SALEMLiving Essentials LLC, the marketer of the 2-ounce shot 5-hour Energy, is immersed in a battle over production of documents with Oregon authorities as part of a 33-state probe into whether the energy drink's marketing is deceptive or misleading.
Attorney General Ellen Rosenblum with the Oregon Department of Justice (ODOJ) contends Living Essentials and other marketers of 5-hour Energy, including Innovation Ventures LLC and Microdose Sales LLC have failed to cooperate with her request to produce unredacted documents.
In a petition filed last month, DOJ requested that the Multnomah County Circuit Court in Portland force the marketers of 5-hour Energy to disclose unredacted documents pertaining to a contention that consumers feel "no crash" when consuming the shot.
Four days later, Living Essentials asked that a court in an entirely different county and a specific judgeCourtland Geyer of the Marion County Circuit Court in Salem, Ore.set aside or amend a Dec. 9, 2013, investigation demand from the ODOJ. Geyer is the same judge who dismissed a complaint filed by 5-hour Energy marketers in an unsuccessful bid to block ODOJ from demanding the redacted information. That case, which was thrown out last year on procedural grounds, is on appeal.
Oregon authorities also are investigating the suitability of 5-hour Energy for adolescents and a "Doctors Recommend" advertising campaign.
Five states, comprised of Maryland, Ohio, Tennessee, Vermont and Oregon, lead a steering committee as part of a 33-state investigation into 5-hour Energy's marketing practices, Assistant Attorney David Hart with the ODOJ said in court papers.
An online government database links 5-hour Energy to more than 90 adverse events between Jan. 1, 2004 and Oct. 23, 2012. Thirteen outcomes are listed as death, with a number of other outcomes described as life-threatening.
Officials with the U.S. Food and Drug Administration (FDA) emphasize such reports don't constitute a finding that a product like 5-hour Energy was fully or partially responsible for a reported illness. Still, reports linking 5-hour Energy and similar caffeine-laden products like Monster Energy to death and serious illnesses have ignited scrutiny on Capitol Hill, led to a number of lawsuits and motivated authorities across the United States to investigate energy drinks.
Ohio, the lead state on the steering committee investigating 5-hour Energy, commenced the probe with the issuance of subpoenas on Nov. 19, 2012. Since that time, Living Essentials said it has been overwhelmed by duplicate requests for information from authorities.
Living Essentials has produced nearly 60,000 pages of documents spanning six years in response to subpoenas and civil investigation demands; another nearly 1,900 pages was produced to address follow-up requests, according to the company.
Living Essentials argued the ODOJ is on a "fishing expedition" to find evidence that would give it probable cause to suspect Living Essentials is violating state laws. According to Living Essentials, authorities have come up empty. ODOJ is seeking to determine whether 5-hour Energy's claims violate the Oregon Unlawful Trade Practices Act (UTPA), a consumer protection statute that bars deceptive trade practices.
"It appears, from the citations to the internet sources in the declaration, that every time a new article appears that attacks or questions energy products, DOJ seizes on the controversy to issue supplemental requests," Living Essentials wrote in court papers. "This type of scattershot fishing expedition, based on media hype and sensationalism, does not justify the burden on the company to respond to multiple requests issued repeatedly over the course of a year, particularly when there is no factual basis to suggest any unlawful conduct by the company."
Living Essentials has requested that the Marion County Circuit Court set aside or modify a Dec. 9 investigation demand for documents from ODOJ. Living Essentials said the new demand is burdensome particularly since the company is aware of nine "new" but "virtually identical" subpoenas and civil investigation demands that have been issued to the company and its affiliates.
"This duplication of efforts by multiple states on behalf of Executive Committee serves no purpose other than to increase the burden on petitioner," Living Essentials declared in the Dec. 27, 2013, petition.
In court papers, ODOJ acknowledged entering into a confidentiality agreement last year with the marketers of 5-hour Energy. However, the agency said it contained no provisions that permitted redactions of documents.
The dispute between ODOJ and the energy-shot marketers dates back to April 2013 when they produced documents in redacted form. Although ODOJ repeatedly requested the documents without the redactions, the marketers allegedly refused to cooperate. That prompted ODOJ to notify the marketers it intended to seek judicial relief. The marketers beat ODOJ to court, requesting a declaration that that they need not produce the documents.
Geyer, the Marion County Circuit Court judge, dismissed the complaint, finding that it was time-barred because the 20-day period in which the marketers could request a modification to the civil investigation demand had elapsed.
Still, he may be sympathetic to Living Essential's substantive arguments about the need to safeguard confidential information. Living Essentials quoted Geyer as noting: "I don't see that confidentiality agreement as offering the protection that now appears necessary in terms of sharing with other states or shielding that formula from a public records request that could potentially be made by a competitive company."
Although Geyer ultimately dismissed the case, the marketers have refused for nine months to produce the documents in unredacted form, ODOJ declared in court documents. The marketers proposed offering "ranges" of the amounts of ingredients in 5-hour Energy, but ODOJ argued such details would be inadequate.
"Unredacted versions of the documents at issue are necessary for DOJ to make an
informed UTPA enforcement decision," Hart, ODOJ's Assistant Attorney, declared in court papers. "This is especially true at this early investigative stage, in 20 which DOJ is attempting to gather evidence to determine whether probable cause exists to bring 21 suit for a UTPA violation."
Three statements that are potentially misleading are at issue in ODOJ's probe. First, authorities are investigating a statement that users of 5-hour Energy don't suffer a "crash" from the effects of the shot. According to ODOJ, after reviewing scientific literature, the National Advertising Division of the Council of Better Business Bureaus recommended that 5-hour Energy discontinue the "no crash" claim.
Second, ODOJ is investigating a "Doctors Recommend" television and online advertising campaign that implied 73% of 3,000 doctors surveyed nationwide recommended 5-hour Energy, according to court records. Finally, authorities are looking into a warning on 5-hour Energy bottles"Do not take if you are pregnant or nursing, or under 12 years of agethat they contend implies the product is suitable for adolescents between the ages of 12 and 18.