HEADLINE: Pepsi's Harrier Jet Ad Was a Joke, SD NY Rules

A federal judge in New York City has dismissed a breach of contract and fraudulent advertising lawsuit against Pepsico Inc. brought by a plaintiff who took its television commercial literally and presented the company with the necessary cash and merchandise points to obtain a Harrier Jet fighter plane. The commercial was a joke and no reasonable, objective person would have taken it seriously, ruled U.S. District Judge Kimba Wood. Leonard v. Pepsico Inc., No. 96 Civ. 9069(KMW) (SD NY, Aug. 5, 1999).

Pepsico, the manufacturer of Pepsi Cola and other soft drink products, ran a television commercial in 1995 and 1996 promoting its Pepsi Points program in which Pepsi drinkers could accumulate points and exchange them for "Pepsi Stuff," gifts from a gift catalogue published by the company.

The commercial showed a male teenager leaving for school attired in various Pepsi Stuff clothing items while subtitles indicated how many points are required to obtain each item. One such banner read, "LEATHER JACKET 1,450 PEPSI POINTS." In the next scene, the same teenager is shown arriving at school in a Harrier Jet. The subtitle then reads, "HARRIER JET FIGHTER 7,000,000 PEPSI POINTS."

The Pepsi Points catalogue did not include the Harrier Jet, but it stated that if a consumer lacks sufficient points to redeem an item, he or she could purchase the required points from Pepsico at 10 cents each.

Inspired by the ad, Seattle resident John R. Leonard set out to accumulate the cash and points needed to claim the jet, which is valued at $23 million. He raised $700,000 from friends -- seven million points at ten cents each -- and sent a check and 15 Pepsi Points along with an order form from the catalogue to Pepsico.

Pepsico's fulfillment house returned the check along with a letter explaining that the jet fighter was not in the catalogue nor included on the order form and that only catalogue merchandise could be redeemed. The Harrier Jet, it explained, was merely a device to create a humorous ad.

When it became clear that Leonard intended to pursue the matter, Pepsico filed a declaratory judgment suit in the Southern District of New York on July 18, 1996, and Leonard filed suit in a Florida state court. That suit was removed to federal court and transferred for consolidation with the New York suit.

In her opinion, Judge Wood granted Pepsico's motion for summary judgment, finding that the advertisement did not constitute an offer to sell nor did the company accept Leonard's proffer of $700,000 and 15 Pepsi Points, thus no contract was entered into.

"Plaintiff's understanding of the commercial as an offer must also be rejected because the court finds that no objective person could reasonably have concluded that the commercial actually offered consumers a Harrier Jet," she said. "If it is clear that an offer was not serious, then no offer has been made."

Ruling on the issue of whether the jet offer was serious or made in jest, Judge Wood explained that the commercial was "the embodiment of what defendant appropriately characterizes as zany humor" utilizing exaggeration and fantasy to make its point that having Pepsi Stuff is stylish, desirable, and admired by all.

In addition, the fact that Pepsico designated that the plane could be had for 7,000,000 Pepsi Points indicated that the company clearly intended it to be out of the realm of possibility.

"To amass that number of points, one would have to drink 7,000,000 Pepsis (or roughly 190 Pepsis a day for the next hundred years -- an unlikely possibility), or one would have to purchase approximately $700,000 worth of Pepsi Points," she observed. Since the cost of a Harrier Jet is about $23 million, an objective, reasonable person would conclude that purchasing it for $700,000 "is a deal too good to be true."

The court granted Pepsico its motion for summary judgment and dismissed the case in its entirety. Judge Wood ordered the clerk to close the consolidated cases and ruled that any pending motions are moot.

Leonard was represented by David E. Nachman of Solomon, Zauderer, Ellenhorn, Frischer & Sharp in New York. David N. Wynn of Arent Fox Kintner Plotkin & Kahn in New York represented Pepsico along with Charles D. Ossola of Arnold & Porter in Washington, DC.