Pepsi Faces Legal Heat Over High Carcinogen Levels in Pepsi, Diet Pepsi, PepsiOne

A federal judge recently ruled that PepsiCo must address class action allegations that its Pepsi, Diet Pepsi, and Pepsi One products contain carcinogenic 4-methylimidazole (4-MeI) at levels that exceed the threshold set by California Proposition.

Nine class action cases were consolidated into a single action, with the lead plaintiff claiming that Pepsi fails to warn California consumers that caramel coloring used in Pepsi produces 4-MeI as a byproduct. The chemical is listed on California’s Proposition 65 list of carcinogens in 2011 after the National Toxicology Program found that it caused lung tumors in laboratory animals, according to the state’s Office of Environmental Health Hazard Assessment.

According to California’s Proposition 65, the amount of 4-MeI that a human can ingest without facing a significant risk of cancer is 29 micrograms per day. Known as the Maximum Allowable Dose Levels (MADLs), a manufacturer who keeps carcinogen levels below this threshold falls within Proposition 65’s safe harbor.

Plaintiffs in the consolidated class action claim that Pepsi intentionally concealed that its drink contains levels of 4-MeI that exceed this safety threshold.

In 2014, Consumer Reports published the results of tests that it performed on a  number of soft drinks, concluding that the amounts of 4-MeI in the Pepsi beverages was higher than other soft drinks in the test. The test results indicated that a can or bottle of Pepsi’s beverages contain over 29 micrograms of 4-MeI. The lead plaintiff relies heavily on these test results in her complaint. According to the plaintiff, these findings are significant considering that the average soda drinker consumes more than one 12-ounce can each day.

The complaint also alleges that according to in its annual reports from 2010 to 2013, Pepsi made statements suggesting that it knew that it was subject to Proposition 65, and made false statements regarding its compliance with the new Proposition 65 regulations governing the maximum levels of carcinogenic ingredients that can be in consumer products.

Pepsi initially filed a motion seeking to dismiss the litigation on the grounds that the entire lawsuit rests on the consumers’ mistaken position that exceeding the 29 microgram limit in a single 12-ounce serving constitutes a violation of Proposition 65. According to Pepsi, Proposition 65 requires a manufacturer to calculate the consumption based not he lifetime exposure patterns using the average rate of intake or exposure for average users.

A motion to dismiss asks the judge to examine the plaintiff’s allegations in the complaint and conclude that the plaintiff’s have failed to state a claim. To survive this challenge, the complaint must have adequately pled enough facts to support a cause of action alleged in the complaint. When deciding the motion, the reviewing judge assumes that all facts alleged in the complaint are true.

In denying Pepsi’s motion for dismissal, Federal Judge Edward Chen disagreed with Pepsi’s interpretation of Proposition 65, finding that the plaintiffs pled sufficient allegations establishing that Pepsi’s beverages did not fall within the acceptable carcinogenic limits.

“In particular, [the complaint] alleges that studies show that consumers who drink soda consume, on average, more than one 12-ounce serving per day. Assuming the facts alleged in the [complaint] to be true, a plausible inference that, where each serving of the Pepsi beverages contained more than 29 micrograms of 4-MeI, the average daily exposure to a consumer who drinks more than one serving per day exceeds 29 micrograms,” wrote Judge Chen.

Despite this initial victory for the plaintiffs, Chen invited Pepsi to challenge the plaintiff’s exposure rate calculation during a summary judgment motion or during trial.

Chen also rejected Pepsi’s argument that mandating a Prop. 65 warning on its products would impose a labeling requirement different from the requirements of the federal Food, Drug, and Cosmetic Administration and is therefore subject to the National Labeling and Education Act’s preemption of state laws on misbranding.

Chen disagreed, finding: “(T)he NLEA carves out an exemption from its express preemption clause where warnings concerning the safety of food or component of food are at issue.

“The Proposition 65 warning and the cancer risks alleged in the CAC unambiguously implicate safety concerns. Thus, unlike cases in which no safety concerns are raised, the section 6(c)(2) exemption from preemption applies where, as here, such concerns are manifest.”

Chen also ruled that the plaintiffs’ allegations that Pepsi misrepresented the amount of 4-MeI in its products are also not preempted.

The consumers allege “a material misstatement in the form of a public statement regarding steps that Pepsi had taken to conform its beverages to state regulations. In the light most favorable to plaintiffs, the misstatement or omissions that Pepsi made in its public statements and/or on its website is a deceptive claim regarding a consumer product. Pepsi has pointed to no provision of the FDCA or FDA regulations that preempts claims based on such alleged misrepresentations, which are not alleged to be included on product labels or packaging,” Chen ruled.

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