No Crash Later?

The lawsuit sparked criticism and queries from certain lawmakers. On January 17, 2013, U.S. representatives Edward J. Markey, Richard J. Durbin, and Richard Blumenthal submitted letters to manufacturers of energy drinks, including Monster Energy, Red Bull and Five Hour Energy emphasizing, "The blurred distinction between supplements and conventional foods or beverages combined with recent published reports by the Substance Abuse and Mental Health Services Administration (SAMHSA) and FDA regarding consumption of energy drinks has led to significant consumer confusion and concern about the use and safety of these products. One of the major concerns surrounding energy drinks is the potential health risks for children who consume these products." (Letters to various energy drink companies, Jan. 17, 2013)  The congressmen proceeded to ask the manufacturers a spectrum of questions about their products, including, caffeine content, marketing tactics, and studies of the products' effects on children and teens.

The congressmen and other critics take issue with the classification of some energy drinks as "dietary supplements" as opposed to food and beverages, which fall under the regulatory purview of the FDA. In 1994, Congress enacted the Dietary Supplement Health and Education Act (DSHEA), which defines dietary supplement as "a product . . . intended to supplement the diet that bears or contains one or more of the following dietary ingredients: (A) a vitamin; (B) a mineral; (C) an herb or other botanical; (D) an amino acid; (E) a dietary substance for use by man to supplement the diet by increasing the total dietary intake; or (F) a concentrate, metabolite, constituent, extract, or combination of any ingredient described in clause (A), (B), (C), (D), or (E)." 21 U.S.C. § 321(ff)(1). A dietary supplement may not be held out as a conventional food and must be labeled as a dietary supplement. 21 U.S.C. § 321(ff)(2).   Conversely, the DSHEA put the regulatory ball into the manufacturer's court: it is the manufacturer's responsibility to ensure that its dietary supplements are safe and that representations made to consumers are not false or misleading. (Q&A on Dietary Supplements, Food and Drug Administration.) In fact, dietary supplements do not need FDA approval before they are marketed, though subsequent laws, including the Bioterrorism Act, have pulled back somewhat on absolute regulatory freedom.

Because of their classification as dietary supplements, manufacturers of energy drinks are not required to disclose the amounts of caffeine and other stimulants in their particular products. However, due to negative publicity and concerns expressed by critics, Monster Beverage Corporation announced in February 2013 that Monster Energy drinks would no longer be classified as dietary supplements, but rather as beverages. Monster to Move Drinks to Food Labels: Beverage Digest, Bloomberg, February 13, 2013. As a result, the company will now label its products with the amounts of certain ingredients and nutritional information, including caffeine content. Red Bull, the second leading energy drink after Monster, was previously classified as a beverage. Monster Energy Drinks Will No Longer Be Labeled as Dietary Supplement, AboutLawsuits.com, February 14, 2013.

Despite the growing criticism—and litigation—surrounding energy drinks, this $8.9 billion-a-year industry is likely here to stay, and manufacturers, distributors and retailers of energy drinks should take precautions to protect themselves from becoming a target. Counsel for clients in this industry should consider the following potential issues: whether any marketing or advertising claim about the potential benefits of the product could be susceptible to an allegation of misleading or unsupported representations; confirm that advertisements and marketing campaigns are not specifically targeted at children and teenagers, particularly if the product contains a label indicating that it is not for children; ensure that claims made, particularly regarding caffeine and stimulant content, are accurate and readily verifiable; and determine (1) whether the product is classified as a dietary supplement or as a beverage, and (2) if it is a dietary supplement, whether changing its classification to that of a beverage, though subject to more regulation, would provide greater protection to the client. Litigation Risks on the Horizon for Manufacturers, Distributors, and Retailers of Energy Drinks, Lexology, September 11, 2012. It is also crucial to reassess your client's insurance policies in light of these new risks and evaluate whether necessary indemnity provisions are in place and whether additional insurance coverage is necessary.

Keywords: litigation, products liability, energy drinks, food safety

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