5-hour ENERGY drink makers fined $4.3 million (£3.2 million) for “false” advertising

A popular energy drink company has been fined around £3.2 million after they were found to have produced “false” advertising.

Living Essentials LLC, a company who manufactures a drink product called “5-hour ENERGY”, marketed themselves as the world’s number one selling energy shot where it provides the “bright, alert feeling you need to get through your day without making you feel wired up”.

Their website states that it’s still number one in the U.S. “by a wide margin – because it works”.

Lawsuits

Attorney Generals in Washington, Oregon and Vermont first sued the energy shot company in July 2014 after it was alleged they used “deceptive” and “misleading” advertising. All three states sought a permanent injunction against the company to: prevent any further sale of the “5-hour ENERGY” shot; levy civil penalties; and allow compensation for consumers.

Oregon’s Attorney General, Ellen Rosenblum, stated:

“…plainly and simply, in Oregon you cannot promote a product as being effective if you don’t have sufficient evidence to back up your advertising claims.”

According to Oregon’s Attorney General, the makers of the “5-hour ENERGY” shot stated that the drink contained a unique combination of ingredients to boost energy, when in actual fact the only effective ingredient was a concentrated dose of caffeine, Reuters reports.

The lawsuits brought by the three states were as a result of a 33 state-investigation back in 2012. The purpose of the investigation was to look at whether there were any truths in the company’s representations.

Lawsuits upheld

The court largely swayed in favour of the states, concluding that the company didn’t provide enough evidence to support its marketing claims that the “combination of caffeine, B vitamins and amino acids would provide energy that would last longer than consumers would experience from a cup of premium coffee (and in some of the ads, longer than 3 or 4 cups of coffee)”.

In her judgement in the King County Superior Court, Judge Andrus wrote:

“…the studies do not clearly establish that 5-Hour Energy’s vitamins and nutrients work synergistically with caffeine to make these benefits last longer than they would last with caffeine alone.”

Washington Court

Washington State Court found that Living Essentials had “duped” customers into believing the energy shot was a more effective energiser than caffeine.

One of the main issues here is that, because it’s the world’s number one selling energy shot, many millions of consumers may have bought the 58ml energy shot on the representation that “it worked”, when this was reportedly far from the truth. According to one of the lawsuits, Living Essentials sells around 9 million shots of the drink per day.

The above is enough to conclude that consumers were “duped” into thinking that the energy shot was more effective than any other caffeine or caffeine-related drinks out there in the market.

On this basis, I believe that many consumers would’ve bought the drink.

Penalty

On 7^th October 2016, the court ordered a payout of $4.3 million (£3.2 million), with half of the fine $2.2 million (£1.7 million) going towards each individual violation of Washington state consumer protection laws.

However, the judge decided not to compensate each and every consumer on the basis that “the identity of such purchasers is unknown and the amount of each restitution award would be so small that the cost of setting up and administering restitution fund would dwarf any benefit consumers would receive from restitution.”