Judge vacates $1.26B ruling against PepsiCo

AP News
Posted: Nov 06, 2009 5:07 PM

A judge has tossed out a decision _ for now at least _ that could have cost PepsiCo Inc. $1.26 billion after the soft drink maker didn't respond to a lawsuit claiming it stole the idea for bottled water.

The decision Friday by a Wisconsin court means PepsiCo will get its say in court _ now that it has found out about the case.

Two men claim PepsiCo violated trade secrets and stole their idea to sell bottled water. They sued the company and two Wisconsin distributors in April but PepsiCo didn't respond for several reasons, including the fact that a secretary who received letters relating to the case failed to act on them.

Last month, a judge sided with the men and gave them a default $1.26 billion judgment, granting them the award without a trial.

When PepsiCo finally learned of the case, after the judgment, the company asked the court to toss out the ruling or at least give it a chance to fight the accusations.

In a statement Friday, PepsiCo said it was pleased with the decision and looked forward to defending the case on its merits. No future court dates have been set.

A lawyer for the two men involved in the suit _ Charles Joyce, of Juneau, Wis., and James Voigt, of Cleveland, Wis. _ was not immediately available for comment Friday.

The lawsuit, which asked for a jury trial and damages of more than $75,000, accuses PepsiCo of misusing trade secrets. It also names Wis-Pak Inc. and Carolina Canners Inc., companies that make and distribute PepsiCo products, and Thomas M. Hiles, then the executive vice president of Carolina Canners.

The men claim they entered written confidentiality agreements about a new beverage they were calling "U.P." with executives of Wis-Pak and Carolina Canners in 1981. The executives violated the agreements and gave the information to PepsiCo, which eventually rolled out a bottled water brand _ Aquafina _ about a dozen years later, Joyce and Voigt claim.

PepsiCo said it never knew about the case and also blamed the fact that it was served the lawsuit in North Carolina, where it is incorporated, instead of Purchase, N.Y., where it is headquartered.