8th Circuit Affirms $3M Judgement Against Pepsi in Bottling Company Lawsuit

The Eighth Circuit on Thursday issued a judgment ruling that Pepsi-Cola owes $3 million to a bottling company, affirming the Southern District of Iowa decision in a lawsuit contesting the agreements between the parties. The defendant appealed the case claiming that the jury trial should not be accepted. 

Mahaska Bottling Company Inc., Pepsi-Cola Bottling Company of Salina Inc., and Pepsi-Cola Bottling Company of Norfolk Inc., which previously partnered with Pepsi to provide bottling, filed the lawsuit in 2016. Reportedly, these companies had exclusive rights to distribute Pepsi products, including fountain syrup, in specific areas, but eventually disputes arose over the contracts between the companies leading to the lawsuit. Pepsi was accused of price fixing, conspiracy, interference with contracts, business defamation, and breach of fiduciary duty. 

The district court, after a split jury verdict, awarded almost $3 million in damages to the plaintiffs and $24,000 in damages to Pepsi. After the court denied Pepsi’s motion seeking a new trial, the defendants, Pepsi and Bottling Group LLC, appealed the closing argument in the jury trial, objecting to the plaintiffs’ PowerPoint and significant amount of “improper statements.”

In its 8-page opinion, the Eighth Circuit explained that the jury was, in this instance, impacted by some of the major actors and a contentious trial. “Sometimes the trial reflects an aggressiveness and hurly-burly that walks right up to the line of impropriety but does not cross it. This is such a case.” the judges said, noting that neither side reacted to the trial judge’s attempts to “lower the heat.” However, the appellate court determined that damages being awarded on both sides shows that the jurors considered all of the evidence and were not prejudiced. 

The Eighth Circuit’s unanimous opinion also noted that Pepsi did not object to the closing arguments at the time or before the final charge was given to the jury, and instead chose to wait until it could see the outcome before seeking a new trial. Because of this, the court determined that the claims “are subject to plain error review.” 

The alleged improper statements from the plaintiffs included statements about the plaintiffs, about Pepsi’s size, the credibility of Pepsi’s witnesses, punishment, and statements encouraging bias. The Eighth Circuit determined that none of Pepsi’s rights were affected in a way that altered the trial’s integrity, although “portions of Mahaska’s closing argument were hyperbolic” or “approached the line for permissible argument.” 

The plaintiffs are represented by Friedman & Feiger, Izadi Legal Group, Armstrong Teasdale, and Whitfield & Eddy. Pepsi is represented by Freshfields Bruckhaus Deringer and Nyemaster & Goode.