Consumer Fraud

5-Hour Energy makers ordered to pay $4.3 million for misleading Washington consumers

5 hour energy drink 435x244 5 Hour Energy makers ordered to pay $4.3 million for misleading Washington consumersPresident Donald Trump’s travel ban wasn’t the only issue Washington state Attorney General Bob Ferguson was fighting on behalf of the citizens of his state. The same week a three-judge panel with the 9th U.S. Circuit Court of Appeals refused to remove a Seattle judge’s restraining order on the ban – a virtual win for Ferguson – Washington’s King County Superior Court Judge Beth M. Andrus slapped the makers of 5-Hour Energy drink with nearly $4.3 million in penalties and attorneys’ fees in a case brought by Ferguson alleging the company’s ads were misleading Washington consumers.

Ferguson brought the suit against 5-Hour Energy makers Living Essentials LLC and Innovative Ventures LLC in July 2014 following a multistate investigation into the accuracy of the companies’ advertising and marketing claims. In her final judgment last fall, Judge Andrus said it became evident that the companies spent more time trying to justify the science behind their claims than they did prior to making the claims in the state. She found in favor of most of the state’s claims that the company was in violation of the Consumer Protection Act.

“There was scant evidence as to what science anyone at Living Essentials had ever seen or relied on before it began to sell this product,” she said. “Marketers and lawyers seemed to be driving the defendants’ advertising decisions and most of the science presented at the trial was compiled by experts retained for this litigation, rather than information gathered by the defendants while investigating the effectiveness of their own products.”

The companies claimed that the 5-Hour Energy shots were better than coffee, and that its decaffeinated formula provided energy, alertness and focus that lasted hours. The company also claimed that the drinks were recommended by doctors.

On Feb. 7, Judge Andrus ordered Living Essentials and Innovative Ventures to pay about $2.2 million in civil penalties to Washington state, and nearly $2.1 million to cover attorneys’ fees and related costs. Living Essentials is also liable for post-judgment interest, the order stated.

Source: Law360