Free money

[Gob]

At the intersection of neurotic dumbassery and opportunism lies the American legal system, where the beverage company that makes Red Bull just decided to settle after being sued for the failure to give people "wings," as promised in their advertising.

It's not the literal unfurling of feathery pinions from their shoulders customers were after - we're not quite there yet, but maybe give it a couple of years. No, they charged that the company was over-estimating the stimulant effects of the beverage, to a degree that went beyond "puffery" into "deceptive and fraudulent," according to the suit.

Business Insider has more details on the case:

Red Bull says in its marketing that the drink can improve concentration and reaction speeds, but the plaintiff in the case said these claims were false and lacked scientific support. While the suit did not allege that plaintiffs were disappointed that they didn't suddenly sprout wings, it does say that Red Bull relies a lot on terms like "wings" and "boost" to give consumers the impression that the drink gives people some sort of physical lift or enhancement.

If the proposed settlement is passed by the US District Court of the Southern District of New York, where the case was brought, Red Bull will be required to pay $6.5 million into a settlement fund within a week.

The settlement says Red Bull will reimburse customers disappointed the energy drink hasn’t lived up to their expectations with either a check for $10 or a voucher for $15 worth of Red Bull products. This could prove costly, as the class action suit covers the millions of people who have bought at least one can of Red Bull over the past 10 years.

$6.5 million to cover compensation to literally everyone who bought a can of this stuff over the past decade? And the compensation can take the form of... a $15 voucher for the very same beverage they found criminally disappointing? All righty then!

I'm sure there were all sorts of legal intricacies that made this complaint solid enough for Red Bull to settle, without admitting wrongdoing or liability, but the outcome seems more like a highly subjective judgment on hyperbolic advertising that could theoretically be applied to a lot of what rolls across the screen during a typical evening of television. Where does this line get drawn? Maybe it's still safe to claim that your brand of beer is magically hand-delivered into the cooler by tiny scuba divers who chisel it from the bottom of an iceberg, but I see an awful lot of ads for sports drinks and foods that imply performance boosts. I was not actually under the impression that any of them would make me competitive with a professional athlete, and I'm pretty sure there's probably a disclaimer to that effect in the blizzard of tiny letters covering half the screen during every commercial, but evidently those disclaimers no longer provide sufficient dumbass shielding.

Soon advertising will consist of white screens covered with simple messages that say, "Some people who don't actually work for our company think our product is preferable to its competitors." Maybe a little harmonica music could be included, but don't you dare use any musical selections that might imply consumers of your company's products have a snowball's chance in hell of scoring a date with Katy Perry!

This is also yet another story that demonstrates the relative ease of shaking down image-obsessed corporations with class-action suits. Not to say that all such suits are without merit, mind you - I don't mean to be a Red Bull in the legal china shop here - but it's not hard to back companies into a corner and make them think a few million paid out in settlement money is preferable to a long court battle, with attendant negative press. I'm going to go out on a limb and guess that the lawyers in this case were not paid with $15 vouchers for energy drinks.

[Guinevere]

Source please?

First of all, class-action suits have an additional level of review from other lawsuits because you have to get the class certified before the suit can proceed. That is not a simple process, and many many lawsuits don't make it through that scrutiny.

Second, the whole idea of class actions is to bring claims that individually and not likely to be worth the time and effort of pursuing, but where a defendant has acted wrongly and, collectively received some benefit from that wrong action. Bringing an action as a class is also far more efficient and timely, for both plaintiffs and defendants, and takes up fewer court resources compared to litigating each claim individually.

Class actions also keep the first plaintiffs from receiving all of the benefits of being early to the suit process and ensuring there are funds left to compensate all potential plaintiffs.

Class actions can be an effective way to curb the behavior of the wrong-doer, where are single suit may not be as effective.

And yes, sometimes the attorneys are the ones who pocket most of the cash, because the award is spread over so many plaintiffs. There are mechanisms to allow plaintiffs to opt-out of such settlements.

[Long Run]

This is the typical suck some money out of a deep pocket case, and the lawyers make some pretty good coin off of it, and the consumer gets squat. (Not all class actions are that, but there are plenty that fit that bill, including this one). At worst, Red Bull is "guilty" of puffery. Everyone knows the product is what it is -- a lot of caffeine and whatever else they put in their drink that I would never think about touching. The product costs very little. A consumer can try it out and see if they like it. If they don't, don't buy anymore, and if one feels strongly enough, go ahead and critique the stuff on social media. That works most places, except the U.S., where some lawyer sees a payday and finds a plaintiff and there you go.

The goal of this type of litigation is to create a private sort of oversight system. There is a better way, though. There are state attorneys general who crack down on unproven claims, as does the federal government. That is a much better system, with much more legitimacy. The company pays a fine that goes to help fund the government (rather than some law firm) and the company promises not to inflate their product's benefits in the future, which is the whole point.

[Gob]

Source please?

https://www.google.com/search?q=red+bul ... d=0CBsQqAI

[rubato]

Someone should sue Dr Oz back into obscurity for bare-assed lying about supplements.


Yrs,
Rubato

[BoSoxGal]

Someone should sue Dr Oz back into obscurity for bare-assed lying about supplements.


Yrs,
Rubato

[Guinevere]

Source please?

https://www.google.com/search?q=red+bul ... d=0CBsQqAI

For the article you posted .... I don't doubt the litigation - I got my own notice of settlement - but I'd like the see the source article.

[rubato]

As bad as the US health care system is compared to the rest of the G-20 the legal system is worse. And declining.

If the legal system were paid based on competitive outcomes like cars, computers, and televisions it would get cheaper and better instead of more expensive and worse.


yrs,
rubato

[Guinevere]

So what you're saying rube, is please allow businesses, banks and governments to steal, lie, cheat, discriminate, harass, spy, detain and maim the citizens of this country.

Here is a list from Wiki of some recent class-action lawsuits and the subjects of the suits:

Link here, b/c I don't have time to play with formatting: http://en.wikipedia.org/wiki/List_of_cl ... n_lawsuits

Alperin v. Vatican Bank Causes of action included "conversion, unjust enrichment, restitution, the right to an accounting, human rights violations and violations of international law". United States Court of Appeals for the Ninth Circuit
Anderson v. Jackson demolition of public housing damaged by Hurricane Katrina United States Court of Appeals for the Fifth Circuit 2009
Cobell v. Salazar Indian trust assets United States District Court for the District of Columbia 2009
Collins v. United States honorable discharge under "Don't ask, don't tell" United States Court of Federal Claims 2013
Conant v. McCaffrey right to recommend medical marijuana United States district court
Daniels v. City of New York racial profiling and unlawful stop and frisk
Daniela Apostol v. Eastman Kodak Company False advertising, unfair enrichment, fraudulent concealment, unfair competition[1][2]
De Beers Diamonds Antitrust Litigation U.S. District Court for the District of New Jersey
Doe v. Chiquita Brands International funding and arming known terrorist organizations
Dukes v. Wal-Mart Stores discriminating against women in promotions, pay, and job assignments United States Supreme Court 2011
EEOC (Janice Smith) v. Wal-Mart Stores hiring decisions based on gender
Fraley v. Facebook, Inc. misappropriation of users' names and likenesses United States District Court for the Northern District of California
Gonzalez v. Abercrombie & Fitch Stores racial and gender discrimination in employment and marketing
Gratz v. Bollinger undergraduate affirmative action admissions policy too mechanistic in its use of race as a factor in admissions Supreme Court of the United States 2003
Greek Cypriots v. TRNC and HSBC Bank USA denial of access to land and property United States District Court for the District of Columbia
GM Instrument Cluster Settlement Owners of vehicles with faulty instrument clusters receive "special coverage" U.S. District Court in Seattle 2008
Hepting v. AT&T surveillance of telecommunications
James v. Meow Media video game responsibility for murders
Jenson v. Eveleth Taconite Co. sexual harassment, abusive language, threats, stalking and intimidation
Jewel v. NSA surveillance 2010
Lane v. Facebook, Inc. Internet privacy and social media United States District Court for the Northern District of California 2010
Luévano v. Campbell racial bias in written test for employment
Madrigal v. Quilligan involuntary sterilization
Mauldin v. Wal-Mart Stores health insurance not covering prescription contraceptives United States District Court for the Northern District of Georgia
Mochizuki v. United States forcible kidnapping and imprisonment
Morgan v. Hennigan racial segregation and school busing
Nasdaq Market Makers Antitrust Litigation stock market collusion
National Federation of the Blind v. Target Corporation e-commerce website accessibility
National Organization for Women v. Scheidler anti-abortion activities Supreme Court of the United States 1994
Payment Card Interchange Fee and Merchant Discount Antitrust Litigation price fixing and other allegedly anti-competitive trade practices in the credit card industry 2012
Pigford v. Glickman racial discrimination in its allocation of farm loans and assistance 1999/2010
Price v. Philip Morris, Inc Cigarette company advertising class action led by plaintiff's attorney Stephen Tillery resulted in $10.1 billion judgement[3] Madison County, Illinois 2003/2006
Ritalin class action lawsuits promoting disorder ADHD to increase drug profits
Robbins v. Lower Merion School District charges schools secretly spied on students through surreptitiously and remotely activated webcams embedded in school-issued laptops the students were using at home; privacy rights U.S. District Court for the Eastern District of Pennsylvania filed 2010; pending certification
Ruiz v. Estelle prisoners' rights United States District Court for the Southern District of Texas 1979
Scheidler v. National Organization for Women (2003) anti-abortion activities Supreme Court of the United States 2003
Scheidler v. National Organization for Women (2006) anti-abortion activities Supreme Court of the United States 2006
Shell Canada lawsuit gasoline additive damaging fuel supply systems of cars
Shyamala Rajender v. University of Minnesota employment discrimination based on sex United States District Court for the District of Minnesota 1980
Smiley v. Citibank limiting credit card late fees and other penalties Supreme Court of the United States 1996
Sullivan v. Zebley Social Security regulation on determining disability for children Supreme Court of the United States 1990
Swift v. Zynga misleading advertising United States District Court for the Northern District of California
TNA Entertainment, LLC v. Wittenstein and World Wrestling Entertainment, Inc. use of secret contact information to steal talent
Turkmen v. Ashcroft unlawful detainment
Vroegh v. Eastman Kodak Company false advertising, unfair business practices, breach of contract, fraud, deceit and/or misrepresentation
World Jewish Congress lawsuit against Swiss banks retrieving deposits from dormant bank accounts

[Sue U]

This is the typical suck some money out of a deep pocket case, and the lawyers make some pretty good coin off of it, and the consumer gets squat. ... The product costs very little.

The fact that the product costs very little is exactly why individual consumers get little out of the class action settlement. If it were otherwise, you'd be bitching that consumers received compensation far beyond actual losses.

Consumer fraud class actions are not "suck some money out of a deep pocket case," they are civil enforcement mechanisms to keep marketers honest. If Red Bull were only "'guilty' of puffery," there wouldn't be a settlement at all; what, you don't think their lawyers are capable of making a motion to dismiss? If the litigation were frivolous, they could seek Rule 11 sanctions. Here, however, Red Bull was affirmatively representing that its product did something that in fact it doesn't do, and was selling it on that basis, asking consumers to rely on that representation. That's pretty much the definition of fraud.

The goal of this type of litigation is to create a private sort of oversight system. There is a better way, though. There are state attorneys general who crack down on unproven claims, as does the federal government. That is a much better system, with much more legitimacy. The company pays a fine that goes to help fund the government (rather than some law firm) and the company promises not to inflate their product's benefits in the future, which is the whole point.

Except the fact is that the government has neither the resources nor the incentive to go after all the various consumer fraud cases there are; that's why enforcement is left to private actions -- or would you rather have a giant government agency acting as the fraud police? And in fact, some states (like mine) require that the Attorney General be put on notice of any consumer fraud class action, so that the state can step into the litigation itself if it chooses. The federal government does the same with qui tam claims. The system is set up so that the government doesn't have to spend the resources to investigate and initiate an action, but can get the same societal results through private litigation.

What the hell kind of Republican are you, looking to Big Government to solve the problems of the marketplace? Why do you hate free enterprise and entrepreneurship?