Anyone not living in a cave for the last several years has heard about REDBULL, the ubiquitous energy drink which came out of nowhere to dominate grocery store shelves and Vodka drinks in bars across the nation. Athletes have been known to down a can in their search for quick energy, and it has become the mainstay of college student all-night studying marathons.
Recently, the makers of REDBULL were targeted by a class action lawsuit. The action challenged the company’s advertising campaigns that claimed the drink increases energy and concentration. The plaintiffs’ counsel says the claim was fraudulent because a can of the red liquid only provides as much “energy” as a cup of coffee. REDBULL defends its advertising as accurate and truthful, yet recently agreed to settle the case, paying up to $13,000,000 in cash and product to disgruntled consumers “to avoid the distraction and expense of litigation.” (You would think the company could have saved the money and avoided the litigation distraction by downing a 12-pack of their product to increase their concentration).
The REDBULL litigation provides more interesting news items than the typical lawsuit. It is black letter law, for example that for fraud to be actionable, the injured party’s reliance on the allegedly false statement must have been reasonable. Thus, a defense of “any reasonable person would have known I was lying” actually is a defense. So, maybe REDBULL made a mistake by defending its advertising. After all, their very name shouts BULL! Perhaps they should have asked the plaintiffs’ lawyer a simple question: “In every advertisement, we told the consuming public that it had just read bull, so how can they be mislead?”
The REDBULL experience also reveals a lot about the media’s view of class action lawsuits. The announcement of the proposed settlement spread like wildfire across the Internet, leading to an onslaught of visits to the website set up to announce the proposed agreement and process class members’ claims., causing the site to crash. Since the settlement amount is capped at $13 million, regardless of how many people seek compensation, the more who apply, the lower the amount each will receive. The crash of the settlement website leads some news outlets to reveal their true colors. On its website, Time characterized the news reporting as unfortunate, and claimed that the reports had “ruined everything” due to the lowering of individual payments, rather than lauding the media for helping to ensure that all claimants learned of the fund and had the opportunity to be included.
Other reporters were so quick to jump on the “news”; they revealed their somewhat questionable investigative practices by clearly taking other reports of the deal and passing them along as if they were original content. About 15 minutes after the legitimate report on the settlement at Buzzfeed.com, Internet pranksters created a spoof report, which also quickly went viral. The sites passing along the altered “news” reported that the suit, which was being settled, was brought by plaintiffs suing because the REDBULL advertisements showing people growing wings and zooming away after one sip were angry because they hadn’t even grown a feather, let alone a wing.
Frankly, it’s not clear how any other “news outlet” could have believed the altered report. The spoof report claimed the winged suit was brought on behalf of all RedBull drinkers, but any lawsuit of that nature would obviously be brought only on behalf of the subclass that takes their REDBULL with Vodka, and lots of it.
©2014 under analysis llc. Under analysis is a column of the Levison Group. Charles Kramer is a principal of the St. Louis based law firm Riezman Berger PC. Comments, thoughts, or criticisms may be sent c/o this paper or direct to the Levision Group at Comments@levisongroup.com.