On May 29, 2025, PepsiCo[i] won at least a reprieve, obtaining an order of dismissal of a former executive’s lawsuit. The former executive claimed the snack food and beverage giant defrauded and defamed him by denying he created Flamin’ Hot Cheetos.[ii]
Richard Montañez was a janitor at Frito-Lay in the eighties. He and his wife experimented with adding flavors of Mexican street corn to the recipe for Cheetos. Montañez alleged he presented the idea to Frito-Lay CEO Roger Enrico in connection with a contest asking employees to “act like owners” of the company.[iii]
The flavor was a hit, and in 1989, Frito-Lay launched the Flamin’ Hot product line. Montañez rose through the ranks to ultimately become the vice president of multicultural sales. He retired in 2019 and joined the inspirational speaking circuit touting his rags-to-riches story. His tale was told in two best-selling memoirs and the movie Flamin’ Hot in 2023.
In 2018, a former Frito-Lay employee contacted the company to dispute Montañez’s account of creating the popular flavor. PepsiCo investigated and determined it could not draw a clear link between Montañez and the creation of the product.
PepsiCo publicly stated as such and otherwise refused to respond to inquiries regarding Montañez’s story and the documentary. Montañez filed a defamation lawsuit against PepsiCo, alleging the company made false statements that undermined his claim of inventing the product, damaging his lucrative speaking career.
The court found Montañez, as a public figure, needed to prove PepsiCo acted with “actual malice”—meaning PepsiCo knew the statements were false or acted with reckless disregard for the truth. U.S. District Judge John Holcomb dismissed Montañez’s lawsuit, ruling he failed to adequately plead intentional malice regarding his invention claims. The court’s analysis of Montañez’s status as a public figure highlighted the historically higher pleading standard required in defamation claims involving public figures.
Montañez was granted leave to amend his complaint, meaning he can revise his allegations to address the deficiencies identified by the court. If he can provide more detailed and sufficient facts, he may still pursue his claims.
Takeaways
While the court’s ruling favors PepsiCo and Frito-Lay, they may still need to manage public relations and address any lingering doubts or negative perceptions about their handling of Montañez’s story.
The case also highlights the tension between Montañez’s personal narrative and corporate documentation. Frito-Lay acknowledged Montañez’s contributions to product development but maintained that company records did not support his specific claim about inventing Flamin’ Hot Cheetos.
Montañez’s inspirational story continues to resonate with many who see it as an example of innovation and the potential for advancement regardless of one’s starting point. Additionally, this result highlights the need for innovators to create a paper trail as well as a binding agreement regarding an individual’s personal ideas or contributions to product development. If you have a great idea, make sure you protect your right to call the idea your own.
Sources
[i] PepsiCo is the parent company of Frito-Lay.
[ii] Montañez v. Pepsico, Inc., et al., 5:24-CV-01792-JWH-DTB (C.D. Cal., May 29, 2025).
[iii] Order Granting Defendants’ Motion to Dismiss, Montañez v. Pepsico, Inc., et al., 5:24-CV-01792-JWH-DTB, at 2 (C.D. Cal., May 29, 2025).
