FOLEY SQUARE, N.Y. (Legal Newsline) - Red Bull has agreed to a $13 million settlement in a class action lawsuit that came about from its allegedly false advertising of Red Bull having more benefits than coffee.
Benjamin Careathers, David Wolf and Miguel Almaraz sued Red Bull North America Inc., Red Bull GMbH and Red Bull Distribution Company Inc. because they claim the defendants' labeling and marketing has deceived consumers.
The plaintiffs claim Red Bull falsely marketed its energy drinks as providing certain functional benefits and thereby induced consumers into purchasing and/or paying a price "premium" for those drinks over alternate sources of caffeine, according to the settlement document filed July 31 in the U.S. District Court for the Southern District of New York.
Red Bull denies all wrongdoing or liability, and is prepared to vigorously defend its marketing claims if the litigation proceeds, according to the document.
"Notwithstanding, following extensive, good-faith and arms' length negotiations between experienced counsel, and under the auspices of a respected mediator, the parties have agreed to settlement terms that they believe will fairly resolve this action, avoid protracted, expensive and uncertain litigation, and reasonably and adequately provide prompt effective relief for putative class members," the settlement document says.
The parties agree that an appropriate settlement class would be comprised of persons who purchased at least one Red Bull beverage dating back to Jan. 1, 2002.
All members of this settlement class who submit a valid and timely claim will have a choice of receiving either a $10 cash reimbursement or free Red Bull products with an approximate retail value of $15.
Product packaging and sizing shall be determined by Red Bull at its discretion after the final value of the product option has been determined.
Class counsel will receive an amount not to exceed $4.75 million for attorneys' fees, costs and expenses, according to the document.
Careathers, Wolf and Almaraz will receive an amount not to exceed $5,000 each.
The plaintiffs are also asking that the alleged false advertising campaign by Red Bull be discontinued.
"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and believes that its marketing materials and advertising have always been truthful and accurate, it has voluntarily withdrawn or revised the marketing claims challenged by plaintiffs, and will confirm that all future claims about the functional benefits from consuming its products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 settlement document states.
Careathers filed his class action against Red Bull on Jan. 16, 2013, in the U.S. District Court for the Southern District of New York, and Wolf and Almaraz filed theirs on Feb. 27, 2013, in the U.S. District Court for the Central District of California. The cases were later consolidated.
The plaintiffs are represented by Benedict Morelli, David Ratner, Adam Deutsch, Jeremy Alters and Matthew Moore of Morelli Alters Ratner LLP; and Frederic Fox, Justin Farar, Laurence King and Linda Fong of Kaplan Fox & Kilsheimer LLP.
The defendants are represented by Kenneth Plevan, Jordan Feirman, Jason Russell and Hillary Hamilton of Skadden Arps Slate Meagher & Flom LLP.
The case has been assigned to District Judge Katherine Polk Failla.
U.S. District Court for the Southern District of New York case number: 1:13-cv-00369
From Legal Newsline: Kyla Asbury can be reached at email@example.com.