On March 18, 2019, a Washington state appeals court denied the makers of 5-Hour Energy drinks- Living Essentials LLC and Innovative Ventures LLC- their appeal to dismiss a $4.3 million award against them in a false advertising lawsuit. The Court of Appeals determined that the trial court was correct in finding that the above-described companies did not have a sufficient basis to claims about the products.
The Court of Appeals rejected the companies' arguments that the trial court was too strict in applying the Federal Trade Commission's prior-substantiation doctrine, which holds that a company must have evidence to back up claims about its products before they are marketed.
The appeal was in regards to three ad campaigns over which Living Essentials LLC and Innovative Ventures LLC were ordered in February 2017 to pay $2.2 million in damages and another $2.1 million in attorney costs and fees to the state of Washington.
The Court of Appeals affirmed the trial court findings that the claims about the drinks were deceptive, including that the drinks are “Superior to Coffee,” that the decaffeinated variety of 5-Hour Energy provides energy and alertness “for hours” and that 73 percent of doctors recommend the drinks.
The Court of Appeals also found that the trial court looked at both pre- and post-lawsuit studies and testimony in reaching its decision that the advertisements were misleading. The court ruled there was not enough scientific evidence to support its claims that the particular combination of ingredients in the drinks enhanced the caffeine's effects or that the decaf version provided energy “for hours.”
The Court of Appeals also rejected the company's argument that the court's standard of “competent and reliable scientific evidence” was too vague (and unconstitutional), holding that the phrase has been a “benchmark” for determining whether ads have a reasonable basis since 1984.
Counsel information for Living Essentials, Innovation Ventures and the State of Washington was not available.
The case is State of Washington v. Living Essentials LLC et al, case number 76463-2-I, in the Court of Appeals of the State of Washington, Division I.
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