| Leonard v. PepsiCo, Inc. | |
|---|---|
 | |
| Court | United States District Court for the Southern District of New York |
| Full case name | John D.R. Leonard v. Pepsico, Inc. |
| Decided | August 5, 1999 |
| Docket nos. | 96-cv-5320; 96-cv-9069 |
| Citation | 88F. Supp. 2d116 |
| Case history | |
| Subsequent actions | Affirmed, 210F.3d88 (2d Cir. 2000) (per curiam) |
| Court membership | |
| Judge sitting | Kimba Wood |
Leonard v. Pepsico, Inc., 88F. Supp. 2d 116, (S.D.N.Y. 1999), aff'd 210F.3d 88 (2d Cir. 2000), more widely known as thePepsi Points case, is anAmerican contract law case regardingoffer and acceptance. The case was brought in theUnited States District Court for the Southern District of New York in 1999; its judgment was written byKimba Wood.
In 1996,PepsiCo began a promotionalloyalty program in which customers could earnPepsi Points which could be traded for physical items. Atelevision commercial for the loyalty program displayed the commercial's protagonist flying to school in aMcDonnell Douglas AV-8B Harrier II vertical take off jet aircraft, valued at $37.4 million at the time, which could be redeemed for 7,000,000 Pepsi Points. The plaintiff, John Leonard, discovered these could be directly purchased from Pepsi at 10¢ per point. Leonard delivered a check for $700,008.50 to PepsiCo, attempting to purchase the jet. PepsiCo initially rejected Leonard's offer, citing the humorous nature of the offer in the advertisement. Leonard then sued PepsiCo, Inc. in an effort to enforce the offer and acceptance perceived by Leonard to be made in the advertisement. In her judgment, Wood sided with PepsiCo, noting the frivolous and improbable nature of landing a fighter jet in a school zone that was portrayed by the protagonist. PepsiCo would re-release the advertisement, valuing the jet at 700,000,000 Pepsi Points.
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, bombing everything in sight 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."
In the mid-1990s, Pepsi faced competition fromCoca-Cola, and sought to attract a younger audience.[1] In March 1996, Pepsi began thePepsi Stuff promotional campaign, allowing customers to accrue Pepsi Points that could, in turn, be redeemed for items such asT-shirts and leather jackets. These points could be earned through purchasing Pepsi products, with labels attached to the boxes of such products.[2] The campaign was the largest in Pepsi's history.[3] To advertise the promotion, Pepsi released a series of television commercials; one of these commercials showcased acomputer-generated Pepsi-brandedAV-8 Harrier II, aHarrier jet manufactured byMcDonnell Douglas.[2][4] The commercial, which offered the jet for 7,000,000 Pepsi Points, caught the attention of John Leonard, a 21-year-old business student. In place of a label, the promotion allowed Pepsi Points to be directly purchased for 10¢ per point, a detail noticed by Leonard, who convinced five investors to lend him a total of $700,000.[2] Leonard sent a check for $700,008.50 (including $10 for shipping and handling), and 15 labels, per promotion rules. The offer was refused by Pepsi, who referred to the promotion of the Harrier jet in the commercial as "fanciful" and stated its intention was to create a "humorous and entertaining ad".[5]
The claim alleged bothbreach of contract and fraud. The case was originally brought inFlorida, but eventually heard inNew York. The defendant,PepsiCo, moved for summary judgment pursuant toFederal Rule of Civil Procedure 56. Among other claims made, Leonard claimed that a federal judge was incapable of deciding on the matter, and that instead the decision had to be made by a jury consisting of, among others, members of the "Pepsi Generation" to whom the advertisement would allegedly constitute an offer.[6]
The court, presided over by JudgeKimba Wood, rejected Leonard's claims and denied recovery on several grounds, including:
In justifying its conclusion that the commercial was "evidently done in jest" and that "The notion of traveling to school in a Harrier Jet is an exaggerated adolescent fantasy," the court made several observations regarding the nature and content of the commercial, including:
The court also stated that:
In light of the Harrier Jet's well-documented function in attacking and destroying surface and air targets, armed reconnaissance and air interdiction, and offensive and defensive anti-aircraft warfare, depiction of such a jet as a way to get to school in the morning is clearly not serious even if, as plaintiff contends, the jet is capable of being acquired 'in a form that eliminates [its] potential for military use.'[7]
The decision was appealed to theUnited States Court of Appeals for the Second Circuit, which issued a brief,per curiam opinion concluding, "We affirm for substantially the reasons stated in Judge Wood's opinion."[8]
Pepsi never cashed the check, so there was no case for fraud. Pepsi continued to air the commercial, but it updated the cost of the Harrier Jet to 700 million Pepsi Points[9] and added a clarifying "Just Kidding" disclaimer. The Pentagon stated that the Harrier Jet would not be sold to civilians without "demilitarization".[10]
On November 17, 2022, adocuseries about the case titledPepsi, Where's My Jet? was released onNetflix.[11]
2026 Resolution:
Thirty years after Pepsi refused to honor his points, Leonard's loyalty was finally rewarded—by a different company entirely. In February 2026,Frontier Airlines redeemed his 7 million Pepsi Points for 7 million Miles 30 years after the original commercial, granting him free flights for life on Frontier and making him, as he put it in the commercial, the owner of "his jet."[12]
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