My previous post mentioned that I would be speaking on the Pepsi Points case on the afternoon of 22 September. (Thanks to Professor Dan O’Gorman and 3L Joshua J. Floth for the invite.) Among other things, my presentation (see also my slide deck below) highlighted three procedural aspects of the case:

1. To begin with, the court found itself in a procedural paradox or choice-of-law Catch-22: “The choice of law question [i.e. whether to apply New York state law or Washington state law] cannot … be resolved until after the Court determines whether the [Pepsi] commercial was an offer or not.” See Leonard v. Pepsico, 88 F.Supp.2d 116 (S.D.N.Y. 1999), at p. 122. But to determine whether the Pepsi ad is a legally-enforceable reward offer or just mere puffing, don’t we need to know which State’s law to apply? (P.S.: Remember Erie v. Tompkins R.R.? There is supposed to be no federal common law! See slide #2 below.)
2. It took the court over three years to figure out that the Pepsi ad was just a bad joke: “The present motion thus follows three years of jurisdictional and procedural wrangling.” See 88 F.Supp.2d, at p. 121. (For my part, I have proposed a simplified Turing-like legal procedure to speed up civil litigation. See F. E. Guerra-Pujol, The Turing Test and the Legal Process, Information & Communications Technology Law, Vol. 21, No. 2 (2012), pp. 113-126, available here. See slide #3 below.)
3. But by far the worst aspect of the Pepsi Points case is that the court cavalierly invaded the province of the jury: “A reasonable viewer would understand such advertisements as mere puffery, not as statements of fact, see, e.g., Hubbard v. General Motors Corp. … (advertisement describing automobile as ‘Like a Rock,’ was mere puffery, not a warranty of quality).” See 88 F.Supp.2d, at p. 128. Alas, putting aside the fact that the case cited by the court (Hubbard v. General Motors) is totally irrelevant to the Pepsi case (in Hubbard the dispute was over product quality), the bottom line is that a jury should have decided what a “reasonable viewer” would have thought because “reasonableness” presents a question of fact for the trier of fact (i.e. the jury) to weigh the evidence and judge the credibility of the witnesses. (See slide #4 below.)

I then concluded my talk with three additional observations:

1. It’s perfectly legal to buy and sell military jets. (See this FAA circular from 1996, for example, as well as slide #5 below.)
2. When this case was decided in August of 1996, Pepsico’s market capitalization was over $21 Billion (see here); a Harrier jet, by comparison, cost a mere $23 Million, or 0.00106% of Pepsi’s market cap. (See slides #6 & #7 below.)
3. Lastly, shouldn’t food and beverage companies owe a fiduciary duty to their consumers and to the public, especially when their ad campaigns are directed to young people? (There is no slide to illustrate this last point because this fiduciary-duty idea popped into my head just a few minutes before the panel was set to begin.)