John D.R. Leonard V. Pepsico, Inc.

John D.R. Leonard v. PepsiCo, INC.

1. (a)What are the facts and (b) sources of law in this case?

a. Defendant PepsiCo conducted a promotional campaign in Seattle, Washington from October 1995 to March 1996. The promotion, titled "Pepsi Stuff," attempted to persuade consumers into collecting numerous "Pepsi Points" in order to redeem them for merchandise featuring the Pepsi logo. During this campaign, PepsiCo launched a promotional commercial intended for the Ð''Pepsi Generation,' in order to gain the largest possible response to help push their campaign. One such commercial shows a well dressed teenager preparing for school simultaneously advertising a t-shirt, leather jacket and sunglasses for various reasonable point values. As the scene shifts to the outside of a high school, the teenager from the beginning scene opens the cockpit of a Harrier Jet just as the words "HARRIER FIGHTER 7,000,000 PEPSI POINTS" appear on the screen. The plaintiff John Leonard viewed this commercial and then later attempted to purchase the Harrier Jet with the advertised "Pepsi Points" from PepsiCo but was denied. Leonard later sued Pepsi on the grounds that the "Pepsi Stuff" commercial constituted an offer for a Harrier Jet. Whether or not the commercial made this proposal is the main question asked in this case. Since the plaintiff is young, adventurous and of the Ð''Pepsi Generation,' the supposed offer appealed to him tremendously. Leonard claimed that he was so inspired by this commercial that he set out to obtain a Harrier Jet from the defendant PepsiCo by obtaining the advertised amount of "Pepsi Points". On March 27, 1996, the plaintiff submitted an Order Form with $700,008.50 and the required 15 original Pepsi Points along with a letter to "obtain a new Harrier Jet as advertised in your Pepsi Stuff commercial"(Leonard v PepsiCo, 3). The order form submitted by the plaintiff stated that only catalogue merchandise can be redeemed through the program. Letters were exchanged until May 30, 1996 when the plaintiff received a letter from the defendant stating the only intention of the Harrier Jet in the commercial was to create a humorous ad and that no reasonable person would see it as an offer. Between July and August of 1996, two lawsuits were brought forth: one by PepsiCo, the "declaratory judgment action" and the other by Leonard, the "Florida action." The Florida suit was transferred by US District Court Judge James Lawrence King for a lack of meaningful relationship to the controversy. Upon this transfer, the plaintiff moved to dismiss the declaratory judgment action for lack of personal jurisdiction. The plaintiff's motion was granted and then appealed by the defendant PepsiCo. Leonard then motioned to voluntarily dismiss the Florida suit and it was granted on the stipulation that he pay definite attorney fees. Leonard refused to pay the fees and elected to proceed with the litigation process. In turn PepsiCo agreed not to request the enforcement of the attorneys' fees award. The case was finally transferred to the Southern District court of New York and under the Federal Rule of Civil Procedure PepsiCo motioned for summary judgment of the case.

b. This case involves two sources of law:

1) The court confirmed with both parties that the decision of this issue requires the consideration of contract law principles. The common law governs all contracts and many cases cited by each party in this case are of common law from courts other than New York's.

2) The court also uses substantive law to decide whether or not each issue brought up by either party has precedence in the court of law. This consists of "all laws that define, describe, regulate and create legal rights and obligations" in society (Essentials, 20).

2. Identify the specific legal issues before the court.

Ð'* The main legal issues were whether PepsiCo's commercial was constituted as an advertisement and if it did represent an offer to the plaintiff. In a unilateral contract the offer is expressed so the offeree can accept the offer only by completing the contract performance. In this case there is no written document between the two parties stating an official agreement from either side. Also, the requirements of PepsiCo's original promotion stated that the desired product must be in the Pepsi Stuff catalog.

3. Summarize the legal arguments raised by the (a) plaintiff and by the (b) defendant.

a. The plaintiff Leonard used drastic interpretations of substantive and contract law to express his understanding of the Pepsi Stuff promotion. Plaintiff feels if "an advertisement is clear, definite, and explicit, and leaves nothing open for negotiation [then] it constitutes an offer, acceptance of which will complete the contract"(Leonard v PepsiCo, 6). In such a case, an advertisement that is so specific leaves no grounds for questioning, therefore a contract is formed. The plaintiff attempts to stretch the boundaries of unilateral contracts claiming that PepsiCo made a clear offer and that he should receive the reward promised for his performance of the specified act. This is backed by the commanding 1892 Carlill v. Carbolic Smoke Ball Co. case stating, "If a person chooses to make extravagant promisesÐ'...he probably does so because it pays him to make them, and if he has made them, the extravagance of the promises is no reason in law why he should not be bound by them" (Leonard v PepsiCo, 6). The plaintiff claims that the commercial