Blunder to cost PepsiCo $1.4b?

Posted by Daniel Palmer on 5th November 2009

PepsiCo is facing a possible payout of US$1.26 billion (A$1.4b) after not responding to a lawsuit earlier this year.

Two men, who claim PepsiCo took their idea for bottled water, won the judgment after PepsiCo failed to turn up to court.

PepsiCo said they were unaware of the lawsuit until after the default ruling had been announced due to a secretary failing to act on the court documents. As a result they are hopeful of an opportunity to fight the ruling, an opportunity they are likely – though not certain – to receive.

The lack of a response by the snacks and beverage maker was partially due to the fact the lawsuit was served in North Carolina (the place of incorporation) as opposed to their current base in Purchase, New York. Spokesman Joe Jacuzzi told the Associated Press that they had failed to respond because of “an internal process issue.”

He added that the company was adamant that the case against them was weak.

“The plaintiffs’ claim – that in 1981, they gave someone other than PepsiCo an idea for a ‘soft drink’ and that somehow, 15 years later, PepsiCo used that alleged information to develop the Aquafina Water products – is completely dubious and without merit,” he said.

The $1.26 billion is related to a portion of the sales of the Aquafina bottled water product.