"Pepsi no-show in court is costly"
Company asks judge to vacate $1.26 billion ruling
By Paul Gores of the Journal Sentinel
Posted: Oct. 28, 2009
When PepsiCo Inc. didn't show up in Jefferson County Circuit Court to defend itself against accusations it hijacked the idea of two Wisconsin men to sell water in bottles, a judge decided against the soft-drink maker and handed the pair one big gulp of a damage award - $1.26 billion.
Now PepsiCo, alarmed by the enormous default judgment, is pushing hard to have the award rescinded.
Although the case was filed in April and the damage award was handed down by Circuit Judge Jacqueline R. Erwin on Sept. 30, PepsiCo contends the proper people in the company didn't even know about it until Oct. 5 because of a series of miscues.
PepsiCo did not immediately respond to a Journal Sentinel request for comment, but company spokesman Joe Jacuzzi told the Associated Press the company feels it has been denied due process and wants the opportunity to defend itself, although it acknowledges an "internal process issue."
One of the reasons for PepsiCo's delayed response, according to court documents, was that a secretary in PepsiCo's legal department was so busy she did not tell anyone about a letter regarding the case or enter it into a log that tracks such matters.
The case was filed by Charles A. Joyce of Juneau and James R. Voigt of Cleveland, who allege that in 1981 they entered into confidentiality agreements with an executive of Watertown-based Pepsi products distributor Wis-Pak Inc. and an executive of Carolina Canners Inc. of Cheraw, S.C., about their idea for a new product.
Joyce and Voigt contend that Wis-Pak and Carolina Canners breached their confidentiality agreement with them because Pepsi began making and distributing its purified bottled water product Aquafina. The lawsuit argues that PepsiCo used information it knew was secret when it began selling Aquafina years later.
Pepsi is asking the judge to vacate her $1.26 billion award, saying the plaintiffs didn't properly serve PepsiCo with the complaint and that the soft-drink maker acted diligently once it became aware of it.
PepsiCo's local attorney, Robert W. Roth, of Menomonee Falls, contends the judgment is "unprecedented" and that the company has "strong defenses" against it.
"The sole basis for the plaintiffs' claims - the confidentiality agreements - are nearly 30 years old and fail to show any connection between the alleged trade secret and PepsiCo's sale of Aquafina," Roth argued in court documents.
Voigt referred a reporter's questions to his Chicago attorney, David C. Van Dyke, who could not be reached. A phone call to the Chuck A. Joyce residence was not answered Wednesday.