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)