Red Bull to Pay $10 in Class-Action Lawsuit Over False Advertising

A deluge of energy-drink consumers has crashed the site where anyone can claim $10—or, if they prefer, $15 worth of Red Bull. (That should be an ocean of Red Bull, or a negative amount of Red Bull, but the company is paying out according to "market price.") The offer is the result of a large class-action settlement, and it applies only to people who have purchased Red Bull in the last 12 years. But no proof of purchase is necessary.

Red Bull GmbH, the Austria-based company that sells the eponymous "energy drink," settled a lawsuit recently over false claims made in advertising the product—including that it will give a person wings. The company will pay out $13 million. The claim site went live yesterday to widespread celebration and consternation.

Red Bull is part of the trend in rebranding soda as energy drinks and, apart from setbacks like this, succeeding fabulously. Red Bull differs from traditional soda only in that it contains taurine (an amino acid) and B-vitamins. Unless you are deficient in taurine or B-vitamins, the energy promised in the marketing of the energy drink comes from the sugar and caffeine, just like soda. And the caffeine content, at 80 mg per can, is modest relative to other similar products. Another soda marketed as an energy drink, Rockstar, contains twice as much caffeine as Red Bull. Those ubiquitous little 5-Hour Energy shots outdo both at 208 mg. But all pale compared to coffee in the quantities it's now sold. A Starbucks venti has 415 mg of caffeine. And that's what upset plaintiffs.

In a legal notice of the initial settlement in August (the claim site didn't go live until this week), David Siegel at Law 360 reported:

Plaintiff Benjamin Careathers, who has been drinking Red Bull since 2002, filed suit in 2013, saying the company spends millions of dollars misleading customers about the superiority of the "functional beverage" and its ability to "give you wings," while ignoring reports by The New York Times, the European Food Safety Authority, and scientific journal Nutrition Reviews that found energy drinks like Red Bull to have the same benefit as the average dose of caffeine consumed in coffee.

Red Bull's ad campaign promised that the drink will increase performance, concentration and reaction speed, allowing the company to charge and get a substantial premium for their products over readily available and much lower priced sources of caffeine that provide the same results, the suit says. The allegedly misleading ads were intended to induce unsuspecting consumers into purchasing, at a premium price, millions of dollars worth of Red Bull energy drinks, according to the complaint.

A single 12-ounce can of Red Bull sells for $2.68 at Walmart. That's more expensive than a 12-pack of Coke.

According to the plaintiff's motion at the time of the settlement, Red Bull GmbH "denies any wrongdoing or liability, and while Red Bull believes that its marketing and labeling have always been entirely truthful and accurate, it confirms that all future claims about the functional benefits of its products will be medically and/or scientifically supported." The U.S. Substance Abuse and Mental Health Services Administration has called energy drinks "a continuing public-health concern," reporting last year that they were responsible for over 20,000 visits to emergency departments in 2011. That's largely, though, because the drinks are combined with alcohol. Technically any caffeinated product could be as dangerous, or benign, depending on how it's marketed and consumed.

Last week, a similar toll for false claims beset caffeinated pants. The Federal Trade Commission (FTC) fined two manufacturers $1.5 million, including Wacoal America, which sold a product called the iPant long-leg shaper for $60. The company claimed the product reduced cellulite by "mobilizing fats." It did not, because that is not a thing. The FTC also sanctioned Norm Thompson Outfitters, maker of caffeine-laden underwear called the Lytess "slimming garment." The company admitted in a letter to customers that it advertised that the product would "reduce the size of your hips by up to 2.1 inches and your thighs by up to one inch and would eliminate or reduce cellulite and that scientific tests proved those results." (Omission of commas theirs; resulting manic tone may or may not be due to heavily caffeinated pants.) Norm Thompson Outfitters "neither admits or denies liability."

Caffeine can be an appetite suppressant, so it's true that using it can result in weight loss. But applying caffeine topically to a specific part of the body should by no logic result in focal fat reduction. It's especially audacious to put specific inch-numbers in ads. But those sorts of claims are everywhere, lingering often for years until the FTC or a lawsuit calls them to question. The Lytess products have been around at least since 2011, when an E! News segment revealed them as Kim Kardashian's secret, and told viewers they, too, could wear the caffeinated underwear to "drop extra pounds without working out."

The Red Bull class-action site that hosts the claim form has been intermittently inaccessible, but you can also make a claim by calling (877) 495-1568 or by writing to Energy Drink Settlement, c/o GCG, P.O. Box 35123, Seattle, Washington, 98124. Claims can be made until March 2, 2015. The payments max out at $13 million, at which point that amount will be divided by the number of claims, and people could get less than $10. At the rate people seem to be taking advantage of the claim site, those payouts could be a lot less. But at least people are taking a stand for what they believe in.

About the Author

More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.

One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”

Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”