Pepsi Must Defend Against Carcinogen Claims

SAN FRANCISCO (CN) - PepsiCo must face a class action that claims Pepsi, Diet Pepsi and Pepsi One contain carcinogenic 4-methylimidazole at levels above the threshold set by California Proposition 65, a federal judge ruled.

Nine putative class actions were consolidated into one, with lead plaintiff Mary Hall claiming that Pepsi does not warn California consumers that caramel coloring used in Pepsi produces 4-MeI as a byproduct.

California listed 4-MeI on its 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.

Under California law, the amount of exposure to 4-MeI that will not cause a significant cancer risk is 29 micrograms per day.

Hall claims that Pepsi intentionally concealed that its drinks contain 4-MeI at levels above this safety threshold.

Consumer Reports in 2014 published the results of tests it conducted in 2013 on a number of soft drinks and found that the amounts of 4-MeI in the Pepsi beverages were higher than in other soft drinks tested. The tests showed more than 29 mcg in a can or bottle of 4-MeI, the complaint states.

Hall calls this significant because soda drinkers typically drink more than one 12-ounce serving per day.

In its annual reports from 2010 to 2013, Pepsi made statements that suggested it knew that it was subject to Prop. 65, according to the consolidated complaint.

Hall claims that Pepsi also said that when the regulatory requirements on the carcinogen changed in California it immediately moved to meet the new requirements, and that the work had been completed in California.

But it did not, according to the complaint. Hall claims Pepsi's statements misled consumers into thinking that its beverages were safe.

Pepsi claimed the consolidated action should be dismissed because the entire lawsuit rests on the consumers' mistaken belief that exceeding 29 mcg in a single 12-ounce serving constitutes a violation of Prop. 65.

Pepsi said that was not the intent of Prop. 65, which calculates consumption based on lifetime exposure patterns using the average rate of intake or exposure for average users.

U.S. District Judge Edward Chen disagreed, finding that the consumers adequately pleaded that the Pepsi beverages at issue did not fall within the safe harbor established by Prop. 65.

"In particular, the CAC [Consolidated Amended 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 CAC 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," Chen wrote.

He ruled that Pepsi can challenge the consumers' exposure calculation methodology at summary judgment or at 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."

Nor are consumers' allegations that Pepsi misrepresented the amount of 4-MeI in its products 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.

Plaintiffs' attorney Daniel Warshaw, with Pearson Simon Warshaw, said he was "pleased with Judge Chen's ruling that this case is not preempted by federal law and no cause of action in plaintiff's complaint should be dismissed based on the technical pleading arguments asserted by Pepsi. We look forward to litigating this case on the merits."

PepsiCo representative Aurora Gonzalez told Courthouse News the company's products are safe.

"Our products are safe and in full compliance with all applicable laws," Gonzalez said. "Friday's ruling did not address the merits of the case, only that the case would continue to proceed. Beyond that, we cannot comment on the specifics of a pending litigation."

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