Federal Court Dismisses Diet Pepsi Putative Class Action
A federal court in New York has dismissed with prejudice a putative class action alleging that Pepsi-Cola Co. falsely and deceptively used the term “diet” for its Diet Pepsi, leading consumers to believe that the beverage would help them lose weight or assist with “healthy weight management.” Manuel v. Pepsi-Cola Co., No. 17-7955 (S.D.N.Y., entered May 17, 2018). Following three federal district court dismissals of nearly identical claims, the court found that “no reasonable consumer would understand a soft drink labeled as ‘diet’ to be a weight-loss product.”
“‘Diet’ immediately precedes ‘Pepsi,’ and thereby connotes a relative health claim—that Diet Pepsi assists in weight management relative to regular Pepsi,” the court held. Although “diet” is used to identify other weight-loss products, “in the context of soft drinks, the term unambiguously signals reduced calorie content relative to the non-diet version of the drink in question.” Ruling that a cause of action for false or misleading conduct cannot rest on an “unreasonable reading of label or advertising at issue,” the court held that the complaint did not adequately plead deception.
The court also rejected arguments that new studies indicate a correlation between the consumption of diet soft drinks and weight gain, noting, “In law, as in science, ‘[c]orrelation is not causation’ . . . Without evidence of causation, plaintiffs cannot establish actual deception.”
The court ruled that the plaintiffs’ state law claims were not preempted by the Food, Drug and Cosmetic Act (FDCA), finding that only claims challenging the use of the term “diet” based solely on nutrient content information available to the U.S. Food and Drug Administration and Congress before 1993 are preempted by FDCA. Diet Pepsi, which was grandfathered in as a “legacy soft drink,” is subject to Section 343(a) of the FDCA, which prohibits false and misleading advertising, the court held. Because the plaintiffs’ allegations were based on Pepsi’s current marketing campaigns and “the current state of scientific knowledge” acquired after 1993 and Section 343(a) has no preemptive force, the state law claims could not be preempted. The court also declined to invoke primary jurisdiction.
