Secretarial Mistake Costs Pepsi $1.26 Billion

9gezegen writes "Pepsi learned that if it wants to continue to 'Refresh Everything,' it needs an extra $1.26 billion. It looks like one of the secretaries forget to inform company lawyers about a trade secrets case in a Wisconsin state court. When nobody arrived to court, the judge gave $1.26 billion default judgement. According to Pepsi lawyers, they were not properly served because the secretary was 'so busy preparing for a board meeting.' One might imagine she was working on the refreshments. Perhaps Pepsi should learn more about the Spamhaus case."

Right. It was the *secretary's* fault

[word munger]

It couldn't possibly be *management's* fault for creating a system in which a clerical error can result in a $billion-plus loss.

Ehh

[nomadic]

Default judgments are easy to get vacated.

Bad service?

[Valdrax]

Someone who is a lawyer correct me if I'm wrong, but this is a terrible argument. I mean, if the secretary is an agent of the company who is authorized to receive communications on the company's behalf, then wouldn't service to a secretary be good enough?

Re:

[mpoulton]

There is an overwhelming tendency for courts to set aside defaults in favor of deciding a case on its merits. Unless the defendant has actually decided not to present a defense, issuing a default judgment subverts the purpose of the justice system, and is an undesirable result. Default judgments are intended to allow worthy plaintiffs to recover when a defendant refuses to participate in the legal process. So, even if this service is likely technically proper, the court will use any possible excuse to ov

Re:

[Maximum Prophet]

Default judgments are intended to allow worthy plaintiffs to recover when a defendant refuses to participate in the legal process.

so if they don't participate, how are you supposed to get the money from them?

This happens all the time. A Sheriff goes down the the company headquarters (or main branch in that state/city) and starts auctioning off items owned by the company.

In one case, when I was living in Austin TX, the sheriff came into a restaurant and took all the money out of the register. Then he waited as people paid their bills, and took that money too. When he had collected enough money to pay the debt, he chased everyone out, and sealed the doors.

Lawyers?

[phorm]

I've never tested the theory, but if a company actually has a proper legal dept, I'm fairly sure I can't just plop down a court summons on the secretary's desk in a nondescript envelope.

The story is light on details though.

Overall, is the idea of "let's sell bottled water" worth several billion. It hardly seems unique...

I don't believe this

[G3ckoG33k]

I don't believe this. Secretaries aren't the only source of information. The simply "shot the pianist" in order to cover up their incompetence. She should sue them for libel. Perhaps a $100 million lawsuit?