5-Hour Energy Knee-Deep In Litigation with Private Plaintiffs, Attorneys General

A federal judge is overseeing a series of proposed class-action lawsuits that have been consolidated and filed against the marketers of 5-hour Energy.

The marketers of 5-hour Energy are busy defending themselves against lawsuits brought by consumers across the nation and attorneys general in four states.

A federal judge is overseeing a series of proposed class-action lawsuits that have been consolidated and filed against the marketers of 5-hour Energy. Nearly 20 consumers across the nation who purchased 5-hour Energy claim the company has made false and misleading advertising and marketing claims, breached certain warranties and committed fraud in violation of state laws in California, New York, Pennsylvania and elsewhere.

Living Essentials, LLC and Innovation Ventures, LLC have argued that complaints over marketing of 5-hour Energy and its warning label are matters preempted by federal law. The marketers also have said the issues aren’t appropriate for resolution by the courts because FDA is considering them.

Although FDA has been examining caffeine and energy products, the marketers’ arguments fell on deaf ears last month before U.S. District Judge Philip Gutierrez, who is overseeing the consolidated class-action suit in California. But the judge threw out a number of claims, including a request for injunctive relief and causes of action under the California Unfair Competition Law, Consumer Legal Remedies Act and False Advertising Law. Essentially, the court found plaintiffs failed to allege with particular details that they relied on 5-hour Energy’s statements. But plaintiffs were given until early October to amend their lawsuit.

The marketers of the popular energy shot have also moved to dismiss claims filed by state authorities. Attorneys general in Indiana, Oregon, Vermont and Washington have accused 5-hour Energy of deceptive practices in violation of consumer protection statutes. Motions to dismiss are pending in at least two of the cases, with a hearing scheduled for Nov. 14 in Washington Superior Court in King County.

A nationwide investigation of 5-hour Energy preceded the lawsuits. Five states—Maryland, Ohio, Tennessee, Vermont and Oregon—led a steering committee as part of a 33-state investigation into 5-hour Energy's marketing practices, according to court papers filed several months ago by Assistant Attorney David Hart with the Oregon Department of Justice.

Rocketing Sales

A 1.93-ounce shot, 5-hour Energy is marketed as a dietary supplement and sold in three formulations: Original, Extra Strength and Decaf. According to Living Essentials and Innovation Ventures, nine million bottles of 5-hour Energy are sold weekly. The marketers have shelled out more than $500 million in five years on advertising and marketing, yielding more than $1 billion annually in retail sales, according to Vermont authorities in court papers.

Some questions for the courts are whether 5-hour Energy achieved its success by deceiving the public with misleading claims that the shot boosts alertness, energy and focus.

“The product’s popularity is ample proof that it provides consumers with feelings of energy, alertness and focus," the marketers of 5-hour Energy declared in the Vermont litigation, “just as advertised."

FDA’s Role

Part of 5-hour Energy’s defense is that the courts shouldn’t be looking into a number of issues raised in the lawsuits because they are within FDA’s expertise and preempted by federal law, namely the Federal Food, Drug, and Cosmetic Act (FD&C) and Nutrition Labeling and Education Act (NLEA).

Last month, Gutierrez rejected defendants’ argument that the private plaintiffs were demanding 5-hour Energy disclose caffeine content or provide additional warnings on the label or package.

“Plaintiffs allege that because 5-hour Energy is nothing more than a caffeine shot (and because decaffeinated 5-hour Energy is nothing more than a placebo), Defendants’ attempts to attribute 5-hour Energy’s effects to B-vitamins and amino acids are false and misleading," the judge stated.

Gutierrez also was not persuaded by the argument that the court should defer to the FDA under a legal doctrine known as “primary jurisdiction." He said consumers were not alleging that defendants’ marketing violated the FD&C or seeking to impose labeling requirements that contrasted with federal law.

Although FDA is investigating 5-hour Energy, “the mere existence of an agency investigation does not weigh in favor of a referral under the primary jurisdiction doctrine," Gutierrez wrote. “Defendants have not made any showing that the litigation of this case would conflict with the FDA’s investigation. In the absence of such a showing, there is no reason to think that this case will interfere with the FDA’s uniform administration of federal labeling laws."

Innovation Ventures and Living Essentials have made similar arguments that issues raised in a complaint by the Office of the Vermont Attorney General are within FDA’s jurisdiction. The case is before a Vermont Superior Court in Montpelier.

“The assertion that 5-hour Energy’s warning label against use by children under 12 can be deemed a promotion in support of the safety of the product for adolescents not only defies common sense but, as a matter of law, is an issue within the jurisdiction of the FDA, not a state court, to resolve," the marketers wrote in court papers seeking to dismiss several counts of the complaint.

A lawyer for Vermont denied in court papers that the state is seeking to regulate consumption of 5-hour Energy. Jill Abrams, Assistant Attorney General with the Vermont Office of the Attorney General, said the state’s claims arise of misleading promotional statements made by the defendants and are actionable under the Vermont Consumer Protection Act.

“The state is not asking this court to evaluate the safety of caffeine or 5-hour Energy for adolescents," Abrams wrote. “Rather, the state has alleged simply that defendants have made an implied statement that the product is safe for adolescents age 12 and over without having competent and reliable evidence for that claim."

The Evidence

Another question in the lawsuits is whether the marketers of 5-hour Energy have sufficient scientific evidence to back up their claims. Living Essentials and Innovation Ventures contend state law does not bar claims at the heart of Vermont’s lawsuit: that vitamins and amino acids in the product contribute to alertness and energy, and that 5-hour Energy is superior to coffee. The marketers cited studies—including a confidential study that examined the safety of 5-hour Energy—to rebut allegations that they lack adequate evidence to support their promotional claims.

The defendants argue Vermont authorities cannot rely on an FTC rule known as substantiation in support of their case; in other words, the Vermont Attorney General cannot claim under the state Consumer Protection Act that 5-hour Energy’s promotional claims must be supported by “competent and reliable scientific evidence." According to the marketers, the substantiation rule can only be brought by the FTC under the FTC Act—not state authorities under a state law.

The marketers also said the state authorities “lack the experience and expertise necessary to properly evaluate scientific evidence offered in response."

In court papers defending Vermont’s lawsuit, Abrams characterized defendants’ position as “nonsensical."

“Civil investigative demands issued by the VAG, including here, routinely seek substantiation for advertising claims and the materials received in response are routinely evaluated," she wrote. “Experts may be retained as necessary."

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