Red Bull may claim to give you wings, but a false advertising settlement with the company apparently couldn’t stop its servers from crashing.
After Red Bull reached a $13 million deal to settle claims that the company falsely advertised its energy drink as capable of improving performance, concentration, and reaction time, the consumer response crashed the compensation Web site.
The plaintiff in the putative class action alleged that Red Bull used terms such as “wings” and “boost” in its marketing to deceive consumers into believing the drinks provided a physical lift or enhancement.
“Even though there is a lack of genuine scientific support for a claim that Red Bull branded energy drinks provide any more benefit to a consumer than a cup of coffee, the Red Bull defendants persistently and pervasively market their product as a superior source of ‘energy’ worthy of a premium price over a cup of coffee or other sources of caffeine,” according to the complaint filed by Benjamin Careathers in a New York federal court, which was consolidated with a similar case filed in California.
In September 2014, the court approved a settlement in which Red Bull agreed to create a $13 million settlement fund to provide persons who purchased at least one Red Bull beverage dating back to 2002 with either $10 in cash or two Red Bull products valued at approximately $15. Class counsel would separately be paid $4.75 million and Red Bull promised to change its ads.
“Beyond monetary relief, although Red Bull denies wrongdoing and believes that its marketing materials and advertising have always been truthful and accurate, it has voluntarily withdrawn or revised the marketing claims challenged by plaintiffs, and will confirm that all future claims about the functional benefits from consuming its products will be medically and/or scientifically supported,” the motion in support of preliminary approval of the settlement stated.
Various news sites reported the settlement which did not require claimants to provide a proof of purchase. Consumers responded in such droves that the more than 4 million visitors crashed the compensation site. As a result, the number of claims will likely decrease the payment amounts, as the settlement provided for pro rata shares based on the number and nature of valid claims.
To read the plaintiffs’ motion in support of preliminary approval for the settlement in Careathers v. Red Bull, click here.
To read the court’s order granting preliminary approval of the deal, click here.
Why it matters: Since consumers are unlikely to save their receipts from the purchase of energy drinks, the settlement did not require proof of purchase. When coupled with the generous 12-year time period in which consumers could have purchased one of the energy drinks at issue, the “no proof” element opens the door for a large number of potential claimants.