San Francisco City Attorney Sues Monster Beverage

San Francisco City Attorney Dennis Herrera has filed a consumer-fraud lawsuit
on behalf of the people of the state of California against Monster Beverage
just one week after the company sued Herrera to halt his investigation into
company advertising practices and demands. People v. Monster Beverage
Corp., No. CGC-13-531161 (Cal. Super. Ct., San Francisco Cty., filed May 6,
2013). According to Herrera’s press release, Monster Beverage’s preemptive
suit constituted “‘forum shopping’ and a bid to win the race to the courthouse.”
Details about Monster Energy’s lawsuit appear in Issue 482 of this
Update.

The new lawsuit alleges that the company “aggressively markets” its energy
drink products to children and teenagers, fails to adequately warn consumers
about the purported risks of consuming such products, and illegally sold
its beverages until earlier this year as a dietary supplement. According to
the complaint, product labels claim that three 16-ounce cans can be safely
consumed, but with 480 milligrams of caffeine, this “is nearly five times the
maximum daily caffeine limit recognized for children and adolescents, and
exceedsthe 400 milligram daily caffeine limit recognized by the Food and
Drug Administration as safe for healthy adults.”

Herrera alleges that (i) Monster energy drinks labeled as dietary supplements
remain on store shelves and are misbranded, (ii) its products sold as
conventional beverages violate the state’s Sherman Law because they contain
additives that do not satisfy the generally recognized as safe standard, (iii)
the company aggressively markets its products to children as young as age
6 without properly warning about the drinks’ “dangerous side effects,” (iv) its
marketing to “underage persons using alcohol and drug references offend the
legislative premises of multiple statutes and regulations aimed at preventing
drinking and drug use among youth,” and (v) labeling and promotions with
unsubstantiated claims about boosting energy and enhancing physical
performance are misleading. The complaint seeks a declaration that the
company has engaged in unfair and unlawful business acts and practices
in violation of the state’s Unfair Competition Law, an injunction to stop the
company from performing acts in violation of the law, restitution, costs, and
an order requiring the company “to pay $2,500 in civil penalties for each act of
unfair and unlawful competition.”