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Docket Number

No. 99-9032.

Attorney(S)

DAVID E. NACHMAN, New York, N Y (David N. Ellenhorn, Emily Stern, Solomon, Zauderer, Ellenhorn, Fischer Sharp, New York, N Y on the brief) for Plaintiff-Appellant. CHARLES OSSOLA, New York, N.Y. (Arnold Porter, Washington D.C., and Arent, Fox, Kitner, Plotkin Kahn, New York, N.Y. on the brief)for Defendant-Appellee.

Judges

Wilfred Feinberg
Dennis G. Jacobs
Janet C. Hall

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Smart Summary

Leonard v. PepsiCo, Inc., No. 99-9032 (2d Cir. Apr. 17, 2000) — Per Curiam

Court: United States Court of Appeals, Second Circuit. | Argued: March 21, 2000. | Decided: April 17, 2000.

Panel: Feinberg, Jacobs, and Hall, Circuit Judges (Hall sitting by designation). | Opinion: Per Curiam.

Factual and Procedural Background

In 1995, defendant-appellee PepsiCo, Inc. ran a promotion in which consumers could acquire merchandise in exchange for "points" obtained by purchasing Pepsi products. A televised commercial depicted a teenager displaying various items obtainable with Pepsi points (a T-shirt, jacket, sunglasses), and concluded with the teenager arriving at school in a Harrier Jet. The advertisement listed a point price for each item and displayed "7 million points" adjacent to the Harrier Jet.

Plaintiff-appellant John D.R. Leonard alleged that the commercial constituted an offer for the Harrier Jet, that he accepted by tendering the equivalent of 7 million points, and that PepsiCo breached the resulting contract by refusing to deliver the jet. PepsiCo contended that the depiction of the Harrier was a hyperbolic joke, pointed to the commercial's reference to further details in the promotional catalog (which contained no Harrier), and argued that no reasonable objective viewer would interpret the advertisement as a genuine offer to transfer a Harrier Jet.

The United States District Court for the Southern District of New York (Wood, J.) granted PepsiCo's motion for summary judgment, concluding: (1) the commercial did not constitute an offer of goods; (2) no objective person could reasonably have concluded the commercial offered a Harrier Jet; and (3) the alleged contract did not satisfy the New York statute of frauds. The plaintiff appealed, and the Second Circuit affirmed.

Legal Issues Presented

Whether the television commercial could be treated as a legally cognizable offer for the Harrier Jet.
Whether an objective, reasonable person could have understood the commercial to be an actual offer of a Harrier Jet.
Whether any alleged contract would satisfy the New York statute of frauds.

Arguments of the Parties

Plaintiff-Appellant's Arguments

The televised advertisement constituted an offer to provide the Harrier Jet in exchange for 7 million Pepsi points.
Plaintiff accepted that offer by tendering the equivalent of 7 million points and thus formed an enforceable contract for specific performance (delivery of the Harrier Jet).

Defendant-Appellee's Arguments

The Harrier Jet's appearance in the commercial was hyperbolic "zany humor" and not a serious offer.
The commercial directed viewers to the promotional catalog for details; that catalog contained no Harrier Jet, undermining any claim the ad made a genuine offer.
No objective, reasonable person would construe the commercial as an offer to transfer a Harrier Jet.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
88 F. Supp. 2d 116 (S.D.N.Y. 1999)	District court opinion (Judge Wood) setting forth the reasons supporting summary judgment for the defendant in this action.	The Second Circuit affirmed the judgment of the district court "for substantially the reasons stated in Judge Wood's opinion," effectively adopting that opinion's rationale for granting summary judgment.

Court's Reasoning and Analysis

The per curiam opinion affirms the district court's grant of summary judgment to PepsiCo and does so by endorsing the analytical grounds previously articulated by Judge Wood. The court's analysis, as reflected in the opinion, rests on three core determinations:

The commercial, taken in context, did not amount to a legally actionable offer of goods. The court accepted the view that the advertisement as a whole did not present terms or manifestations sufficient to create an offer that a reasonable person would treat as seriously meant and contractually binding.
Applying an objective-reasonable-observer standard, the court concluded that no objective person could reasonably have interpreted the commercial as actually offering a Harrier Jet. The court relied on the promotional context and the ad's apparent humorous exaggeration to support this conclusion.
Even if an enforceable contract were alleged, the claimed agreement would fail to satisfy the requirements of the New York statute of frauds. The district court held, and the appellate court agreed, that the statute of frauds barred enforcement of the alleged contract as pleaded.

The Second Circuit's concise explanation makes clear that the appellate court's disposition is grounded in these determinations and that it adopts Judge Wood's reasoning without elaborating additional analysis in the published per curiam opinion.

Holding and Implications

HOLDING: The judgment of the district court granting summary judgment to defendant PepsiCo is AFFIRMED.

Implications:

The practical consequence of this decision is that plaintiff John D.R. Leonard's claim for specific performance (delivery of a Harrier Jet) was rejected and the district court's summary judgment in favor of PepsiCo stands.
The Second Circuit expressly affirmed "for substantially the reasons stated in Judge Wood's opinion," indicating no new, broader legal rule was announced by the appellate court in this per curiam disposition beyond the adoption of the district court's reasoning.

This summary is based solely on the information contained in the provided opinion excerpt. No additional facts or legal authorities beyond those cited in the excerpt were considered or inferred.

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JOHN D.R. LEONARD, Plaintiff-Appellant, v. PEPSICO, INC., Defendant-Appellee

PER CURIAM.

In 1995, defendant-appellee Pepsico, Inc. conducted a promotion in which it offered merchandise in exchange for "points" earned by purchasing Pepsi Cola. A television commercial aired by Pepsico depicted a teenager gloating over various items of merchandise earned by Pepsi points, and culminated in the teenager arriving at high school in a Harrier Jet, a fighter aircraft of the United States Marine Corps. For each item of merchandise sported by the teenager (a T shirt, a jacket, sunglasses), the ad noted the number of Pepsi points needed to get it. When the teenager is shown in the jet, the ad prices it as 7 million points.

Plaintiff-appellant John D.R. Leonard alleges that the ad was an offer, that he accepted the offer by tendering the equivalent of 7 million points, and that Pepsico has breached its contract to deliver the Harrier jet. Pepsico characterizes the use of the Harrier jet in the ad as a hyperbolic joke ("zany humor"), cites the ad's reference to offering details contained in the promotional catalog (which contains no Harrier fighter plane), and argues that no objective person would construe the ad as an offer for the Harrier jet.

The United States District Court for the Southern District of New York (Wood, J.) agreed with Pepsico and granted its motion for summary judgment on the grounds (1) that the commercial did not amount to an offer of goods; (2) that no objective person could reasonably have concluded that the commercial actually offered consumers a Harrier Jet; and (3) that the alleged contract could not satisfy the New York statute of frauds.

We affirm for substantially the reasons stated in Judge Wood's opinion. See 88 F. Supp.2d 116 (S.D.N.Y. 1999).

LEONARD v. PEPSICO, INC