$1.26 Billion Glorified Tap Water Judgment Against Pepsi Thrown Out

Good news for Pepsico: the lawsuit two Wisconsin men filed, accusing the company of stealing from them the idea that eventually became Aquafina, will have to be judged on its actual merits. The default judgment of $1.26 billion that they received when Pepsi failed to acknowledge the suit has been vacated.

At a hearing Friday, PepsiCo attorney Dean Panos argued that Erwin should vacate her prior order because Wisconsin law disfavors default judgments. Panos also argued that since the case had barely begun, the plaintiffs would not be harmed, and that no default judgment can stand if the underlying complaint is defective.

The men allege that Pepsi stole their proprietary idea for purifying and selling tap water, and turned it into the inexplicable success that is Aquafina.

Judge scraps $1.26 billion judgment against Pepsi [Journal Sentinel] (Thanks, Emily!)

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Misplaced Letter Costs PepsiCo $1.26 Billion In Bottled Water Lawsuit

(Photo: marcus_in_ny)

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  1. My Head Hurts says:

    no news day :(

  2. The Marionette says:

    Why would anyone be surprised by the outcome? That would be like someone trying to sue microsoft because they told them the idea of integrating other os stuff into their newer windows (years ago) and ms went ahead and did it. Then years later (after “x” feature was put in) the person tries suing ms.

    • ludwigk says:

      @The Marionette: And after filing papers in court, and notifying ms, MS failing to respond in a timely manner, causing a judge to enter summary judgment against them for failure to defend themselves.

      There, fixed.

    • mythago says:

      @The Marionette: And through a series of incompetence and big-organization dumbassery, Microsoft doesn’t bother to respond to the lawsuit?

    • The Marionette says:

      @The Marionette: Maybe I should’ve rephrased what I said. To translate what I said it’s kinda gutsy for a person (or even a couple of people in this case) to go go after a big company for money. So no ludwik, it’s not fixed.

      @mythago: Pepsico and MS are both big companies, but considering pepsico being $96.37 Billion and Microsoft being $253.23 Billion, I’m sure microsoft would’ve been more at the top of their game at keeping track of pending lawsuits.

  3. menty666 says:

    I think the important thing to keep in mind here is that there really is no hard and fast ‘law’, just shades of gray that vary depending on how many lawyers you can afford.

    I’m not saying it was a good judgement, frankly they lost because of one incompetent employee, but still, it just shows that laws don’t actually apply anymore to whiny crybabies.

    • humphrmi says:

      @menty666: I’m not sure that “how many lawyers you can afford” affects reversing a default judgment. I’ve gotten a default judgment thrown out, pro-se. You just tell the judge that you never received notification of the court date.

      Default judgments are pretty much universally thrown out just by asking nice.

      • Esquire99 says:

        @humphrmi:
        +1.

        It’s generally not hard to get a Default Judgment vacated unless you walk into court and tell the judge that the only reason you didn’t show up was because you didn’t want to.

        • humphrmi says:

          @Esquire99: In fact, I knew an attorney who used default judgments as a tool – in cases where a delay tactic is being used, attorneys tell their clients not to show up for the first court date, then they get the default judgment vacated later. It buys them more time, and when it is vacated, it gives the plaintiffs a sense of having their chain yanked by the defendant. In fact, I wouldn’t be surprised if Pepsi did this on purpose… now after some elation about getting a default judgment for 1 billion dollars, the plaintiffs have nothing and need to go back to court to prove their case — deflating any sense of victory that they had.

          And, again, it doesn’t really require a lawyer – the motion to vacate is pretty simple in most courts.

  4. ZeGoggles says:

    GET THAT CAT AWAY FROM THE SINK RIGHT NOW.

    ..Sorry. I always wanted to “yell” at a cat picture. Carry on. Happy Sunday.

  5. mrsultana can't get a password to work says:

    I gotta admit, the Pepsico lawyer made me laugh. Essentially, their argument was, “If those guys are right, they’ll still win the trial. If they’re wrong, then they shouldn’t have won in the first place.”
    Getting someone to acquiesce by the ol’ “if you’re innocent, you have nothing to worry about” defense is something usually reserved for people advocating me giving up my first amendment rights.

  6. MooseOfReason says:

    “I want $1 billion because they became successful.”

    I mean, I don’t sympathize with the plaintiffs at all.

    • Inglix_the_Mad says:

      @MooseOfReason: Then again I can’t exactly sympathize with PepsiCo here. Not exactly rocket science to respond to a court order.

      • secret_curse says:

        @Inglix_the_Mad: Well, it would require psychic powers to respond to a court order you’ve never read. Pepsico claims their lawyers never actually saw the court order because it wasn’t passed on by the secretary that signed for the letter. Now that they’ve been informed of the claim, they wish to try the case on merit. That seems reasonable to me…

  7. Thaddeus says:

    As I said in the previous post leading up to this one: Had the situation been reversed, Pepsi would be fighting to keep the default judgment on their behalf.

    Then everyone started yelling.

  8. Al Swearengen says:

    I love the “law disfavors it argument”. Those are not solid rules, it is just something a judge can use to reverse a decision he doesn’t like. If the law really disfavored default judgments they wouldn’t be allowed at all. I did think the case was B.S., but if a huge corporation is arrogant enough to not even respond to a complaint, then they should be hit with a default judgment. And now all that will happen is it gets litgated for the next 10 years, millions of dollars are wasted, and then they will settle and everyone eats their own fees. How about the court disfavoring wasting everyone’s time?

  9. Blueskylaw says:

    Purifying and selling tap water can be considered a proprietary idea?

    Can grinding up coffee beans and boiling them in water also be considered a proprietary idea?

    Also, Pepsi and their lawyers were arrogant when they failed to acknowledge the suit. The old standby “paperwork got lost somewhere” doesn’t work anymore when you’re talking billions of Dollars.

    • katstermonster says:

      @Blueskylaw: But if a secretary really didn’t pass along the mail, and NO ONE from the legal team even knew there was a complaint, I fail to see how that’s arrogance. That could very well be a cover story, and the legal team themselves “lost” the complaint in a trash can, but if the story is true, it wasn’t arrogance. Just…stupidity.

  10. bohemian says:

    @Ursus Maritimus: That was my first thought on this. Why is Pepsi getting special treatment and a “do over”. I doubt an individual could get a default un-done by the court. They have a real problem in states like SD. The bar for contacting the other party is really low. You can make attempts to send a certified letter, have it send back as unclaimed and move forward. So the other party can send it to any address they please, including a known old address or the zoo and still move forward with the case. I know a few people who ended up with default judgments without their knowledge this way.

    How Pepsi was allowed to ignore the suit AND get a do-over is just disgusting.

  11. jswilson64 says:

    @Ursus Maritimus: Pepsi gets a do-over because they have duffel bags full of money to pay to lawyers. You don’t get a do-over because you don’t.

  12. Trai_Dep says:

    @Esquire99: They’re professional adults who are highly paid to, among other things, read a calendar and their mail. It’s absurd.
    They should be punished. (Again, everyone should be able to easily vacate these things, but it should sting)

  13. ChemicallyInert says:

    @Esquire99: Am I to assume from your screen-name that you are a lawyer/law student. (Not trying to make a point, just genuinely curious)

  14. Trai_Dep says:

    @xtc46 – thinksmarter on twitter: OK, thanks. I hoped this was the case, so it’s good to hear.

  15. tmed says:

    @coren: In some ways, however, the huge corporation has MORE excuse to misplace the summons. A certified letter to an individual is typically received and signed by that individual or a household member. Sent to a corporation, the summons likely has a much tougher route to get to a responsible party.