are in favor of consumer friendly competition through the use of transparency rather than deception and trickery right?

  7. Phil Keeps It Real [Consumerist] says:

    With a name like Jacuzzi, who cares about 1.26 BILION? ? NOT this guy right here !! That’s WHO!

  8. treimel says:

    @mythago:
    Oh, c’mon Myth–you know this will likely be vacated.

  9. synergy says:

    This makes me feel marginally better about Crystal Pepsi.

    As a sidenote, the all-powerful Wiki claims that it tasted just like colored Pepsi which is a load of hooey. It tasted like mineral water. :-p

  10. ecwis says:

    @RvLeshrac: The headline doesn’t say that PepsiCo “owes” money. It says that the misplaced letter costs them $1.26 Billion. Since they haven’t paid it and most likely never will, it’s false. If for some reason, they pay the $1.26 Billion, then it would be appropriate to say “Misplaced letter Costs PepsiCo $1.26 Billion In Bottled Water Lawsuit.”

  11. rocketbear79: threadkiller says:

    @RvLeshrac: You’re right, I was thinking about this around 4 AM this morning, seeing your time stamp I should have jumped on to post then.

    I think in my haste to call mythago out on his often snarky and unhelpful comments (and I see in the baseball bat thread he is up to it again), I forgot that on appeal you can’t present new evidence, which the SoL argument would require.