The 10 Biggest Pepsi Lawsuits in Company History

PepsiCo

PepsiCo is a famous American Multinational snack, food, and beverage corporation with its headquarters in Harrison, New York. Today, PepsiCo is the second-biggest food possessing twenty-three brands distributed across more than 200 countries worldwide and a beverage company behind Nestle. However, like other companies in the food industry, Pepsi has also been involved in several lawsuits and soda rivalry throughout its journey from being established to rising to the top. The company has repeatedly faced lawsuits against environmentalists on the impact of its products on the environment, the negative effect of its packaging, as well as suits on the line of its drink’s ingredients. Here is a look at the 10 biggest lawsuits in Company history.

10. Pepsi VS. RTD Coffee Maker Trademark Infringement Lawsuit ($1m)

Pepsi was recently involved in a lawsuit filed by the RTD coffee maker Rise Brewing. The coffee maker company sued Pepsi for using ‘Rise’ in Mtn Dew Rise Energy. Rise Brewing company manufactures canned nitro cold brew coffees. These cans feature the word ‘Rise’ in all caps prominently in bold, red print at the top of the cans. Pepsi launched Mtn Dew Rise Energy in March 2021 and has an all-capped ‘Rise’ at the top of its cans. Both of these products are sold nationally in convenience and grocery stores. According to a judge’s ruling, PepsiCo must stop using Mtn Dew Rise Energy for its energy drink. He claimed that the Pepsi drink would confuse customers.

9. Pesticides Regulation Lawsuit in India ($1M)

PepsiCo India operations in India were met with considerable resistance in 2003 and 2006. This was after a New Delhi environmental organization accused PepsiCo of having higher levels of Pesticides than the proposed safety standards on soft drink ingredients put in place by the Bureau of Indian Standards. Pepsi did not accept the allegations. India’s health ministry also dismissed the claims and questioned the data accuracy assembled by the CSE organization because the results were not verified by external peer review. This ensuing dispute resulted in a ban on the sale of Coca-Cola Company and PepsiCo within Kerala, a southwestern state, in 2006. Nevertheless, this prohibition was only short-lived as it was reversed by the Kerala High Court a month later. In November 2010, a lawsuit filed by the Kerala government against PepsiCo India was also invalidated by the Supreme Court of India. PepsiCo was accused of not meeting the local standards during the allegations. The ruling highlighted that the number of pesticides in the tested Pepsi beverages was within the tolerance limits subsequently prescribed to such products because there was no specific provision governing pesticide adulteration in cold drinks at that time. According to the U.S. Department of State, Pepsi was among the most remarkable corporate social responsibility credentials, with PepsiCo’s India Unit receiving recognition based on its water conservation, safety practices, and conforming results.

8. PepsiCo Vs. Buffalo Rock Lawsuit ($1.2m)

In 2019, Buffalo Rock company filed a lawsuit against Pepsi and several other hosts, including Birmingham Tobacco Co., Lakshmi Distributor Inc, etc., claiming that they violated Buffalo Rock’s exclusive territory agreement. This soft drink bottler is one of the largest private companies in Birmingham. According to this lawsuit, Buffalo Rock Company claims Pepsi took part in transshipping, which involves shipping and selling their products from other areas into the exclusive territory of Buffalo Rock. According to Buffalo rock, the practice was impacting their sales negatively as well as employees and business operations, and Pepsi has not taken sufficient steps to avert transshipping. Buffalo Rock was seeking injunctive, financial, and equitable relief of more than $1 million. According to Birmingham Business Journal, the company’s move to file a lawsuit was to protect the employees and the upholding of franchise agreements and seeks to continue its partnership with PepsiCo.

7. Hiring Discrimination Against African Americans Lawsuit ($3.13m)

A race discrimination lawsuit was filed against Pepsi in the Minneapolis Area Office of the U.S. Equal Employment Opportunity Commission (EEOC). The EEOC’s investigation indicated that more than 300 African Americans were negatively affected when Pepsi used a criminal background check policy that unduly excluded that black applicant from permanent employment. Under the former Pepsi policy, job applicants who had been arrested before prosecution weren’t hired for a permanent job even though they had never been sentenced to any offense. The previous policy also denied employment to applicants who had been convicted or arrested for minor crimes. Arrest and conviction records to deny employment opportunities when it’s not relevant for the job can be illegal under Title VII of the Civil Rights Act of 1964. It limits the employment opportunities of workers or applicants based on their ethnicity or race. To resolve those charges of racial discrimination, Pepsi agreed to pay $3.13 million and give job offers and training to victims of the former criminal background check policy. Pepsi also adopted a new criminal background check policy.

6. Pepsi Sued by Coke in A Trademark Lawsuit ($5m)

The Coca-Cola Company and PepsiCo filed a lawsuit over PepsiCo’s Trop50 juice packaging design. Coca-Cola claimed that the packaging was very similar to its Simply Juice range. The Coca-Cola company alleged that Pepsi was sponging on the success of the billion-dollar Simply Brand by confusing customers with matching packaging while diluting the product’s quality. The Simply Juice range was started by Coca-Cola in 2001, featuring a carafe-style bottle with an oversized green cap. On the other hand, PepsiCo began selling Trop50 stevia-sweetened orange juice and redesigned it to feature a carafe-style bottle with a big green cap. However, Coca-Cola and Pepsi settled the trademark lawsuit in 2011. While the settlement terms were not disclosed, a U.S. District Judge signed a dismissal order for the suit.

5. Class Action Lawsuit Over Independent Contractor Classification($5m)

As of 2021, Pepsi Bottling Class Turla Action lawsuit over independent contractor classification. Seven independent contractors filed a class-action lawsuit against Pepsi-Cola Bottling Company of New York (PCBCNY) for deliberately misclassifying them as contractors, not employees, to avoid offering wages and benefits while still exercising substantial control over their operations. These lead plaintiffs included former or current independent distributors of Pepsi non-alcoholic beverages. They represented a Class that provided for anyone who worked as a driver in the Pepsi bottling company. Also sued in the lawsuit were the current and former executives that hold the material and direct roles in the company’s management. The plaintiffs sought reclassification and recognition as Pepsi employees, the ban of Pepsi’s unlawful practices, compensation of the unlawfully withheld wages, and statutory and attorney charges.

4. PepsiCo’s Naked Juice Lawsuit ($9m)

In 2011, a class-action lawsuit over Naked Juice claimed to contain ‘non-GMO’ and ‘all-natural ingredients. In a lawsuit filed by a consumer advocacy group known as the Center for Science Public Interest (CSPI), they claimed that Pepsi misled consumers by marketing the Naked Juice beverage as healthier than they are. For instance, CSPI claimed that Naked Juices misled consumers into believing that the drink contained super nutrients while the dominant ingredients were nutrition-poor and cheap juices. Following this lawsuit, PepsiCo agreed to revise the bottle labels on its Naked Juice within eight months for some disputed flavors, such as the Kale Brazer. According to Consumerist, Pepsi sued misleading imagery and did not accurately convey the main ingredient of the orange juice. For instance, the Kale Blazer juice is mostly apple and orange juice despite the marketing and packaging featuring leafy-agree imagery. In addition to using more accurate imagery and listing the drinks the ingredients of the drink in order of distinction, other revisions include a clear text stating whether the drink is a ‘fruit & juice,’ ‘Fruit Juice’ or a smoothie and decreased text font for the bottles ‘No Sugar Added’ and ‘100% juice’.

3. Pepsi Versus John Leonard Harrier Jet Lawsuit ($33.8m)

In 1996, a man sued Pepsi for not giving him a Harrier Jet. The legal controversy came when Pepsi-Cola was airing its Pepsi Stuff promotional campaign. The campaign commercial was simple: purchase Pepsi products, collect the points from Pepsi labels, and claim prizes such as sunglasses, t-shirts, or a Harrier Jet for seven million points. This advertisement caught the attention of the then 21-year-old business student, John Leonard, who was only interested in the Harrier Jet. According to CBS NEWS, Leonard noticed that in place of labels, consumers could purchase Pepsi points for ten cents each meaning that it would cost $700,000 to buy the Pepsi points he requires for the Harrier Jet. John Leonard convinced five well-off investors to provide him with the $700,000 and then sent Pepsi 15 labels and checks and waited for the jet, but it never came. Instead, Pepsi dismissed it, saying that the ad about a harrier jet was just a joke, prompting Leonard to file a lawsuit against Pepsi. But in the end, Leonard’s case was not successful, with the court granting a summary judgment in favor of Pepsi, arguing that no objective individual could have concluded that the commercial was, in reality, offering consumers a harrier jet.

2. The Plastic Pollution ‘Nuisance’ Lawsuit ($6 Billion)

In a 2020 lawsuit that involved ten companies that were top producers of plastic gotten from beach cleanups in a worldwide audit done last year by Break Free from Plastic group, including Pepsi, and Coca-Cola, a California environmental group sued the companies for creating a plastic pollution ‘Nuisance’ and misleading consumer about the recyclability of plastic. Filed in San Mateo County superior court, the lawsuit urges that companies selling plastic bags and bottles that contaminate the ocean should be held accountable for polluting the environment. According to executive director David Phillips, the companies should get the responsibility for polluting the ecosystem with plastic. According to the Guardian, at the current dumping rate, plastic will overshadow fish in the ocean by 2050, the lawsuit charged that these companies have for decades engaged in campaigns to deflect the plastic pollution crisis blame to consumers. The suit seeks to make Pepsi and other companies pay to compensate for the harm the plastic pollution has caused to the oceans and earth. It also demanded that the companies stop advertising products as ‘Recycled’ when they are significantly not recycled. Following the lawsuit, PepsiCo has endeavored to minimize the environmental impacts through recycling initiatives and packaging developments, even unveiling the first plant-based PET bottle worldwide.

1. Number Fever Lawsuit; A Pepsi Promotion That Turned into A Deadly Fiasco ($32 Billion)

Several decades ago, a Pepsi promotion stunt promised Philippine soda drinkers an opportunity at a million pesos. However, an error at a bottling plant resulted in 600,000 winners, lawsuits, rioting, and several deaths. After an effective U.S. rollout, Christopher Sinclair, the then chief executive of Pepsi-Cola, made it a part of his strategy to fight the Coca-Cola brand abroad. Pepsi appointed a Mexican company, D.G. Consultores, to bring Number Fever to Mexico, Guatemala, Chile, and the Philippines. The monthly sales quickly increased from $10 to $14 million, and its market share rose to 24.9%. A massive advertisement campaign dominated the media, with four newspapers and more than twenty radio stations circulating the numbers. The high numbers saw the promotion extended by five weeks when the Number Fever was already verging on Number Hysteria. This saw two Pepsi salespeople murdered over a dispute on a crown and a maid jailed for stealing the winning crown of her employer. On May 25, Pepsi announced 349 number as the winner, which was more than 600,00 crowns leading to many protests and endless lawsuits. This lawsuit nearly cost Pepsi $32 billion. Although the protests died out eventually, the suits treaded along for years. It was until a Philippine court finally e gave a ruling that Pepsi had not been negligent and was not accountable for the damages that the company’s nightmare ended. Although the lawsuits filed by del Fierro did not win a settlement, the entire 349 controversies helped pressure the government to tighten its provisions on deceptive and misleading advertisements.

Bottom Line

These are some of the most significant Pepsi lawsuits in company history. While some of these lawsuits were aimed at seeing the downfall of Pepsi, the company has remained committed to improving its shortcomings by using the lawsuits as its stepping stone. Generally, PepsiCo is a sweet story of incredible persistence that overcame controversy and failure.

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