$13 Million to Settle Red Bull Marketing Lawsuit
Attorneys question likelihood agreement will be approved
Published in CSP Daily News
WHITE PLAINS, N.Y. -- Members of a class-action lawsuit against Red Bull North America and its parent company will receive either a $10 reimbursement or about $15 worth of free Red Bull energy drinks if a settlement agreement is approved by a judge. The cost of the settlement to Red Bull would total about $13 million, including all attorneys' fees, according to court documents.
The class action, dating back to January 2013, alleges that "Red Bull falsely marketed its energy drinks as providing certain functional benefits and thereby induced consumers into purchasing and/or paying a price 'premium' for those drinks over alternative sources of caffeine." In short, attorneys claimed Red Bull provides no more energy boost or focus than drinking coffee or using caffeine tablets.
As part of the settlement filed July 31, "Red Bull denies all wrongdoing or liability and is prepared to vigorously defend its marketing claims if the litigation proceeds." The beverage maker has voluntarily "withdrawn or revised" some of the marketing claims challenged by the plaintiff, a longtime Red Bull drinker named Benjamin Careathers.
Food and drug attorneys question whether the settlement will earn court approval.
"No way is the judge going to approve this," one attorney told Food Navigator-USA. "I suspect that the lawyers in any current or pending product liability cases will also weigh in against the settlement."
Added Stephen Gardner, director of litigation at the Center for Science in the public Interest, "It would release all claims by any Red Bull purchasers, not just the claims covered by the lawsuit. As a principal of class settlements, an overboard release is always a negative."
If the settlement is approved as it stands, "every consumer of a Red Bull beverage dating back over 10 years will be eligible to claim benefits without any need to provide proof of purchase beyond attesting that they satisfy the requirements to be included in the class." Red Bull, however, would only have to pay out to members of the class up to the amount agreed to in the settlement.
In the original lawsuit, Careathers and his co-plaintiffs sought restitution of the money he and his friends have paid to Red Bull over the 10-plus years they've been drinking the product.
It's not known when the judge might make a ruling.