Benjamin Careathers, a regular consumer of Red Bull, sued the drinks giant for false advertising.
The American argued that after 10 years drinking the caffeinated soft drink he neither had wings nor any enhanced athletic or intellectual performance.
Red Bull slogan claims the fizzy drink “gives you wings”.
According to the complainant, the Austria-based firm deliberately misled unsuspecting customers to spend millions of dollars on the premium drink in the hope of gaining an edge on their competitors.
And fearful of a costly and time-consuming trial, Red Bull was forced to settle the case out of court, pledging to refund $10 to any US customer who bought the drink since 2002 and agreeing to amend future advertising.
Red Bull GmbH must pay $13 million to settle the suit, $6.5 million of which will go into a fund that will be paid out to an estimated 1.4 million consumers, who can apply for the refund through a specially created website.
“Red Bull settled the lawsuit to avoid the cost and distraction of litigation,” a spokesman said.
“However, Red Bull maintains its marketing and labelling have always been truthful and accurate, and denies any and all wrongdoing or liability.”
Red Bull slogan claims the fizzy drink gives you wings
However, the class-action lawsuit, which began in January 2013, cited evidence in The New York Times, Nutrition Reviews and the European Food Safety Authority Journal that indicated energy drinks provide their boost through caffeine alone, not guarana or any other ingredient.
As a result, Benjamin Careathers argued, Red Bull’s performance-enhancing properties could only be tested by the quantity of caffeine in each can, which worked out more expensive that a cup of coffee from Starbucks.
“Such deceptive conduct and practices mean that [Red Bull’s] advertising and marketing is not just <<puffery>>, but is instead deceptive and fraudulent and is therefore actionable,” the suit said.
“Even though there is a lack of genuine scientific support for a claim that Red Bull branded energy drinks provide any more benefit to a consumer than a cup of coffee, the Red Bull defendants persistently and pervasively market their product as a superior source of <<energy>> worthy of a premium price over a cup of coffee or other sources of caffeine.”
The company’ pledge to refund $10 – or $15 worth of Red Bull products – to each drinker since 2002 has sparked an overwhelming reaction around the world, temporarily crashing the energydrinksettlement.com website.
It has since been confirmed that the amount refunded to individuals could be much lower than originally estimated, as more and more consumers apply for compensation from a finite pool of settlement money.
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Mercedes faces an investigation by the Federation Internationale de l’Automobile (FIA), Formula 1’s governing body, after being accused of taking part in an illegal tyre test.
Red Bull and Ferrari lodged an official protest at the Monaco Grand Prix after discovering tyre supplier Pirelli used Mercedes to do a three-day test.
In-season testing in F1 is forbidden. Pirelli says it has a contract with the FIA allowing limited testing.
The Monaco GP stewards are to prepare a report for the FIA.
A statement said the governing body “may bring the matter before the International Tribunal”.
The body, effectively for these purposes the FIA’s court, can impose any number of penalties, ranging from exclusion from the world championship to a fine.
Ferrari team principal Stefano Domenicali said: “As it is to do with the sporting regulations, you might expect a sporting penalty, but because it is not really clear what could be the effect on the race weekend, it is maybe bigger than that.
“I honestly don’t know what should be the solution. Because there is no precedent, I have no idea what should happen.”
Red Bull and Ferrari have accused Mercedes of breaking article 22.4 of the sporting regulations, which forbids in-season testing other than for a single three-day young driver test or for very limited straight-line aerodynamic tests.
Mercedes to be investigated by FIA after Ferrari & Red Bull tyre test protest
Pirelli say they are allowed to ask teams to do up to 1,000km of testing, which was as much as Mercedes did over three days at the Circuit de Catalunya in the immediate aftermath of the Spanish Grand Prix, the race before Monaco.
But Red Bull and Ferrari say the rules state this must only be with a car that is at least two years old. Mercedes used their 2013 car.
Rival teams were not informed about the test, which not only involved Mercedes’ 2013 car but also race drivers Nico Rosberg and Lewis Hamilton.
Rival teams are angry because extra testing could give Mercedes a technical advantage. Mercedes says they sought permission from the FIA, which approved the test.
Mercedes has been struggling with heavy tyre usage this season.
The tyres used were development designs for next season and a new tyre Pirelli wants to introduce at the Canadian Grand Prix, the next event after Monaco.
Pirelli is aiming to introduce rear tyres that are less vulnerable to delamination following a series of failures. But the plan is in dispute – Ferrari, Lotus and Force India have yet to approve it.
Red Bull team principal Christian Horner said he had only learnt about the test on Saturday night.
“I can understand Pirelli wanting to test the tyres,” he said.
“What’s disappointing is it’s been done in not a transparent manner. A three-day test has taken place with a current car running on tyres that are going to be used in the next grand prix and irrelevant of what you call it, that’s testing.”
He added: “We need to deal with it through the proper channels so that’s what we’ll look at doing.”
A Ferrari spokesman added: “Pirelli can offer to the teams the chance to do 1,000km of testing for tyre development and safety. But the fundamental aspect is the year of the car because if you use a current car it should be allegedly a breach of article 22.
“We want a clarification on this because if it is not against article 22 we would be interested in doing this.”
Mercedes’ test is the second tyre test conducted by Pirelli this season. The first was done by Ferrari between the Bahrain and Spanish Grands Prix but involved a 2011 car.
Insiders say Mercedes’ tyre problems this year made it logical for Pirelli to use their car in assessing new tyres aimed at preventing failures.
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Chaleo Yoovidhya, the creator of the energy drink Red Bull has died in Bangkok aged 80.
Chaleo Yoovidhya rose from humble origins to become one of Thailand’s richest man, with a wealth estimated at $5 billion in 2011.
His pharmaceutical company produced a tonic drink in the 1970s, but it became popular worldwide in the next decade when he went into partnership with an Austrian entrepreneur.
Red Bull also owns two football clubs and a Formula 1 team.
Chaleo Yoovidhya, the creator of the energy drink Red Bull has died in Bangkok aged 80
Chaleo Yoovidhya was born of poor Chinese immigrant parents in the northern province of Phichit, reportedly in 1932, local media say.
He worked as a salesman before setting up TC Pharmaceuticals in 1962.
TC Pharmaceuticals introduced the drink Krating Daeng, which became popular with shift workers and lorry drivers.
In 1984 Chaleo Yoovidhya launched it as Red Bull with the Austrian marketing expert Dietrich Mateschitz, and three years later began selling it in Austria.
Red Bull is now sold in 70 countries throughout the world.
Forbes Magazine put Chaleo Yoovidhya equal 205th in its March 2012 world billionaire list.
