Wednesday Writs: Win Stupid Prizes In Leonard v Pepsico Edition
Rummaging around on Twitter over the weekend, I found a tweet about a Florida Hooter’s waitress, bamboozled by her employer who offered a “new Toyota” to the winner of a beer sales contest. Ms. Jodee Berry won, and was led to the parking, blindfolded, to receive her prize. When the blindfold was removed, she was handed something like this:
A new toy Yoda.
Jodee didn’t think it was funny. She quit her job and sued the company, who eventually agreed to pay her an unspecified amount of money that, per her lawyer, would allow her to go buy whatever Toyota she wanted.
I tweeted out the story, which actually happened in 2001. OT’s own Christopher Bradley saw it and reminded me of another case of a company acting a bit too clever, one that is probably discussed in law schools everywhere.
Harken back to the innocent days of 1995. OJ Simpson was acquitted when the glove did not fit; Bruce Willis Died Hard with a Vengeance; an angry Canadian woman name Alanis dominated MTV, not to be confused with the space shuttle Atlantis, which docked with the International Space Station for the first time; and I was a disgruntled 16-year-old with a raging addiction to both Pepsi and Marlboros (red pack.) The upsides of my addictions were that, had I been so inclined, I could save proofs of purchase from my soda and cigs – Pepsi Points and Marlboro Miles, respectively – and furnish my home with their branded goods. There were beach towels, hoodies, coolers, backpacks, even bicycles to be earned by excess consumption of my vices, but I don’t recall ever bothering to collect my points/miles.
21-year-old college student John Leonard was paying attention, though. He was in the Pacific Northwest, the test market where Pepsi first launched their rewards points program. The slogan was simple: “Drink Pepsi. Get stuff.” And according to the commercial, among the stuff you could get was a Harrier Jet. Behold this amazing description of the commercial:
The commercial opens upon an idyllic, suburban morning, where the chirping of birds in sun-dappled trees welcomes a paperboy on his morning route. As the newspaper hits the stoop of a conventional two-story house, the tattoo of a military drum introduces the subtitle, “MONDAY 7:58 AM.” The stirring strains of a martial air mark the appearance of a well-coiffed teenager preparing to leave for school, dressed in a shirt emblazoned with the Pepsi logo, a red-white-and-blue ball. While the teenager confidently preens, the military drumroll again sounds as the subtitle “T-SHIRT 75 PEPSI POINTS” scrolls across the screen. Bursting from his room, the teenager strides down the hallway wearing a leather jacket. The drumroll sounds again, as the subtitle “LEATHER JACKET 1450 PEPSI POINTS” appears. The teenager opens the door of his house and, unfazed by the glare of the early morning sunshine, puts on a pair of sunglasses. The drumroll then accompanies the subtitle “SHADES 175 PEPSI POINTS.” A voiceover then intones, “Introducing the new Pepsi Stuff catalog,” as the camera focuses on the cover of the catalog.
The scene then shifts to three young boys sitting in front of a high school building. The boy in the middle is intent on his Pepsi Stuff Catalog, while the boys on either side are each drinking Pepsi. The three boys gaze in awe at an object rushing overhead, as the military march builds to a crescendo. The Harrier Jet is not yet visible, but the observer senses the presence of a mighty plane as the extreme winds generated by its flight create a paper maelstrom in a classroom devoted to an otherwise dull physics lesson. Finally, the Harrier Jet swings into view and lands by the side of the school building, next to a bicycle rack. Several students run for cover, and the velocity of the wind strips one hapless faculty member down to his underwear. While the faculty member is being deprived of his dignity, the voiceover announces: “Now the more Pepsi you drink, the more great stuff you’re gonna get.”
The teenager opens the cockpit of the fighter and can be seen, helmetless, holding a Pepsi. …the teenager exclaims, “Sure beats the bus,” and chortles. The military drumroll sounds a final time, as the following words appear: “HARRIER FIGHTER 7,000,000 PEPSI POINTS.” A few seconds later, the following appears in more stylized script: “Drink Pepsi Get Stuff.” With that message, the music and the commercial end with a triumphant flourish.
The Harrier fighter jet caught Mr. Leonard’s eye. He also discovered that Pepsi points could be purchased for .10 each. He contacted some investors and raised the $700,000 needed to buy enough points to “purchase” the jet and sent in his order form to Pepsi. The Harrier was conspicuously missing from the catalog and its accompanying order form, so Leonard wrote “1 Harrier Jet” on the line provided and sent it to Pepsi, along with his check.
Leonard must’ve known Pepsi was unlikely to deliver the goods; the check was drawn on his lawyer’s account. Pepsi rejected the request for a jet, prompting the lawyer to respond that the refusal was “unacceptable,” demanding the transfer of the “clearly offered” jet within ten days, under threat of lawsuit. Pepsi, unwilling to wait to see if Leonard’s bluff could be called, filed for declaratory relief in the District Court for the Southern District of New York, asking the court to issue a ruling that Pepsi was under no obligation to provide Mr. Leonard with a Harrier jet. Leonard also filed suit, inexplicably in Florida state court, from which it was removed to federal district court in Florida which then transferred it to the New York court, from where it became our case of the week, Leonard v. Pepsico.
In the NY District Court, Leonard filed a motion to dismiss Pepsi’s suit for lack of personal jurisdiction, which was granted. He also voluntarily dismissed the action he had filed in Florida, which was also granted- but not before the court ordered him to pay Pepsi’s attorneys over $80,000 for the cost of having to defend the suit in Florida, the wrong venue. Not only did he fail to pay, but he then moved to withdraw his voluntary dismissal. The case proceeded, with Leonard stipulating that the NY District Court had jurisdiction and Pepsico agreeing to forgo the previously ordered attorneys’ fees. Pepsi then moved for summary judgment.
It was the written opinion of Judge Kimba Wood from which the above description of the commercial came. In issuing her very entertaining ruling, Judge Wood had to determine whether, under the law, Pepsi’s commercial constituted a contract.
Stay with me; this gets convoluted. Leonard lived in Washington State and Pepsico was headquartered in New York. The court had to determine which state’s contract laws to apply. However, because Leonard originally filed the suit in Florida, the court applied Florida’s “choice of law” laws to determine whether Washington or New York contract law would control. In Florida, the law of the state in which the last act necessary to complete the contract took place is controlling. Unfortunately, the parties disagreed on that, as well.
Quick primer on the basics of contract law: it requires an offer, an acceptance, and consideration. “Consideration” is a thing of value promised by one party to the contract to the other party. Leonard, of course, maintained that the commercial was an offer to redeem Pepsi points for goods, specifically the jet, and he accepted the offer by sending in the form with points/cash redeemable for points, which he did in Washington. Pepsi maintained that the commercial was a “solicitation for offers”, in which case the necessary acceptance would be their acceptance of the order form, which occurred in New York. Before the court could determine which is correct, it had to decide whether or not the commercial was an offer.
In general, it is settled law that a mere advertisement is not intrinsically an offer. An advertisement can be an offer, but not simply by virtue of being an ad. For example, if the Kroger weekly circular advertises a certain brand of coffee, but that brand is sold out when you go to the store, there has not been a contract broken. On the other hand, if you pre-paid for that brand of coffee because an ad invited you to do so, (assuming you did not agree to any substitutions,) their failure to produce the coffee after accepting your payment may fairly be seen as a breach of contract (though normally, we just get our money back or get a raincheck and need not resort to litigation.) Applying these principles, Judge Wood determined that the offer was Leonard’s submitted order form, and no contract would have been made unless Pepsico had accepted Leonard’s payment.
As further explanation, Judge Wood compared this case to the 1957 case of Lefkowitz v. Great Minneapolis Surplus Store. In that case, the defendant store posted an advertisement: “Saturday 9 AM Sharp, 3 Brand New Fur Coats, Worth to $100.00, First Come First Served $1 Each.” Mr. Lefkowitz showed up at the appointed time and place with his dollar, only to be denied the fur coat because the offer was “only for ladies, not gentlemen.” In that case, Mr. Lefkowitz’s ensuing lawsuit was successful because the store’s ad was not a general advertisement; it was very specific, unambiguous, left nothing to negotiate and was deemed a contract. But Judge Wood did not see the Pepsi commercial in the same vein. She noted that the commercial actually stated that there were additional details in writing and did not offer the complete terms of what was necessary for redeeming Pepsi points (let alone for a jet.)
Leonard had his own caselaw to present, including the 1893 English case of the Carbolic Smoke Ball. The ad in question in that case read as follows:
100 £ reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza, colds, or any diseases caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied with each ball. 1000 £ is deposited with the Alliance Bank, Regent Street, shewing our sincerity in the matter.
During the last epidemic of influenza many thousand carbolic smoke balls were sold as preventives against this disease, and in no ascertained case was the disease contracted by those using the carbolic smoke ball.
A Mrs. Carlill purchased a smokeball, used as directed, and caught the flu anyway. The good people at Carbolic Smoke Ball factory failed to make good on their promise, and a court ordered them to pay Mrs. Carlill her £100. Said the court: “advertisements offering rewards… are offers to anybody who performs the conditions named in the advertisement, and anybody who does perform the condition accepts the offer.” The difference, Judge Wood reasoned, is that the Smoke Ball ad and other similar cases involve a reward to specified persons who follow specific steps; they are not mere invitations to purchase consumer goods. Judge Wood interpreted the commercial not as an invitation for a person to turn in 700,000 Pepsi points in exchange for a jet, but as an invitation for folks to collect their points and redeem them for items found in the catalog.
After noting that no reasonable, objective person would have believed the company was offering a jet, the judge turned to the plaintiff’s argument that summary judgment was improper. Federal judges come from a very narrow segment of the population, Leonard argued. It would only be fair for his case to be decided by a jury of members of the Pepsi Generation, like himself: “young, open to adventure, willing to do the unconventional.” Judge Wood ignored the veiled insult, holding that it did not take a young, adventurous soda drinker to determine the legal concepts underlying a contract.
Finally, Judge Wood got to the heart of the matter: the commercial was an evident joke.
“Plaintiff’s insistence that the commercial appears to be a serious offer requires the Court to explain why the commercial is funny. Explaining why a joke is funny is a daunting task; as the essayist E.B. White has remarked, ‘Humor can be dissected, as a frog can, but the thing dies in the process….'”
She describes the commercial as an example of “puffery” not to be taken seriously, citing Hubbard v. General Motors Corp., in which the court held that “advertisement describing [an] automobile as ‘Like a Rock,’ was mere puffery, not a warranty of quality.” The court then offers further reasoning why the plaintiff had reason to know the commercial was in jest:
Second, the callow youth featured in the commercial is a highly improbable pilot, one who could barely be trusted with the keys to his parents’ car, much less the prize aircraft of the United States Marine Corps. Rather than checking the fuel gauges on his aircraft, the teenager spends his precious preflight minutes preening. The youth’s concern for his coiffure appears to extend to his flying without a helmet. Finally, the teenager’s comment that flying a Harrier Jet to school “sure beats the bus” evinces an improbably insouciant attitude toward the relative difficulty and danger of piloting a fighter plane in a residential area, as opposed to taking public transportation.
Further, says Judge Wood, “no school would provide landing space for a student’s fighter jet…”
It is probably clear now why this is such a fun case for law school students. The facts of the case are funny, and the opinion is a delight. I’ll end this rather lengthy but light-hearted edition of case of the week with the time another precocious youth demanded a company make good on its zany offer. Note that, in this case, the elements are there for a much stronger argument for holding the radio station to its word:
[WW2] Supreme Court won’t revive Kansas voting law requiring proof of citizenship
The Supreme Court declined Monday to revive a Kansas law that required showing specific proof-of-citizenship documents before registering to vote, ending a fight that had continued for years.
A trial court and the U.S. Court of Appeals for the 10th Circuit had declared it unconstitutional. It was championed by former Kansas secretary of state Kris Kobach, a Republican who had led the short-lived voter fraud commission President Trump formed to try to substantiate his unproven claims that millions of immigrants living illegally in the United States were voting.
Kobach was defeated in his attempts for higher office in the state.
The court did not give a reason for rejecting the appeal of the state’s new secretary of state, Scott Schwab. Kansas Gov. Laura Kelly (D) had opposed the effort asking for Supreme Court review.
[WW3] Why Big Law Firms Make For Tough Discrimination Class Action Targets
Plaintiffs bringing gender discrimination claims against Jones Day on Monday indicated that they were dropping all class and collective action claims and moving forward as individuals. The move follows a similar move by plaintiffs in a case against Morrison & Foerster.
[WW4] You don’t say…
Jenna Ellis, the attorney from Colorado representing President Donald Trump in his bid to overturn his 2020 election loss, was fired from her job as a Weld County prosecutor in 2013 for making mistakes on cases, records obtained by The Colorado Sun show. Ellis “failed to meet the employer’s expectations” and “made mistakes on cases the employer believes she should not have made,” according to a document from the Colorado Department of Labor and Employment. Another record says Ellis, who held the title deputy district attorney at the Weld County District Attorney’s Office, was fired for “unsatisfactory performance.”
“The employer noted some cases were being processed that did not adhere to the Victim Rights Act,” the state labor department document says. “… There is the appearance in case documentation the claimant did not follow proper protocol for some of the cases she handled.” The Victims’ Rights Act is a state law that ensures victims are involved in and informed of the case against their assailant. There’s also a federal version that offers similar assurances and protections.
Want exclusive Colorado political news and analysis? Subscribe here to get The Unaffiliated, the twice-weekly political newsletter from The Colorado Sun. The documents, obtained through an open records request, appear to contradict what Ellis told The Wall Street Journal about her termination. The newspaper reported that Ellis said she was fired because “she refused to bring a case to trial that she believed was an unethical prosecution.” The district attorney’s office told the Journal that Ellis handled traffic cases and other misdemeanors.
Ellis did not respond to an inquiry from The Sun on Friday about the circumstances that led to her firing and about how the documents appear to contradict what she told the Journal. Instead, the Trump campaign replied on Ellis’ behalf on Sunday, offering a 20-word, unsigned statement.
Eighty-six percent of the September test takers passed the exam, the highest passage rate since July 2016 and nearly 30 percentage points higher than the average passage rate of 56.6 percent between February 2015 and July 2019.
The 2020 class of the University of Maine School of Law did even better — 48 of 53 members passed the September exam, pushing the passage rate for the state’s only law school to 90.6 percent, up from 58.6 percent last year.
The higher rate means more recent law school graduates can practice law on their own in Maine without supervision from a licensed attorney. And the recent graduates can help replace an aging crop of Maine lawyers, especially as the COVID-19 pandemic has created a host of new legal challenges and case backlogs in the court system.
[WW6] Appellate judges say court ruling on whether ‘Mormons are Christians’ was inappropriate
The question of whether Mormons are “Christians” may be a thought-provoking debate for theologians.
But the state Court of Appeals is warning Arizona judges to stay away from such issues.
And the appellate judges are advising parents who get divorced they need to be careful in how they word the provisions of any parenting plan in a dissolution decree if they have strong feelings about the religious training for their children.
In a unanimous ruling, the appellate judges struck down a ruling by Maricopa County Superior Court Judge Michael Mandell. They said he is constitutionally precluded from issuing a ruling, even if he has testimony to support his conclusion.
The case involves a dispute between Kathleen and Shawn Ball, married in 1999. They have two children.