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5-Hour Energy Makers Sued By 3 States For Allegedly Misleading Advertising

Controversial Energy Drink Under Fire
Reuters
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It's like we gots a quicky-mart in the fridge.

By Patience Haggin

July 17 (Reuters) - Oregon, Washington and Vermont sued the makers of 5-Hour Energy on Thursday for allegedly deceptive and misleading advertising, and said similar suits will follow in other states in the coming weeks.

The Oregon lawsuit was filed in Multnomah County Circuit Court against the makers of the caffeine-charged beverage, Michigan-based manufacturer Living Essentials and its parent company Innovation Ventures.

Washington and Vermont filed similar suits, according to a statement released by Washington Attorney General Bob Ferguson.

All three states are seeking a permanent injunction prohibiting 5-Hour Energy's allegedly deceptive marketing practices, as well as civil penalties and restitution to consumers.

"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," Oregon Attorney General Ellen Rosenblum said in a statement.

A representative for 5-Hour Energy described the Oregon suit's allegations as "grasping at straws" and "civil intimidation" and said the companies would fight to defend themselves.

In its lawsuit, Oregon said advertising for 5-Hour Energy claimed the drink contained a unique combination of ingredients to boost energy, whereas its only effective ingredient was a concentrated dose of caffeine.

The lawsuit also said consumers had been misled with claims that the drink would not cause them to experience a "crash" like the one that typically follows a caffeine high, and that it had been recommended by doctors.

Living Essentials said it sells about 9 million bottles of 5-Hour Energy each week.

A spokeswoman for Rosenblum said other states would file similar suits over the next few days, and still more in the coming weeks.

The lawsuits are the result of an investigation launched in 2012 by 33 states, in which Oregon, Tennessee, Maryland and Vermont have taken the lead.

Living Essentials and Innovation Ventures are also facing pending civil lawsuits from consumers over 5-Hour Energy in other U.S. courts.

The Oregon case is State of Oregon ex rel Ellen Rosenblum v Living Essentials LLC and Innovation Ventures LLC, Circuit Court of the State of Oregon.

The Washington case is State of Washington v Living Essentials LLC and Innovation Ventures LLC, King County Superior Court of the State of Washington.

Details of the Vermont suit were not immediately available. (Reporting by Patience Haggin; Editing by Ted Botha and Mohammad Zargham)

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Before You Go

The Most Misleading Product Claims
9. Strawberry Naturally Flavored Fruit Roll-Up(01 of09)
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Parent company: General MillsAd changed: YesSettlement amount: Money not part of settlementStrawberry Naturally Flavored Fruit Roll-Ups fell short in both its “strawberry” and “naturally flavored” claims. The maker of Fruit Roll-Ups, General Mills, settled a lawsuit late in 2012 over complaints that the snack contained no strawberries and that its ingredients were mostly synthetic. According to Consumer Affairs, while the snack contained no strawberries, it did contain “pears from concentrate, corn syrup, dried corn syrup, sugar, partially hydrogenated cottonseed oil, and 2 percent or less various natural and artificial ingredients.” The label on Fruit Roll-Ups still says “Made With Real Fruit,” but the company will have to disclose on its packaging the actual percentage of real fruit in the treat beginning in 2014.Read more more at 24/7 Wall St. (credit:<a href="http://www.flickr.com/" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr" data-vars-item-type="text" data-vars-unit-name="5bb310e4e4b0480ca6636b8a" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="15" data-vars-position-in-unit="15">Flickr</a>:<a href="http://www.flickr.com/photos/39160147@N03/8057149653" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="JeepersMedia" data-vars-item-type="text" data-vars-unit-name="5bb310e4e4b0480ca6636b8a" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/photos/39160147@N03/8057149653" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="16" data-vars-position-in-unit="16">JeepersMedia</a>)
8. Hyundai And Kia(02 of09)
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Parent company: Hyundai Motor Co.Ad changed: YesSettlement amount: InconclusiveDrivers of new Hyundais and Kias may have paid a little more for gas than they were promised. In November, the EPA announced that Hyundai and Kia had overstated gas mileage for approximately 900,000 vehicles, or about 35% of the 2011-2013 models sold through October 2012. Kia and Hyundai overstated the mpg for most of the vehicles by one or two miles, with the Kia Soul overstated by as much as six miles. Both companies opted to reimburse drivers for the incorrect mileage claim with a prepaid debit card.Read more at 24/7 Wall St. (credit:Getty Images)
7. Nutella(03 of09)
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Parent company: FerreroAd changed: YesSettlement amount: $3.05 millionNutella is a popular spread that combines hazelnuts with cocoa and skim milk. In early 2011, a mother in California sued Ferrero, the company that owns Nutella, alleging that it made misleading health claims by suggesting the product was a healthy breakfast option despite its high saturated fat content. Ferrero eventually settled the class-action lawsuit for $3 million. The company also agreed to change its marketing statements, both on television and online. Although Ferrero agreed to limit its health claims, the Nutella is still marketed on its website as a way “to turn a balanced breakfast into a tasty one.” This claim is now preceded by a notice stating, “But keep in mind, a balanced breakfast should provide the proper balance of protein, carbohydrates from whole grains, fat and the nutrients provided by either a serving of fruit or vegetables.”Read more at 24/7 Wall St. (credit:<a href="http://www.flickr.com/" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr" data-vars-item-type="text" data-vars-unit-name="5bb310e4e4b0480ca6636b8a" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="11" data-vars-position-in-unit="11">Flickr</a>:<a href="http://www.flickr.com/photos/22905496@N07/8405709872" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="Rakesh Rocky" data-vars-item-type="text" data-vars-unit-name="5bb310e4e4b0480ca6636b8a" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/photos/22905496@N07/8405709872" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="12" data-vars-position-in-unit="12">Rakesh Rocky</a>)
6. Splenda(04 of09)
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Parent company: Johnson & JohnsonAd changed: N/ASettlement amount: N/ASplenda is an artificial sweetener that promises the taste of sugar but with zero calories. Splenda Essentials, the brand’s higher-priced label, offers products fortified with fiber, B vitamins, or antioxidants. Last year, the CSPI filed a lawsuit against McNeil Nutritionals — the Johnson & Johnson subsidiary that manufactures Splenda — alleging the additions of fiber, vitamins and antioxidants gave customers the false impression that “Splenda Essentials will help one lose weight, avoid disease, or confer other health benefits.” McNeil Nutritionals was also sued several years ago by Merisant Co. — makers of rival product Equal — over its claim that Splenda was “made from sugar so it tastes like sugar.” The two sides eventually settled for an undisclosed amount. Splenda’s website notes that the product is made by altering sugar’s chemistry and is not natural.Read more at 24/7 Wall St. (credit:AP)
5. Siri(05 of09)
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Parent company: AppleAd changed: N/ASettlement amount: N/AApple’s website states that Siri, the company’s voice-recognition and personal assistant software, “understands what you say. And knows what you mean.” But since its debut, most reviews of the service would seem to suggest that Siri is tin-eared. So much so that multiple disappointed Apple customers have filed lawsuits against the company. These lawsuits allege that the advertising campaigns touting Siri present a product with far greater capabilities than that sold to consumers. In a motion to dismiss one of the class-action complaints, Apple noted that claimants provided “only general descriptions of Apple’s advertisements, incomplete summaries of Apple’s website materials, and vague descriptions of their alleged — and highly individualized — disappointment with Siri.”Read more at 24/7 Wall St. (credit:AP)
4. California Shelled Walnuts(06 of09)
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Parent company: Diamond Foods Inc.Ad changed: YesSettlement amount: $2.6 millionDiamond Foods recently went too far when it claimed on its website and labels that the omega-3 fatty acids contained in its California Shelled Walnuts had positive health effects. According to the company, the fatty acids found in the walnuts prevent strokes and curb depression, among other things. But the FDA argued that such claims would make walnuts drugs, since only medications can make such health claims. In 2012, Diamond Foods agreed to pay $2.6 million to settle a separate class-action suit accusing the company of false advertising and agreed to discontinue the “heart health” statements on its packaging and website.Read more at 24/7 Wall St. (credit:<a href="http://www.flickr.com/" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr" data-vars-item-type="text" data-vars-unit-name="5bb310e4e4b0480ca6636b8a" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="6" data-vars-position-in-unit="6">Flickr</a>:<a href="http://www.flickr.com/photos/82647996@N00/8271398267" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="Shht!" data-vars-item-type="text" data-vars-unit-name="5bb310e4e4b0480ca6636b8a" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/photos/82647996@N00/8271398267" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="7" data-vars-position-in-unit="7">Shht!</a>)
3. 5-Hour Energy(07 of09)
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Parent company: Living EssentialsAd changed: NoSettlement amount: Lawsuit not settledAdvertisements claim that 5-Hour Energy drink will give an energy boost with “no crash later.” However, a recent study showed that 24% of participants consuming the drink experienced a “moderately severe crash that left them extremely tired and in need of rest, another drink or some other action.” When contacted by The New York Times, the manufacturer, Living Essentials, pointed out that the fine print on the bottle states that “no crash later” merely indicates no sugar crash. Of course not — the drink contains no sugar. This isn’t the first problem with 5-Hour Energy. It has also been in the news as the FDA investigates a series of 13 deaths over the past four years that may be linked to the product.Read more at 24/7 Wall St. (credit:Getty Images)
2. Skechers Shape-Ups(08 of09)
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Parent company: Skechers USAAd changed: YesSettlement amount: $40 millionSkechers line of Shape-Up shoes was just too good to be true. In May, the company agreed to pay $40 million to settle charges by the FTC and the attorneys general of 42 states. The FTC argued that advertising for Shape-Ups, along with Skechers’ similar Tone-Up and Resistance Runners, misled consumers into believing the shoes would help them slim down and tone their figures. One of the company’s misleading tactics involved a chiropractor who, in a TV ad, endorsed the shoes’ effectiveness based on a study. However, the company paid for the study and the chiropractor was married to a company’s marketing executive.Read more at 24/7 Wall St. (credit:<a href="http://www.flickr.com/" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="Flickr" data-vars-item-type="text" data-vars-unit-name="5bb310e4e4b0480ca6636b8a" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="2" data-vars-position-in-unit="2">Flickr</a>:<a href="http://www.flickr.com/photos/53476205@N03/5413007305" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="Skechers Espa&#xF1;a" data-vars-item-type="text" data-vars-unit-name="5bb310e4e4b0480ca6636b8a" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://www.flickr.com/photos/53476205@N03/5413007305" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="3" data-vars-position-in-unit="3">Skechers España</a>)
1. POM Wonderful(09 of09)
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Parent company: POM Wonderful LLCAd changed: YesSettlement amount: Money not part of settlementPOM Wonderful ads promised consumers they could “cheat death” if they sipped the pomegranate juice. The drink, the ads said, “can help prevent premature aging, heart disease, stroke, Alzheimer’s, even cancer. Eight ounces a day is all you need.” Already in 2010, the FTC told the company to stop its deceptive advertising. POM Wonderful sued, but this month the FTC upheld the earlier decision that POM Wonderful made deceptive claims about the health benefits of its products and barred the manufacturers from making such claims. The FTC notes that in order for a food or drink manufacturer to make claims about health benefits, it would have to produce evidence from two randomized controlled trials, which the makers of POM have not done.Read more at 24/7 Wall St. (credit:Getty Images)
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