We are pleased to bring you the most recent edition of the Wisconsin Law Quarterly. To view the issue, please click here.
On September 30, 2009 a Jefferson County judge entered a default judgment against Pepsi Company to the tune of $1.26 billion. The plaintiffs in the action were two gentlemen who had confidential meetings with local Pepsi bottlers back in 1981. The litigation began in April 2009 when the plaintiffs brought suit asserting misappropriation of a trade secret claiming that this information was illicitly passed on to Pepsi who then used the information for its Aquafina line of bottled water. Pepsi claimed that it first received a legal document related to this case from its registered agent on September 15, 2009 but one of its legal secretaries put it aside because she was too busy preparing for a board meeting. Pepsi failed to answer timely and subsequently failed to appear at the default judgment motion hearing and the judge entered default judgment against Pepsi for $1.26 billion.
Unsurprisingly Pepsi immediately moved to vacate the default judgment award and dismiss the original complaint. Pepsi argued that Wisconsin law disfavors default judgments, that no party would be prejudiced given the case had just begun, and that the original complaint should be dismissed based on the statute of limitations and defects in proper service upon Pepsi. The same judge that granted the default judgment on September 30, 2009 vacated the default judgment on November 5, 2009. Several motions to dismiss are now pending. While it remains unclear at this time whether an appeal will take place and what issues will be present on appeal, if the default judgment issue is appealed, it will present an interesting scenario for the appellate courts given the extreme nature of the default judgment awarded compared to the typical reluctant nature of Wisconsin courts to vacate default judgments. At the very least this should serve as a reminder to all that any summons and complaint must be taken seriously and treated with the appropriate level of urgency so as to avoid any chance of default judgment and the associated hurdles presented by default judgments in Wisconsin.