Judge Grants Final Approval to Red Bull Class Action Settlement

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A New York federal judge has granted final approval to a class action settlement reached with Red Bull GmbH over false claims about the benefits of the beverage, despite some reservations on the part of the judge.

Red Bull will now be able to send out checks for $4.23 to 2 million customers who filed claims to partake in the $13 million class action settlement or  receive millions of free cans of Red Bull, which the beverage company agreed to in August 2014.

Even though U.S. District Judge Katherine Polk Failia approved the class action settlement, she did so despite concerns that there ended up being a lot more Class Members who filed claims than originally expected, leaving them with slightly more than 40 percent of the amount that they were expected to receive. Class Members were originally supposed to receive $10 each.

Judge Failia cut $1.4 million from the $4.75 million attorneys’ fees originally agreed upon, bringing them to $3.4 million.

“It’s an awful lot of money given what’s happened in this case,” said Judge Failla said. “The claims themselves were somewhat marginal. They are more than nuisance-value claims but I’m not sure how much more.”

Red Bull will pay out at total of $16.5 million in this class action settlement, with the attorneys’ fees included.

Class Members had the option of either receiving a four-pack of Red Bull or the almost $5.00 cash payout. Forty percent opted for the energy drink and 60 percent chose the cash. There were 30 Class Members who opted out of the Red Bull class action settlement, and 11 Class Members who objected to the settlement, which Judge Failia rejected, despite her own reservations.

Red Bull was hit with the false advertising class action lawsuit by plaintiff Benjamin Careathers in 2013. A similar class action lawsuit was filed against Red Bull in a California federal court by plaintiffs David Wolf and Miguel Almaraz.

The plaintiffs alleged that “Red Bull falsely marketed its energy drinks as providing certain functional benefits and thereby induced consumers into purchasing and/or paying a ‘premium’ for those drinks over alternate sources of caffeine.”

They claim that that “Red Bull labeling and marketing has deceived customers.”

“The thrust of the allegations herein is that the functional benefits of consuming Red Bull are not superior to the benefits from ingesting an equivalent amount of alternate sources of caffeine, and that consumers have been misled by Red Bull advertising to believe the drink is a superior source of energy beyond caffeine,” the plaintiffs explained in the motion to approve the Red Bull class action settlement.

According to the agreement, “Red Bull denies all wrongdoing or liability, and is prepared to vigorously defend its marketing claims if the litigation proceeds.”

The plaintiffs are represented by Benedict Morelli, David Ratner, Adam Deutsch, Jeremy Alters and Matthew Moore of Morelli Alters Ratner LLP, and Frederic Fox, Justin Farar, Laurence King and Linda Fong of Kaplan Fox & Kilsheimer LLP.

The defendants are represented by Kenneth Plevan, Jordan Feirman, Jason Russell and Hillary Hamilton of Skadden Arps Slate Meagher & Flom LLP.

The Red Bull False Advertising Class Action Lawsuits are Benjamin Careathers v. Red Bull North America Inc., Case No. 1:13-cv-00369, and David Wolf et al. v. Red Bull GmbH, Case No. 1:13-cv-08008, both in the U.S. District Court for the Southern District of New York.

UPDATE: On Jan. 26, 2016, Top Class Actions readers started reporting that they received four-packs of Red Bull or checks worth $4.25 in the mail.