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$1.26-billion judgment against PepsiCo for failing to answer lawsuit

Two Wisconsin men claim the company stole their idea of selling bottled water. PepsiCo didn't respond because of 'an internal process issue,' but the judgment will likely be set aside and a trial set.

October 29, 2009|Associated Press

MILWAUKEE — Two men who contend PepsiCo Inc. stole their idea to sell bottled water sued the snack- and drink-maker in Wisconsin and won a $1.26-billion judgment last month after the company didn't respond.

PepsiCo, which calls the accusation "dubious," says it didn't know about the lawsuit until almost a week after the court granted the award without a trial.

The company wants the court to toss out the ruling, known as a default judgment, or at least give PepsiCo a chance to fight the accusation.

PepsiCo said part of the problem was that the lawsuit was served in North Carolina, where it is incorporated, instead of Purchase, N.Y., where it is based. Later, a secretary who received letters relating to the case failed to act on them.

Spokesman Joe Jacuzzi said PepsiCo wants to fight the claims, but acknowledges it failed to respond because of "an internal process issue."

PepsiCo probably will get to make its case and won't have to pay the $1.26 billion because judges tend to be lenient about enforcing default judgments, said Myron Moskovitz, a law professor at Golden Gate University in San Francisco. Judges don't want to deprive anyone of their right to be heard in court, he said.

"I'd be surprised if they didn't set it aside," he said of the judgment. "But there's going to be some red faces in court."

Charles Joyce of Juneau, Wis., and James Voigt of Cleveland, Wis., sued PepsiCo in April, asking for a jury trial and damages of more than $75,000.

Their lawyer, David Van Dyke, with the Chicago law firm Cassiday Schade, said he asked for $1.26 billion based on the revenue and profit PepsiCo has made from the Aquafina brand.

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