Problem Solvent

In April, Christopher Crowley, executive vice president and treasurer of Polar Beverages, was informed that class-action lawsuits had been filed against his family's business in Massachusetts and Florida. The charge? That Polar's Diet Orange Dry soda contained dangerous levels of benzene, a chemical compound that has been linked to acute myelogenous leukemia and other ailments.

Crowley was shocked, but a month later, he got some good news. The U.S. Food and Drug Administration confirmed what Polar had already found in its independent testing: the soda contained less than 1 part per billion of benzene. That's akin to "one small drop of water in an Olympic-size pool," an FDA official noted. To reach the dangerous levels asserted in the lawsuits — 9.1 parts per billion, well above the federal safe drinking water standard of 5 parts per billion — the beverage had to be heated to a temperature high enough to cause a chemical reaction between ascorbic acid (Vitamin C) and the preservative benzoate salt. Asserts Crowley: "People don't typically come home and put our products in the oven."

Maybe not. But the plaintiffs in the Polar case didn't cease and desist. In fact, the litigants had already broadened their targets to include beverage-industry giant PepsiCo. Other consumer groups followed suit, launching class-actions against Kraft Foods, Safeway, and others, charging that excessive exposure of their products to heat and light could put consumers at risk. (Some have indeed tested above the FDA threshold.) In fact, defense attorneys say benzene-related suits are quickly becoming a favorite of the plaintiff's bar. The beverage-industry cases aside, "this is the fastest-growing toxic tort we've seen in the last few years," notes David S. Osterman, a partner at McCarter & English.

Concerns about benzene are not new. A benzene scare in the United States in 1990 forced French beverage specialist Perrier to pull 160 million bottles of mineral water off store shelves. While the problem stemmed from negligence in the filtering procedure and not contamination of the spring, the ensuing uproar cost the company its dominance in the market. The oil industry has long battled benzene cases filed by employees, many of whom claim that workplace exposure to the chemical compound made them seriously ill.

But the recent litigation against Polar and other beverage makers worries some CFOs and corporate attorneys. They foresee a flood tide of benzene suits, including cases that have nothing to do with occupational exposure. Last year, for example, a jury in Missouri ordered BP Amoco to pay $13.3 million in compensatory damages after a woman who lived near a refinery died from contact with the chemical. "Plaintiffs are straining to find new benzene exposures," warns Bruce J. Berger, a partner with Spriggs & Hollingsworth LLP in Washington, D.C. "Then they're alleging causal connections to diseases that have been plaguing mankind for the duration of time."

Without a Trace
No wonder the Insurance Information Institute's (III) chief economist Robert Hartwig dubs benzene "a looming potential liability." The hydrocarbon compound, which occurs naturally in crude oil but is usually synthesized from petroleum compounds, was first mass-produced for commercial purposes in the 1800s. These days, more than 15 billion pounds of the stuff are produced annually. Found in everything from paint thinners to plastics, benzene is hard to avoid. "Benzene is such a ubiquitous air contaminant," says David W. Pyatt, principal of Colorado-based Summit Technology, "that people are exposed to it during almost all their daily activities, including pumping gas."

While the U.S. Department of Health and Human Services classifies benzene as a known carcinogen, questions remain about the level and length of contact needed to actually trigger a malignancy. "The dose makes the poison," asserts Richard Clapp, professor of public health at Boston University. In the legal arena, however, even trace amounts can generate litigation, with plaintiffs asserting that long-term exposure to minute amounts can do harm. Not all observers agree. "It's like saying 1 or 2 aspirin can cure a headache," says one defense attorney, "but 250 can kill you."

So far, the initial spate of beverage cases has barely passed the filing stage. Many, no doubt, will be settled before getting to court. But Andrew Rainer, a partner at McRoberts, Roberts & Rainer LLP and a lead attorney on the class-action case, contends that most of the litigation could have been avoided entirely. Benzene was first identified as a potential problem in soda in the early 1990s, Rainer says, and there was "a quiet agreement between the [beverage] industry and the FDA to reformulate."

Many beverage makers did just that. One problem, though, was that not all manufacturers were informed of the deal, and new entrants in the sector were not made aware of the agreement. Despite doubts about the dangers posed by minimal exposure, Rainer maintains that any risk is unacceptable. "There's no reason consumers should be exposed to carcinogens."

Toward that end, the plaintiffs and the members of the class are not only seeking recompense, they want beverage makers to remove benzene from their products. Some have. TalkingRain Beverage Co., which was targeted at the same time as Polar Beverages, began pulling sodium benzoate out of its beverages and switching to potassium sorbate in the weeks before the lawsuits were filed.

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