Energy Drink Regulatory Update: Monster Sues City of San Francisco in Federal Court, City Fires Back in California State Court

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As we reported here last week, the FDA announced that it is conducting an investigation into the use of caffeine in foods and beverages. Since the FDA’s announcement, the energy drink industry has continued to receive significant media attention. On May 6, 2013, the San Francisco City Attorney’s office announced that City Attorney Dennis Herrera, on behalf of the people of the state of California, filed a lawsuit in San Francisco Superior Court against Monster Beverage Corp. (“Monster”) for allegedly engaging in unfair, deceptive and unlawful business practices in violation of California laws. (To read the full press release, please click here.) This lawsuit comes just days after Monster filed a complaint against Dennis Herrera in the U.S. District Court for the Central District of California, alleging that Mr. Herrera’s attempts to regulate energy drinks are preempted by the federal Food, Drug, and Cosmetic Act (“FDCA”) and impinge on Monster’s constitutionally protected speech. By “singl[ing] out” Monster, despite the similarity between its advertising strategy and advertising for other energy drinks on the market, Monster argues that Mr. Herrera “appears to be motivated by publicity rather than science.” (To read the full text of the complaint filed in Monster Beverage Corporation v. Dennis Herrera, please click here.)

Mr. Herrera’s complaint alleges that Monster, the nation’s largest energy drink manufacturer, “promotes consumption of its drinks in an excessive and unsafe manner” and “has failed to adequately warn consumers of the dangers of consuming Monster Energy Drinks.” (To read the full complaint for People of the State of California ex rel. Dennis Herrera v. Monster Beverage Corporation, please click here.) The complaint states that Monster “promotes excessive consumption of its drinks” with statements such as: “bigger is always better,” “chug it down,” “throw [it] back,” a “smooth flavor you can really pound down,” and “the biggest chugger friendly wide mouth we could make.” Furthermore, in describing Monster’s “targeted advertising” toward children and adolescents, Mr. Herrera explicitly refers to Monster’s various social media pages, including Facebook, Twitter, YouTube, and a “Monster Army” social networking site. Mr. Herrera also alleges that Monster advertises to teenage boys by creating a “lifestyle” featuring “extreme sports, music, gaming, military themes, and the scantily-clad ‘Monster Girls.’” (For more information regarding the litigation between Monster and San Francisco City Attorney Herrera, please read the Los Angeles Times article here.)

To support its allegations that Monster is unsafe for consumption by children and adolescents, Mr. Herrera relies heavily on scientific research that claims there is “a strong correlation between consumption of caffeine at levels found in Monster’s products and adverse health and safety consequences.” The scientific research Mr. Herrera refers to throughout the complaint is the same information contained in a letter from health law experts to the FDA sent in March of this year, which we discussed previously here. The complaint goes on to allege that the despite this scientific evidence, Monster “aggressively markets its products to children and teenagers,” and that its targeted advertising efforts are responsible for the product’s popularity with and frequent consumption by youth.

The complaint against Monster also alleges that Monster’s energy drink products are misbranded and adulterated foods under California law. Although Mr. Herrera acknowledges Monster’s move earlier this year to label its products as conventional beverages instead of dietary supplements, he nevertheless alleges that Monster’s products are misbranded because “Monster’s packaging, labeling, serving size, recommended conditions of use, and advertising statements demonstrate that Monster Energy Drinks are, and have long been, conventional beverages.” Further, the complaint states that Monster’s product are adulterated because they contain levels of added caffeine that “do not satisfy the GRAS [generally recognized as safe] standard because there is no scientific consensus concerning the safety of the caffeine levels in [its] products.”

If this lawsuit is successful, Monster Energy could be enjoined from continuing to engage in conduct the state deems harmful to consumers and competitors, and forced to pay significant civil penalties and restitution. The outcome of this lawsuit could have major repercussions for the energy drink industry, not only in California but across the country.

Fuerst Ittleman David & Joseph, PL will continue to track the progress of this lawsuit and any other developments in the regulation of energy drink products. For more information, please contact us via email at contact@fuerstlaw.com or via telephone at (305) 350-5690.