Red Bull Consumer Fraud Class Action Reaches $13M Settlement

Los Angeles, CA: A $13 million settlement has been reached in a consumer fraud class action lawsuit pending against Red Bull GmbH. The Austrian beverage maker and its US-based subsidiaries are accused of falsely advertising its energy drinks as providing more benefit to a consumer than a cup of coffee.

According to the terms of the settlement, eligible class members, which could include millions of people who purchased at least one Red Bull during a 10-year period, would have the option of a $10 cash reimbursement or two free Red Bull products with an approximate retail value of $15, with Red Bull agreeing to cover the shipping costs.

The consumer fraud lawsuit was filed in 2013 by plaintiff Benjamin Careathers, who has been drinking Red Bull since 2002. He alleges that the beverage maker spends millions of dollars in advertising that deliberately misleads 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 lawsuit states.

The allegedly misleading ads were intended to entice unsuspecting consumers into purchasing, at a premium price, millions of dollars in Red Bull energy drinks, according to the complaint. Similar allegations were made in a separate lawsuit filed in California by plaintiffs David Wolf and Miguel Almaraz, and that lawsuit was transferred to New York.

Further, the plaintiffs' motion states "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and believes that its marketing materials and advertising have always been truthful and accurate, it has voluntarily withdrawn or revised the marketing claims challenged by plaintiffs, and will confirm that all future claims about the functional benefits from consuming its products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 cases are Benjamin Careathers v. Red Bull North America Inc., case number 1:13-cv-00369, and David Wolf et al. v. Red Bull GmbH, case number 1:13-cv-08008, both in the U.S. District Court for the Southern District of New York.

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Published on Aug-5-14