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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Pepsi’s Russian Spy Scandal Case Is Dismissed

Associated Press

The case had about all a retired county judge could handle: claims of espionage, Russian law, PepsiCo and a medical company.

When Judge Marsh McLelland sorted out the mess, he threw out the lawsuit that alleged Pepsi stole trade secrets in Moscow to start its own health care business in Russia.

“I’m certainly no expert on Russian law or international law,” said McLelland, who comes out of retirement to handle complex cases.

“But I’ve been a trial judge since 1968 and that’s all the expertise I need.”

He ruled Thursday, just as Pepsi argued, that no Russian law existed in 1993 or 1994 that allowed American Medical Centers Inc. to sue over the alleged theft of trade secrets.

Pepsi, headquartered in Purchase, N.Y., can be sued anywhere it does business. In June, AMC filed its lawsuit in New Bern, where the soft drink was invented in 1898.

Eventually, Pepsi and AMC agreed to hold the hearing in Graham, a convenient site for both sides.

“They ignorantly tried to jump us down here in some little corner of North Carolina,” Pepsi lawyer Larry Dickey said.

Stamford, Conn.-based AMC claimed Pepsi spies went to the medical company’s Moscow health care center in 1993 to figure out how it was organized.

The spies stole AMC’s confidential client list by posing as potential health-care customers, the lawsuit said.

Pepsi allegedly planned to use the information to start its own Western-style health care venture.

Pepsi called the claims “silly and without substance.” But Pepsi did open its own health care clinic in Moscow in June.