Wednesday, October 28, 2009

Secretary's Mistake Blamed for $1.26 Billion Dollar Judgment

The Business Insider headline screams, "Pepsi Nailed With $1.26 Billion Judgment After Secretary's Mistake" - causing any of us who've ever worked as a secretary or administrative assistant to quake in our boots, and to quickly scan the article to find out how to avoid making a $1.26 billion dollar mistake.

The gargantuan judgment arose out of Pepsi's alleged failure to file a timely response to a lawsuit from two fellows claiming that Pepsi stole the idea to sell bottled water - several decades ago. Pepsi is appealing the default judgment and claiming it was not properly served.

The secretary's role in the terribly embarrassing affair is as follows:


A letter from a co-defendant was sent to a Pepsi deputy general counsel on September 15, but his secretary was "so busy preparing for a board meeting," she just put it aside.

And that was all that happened until October 5, when the same secretary received a copy of the plaintiff's motion for default judgment. The secretary then sent the letter to the relevant legal assistant, remembering the other letter and sending it along the next day. A company attorney "immediately" called for the complaint.


Wow, talk about throwing a secretary under a bus. This seems like a lot of blame heaped on one clerical staffer.

The WSJLaw Blog sheds some additional light on what may have been a "series of unfortunate events" and corporate miscommunication, including Pepsi's inability to explain why counsel for its own distributors, who made court appearances in the case, didn't bring the case to its attention.

And what about the issue of the time to respond to the complaint running out? Apparently, Pepsi's agent in North Carolina had notice of the lawsuit for "months and months" before finally notifying its legal department in September.

Regardless of how it happens, missing a deadline to respond to a lawsuit is one of the most serious mistakes that can occur in litigation. Possible horrifying consequences include having a default judgment entered (although likely smaller than this one) or being sued for malpractice.

(Or getting fired, or getting Googled and finding your name in dozens of articles almost identically titled, "Secretary Responsible for $1.26 Billion Dollar Mistake!!!!!")

This news story, while certainly a worst case scenario involving more money than most of us can write out the zeros for, is a reminder that even the best deadline tracking systems are subject to human error.

So for those of us who handle important mail, the morals of this story are:


  • Don't put business correspondence aside - or in drawers.
  • Immediately scan and save a copy if your office has that capability, in case it gets lost.
  • Read all correspondence. If it's important, not only put it in the responsible party's in-box but email a copy and personally bring it to his or her attention as well
  • Deliver it immediately to the addressee, likely your boss or supervising attorney, or any other suitable person as directed by your company's chain of command. (When in doubt, send a copy to everybody on your team.)
  • Keep your workspace organized and clean to prevent items from being lost or misplaced in the area that you control.
  • Repeat - do not put business correspondence aside - or in drawers.


UPDATE: My sympathies to the much maligned secretary who made Above the Law's Legal Secretary of the Day.

2 comments:

  1. Whoa, that is one expensive mistake! You have great advice, Lynne. I especially like the suggestion of scanning all correspondence into the system immediately.

    ReplyDelete
  2. Additionally to Lynne's WONDERFUL advice...where the h#ll is the responsibility of the supervising attorney?!

    ReplyDelete

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