A New York federal judge granted preliminary approval to a settlement reached between groups of New Yorkers and Californians who challenged the energy drink maker, Red Bull’s, advertising slogan that “Red Bull gives you wings!” In Careathers v. Red Bull North America, Inc., 1:13-CV-0369 (S.D.N.Y.2013), and Wolf and Almaraz v. Red Bull GmbH, Red Bull North America, Inc., and Red Bull Distribution Company, Inc., 1:13-cv-08008 (C.D.Ca.2013), the proposed classes alleged that Red Bull falsely marketed its energy drinks as providing certain “functional benefits”, resulting in consumers paying a price premium for the energy drink over alternate sources of caffeine.
The two cases were eventually consolidated in the New York court. The Plaintiffs sought monetary damages and injunctive relief for claims consisting of 1) breach of express warranty; 2) unjust enrichment; 3) violation of New York’s consumer protection statutes; and, 4) violation of consumer protection laws in 40 other states.
Members of the preliminarily approved class include anyone who purchased a Red Bull energy drink from January 1, 2002 to the present. Class members will not be required to provide any proof of purchase, such as a receipt, rather class members will simply certify that they purchased an applicable energy drink. The more than $13 million settlement will provide each class member with an option to receive a $10.00 cash reimbursement for any Red Bull products purchased during the settlement class period or (a chance to grow wings again by) receiving $15.00 in Red Bull energy drink products. In addition to the monetary settlement reached with the Plaintiffs, although it did not admit any fault, Red Bull voluntarily agreed to modify or withdraw the challenged marketing statements and to confirm that all future claims about the “functional benefits” and safety of its products will be medically and/or scientifically-supported.
The preliminary approval of this settlement is not without precedent. The same New York Court approved a 2012 class action settlement in Fishbein v. All Market, Inc., No. 11-cv-5580 (S.D.N.Y.2012), which provided a $10 million monetary settlement for consumers allegedly deceived by marketing claims that the coconut water product at issue was, among other things, “super hydrating” and “nutrient-packed.” Also in 2012, a New Jersey Federal Court approved a $6.95 million settlement in In re Nutella Marketing & Sales Practices Litig., No. 3:11-cv-01086 (D.N.J. 2012). In that case consumers claimed that Nutella’s advertising was false and misleading and violated various consumer protection laws by advertising that the chocolate-hazelnut spread was nutritious and part of a balanced breakfast.
Despite the Plaintiffs’ inability to fly to the courthouse, the New York court in this case approved the preliminary settlement and set a final hearing on the settlement terms for May 1, 2015.