How One Red Bull Drinker’s Lawsuit Turned Into a $13 Million Settlement

Red Bull
Credit: Wikimedia Commons/bfishadow / Flickr, licensed under CC BY 2.0.

Here’s a story you might not expect: someone actually sued Red Bull for not giving them wings. Benjamin Careathers filed that lawsuit in January 2013, after drinking the stuff since 2002 with nothing to show for it but the usual caffeine buzz.

He believed the company’s marketing had crossed over from a fun slogan into something closer to false advertising, and he wanted a court to weigh in.

How the Lawsuit Began

Careathers filed his complaint on January 16, 2013, in the U.S. District Court for the Southern District of New York. He said he had been buying and drinking Red Bull for about ten years, expecting the boost the ads kept promising him. Instead, he felt like he’d gotten nothing more than what any caffeinated drink offers.

His lawsuit named Red Bull North America as the defendant and asked the court to open the case up to anyone else who had bought the drink and felt just as let down.

Less than a year later, on December 20, 2013, Judge Katherine Polk Failla merged Careathers’ case with a nearly identical one out of California, filed by David Wolf and Miguel Almaraz.

Both lawsuits argued basically the same thing, so the court combined them under one case number, with Careathers’ complaint leading the way. From there, both groups of plaintiffs worked through the process together, and Red Bull found itself facing one unified case instead of two separate ones.

What the Complaint Actually Claimed

The whole case centered on Red Bull’s slogan, “Red Bull gives you wings,” along with claims that the drink sharpened focus, reaction speed, and overall performance. Careathers wasn’t out there expecting actual wings to sprout from his back.

His point was more specific than that. The marketing suggested Red Bull outperformed a regular cup of coffee, and he didn’t think there was real science backing that claim up.

The complaint laid out just how far that message had spread. It pointed to television commercials, internet ads, social media posts, athlete sponsorships, printed brochures, and the company’s Flugtag events, where amateur pilots launch homemade flying machines off a ramp and into the water.

Court filings put Red Bull’s U.S. marketing spend at more than $2 billion over the years, including $364 million in 2009 alone.

The numbers on the can gave the skepticism some real weight. An 8.4-ounce serving of Red Bull holds 80 milligrams of caffeine, while the U.S. Department of Agriculture lists an average 8-ounce cup of brewed coffee at around 95 milligrams.

Careathers argued people were paying extra for a product that, milligram for milligram, had less caffeine than what they could brew at home for free. His complaint went so far as calling the company’s advertising “not just puffery,” arguing instead that it crossed into deceptive territory.

Red Bull’s Response and the Road to a Settlement

Red Bull wasn’t ready to agree with any of that. A company spokeswoman said Red Bull settled the lawsuit “to avoid the cost and distraction of litigation,” while standing by the accuracy of its advertising. The company also made clear it had no plans to drop the slogan and would keep using “Red Bull Gives You Wings” going forward.

By August 2014, both sides had worked out a deal. Red Bull agreed to put $13 million into a settlement fund without admitting to any wrongdoing. The court’s paperwork spelled that out clearly: nothing about the agreement could be used as proof that Red Bull broke any law or misled anyone. It was, in legal terms, a way to close the case rather than settle the question of who was right.

Under the original terms, anyone in the U.S. who bought Red Bull between January 1, 2002, and October 3, 2014, could file a claim for $10 in cash or $15 worth of Red Bull products, and no receipt was needed to do it.

Judge Failla gave the deal preliminary approval on September 3, 2014, set a claims deadline of March 2, 2015, and scheduled a final fairness hearing for May 1 of that year.

Court’s Final Word

Not everyone was on board with the deal. Eleven class members objected before the fairness hearing, and thirty more opted out of the settlement altogether.

Attorney Theodore Frank, representing the Center for Class Action Fairness, argued that the $4.75 million requested for attorneys’ fees rested on an inflated $18.5 million estimate tied to unspecified changes in Red Bull’s labeling.

Judge Failla agreed the number was too high and cut the fee award down to roughly $3.4 million.

Class member Dave Mager had a different concern. Court records describe his filing as laying out “several objections to the settlement.”

He felt flat payouts didn’t account for how much Red Bull someone had actually bought, and he wanted more time for people to cash their checks, along with any leftover settlement money going back to the class instead of to charity.

Another objector, Jonathan Corbett, took a lighter approach and joked in his own filing that he never seriously expected the drink to grow him actual wings.

Despite the pushback, Judge Failla granted final approval as scheduled and signed the Final Judgment and Order of Dismissal ten days later, on May 12, 2015.

The court also awarded Careathers, Wolf, and Almaraz $5,000 each as incentive payments, noting in its order that the three had served as “the face of the settlement in the media and on the internet” throughout the case.

What Happened After the Settlement

The sheer number of claims worked against individual payouts. So many people filed that the $10 cash option shrank down to about $4.25 per person, while claimants who chose products got a four-pack of Red Bull instead. About 60 percent of claimants went with the cash, and the rest picked product.

Checks and product vouchers started showing up in mailboxes throughout 2015, with plenty of people reporting payment by early 2016. A second, smaller round of checks worth up to $2.01 each went out starting in October 2016, most likely pulled from unclaimed settlement funds.

Mager didn’t drop the payout dispute quietly. In June 2015, he filed an appeal with the U.S. Court of Appeals for the Second Circuit, challenging how fair the settlement structure really was.

Frank’s Center for Class Action Fairness, on the other hand, chose not to appeal once the court trimmed down the attorney fee request.

Sources

CBC News

BevNET

NBC News

ABC7 Chicago

BeverageDaily

American Bar Association, Litigation News

Law360

Top Class Actions

Top Class Actions

Top Class Actions

CourtListener

Consumer Products Law Blog

Hamilton Lincoln Law Institute (formerly Center for Class Action Fairness/CEI)

Horwitz, Horwitz & Associates

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