(Reuters) -PepsiCo won the dismissal of a lawsuit by a former executive who said the food and beverage company defrauded and defamed him by denying that he invented Flamin' Hot Cheetos.
In a decision on Wednesday, U.S. District Judge John Holcomb said Richard Montanez, who retired from PepsiCo in 2019 to become a full-time motivational speaker, did not show that PepsiCo and its Frito-Lay unit intentionally reneged on a promise to tell the "true story" of how he created the popular spicy chips.
The Santa Ana, California-based judge also said PepsiCo did not defame Montanez by allegedly refusing in 2023 to assist in a documentary about his life unless it debunked his claim.
Holcomb said the actual malice standard for defamation, requiring knowledge of falsity or reckless disregard for the truth, was appropriate based on Montanez's describing himself as "part of the cultural canon" through two best-selling books and a hit movie directed by Eva Longoria.
Lawyers for Montanez did not immediately respond to requests for comment on Thursday. Camille Vasquez, a lawyer for Purchase, New York-based PepsiCo, declined to comment.
Montanez began in 1976 as a Frito-Lay janitor in Rancho Cucamonga, California, and rose to become PepsiCo's vice president of multicultural marketing and sales.
He said he sparked what became Flamin' Hot Cheetos around 1989, when took unflavored Cheetos home to experiment with seasonings and "drew inspiration" from elote, a Mexican grilled corn seasoned with chili powder.
PepsiCo introduced Flamin' Hot Cheetos in 1992, and made it a multibillion-dollar brand.
Montanez said he once booked 35 speaking engagements annually at $10,000 to $50,000 each but lost most bookings after a Los Angeles Times article in May 2021 in which Frito-Lay rejected the "urban legend" that he invented the snack chips.
Frito-Lay later said its comments were misconstrued, and it had no reason to doubt Montanez's efforts to create new Cheetos products. The newspaper defended its reporting.
Montanez's story about Flamin' Hot Cheetos was told in Longoria's 2023 film "Flamin' Hot" and in two memoirs.
The case is Martinez v PepsiCo Inc et al, U.S. District Court, Central District of California, No. 24-01792.
(Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman)
PepsiCo, Inc. is one of the worldwide leaders in producing non-alcoholic beverages and snacks. Net sales break down by area of activity as follows:
- North America (60%): sale of beverages (50.3% of net sales; sodas, concentrated juices, water, tea and coffee-based beverages; Aquafina, Diet Mountain Dew, Diet Pepsi, Gatorade, Gatorade Zero, Mountain Dew, Pepsi, Propel brands, etc.), snacks (44.9%; chips, tortillas and pretzels; Lay's, Doritos, Tostitos, Cheetos, Fritos, Ruffles, etc.), and cereals (4.8%; ready-to-eat cereals, rice, wheat, etc.);
- Europe (15.1%): sale of snacks (Cheetos, Chipita, Doritos, Lay's, Ruffles and Walkers brands) and beverages (7UP, Diet Pepsi, Lubimy Sad, Mirinda, Pepsi and Pepsi Max);
- Latin America (12.8%): sales of snacks (Cheetos, Doritos, Emperador, Lay's, Mabel, Marias Gamesa, Ruffles, Sabritas, Saladitas and Tostitos brands) and beverages (7UP, Gatorade, H2oh!, Manzanita Sol, Mirinda, Pepsi, Pepsi Black, San Carlos and Toddy);
- Africa/Middle East/South Asia (6.8%): sale of snacks (Chipsy, Doritos, Kurkure, Lay's, Sasko, Spekko and White Star brands) and beverages (7UP, Aquafina, Mirinda, Mountain Dew and Pepsi);
- Asia/Pacific/Australia/New Zealand (5.3%): sale of snacks (BaiCaoWei, Cheetos, Doritos, Lay's and Smith's brands), beverages and syrups (7UP, Aquafina, Mirinda, Mountain Dew, Pepsi and Sting).
Net sales are distributed geographically as follows: the United States (56.3%), Mexico (7.8%), Russia (4.2%), Canada (4.1%), China (3%), the United Kingdom (2.2%), South Africa (2%), Brazil (1.9%) and other (18.5%).
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