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Leonard v. Pepsico, Inc.
88 F. Supp. 2d 116 (S.D.N.Y. 1999),
aff'd 210 F.3d 88 (2d Cir. 2000)
Wood, District Judge:
Plaintiff brought this action seeking, among other things, specific
performance of an alleged offer of a Harrier Jet, featured in a television advertisement
for defendant's "Pepsi Stuff" promotion. Defendant has moved for summary judgment pursuant to Federal Rule of
Civil Procedure 56. For the reasons stated below, defendant's motion is granted.
I. Background
This case arises out of a promotional campaign conducted by defendant,
the producer and distributor of the soft drinks Pepsi and Diet Pepsi. The promotion,
entitled "Pepsi Stuff," encouraged consumers to collect "Pepsi Points"
from specially marked packages of Pepsi or Diet Pepsi and redeem these points for
merchandise featuring the Pepsi logo. Before introducing the promotion nationally,
defendant conducted a test of the promotion in the Pacific Northwest from October 1995 to
March 1996. A Pepsi Stuff catalog was distributed to consumers in the test market,
including Washington State. Plaintiff is a resident of Seattle, Washington.
While living in Seattle, plaintiff saw the Pepsi Stuff commercial that he contends
constituted an offer of a Harrier Jet.
A. The Alleged Offer
Because whether the television commercial constituted an offer is the
central question in this case, the Court will describe the
commercial in detail. 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. n2
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. "Looking very pleased with himself," 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.
Inspired by this commercial, plaintiff set out to obtain a Harrier Jet.
Plaintiff explains that he is "typical of the 'Pepsi Generation' . . . he is young,
has an adventurous spirit, and the notion of obtaining a Harrier Jet appealed to him
enormously." Plaintiff consulted the Pepsi Stuff Catalog. The Catalog features youths
dressed in Pepsi Stuff regalia or enjoying Pepsi Stuff accessories, such as "Blue
Shades" ("As if you need another reason to look forward to sunny days."),
"Pepsi Tees" ("Live in 'em. Laugh in 'em. Get in 'em."), "Bag of
Balls" ("Three balls. One bag. No rules."), and "Pepsi Phone
Card" ("Call your mom!"). The Catalog specifies the number of Pepsi Points
required to obtain promotional merchandise. (See Catalog, at rear foldout pages.) The
Catalog includes an Order Form which lists, on one side, fifty-three items of Pepsi Stuff
merchandise redeemable for Pepsi Points (see id. (the "Order Form")).
Conspicuously absent from the Order Form is any entry or description of a Harrier Jet.
(See id.) The amount of Pepsi Points required to obtain the listed merchandise ranges from
15 (for a "Jacket Tattoo" ("Sew 'em on your jacket, not your arm."))
to 3300 (for a "Fila Mountain Bike" ("Rugged. All-terrain. Exclusively for
Pepsi.")). It should be noted that plaintiff objects to the implication that because
an item was not shown in the Catalog, it was unavailable.
The rear foldout pages of the Catalog contain directions for redeeming
Pepsi Points for merchandise. (See Catalog, at rear foldout pages.) These directions note
that merchandise may be ordered "only" with the original Order Form. The Catalog
notes that in the event that a consumer lacks enough Pepsi Points to obtain a desired
item, additional Pepsi Points may be purchased for ten cents each; however, at least
fifteen original Pepsi Points must accompany each order.
Although plaintiff initially set out to collect 7,000,000 Pepsi Points
by consuming Pepsi products, it soon became clear to him that he "would not be able
to buy (let alone drink) enough Pepsi to collect the necessary Pepsi Points fast
enough." Reevaluating his strategy, plaintiff "focused for the first time
on the packaging materials in the Pepsi Stuff promotion," and realized that buying
Pepsi Points would be a more promising option. Through acquaintances, plaintiff ultimately
raised about $700,000.
B. Plaintiff's Efforts to Redeem the Alleged Offer
On or about March 27, 1996, plaintiff submitted an Order Form, fifteen
original Pepsi Points, and a check for $700,008.50. Plaintiff appears to have been
represented by counsel at the time he mailed his check; the check is drawn on an account
of plaintiff's first set of attorneys. At the bottom of the Order Form, plaintiff
wrote in "1 Harrier Jet" in the "Item" column and
"7,000,000" in the "Total Points" column. In a letter accompanying his
submission, plaintiff stated that the check was to purchase additional Pepsi Points
"expressly for obtaining a new Harrier jet as advertised in your Pepsi Stuff
commercial."
On or about May 7, 1996, defendant's fulfillment house rejected
plaintiff's submission and returned the check,
explaining that:
The item that you have requested is not part of the Pepsi Stuff collection. It is not included in the catalogue or on the order form, and only catalogue merchandise can be redeemed under this program. The Harrier jet in the Pepsi commercial is fanciful and is simply included to create a humorous and entertaining ad. We apologize for any misunderstanding or confusion that you may have experienced and are enclosing some free product coupons for your use.
Plaintiff's previous counsel responded on or about May 14, 1996, as follows:
Your letter of May 7, 1996 is totally unacceptable. We have reviewed the video tape of the Pepsi Stuff commercial . . . and it clearly offers the new Harrier jet for 7,000,000 Pepsi Points. Our client followed your rules explicitly. . . . This is a formal demand that you honor your commitment and make immediate arrangements to transfer the new Harrier jet to our client. If we do not receive transfer instructions within ten (10) business days of the date of this letter you will leave us no choice but to file an appropriate action against Pepsi . . . .
This letter was apparently sent onward to the advertising company responsible for the actual commercial, BBDO New York ("BBDO"). In a letter dated May 30, 1996, BBDO Vice President Raymond E. McGovern, Jr., explained to plaintiff that:
I find it hard to believe that you are of the opinion that the Pepsi Stuff commercial ("Commercial") really offers a new Harrier Jet. The use of the Jet was clearly a joke that was meant to make the Commercial more humorous and entertaining. In my opinion, no reasonable person would agree with your analysis of the Commercial.
On or about June 17, 1996, plaintiff mailed a similar
demand letter to defendant.
. . .
II. Discussion
. . .
C. An Objective, Reasonable Person Would Not Have Considered the Commercial an Offer
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.
1. Objective Reasonable Person Standard
In evaluating the commercial, the Court must not consider defendant's
subjective intent in making the commercial, or plaintiff's subjective view of what the
commercial offered, but what an objective, reasonable person would have understood the
commercial to convey. See Kay-R Elec. Corp. v. Stone & Weber Constr. Co., 23 F.3d 55,
57 (2d Cir. 1994) ("We are not concerned with what was going through the heads of the
parties at the time [of the alleged contract]. Rather, we are talking about the objective
principles of contract law."); Mesaros, 845 F.2d at 1581 ("A basic rule of
contracts holds that whether an offer has been made depends on the objective
reasonableness of the alleged offeree's belief that the advertisement or solicitation was
intended as an offer."); Farnsworth, supra, § 3.10, at 237; Williston, supra, § 4:7
at 296-97.
If it is clear that an offer was not serious, then no offer has been
made:
What kind of act creates a power of acceptance and is therefore an
offer? It must be an expression of will or intention. It must be an act that leads the
offeree reasonably to conclude that a power to create a contract is conferred. This
applies to the content of the power as well as to the fact of its existence. It is on this
ground that we must exclude invitations to deal or acts of mere preliminary negotiation,
and acts evidently done in jest or without intent to create legal relations. Corbin
on Contracts, § 1.11 at 30 (emphasis added). An obvious joke, of course, would not give
rise to a contract. See, e.g., Graves v. Northern N.Y. Pub. Co., 260 A.D. 900, 22 N.Y.S.2d
537 (App. Div. 4th Dept.1940) (dismissing claim to offer of $1000, which appeared in the
"joke column" of the newspaper, to any person who could provide a commonly
available phone number). On the other hand, if there is no indication that the offer is
"evidently in jest," and that an objective, reasonable person would find that
the offer was serious, then there may be a valid offer. See Barnes, 549 P.2d at 1155
("If the jest is not apparent and a reasonable hearer would believe that an offer was
being made, then the speaker risks the formation of a contract which was not
intended."); see also Lucy v. Zehmer, 196 Va. 493, 84 S.E.2d 516, 518, 520 (Va.1954)
(ordering specific performance of a contract to purchase a farm despite defendant's
protestation that the transaction was done in jest as "'just a bunch of two doggoned
drunks bluffing'").
2. Necessity of a Jury Determination
Plaintiff also contends that summary judgment is improper because the
question of whether the commercial conveyed a sincere offer can be answered only by a
jury. Relying on dictum from Gallagher v. Delaney, 139 F.3d 338 (2d Cir. 1998), plaintiff
argues that a federal judge comes from a "narrow segment of the enormously broad
American socio-economic spectrum," id. at 342, and, thus, that the question whether
the commercial constituted a serious offer must be decided by a jury composed of, inter
alia, members of the "Pepsi Generation," who are, as plaintiff puts it,
"young, open to adventure, willing to do the unconventional." Plaintiff
essentially argues that a federal judge would view his claim differently than fellow
members of the "Pepsi Generation."
Plaintiff's argument that his claim must be put to a jury is without
merit. Gallagher involved a claim of sexual harassment in which the defendant allegedly
invited plaintiff to sit on his lap, gave her inappropriate Valentine's Day gifts, told
her that "she brought out feelings that he had not had since he was sixteen,"
and "invited her to help him feed the ducks in the pond, since he was 'a bachelor for
the evening.'" Gallagher, 139 F.3d at 344. The court concluded that a jury
determination was particularly appropriate because a federal judge lacked "the
current real-life experience required in interpreting subtle sexual dynamics of the
workplace based on nuances, subtle perceptions, and implicit communications." Id. at
342. This case, in contrast, presents a question of whether there was an offer to enter
into a contract, requiring the Court to determine how a reasonable, objective person would
have understood defendant's commercial. Such an inquiry is commonly performed by courts on
a motion for summary judgment.
3. Whether the Commercial Was "Evidently Done In Jest"
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 . . . ." The commercial
is the embodiment of what defendant appropriately characterizes as "zany humor."
First, the commercial suggests, as commercials often do, that use of
the advertised product will transform what, for most youth, can be a fairly routine and
ordinary experience. The military tattoo and stirring martial music, as well as the use of
subtitles in a Courier font that scroll terse messages across the screen, such as
"MONDAY 7:58 AM," evoke military and espionage thrillers. The implication of the
commercial is that Pepsi Stuff merchandise will inject drama and moment into hitherto
unexceptional lives. The commercial in this case thus makes the exaggerated claims similar
to those of many television advertisements: that by consuming the featured clothing, car,
beer, or potato chips, one will become attractive, stylish, desirable, and admired by all.
A reasonable viewer would understand such advertisements as mere puffery, not as
statements of fact, see, e.g., Hubbard v. General Motors Corp., 1996 U.S. Dist. LEXIS
6974, 95 Civ. 4362 (AGS), 1996 WL 274018, at 6 (S.D.N.Y. May 22, 1996) (advertisement
describing automobile as "Like a Rock," was mere puffery, not a warranty of
quality); and refrain from interpreting the promises of the commercial as being literally
true.
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.
Third, the notion of traveling to school in a Harrier Jet is an
exaggerated adolescent fantasy. In this commercial, the fantasy is underscored by how the
teenager's schoolmates gape in admiration, ignoring their physics lesson. The force of the
wind generated by the Harrier Jet blows off one teacher's clothes, literally defrocking an
authority figure. As if to emphasize the fantastic quality of having a Harrier Jet arrive
at school, the Jet lands next to a plebeian bike rack. This fantasy is, of course,
extremely unrealistic. No school would provide landing space for a student's fighter jet,
or condone the disruption the jet's use would cause.
Fourth, the primary mission of a Harrier Jet, according to the United
States Marine Corps, is to "attack and destroy surface targets under day and night
visual conditions." United States Marine Corps, Factfile: AV-8B Harrier II (last
modified Dec. 5, 1995) <http://www.hqmc.usmc.mil/factfile.nsf>.
Manufactured by McDonnell Douglas, the Harrier Jet played a significant role in the air
offensive of Operation Desert Storm in 1991. See id. The jet is designed to carry a
considerable armament load, including Sidewinder and Maverick missiles. See id. As
one news report has noted, "Fully loaded, the Harrier can
float like a butterfly and sting like a bee -- albeit a roaring 14-ton butterfly and a
bee with 9,200 pounds of bombs and missiles." Jerry Allegood, Marines Rely on Harrier
Jet, Despite Critics, News & Observer (Raleigh), Nov. 4, 1990, at C1. 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."
Fifth, the number of Pepsi Points the commercial mentions as required
to "purchase" the jet is 7,000,000. 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. The cost of a Harrier Jet is roughly $23 million dollars, a fact of which
plaintiff was aware when he set out to gather the amount he believed necessary to accept
the alleged offer. Even if an objective, reasonable person were not aware of this fact, he
would conclude that purchasing a fighter plane for $700,000 is a deal too good to be true.
[Ed. By way of comparison: An unnamed U.S. citizen auctioned a MIG 21
Russian Jet Fighter on EBay for one week in December 2002. The highest of 26 bids,
$60,100, did not meet the seller's undisclosed minimum bid and the auction was therefore
ended without sale.]
Plaintiff argues that a reasonable, objective person would have
understood the commercial to make a serious offer of a Harrier Jet because there was
"absolutely no distinction in the manner" in which the items in the commercial
were presented. Plaintiff also relies upon a press release highlighting the promotional
campaign, issued by defendant, in which "no mention is made by [defendant] of humor,
or anything of the sort." These arguments suggest merely that the humor of the
promotional campaign was tongue in cheek. Humor is not limited to what Justice Cardozo
called "the rough and boisterous joke . . . [that] evokes its own guffaws."
Murphy v. Steeplechase Amusement Co., 250 N.Y. 479, 483, 166 N.E. 173, 174 (1929). In
light of the obvious absurdity of the commercial, the Court rejects plaintiff's argument
that the commercial was not clearly in jest.
4. Plaintiff's Demands for Additional Discovery
In his Memorandum of Law, and in letters to the Court, plaintiff argues
that additional discovery is necessary on the issues of whether and how defendant reacted
to plaintiff's "acceptance" of their "offer"; how defendant and its
employees understood the commercial would be viewed, based on test-marketing the
commercial or on their own opinions; and how other individuals actually responded to the
commercial when it was aired.
Plaintiff argues that additional discovery is necessary as to how
defendant reacted to his "acceptance," suggesting that it is significant that
defendant twice changed the commercial, the first time to increase the number of Pepsi
Points required to purchase a Harrier Jet to 700,000,000, and then again to amend the
commercial to state the 700,000,000 amount and add "(Just Kidding)."
Plaintiff concludes that, "Obviously, if PepsiCo truly believed that no one could
take seriously the offer contained in the original ad that I saw, this change would have
been totally unnecessary and superfluous." The record does not suggest that
the change in the amount of points is probative of the seriousness of the offer. The
increase in the number of points needed to acquire a Harrier Jet may have been prompted
less by the fear that reasonable people would demand Harrier Jets and more by the concern
that unreasonable people would threaten frivolous litigation. Further discovery is
unnecessary on the question of when and how the commercials changed because the question
before the Court is whether the commercial that plaintiff saw and relied upon was an
offer, not that any other commercial constituted an offer.
Plaintiff's demands for discovery relating to how defendant itself
understood the offer are also unavailing. Such discovery would serve only to cast light on
defendant's subjective intent in making the alleged offer, which is irrelevant to the
question of whether an objective, reasonable person would have understood the commercial
to be an offer. See Kay-R Elec. Corp., 23 F.3d at 57 ("We are not concerned with what
was going through the heads of the parties at the time [of the alleged contract].");
Mesaros, 845 F.2d at 1581; Corbin on Contracts, § 1.11 at 30. Indeed, plaintiff
repeatedly argues that defendant's subjective intent is irrelevant.
Finally, plaintiff's assertion that he should be afforded an
opportunity to determine whether other individuals also tried to accumulate enough Pepsi
Points to "purchase" a Harrier Jet is unavailing. The possibility that there
were other people who interpreted the commercial as an "offer" of a Harrier Jet
does not render that belief any more or less reasonable. The alleged offer must be
evaluated on its own terms. Having made the evaluation, the Court concludes that summary
judgment is appropriate on the ground that no reasonable, objective person would have
understood the commercial to be an offer.
. . .
[The Court granted the defendants' motion for summary judgment,
including for additional reasons not reprinted in this edited version of the opinion.]