Laurence D.

King (SBN 206423)

Linda M. Fang (SBN 124232)
2 KAPLAN FOX & KILSHEIMER LLP
13 FEB I 9 PM 12= I 0
350 Sansome Street, Suite 400
3 San Francisco, CA 94104
Telephone: 415-772-4 700
4 Facsimile: 415-772-4707
lking(a1k,aplanfox.com
5 lfong(ci)kaplanfox.com

6 [Additional Counsel on Signature Page]

7 Attorneys for Plaintiff Matt Nunez

8
9 UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

v
'(t
~"'~ 12 MATT NUNEZ, individually and on be~C Vol3 -o 028fy CJL(!h-r
kl3 of others similarly situated,
CLASS ACTION COMPLAINT

\) :14 v.
Plaintiff,

1_ ~ 15
16 INNOVATION VENTURES LLC dba
LIVING ESSENTIALS, LLC, a Michigan
17 limited liability company,
18 Defendants.
19

20

21

22
23 MA IT NUNEZ ("Plaintiff"), by and through his attorneys, on behalf of himself and all

24 others similarly situated, brings this Class Action Complaint against Defendant Innovation

25 Ventures LLC dba Living Essentials, LLC, a Michigan limited liability company ("Defendant")

26 and alleges, based upon personal knowledge as to himself and his own acts, and as to all other

27 matters upon information and belief, as follows:

28

- 1- CLASS ACTJON COMPLAlNT I

 0

I. NATURE OF ACTION

2
1. Plaintiff brings this nationwide class action on behalf of a proposed class and
3
subclass more fully defined below, of all similarly situated consumers who purchased 5-HOUR
4
ENERGY shots designed, manufactured, marketed, advertised, distributed and sold by
5
Defendant, or its predecessors, successors, or subsidiaries.
6
2. Defendant manufactures, markets, distributes and sells its product throughout the
7
United States including California under various brand and product names including, but not
8
limited to, 5-HOUR ENERGY, Extra Strength 5-HOUR ENERGY, and Decaf 5-HOUR
9
ENERGY shot (collectively "5-Hour Energy" or the "product"). Defendant is one of the largest
10
manufacturers and sellers of energy shots in the country, with 2012 annual sales of$996 million.
11
3. Defendant has invested a great deal of time, effort and money to advertise and
12
promote 5-Hour Energy to consumers nationwide. During the Class Period, defendant has made
13
representations to consumers that are unsupported by any competent, credible and reliable
14
scientific evidence. For example, on its website Defendant promises: "Take it in seconds, feel it
15
in minutes, lasts for hours;" "A 5-hour ENERGY shot can help you feel awake and alert for
16
hours*. It wears off gradually;" and on its product packaging, "Hours of energy now No crash
17
later!"
18
4. To bolster its product's claims, Defendant points to scientific studies which
19
purport to demonstrate the superior nature of 5-Hour Energy over simpler and less expensive
20
caffeine only products, such as caffeine tablets or a cup of coffee.
21
5. The New York Times recently reported that "interviews with researchers and a
22
review of scientific studies show: the energy drink industry is based on a brew of ingredients
23
that, apart from caffeine, have little, if any benefit for consumers." 1 The article continues:
24
"Promoting a message beyond caffeine has enabled the beverage makers to charge premium
25
prices. A 16-ounce energy drink that sells for $2.99 a can contains about the same amount of
26
caffeine as a tablet of No Doz that costs 30 cents."
27
1
Barry Meier, Energy Drinks Promised Edge, but Experts Say Proof is Scant, N.Y. Times, Jan.
28 1, 2013, at l.

- 2- CLASS ACTION COMPLAINT

 0

6. Defendant's extensive and comprehensive nationwide marketing campaign via

2 television commercials, internet websites and postings, radio media, advertising, and packaging,

3 was devised to mislead Plaintiff and members of the putative class. By disseminating false and

4 misleading information about 5-Hour Energy, Plaintiff and members of the putative class were

5 induced into purchasing, at a premium price, millions of dollars worth of 5-Hour Energy.

6 7. Defendant knew or should have known that there is no greater benefit of ingesting

7 5-Hour Energy than ingesting an equivalent dose of caffeine and has taken no meaningful steps to

8 clarify consumer misconceptions regarding its product.

9 8. As a result of Defendant's pervasive pattern of deceptive, false and otherwise

10 improper advertising, sales, and marketing practices and through other actions and inactions

11 complained of herein, Defendant violated the Consumer Legal Remedies Act, Civil Code 1750,

12 et seq., and the Unfair Competition Law, Business & Professions Code, 17200, et seq. and was

13 unjustly enriched. To remedy Defendant's illegal conduct, Plaintiff on behalf of himself and other

14 similarly situated purchasers seeks restitution, monetary damages, equitable relief: declaratory

15 relief and/or disgorgement of profits in connection with 5-Hour Energy designed, manufactured,

16 marketed, advertised, distributed and sold by the Defendant, or by its predecessors, successors, or

17 subsidiaries.

18 II. PARTIES
19 A. Plaintiff
20 9. Plaintiff Matt Nunez, a resident and citizen of Orange County, California,

21 purchased and ingested 5-Hour Energy shots manufactured and marketed by Defendant over

22 approximately the last two years. Had he known of the true character and quality of 5-Hour

23 Energy, he would not have purchased (or would have paid less for) the product.

24 B. Defendant
25 10. Defendant Innovation Ventures, LLC dba Living Essentials LLC is a Michigan

26 limited liability company headquartered in Farmington Hills, Michigan. Defendant designed,

27 tested, manufactured, marketed, advertised, distributed and sold 5-Hour Energy in California and

28 throughout the United States.

-3 CLASS ACTJON COMPLAINT

 0 0

III. JURISDICTION AND VENUE

2
11. This Court has jurisdiction over the subject matter of this action pursuant to 28
3
U.S.C. 1332(d)(2) and the Class Action Fairness Act, in that (a) there is complete diversity
4
(Plaintiff is a citizen of California and Defendant is domiciled in Michigan and otherwise
5
maintains its principal place of business in Michigan); (b) the amount in controversy exceeds
6
$5,000,000.00 exclusive of interest and costs; and (c) there are 100 or more members of the
7
proposed Plaintiff class.
8
12. This court has personal jurisdiction over Defendant because it conducts substantial
9
business in California, including the sale and distribution of 5-Hour Energy, and has sufficient
10
contacts with California or otherwise intentionally avails itself of the laws and markets of
11
California, so as to sustain this Court's jurisdiction over Defendant.
12
13. Venue is proper in this judicial district pursuant to 28 U.S.C. 1391, because a
13
substantial part of the events or omissions giving rise to Plaintiffs claims occurred in this judicial
14
district. In addition, Defendant does business and/or transacts business in this judicial district,
15
and therefore, is subject to personal jurisdiction in this judicial district and resides here for venue
16
purposes.
17 IV. SUBSTANTIVE ALLEGATIONS

18
14. 5-Hour Energy is a flavored energy shot brand made by the Defendant. It is sold
19
in 1.93-oz (57 mL) containers. Defendant introduced 5-Hour Energy in 2004 as part of a wave of
20
"energy shot" dietary supplements.
21
15. Defendant sells or distributes 5-Hour Energy to consumers throughout California
22
and the United States in three varieties: Original, Extra Strength and Decaffeinated. The product
23
is available in multiple flavors including pink lemonade, grape, pomegranate, berry, orange and
24
lemon-lime. 5-Hour Energy contains caffeine, citicoline, tyrosine, phenylalanine, taurine, malic
25
acid, glucuronolactone, and a blend of vitamins B6, B 12, niacin and folic acid. 5-Hour Energy
26
Decaf, which contains choline, is alleged to contain only half as much caffeine as a half cup of
27
decaffeinated coffee, and no niacin.
28

4- CLASS ACTION COMPLAINT

 0

16. In the spring of2004, health chain GNC began to stock 5-Hour Energy in its

2 stores. Soon after the product appeared in Walgreens, Rite Aid and regional chain stores.

3 Currently the product is available for purchase at gas stations; Costco; retail chains including

4 Wal-Mart, Walgreens and Target; supermarkets including Safeway, Albertsons and Ralphs; and

5 sports clubs and athletic stores. It can also be purchased online on, for example, the 5-Hour

6 Energy website and Drugstore.com. 2

7 17. In 2011 the company generated net sales of $595.8 million, and during the

8 following year it sold approximately 1.4 million 2-ounce bottles of its energy shots daily, and

9 enjoyed a gross profit margin that averaged 80 percent from 2007 through 2011. 3

10 18. According to a Forbes article published in July, 2012, Defendant has spent
4
11 millions in marketing the product:

12 The brand already invested about $395 million in marketing the 5-Hour Energy
product line over the last four years, the document said, much of it in TV
13
commercials that are famously mundane for example, depicting a narrator
14 strolling through an office of yawning workers in mid-afternoon or showing the
many daily activities where individuals clearly could benefit from a boost of
15 energy.

16
19. Defendant asserts that in addition to the light and portable container in which the
17
product comes, 5-Hour Energy is packed with vitamins and amino acids, contains no sugar, zero
18
herbal stimulants, and is only four ( 4) calories.
19
20. Defendant's main point of sale is that-unlike energy drinks and common caffeine
20
products-5-Hour Energy produces "no crash" later on. On its website the company represents:
21
Until afternoon naps become an accepted part of the work day you may need a
22
little help staying sharp and alert. Coffee and soda help a little, but how long do
23 they last before you're back for more? But with a 5-hour ENERGY shot you can
leave grogginess behind and sail through your day.
24
***
25 I -2--------
htm://ww-vv.shop5hourenergy.com/
26 3
http://w.vw. forbes.com/ sites/dale buss/20 12/07/22/5-hour -energy -p lacc;:s-400mm-in-notes-
27 to-fund-major-expansion/
4
http://www .forbes.com/sites/dalebuss/20 12/07/22/5-)lour-energy-places-400mm-in-notes-
28 to- fund-major-expansion/

-5- CLASS ACTION COMPLAINT

 A 5-hour ENERGY shot can help you feel awake and alert for hours* It wears
off gradually. That's because 5-hour ENERGY@ is sugar free. 5
2

3 21. In addition, Defendant's website states that 5-Hour Energy significantly

4 outperformed the placebo in a clinical trial on continuity of attention and self-related awareness,

5 essentially representing that consumption of a 5-Hour Energy will improve concentration and

6 alertness. 6 However, nothing in that comparison to a placebo supports Defendant's assertion that

7 5-Hour Energy provides anything more for concentration or awareness than any other product

8 which contains caffeine.

9 22. Although Defendant relies upon "scientific" studies and research which purport to

10 substantiate its product claims, independent researchers and industry experts have found

11 otherwise. In a January 2013 New York Times article titled, "Energy Drinks Promised Edge, but

12 Experts Say Proof is Scant," 7 the author cites widespread scientific and governmental criticism of

13 manufacturers' assertion that energy drinks provide any more benefit than the average dose of

14 caffeine consumed in a cup of coffee.

15 23. Despite the lack of any reported scientific support for a claim that 5-Hour Energy
16 provides more benefit to consumers than a caffeine tablet or cup of coffee, Defendant continues
17 to market its product as a superior source of energy worthy of a premium price.
18 24. Additionally, even though Defendant's website asserts that the product is "packed

19 with vitamins," a study undertaken at Vanderbilt Universitl specifically directed at 5-Hour

20 Energy sheds light on the true effects and dangers of some of these ingredients:
21 (a) Niacin (Vitamin B3): A niacin flush can cause liver toxicity, worsening of

22 stomach ulcers and altered blood sugar or insulin levels or uric acid concentrations;
23 (b) Vitamin B6: It has yet to be shown that B6 supplementation in healthy people
24 causes enhanced cognitive function;
25 http://W\,.,w.Shourenergv.com/product.asp
6
http://wv.w.Shourenergy.com/ingredients.asp
26 7
Barry Meier, Energy Drinks Promised Edge, but Experts Say Proof is Scant. N.Y. Times,
27 Jan. 1, 2013.
8
Megan Rogers, 5-Hour Energy: The Healthy Energy Drink?, Vanderbilt Univ. Psych.
28 Dept., available at http:/lhealthpsych.psy.vanderbilt.edu/2008/5-HourEnergy.htm

-6- CLASS ACTION COMPLAINT

 0

(c) Folic Acid (Vitamin B9): Giving folate to a person with a B 12 deficiency can

2 cause irreversible neurological damage;

3 (d) Vitamin B 12: There is no evidence of the efficacy of vitamin B 12 on cognitive

4 function.

5 25. The ultimate conclusion, based in part on another scientific study, was that B6,

6 B 12 and folic acid supplementation, alone or in combinations, do not provide adequate evidence

7 for a beneficial effect of supplementation on cognitive function testing in people with either

8 normal or impaired cognitive function. This conclusion only serves to highlight the discrepancy

9 between the advertising claims and the actual science and research.

10 26. In a 2003 article titled, "Debunking the Effects of Taurine in Red Bull Energy

11 Drink,"9 the study concluded that the claimed improvement in cognitive capabilities and muscular

12 performance were more plausibly related to caffeine alone rather than the purported unique

13 combination of the key components of caffeine, taurine and glucuronolactone. The report

14 concluded that "it seems that drinking a cold cup of coffee may induce the same 'energizing and

15 refreshing' effects of drinking Red Bull-and best of all, at one-third the cost." These same key

16 ingredients are also all found in 5-Hour Energy.

17 27. More recently, a study on the cognitive effects of key energy drink ingredients

18 caffeine, taurine and glucose similarly concluded that caffeine content, but not taurine or glucose

19 in energy drinks, drives cognitive improvements in executive control, working memory and

20 psychomotor perforrnance. 10

21 28. Another study reached a similar conclusion after its evaluation of multiple

22 ingredients commonly found in energy drinks such as 5-Hour Energy, including taurine,

23 glucuronolactone, glucose, B vitamins, guarana, yerbe mate, camitine, St. John's wort and

24

25 9
Woojae Kim, Debunking the Effects a/Taurine in Red Bull Energy Drink, Nutrition
26 Bytes, Department ofBiological Chemistry, UCLA, David Geffen School ofMedicine, UC Los
Angeles, 2003.
10
27 Grace Giles and Caroline Mahoney, et al, Differential Cognitive Effects of Energy Drink
Ingredients: Caffeine. Taurine, and Glucose, Pharmacology, Biochemistry, and Behavior I 02
28 (2012) 569-577.

- 7- CLASS ACTION COMPLAINT

 ginseng. 11 The study concluded that there is little, if any, solid evidence to support an increase in

2 either physical or mental energy due to consumption of energy drinks except for the increases

3 attributable to caffeine.

4 29. Finally, the European Food and Safety Commission undertook a study of taurine

5 and found that no cause and effect relationship has been established between taurine and its

6 contribution to cognitive function, cardiac function and a delay in the onset of physical fatigue. 12

7 30. 5- Hour Energy claims to provide more than 8,000 percent of the recommended

8 daily intake forB 12 and 2,000 percent of the recommended intake of B6. However, according to

9 Dr. Brent Bauer, director of the Complementary and Integrative Medicine Program at the Mayo

I0 Clinic, high doses of B vitamins are not going to boost energy unless someone is B-deficient. 13

11

12

13

14

15

16

17

18

19

20

21

22

23
11
Tom M. McLellan and Harris R. Lieberman, Do Energy Drinks Conrain Active
24 Components Other Than Caffeine?, 70 Nutrition Rev. 12, 730-744 (Dec. 20 l2).
12
25 European Food & Safety Commission Panel on Dietetic Products, Nutrition and Allergies
(NDA), Scientific Opinion on the Substantiation of Health Claims Related to: ... Vitamins,
26 Minerals, Lysine and/or Argeninine and/or Taurine ... Pursuant to Article 13 (1) of Regulation EC
No 1924/2006, 9 EFSA J. 4:2083, *1- *34 (Apr. 8, 2011),
27 http://www.efsa.europa.eu/en/efsajournal/doc/2083.pdf.
13
Elizabeth Lee, WebMD, Are Energy Shots Safe? http:/1\vv.w.webmd.corn/food-
28 recipes/features/energy-shots-review

8- CLASS ACTION COMPLAINT

 I'\

The Product and Defendant's Advertising

2 31. Defendant's exhaustive advertising campaign builds on this deception. In truth,

3 Defendant has no independent, reliable or competent support for its claims.

4 32. Throughout the Class Period, Defendant has marketed 5-Hour Energy as

5 producing "hours of energy now-no crash later" and that the consumer "can feel it in minutes

6 and it lasts for hours."

7 33. In the "Frequently Asked Questions" section of 5-Hour Energy's website,

8 Defendant represents that the product is "a liquid energy shot that can help you feel sharp and

9 alert for hours.'' 14

10 34. In 2007, National Advertising Division, an advertising watchdog group affiliated

11 with the Council of Better Business Bureaus conducted a review of popular energy drinks and

12 shots, which included 5-Hour Energy. According to results reported by the New York Times, 24

13 percent of the people who used 5-Hour Energy had a "moderately severe" crash afterward. 15

14 35. The review concluded that while the company's 2007 study had shown there was

15 evidence to support a "qualified claim that 5-Hour Energy results in less of a crash than Red Bull

16 and Monster Energy," the study showed that 5-Hour-Energy users experienced caffeine-related

17 crashes, and therefore the product was inadequate to support a "no crash" claim. Following the

18 study the group recommended that Defendant discontinue the "no crash claim" based on

19 Defendant's own evidence.

20 36. Instead, Defendant added an asterisk-like symbol and footnote to its no-crash

21 claim explaining that the user would have "no sugar crash" as the product did not contain sugar.

22 37. Andrea C. Levine, director of the National Advertising Division, recently re-

23 opened the group's review of the "no crash later" claim after Defendant incorrect! y asserted in a

24 public statement that the group had found all of Living Essentials' claims to be substantiated.

25 Ms. Levine stated that apparently Living Essentials decided to use only select portions of the

26 14
hllp://www.5hourenergv.com/QandA.asp
15
27 Barry Meier, Energy Shot's "No Crash "Claim is Disputed by Watchdog, N.Y. Times, Jan.
2, 2013, http://www.nytimes.com/20 13/01 /03tbusin~~s/5-hour-energys-no-crash-later-claim-is
28 disputed.html? r=O.

-9- CLASS ACTION COMPLAfNT

 0

report and failed to follow the group's recommendation that Living Essentials drop the language.

2 Ms. Levine stated that Living Essentials added self-serving language of its choosing in the

3 statement as well. In the event that Living Essentials fails lo respond or inadequately responds,

4 the National Advertising Division stated it will likely refer the matter to the Federal Trade

5 Commission.

6 38. Defendant's nationwide advertising campaign for 5-Hour Energy has been

7 extensive and comprehensive throughout the Class Period. Defendant has spent millions of

8 dollars conveying to consumers across the United States its persistently deceptive message that 5-

9 Hour Energy provides superior energy or alertness benefits over a caffeine tablet or standard cup

I0 of coffee.

11 39. Defendant has orchestrated its deceptive 5-Hour Energy advertising campaign by

12 using a variety of media, including television, newspapers, radio, media tours, the Internet, email

13 blasts, video news releases, point of sale displays and prominently on the product's packaging.

14 As a result of its pervasive and uniform advertising campaign, Defendant has elevated 5-Hour

15 Energy to become one of the top sellers in the energy drink category.

16 40. As a result of Defendant's deceptive and misleading messages and omissions

17 about 5-Hour Energy, conveyed directly through its marketing and advertising campaigns,

18 Defendant has been able to charge a significant price premium for 5-Hour Energy over traditional

19 caffeine products, which it has convinced consumers to pay for a purportedly superior product, as

20 its advertising misleadingly conveys.

21 41. Defendant's false and misleading representation claiming 5-Hour Energy provides

22 superior energy or alertness benefits to consumers over a caffeine tablet or standard cup of coffee,

23 and its omissions regarding the product's potential health risks have been--and continue to

24 material to consumers, including Plaintiff and other members ofthe putative class, and Defendant

25 knows that its misleading representations are material in nature.

26 The False, Misleading and Deceptive Claims

27 42. Defendant's claims about 5-Hour Energy's effectiveness and superiority with

28 regard to energy or alertness benefits to consumers over a caffeine tablet or standard cup of coffee

- I0 - CLASS ACTION CO:vlPLAINT

 0

are false, deceptive, unfair and unconscionable because there is not sufficient, competent and/or

2 reliable scientific evidence and/or substantiation for 5-llour Energy's effectiveness and

3 superiority claims when the product is used by the consuming public in real world settings.

4 43. There is no competent, credible and reliable scientific evidence that is sufficient in

5 quality and quantity, based on standards generalJy acceptable in the relevant scientific fields,

6 when considered in light of the entire body of relevant and reliable scientific evidence, to

7 substantiate its claims regarding the superior effectiveness of 5-Hour Energy.

8 44. Defendant's purported scientific evidence is neither competent nor reliable.

9 Defendant does not possess any tests, analyses, research, or studies that have been conducted and

10 evaluated in an objective manner. To the contrary, Defendant's claims appear to be based only

11 on a single, in-house study, in which Defendant's product is compared against a placebo which

12 Defendant has failed to describe.

13 The Health-Related Issues

14 45. In December 2012, the nonprofit Center for Science in the Public Interest ("CPSI)

15 issued a warning to consumers due to Defendant's attempt in a web-based video advertisement

16 that implied CPSI and its director, Michael Jacobson, had endorsed the safety of 5-Hour Energy. 16

17 Indeed, the CPSI stated that 5-Hour Energy could be linked to insomnia, anxiety, reduced

18 fertility, as well as more serious, life threatening events, as reported by the New York Times, due

19 to the interactions and blend of chemicals in the product.

20 46. As discussed herein, Defendant's national advertising campaign for 5-Hour

21 Energy targets children, adolescents and young adults. A study titled, "Health Effects of Energy
17
22 Drinks on Children, Adolescents and Young Adults" made the following conclusions with

23 respect to the supplements:

24 (a) Energy drinks have no therapeutic benefit, and both known and unknown

25 pharmacology of various ingredients, combined with reports of toxicity, suggest that these drinks

26
16
27 http://wvvw.cspinet.org/new/20 121206l.html
!7
Sara Seifert and Judith Schaechter, et a!, Health Effects of Energy Drinks on Children,
28 Adolescents and Young Adults, 127 Pediatrics 3, 511-528 at 522 (Mar. 2011).

- 1I - CLt\SS ACTION COMPLAfNT

 may put some children at risk for serious adverse health effects;

2 (b) Typically, energy drinks contain high levels of cam~ine, taurine and guarine,

3 which have stimulant properties and cardiac and hematologic activity, but manufacturers claim

4 that energy drinks are nutritional supplements which shields them from the caffeine limits

5 imposed on sodas and the safety testing and labeling required of pharmaceuticals;

6 (c) Other ingredients vary, are understudied, and are not regulated;

7 (d) Youth-aimed marketing and risk-taking adolescent development tendencies

8 combine to increase overdose potential;

9 (e) High consumption is suggested by self-report surveys but is under-documented in

10 children (deleterious associations with energy drink consumption have been reported globally in

11 case reports and popular media); and

12 (f) Interactions between compounds, additive and dose-dependent effects, long-term

13 consequences, and dangers associated with risky behavior in children remain to be determined.

14 47. As a result of Defendant's deceptive and misleading messages and omissions

15 about 5-Hour Energy, conveyed directly through its marketing and advertising campaigns,

16 Defendant has been able to charge a significant price premium for 5-Hour Energy over traditional

17 caffeine products, which it has convinced consumers to pay for a purportedly superior product,

18 which may in fact pose serious undisclosed health risks.

19 Defendant's Concealment

20 48. Defendant was and remains under a duty to Plaintiff and the putative class to

21 disclose the facts, as alleged herein. The duty to disclose the true facts arises because, as the

22 manufacturer, Defendant is in a superior position to the know the true character and quality of its

23 products and the true facts are not something that Plaintiff and the putative class members could,

24 in the exercise of reasonable diligence, have discovered independently prior to purchasing 5-Hour

25 Energy.

26 49. The facts concealed and/or not disclosed to Plaintiff and the Class, specifically that

27 (a) consumers do not receive the benefit of five hours of energy with no crash later or energy or

28 alertness benefits to consumers over a caffeine tablet or standard cup of coffee, and (b) and the

- 12- CLASS ACTION COMPLAINT

 product's potential health risks, arc material facts in that a reasonable person would have

2 considered them important in deciding whether or not to purchase (or pay the same price for) 5-

3 Hour Energy.

4 50. Defendant intentionally concealed and/or failed to disclose the shortcomings of 5-

5 Hour Energy for the purpose of inducing Plaintiff and putative class members to act thereon.

6 51. Plaintiff and the putative class members justifiably acted upon, or relied upon to

7 their detriment, the concealed and/or non-disclosed material facts as evidenced by their purchase

8 of 5-Hour Energy. Had they known of the true character and quality of 5-Hour Energy, Plaintiff

9 and the putative class members would not have purchased (or would have paid less for) the

10 product.

11 52. As a direct and proximate cause of Defendant's misconduct, Plaintiff and the

12 putative class members have suffered actual damages. Defendant's conduct has been and is

13 malicious, wanton and/or reckless and/or shows a reckless indifference to the interests and rights

14 of others.
V. CLASS ALLEGATIONS
15

16 53. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Plaintiff brings this

17 class action on behalf of himself and all members of the following class (the "Class"):

18 All persons throughout the United States who purchased 5-Hour

Energy, except for resale, within the applicable statutory limitations
19 period, including the period following the filing date of this action.
20
Additionally, Plaintiff brings this action pursuant to Rule 23 of the Federal Rules of Civil
21
Procedure on behalf of himself and a subclass of similarly situated individuals, defined as:
22
All persons resident in California who purchased 5-Hour Energy,
23 except for resale, within the applicable statutory limitations period,
24 including following the filing date of this action. (the "California Subclass").

25
Excluded from the Class and the California Subclass are: (1) any Judge or Magistrate presiding
26
over this action and members of their families; (2) Defendant, Defendant's subsidiaries, parents,
27
successors, predecessors and any entity in which the Defendant or its parents have a controlling
28
interest and their current or former employees, officers and directors; (3) counsel for Plaintiff

- 13 CLASS ACTION C0\1PLAfNT

 0

and Defendant; and ( 4) legal representatives, successors or assigns of any such excluded persons.

2 54. Plaintiff believes that the Class and California Subclass include thousands of

3 consumers across the United States, though the exact number and the identities of the Class

4 members are currently unknown.

5 55. The members of the Class and California Subclass are so numerous that joinder of

6 all Class members is impracticable.

7 56. Common questions oflaw and fact exist as to all members of the Class and

8 California Subclass and predominate over any questions affecting solely individual members of

9 the Class and California Subclass. Nearly all factual, legal and statutory relief issues raised in

10 this Complaint are common to each of the members of the Class and California Subclass and will

11 apply uniformly to every member of the Class and California Subclass. Among the questions of

12 law and fact common to Class and California Subclass members are:

13 (a) Whether Defendant engaged in the wrongful conduct alleged herein;

14 (b) Whether, in its normal and customary use by consumers, 5-Hour Energy works as

15 advertised, marketed and conveyed to consumers;

16 (c) Whether, in the course of business, Defendant represented that 5-Hour Energy has

17 characteristics, uses, benefits or qualities that it does not have when used in a customary manner

18 by consumers;

19 (d) Whether the claims Defendant made and is making regarding 5-Hour Energy are

20 unfair or deceptive, specit1cally, whether 5-Hour Energy provides 5 hours of energy with no crash

21 later and whether it provides additional energy or alertness benefits to consumers over a caffeine

22 tablet or a standard cup of coffee;

23 (e) Whether Defendant has been unjustly enriched through its acts and/or omissions

24 alleged herein;

25 (f) Whether the Plaintiff and Class members that purchased 5-Hour Energy suffered

26 monetary damages and, if so, what is the measure of those damages;

27 (g) Whether Plaintiff and Class Members are entitled to an injunction, damages,

28 restitution, equitable relief and other relief deemed appropriate and the amount and nature of such

- 14 - CLASS ACTION COMPLAINT

 relief.

2 57. PlaintitTs claims are typical of the claims of other members of the Class and

3 California Subclass because Plaintiff and c\ery member of the Class and California Subclass have

4 suffered similar injuries as a result of the same practices alleged herein. Plaintiff has no interests

5 adverse to the interests of the other members of the Class and California Subclass.

6 58. Plaintiff will fairly and adequately represent and protect the interests of the Class

7 and California Subclass. Plaintiff has retained able counsel with extensive experience in class

8 action litigation. The interests of Plaintiff are coincident with, and not antagonistic to, the

9 interests of the other Class and Califomia Subclass members.

10 59. The questions of law and fact common to the members of the Class predominate

11 over any questions affecting only individual members, including legal and factual issues relating

12 to liability and damages.

13 60. Plaintiff and other members of the Class have suffered damages as a result of

14 Defendant's unlawful and wrongful conduct. Absent a class action, Defendant will retain

15 substantial funds received as a result of its wrongdoing, and such unlawful and improper conduct

16 shall, in large measure, go unremedied. Absent a class action, the members of the Class will not

17 be able to effectively litigate these claims and will suffer further losses, as Defendant will be

18 allowed to continue such conduct with impunity and retain the proceeds of its ill-gotten gains.

19 61. A class action is superior to other available methods for the fair and efficient

20 adjudication of this controversy because joinder of aJI Class members is impracticable.

21 Moreover, because the damages suffered by individual members of the Class are relatively small,

22 the expense and burden of individual litigation make it impossible for members of the Class to

23 individually redress the wrongs done to them. The Class is readily definable, and prosecution of

24 this action as a class action will eliminate the possibility of repetitious litigation. There will be no

25 difficulty in the management of this action as a class action.

26
27
28

- 15 - CLASS ACTION COMPLAfNT

 COUNT I

2 CONSUMER LEGAL REMEDIES ACT

(Violations of Cal. Civil Code 1750 et seq.)
3

4 62. Plaintiff hereby incorporates each preceding and succeeding paragraph as though

5 fully set forth herein.

6 63. The Consumers Legal Remedies Act, Civil Code Section 1750 et seq. (hereinafter

7 "CLRA") was designed and enacted to protect consumers from unfair and deceptive business

8 practices. To this end, the CLRA sets forth a list of unfair and deceptive acts and practices in

9 Civil Code Section 1770.

10 64. The CLRA applies to Defendant's actions and conduct described herein because it

11 extends to the sale of goods or services for personal, family or household use.

12 65. At all relevant times, Plaintiff and members of the Class were "consumers" as that

13 term is defined in Civil Code Section 1761(d).

14 66. The transactions from which this action arises include transactions involving the

15 sale or lease of goods or services for personal, family or household purposes within the meaning

16 of Civil Code Section 1761.

17 67. Defendant's practices in connection with the marketing and sale of 5-Hour Energy

18 violate the CLRA in at least the following respects:

19 a. In violation of Section 1770(a)(5), Defendant knowingly misrepresented the

20 character, uses and benefits of 5-Hour Energy;

21 b. In violation of Section 1770(a)(7) representing that 5-Hour Energy is of a

particular standard, quality or grade, which it is not; and

23 c. In violation of Section l770(a)(9), Defendant has knowingly advertised 5-Hour

24 Energy with the intent not to sell the product as advertised.

25 68. Defendant represents that 5-Hour Energy can help you feel awake and alert for

26 hours or similar words intended to convey to consumers that the consumer was obtaining a

27 product that provides more benefit to consumers than a caffeine tablet or cup of coffee including

28 but limited to the enhancement of physical or cognitive performance. These representations are

- 16 - CLASS ACTION C011.1PLA!NT

 0 0

false and misleading in that there is a lack of any reported scientific support for a claim that 5-

2 Hour Energy provides more benetit to consumers than a caffeine tablet or cup of cotfee. In

3 addition, defendant fails to disclose to consumers that the product may in fact pose serious

4 undisclosed health risks.

5 69. Defendant's acts and practices, undertaken in transactions intended to result and

6 which did result in the purchase of 5-Hour Energy by consumers, violate Civil Code Section 1770

7 and caused hann to Plaintiff and Class and California Subclass members who would not have

8 purchased and/or paid as much for 5-Hour Energy had they known the truth. The acts and

9 practices engaged in by Defendant that violate the CLRA include inducing Plaintiff and the Class

10 and California Subclass to purchase (or pay more for) 5-hour Energy than they would otherwise

11 have paid had they known the truth.

12 70. Plaintiff was injured by purchasing (or overpayjng) for 5-Hour Energy.

13 71. In accordance with Civil Code 1780 (a), Plaintiff and members of the Class and

14 California Subclass seek injunctive and equitable relief for violations of the CLRA. In addition,

15 after mailing appropriate notice and demand in accordance with Civil Code 1782(a) & (d),

16 Plaintiff will subsequently amend this Class Action Complaint to also include a request for

17 damages. Plaintiff and members of the Class and California Subclass request that this Court enter

18 such orders or judgments as may be necessary to restore to any person in interest any money

19 which may have been acquired by means of such unfair business practices, and for such other

20 relief, including attorneys' fees and costs, as provided in Civil Code 1780 and the Prayer for

21 Relief.
COUNT II
22
UNFAIR COMPETITION LAW
23
(Violations of Cal. Bus. & Prof. Code 17200 et. seq.)
24

25 72. Plaintiff incorporates and realleges, as though fully set forth herein, each of the

26 paragraphs set forth above.

27
28

17 - CLASS ACTION COMPLAINT

 0

1 73. Defendant has engaged in unfair competition within the meaning of California
2 Business & Professions Code Section 17200 et seq, because Defendant's conduct is Wllawful,
3 misleading and unfair as herein alleged.
4 74. Defendant's business practices are tn1Iawfu1 because they violate the CLRA.
.S 75. The practices are misleading becauSe they were likely to. deceive consumers into
6 believing that they are obtaining a product that provides more benefit to consmners than a
1 caffeine tablet or cup of coffe~, inclqding but not limited to the. ~nh?(nq~~nt of physical or
8 cognitive pe:rfonnant:e. ln.additiori, on its website. pase, s~hotir ENERGYJqgredients &
9 Safety/' Defendant fails fu iilfor'm oonsW:r.iers that the produ~t.mayin~(a(}tpose serious
10 !J.D.disclosed healtb. risks;
11 16. Defenaa.m~s business -pte.ctiees,. and eaeh:ofthern,..aretmfarrbeca'use: they. offend

12 established. public policy and!or are irilrilorat. unethlcalr oppressiVe,, uns~~pulous and/or

13 substantially injurious to c;pn~um~s~ whic.h ham ~e.al~y. 6'\li:W~ighB: ap.yb~n~fit~soci&ted with

i4 the business practice, in that consumers a~ led to beJie:Ve'that the product they were payingfor
15 had qualities that it .did not.
16 77. Plaintiff has. standing to pursue this ~laim: becaJ.!S~ .he ~ been injured by virtue of
17 suffering a loss of money and/or property as a re8ultofthewrongful conduct alleged herein.
18 Plaintiff would not have purchased 5-Hour Energy or paid as. much fodt had he known the truth.
19 78. Plaintiff and the Class are entitled to relief, 'including full restitution and/or
20 restitutionary disgorgement, to the greatest extent p~nnltted bylawi which may have been

21 obtained by Defendant as a r!::~'ill~ ofSuch. busines.s acts ol'practices, and enjoining Defendant to
22 cease and desist from engaging in the practices described herein.
23 COUNTDl
24 trNJiJST ENRICHMENT
25 79. Plaintiff incorporates and realleges; as though fully set forth herein, each of the
26 paragraphs set forth a,bove,
27 80. Plaintiff and Class members conferred .a monetary benefit on Defendant by
28 purchasing 5-Hour Energy. Plaintiffand.Class members. would have expected remuneration from

GLASS ACT10N COMPLArNT

 Defendant at the time this benefit was conferred had they known that the product did not perform

2 as promised and Defendant's claim that its product is a superior source of energy worthy of a

3 premium price is unsupported by competent, credible and reliable scientific evidence to

4 substantiate such claims.

5 81. As a result of Defendant's deceptive and misleading packaging, advertising,

6 marketing and sales of 5-Hour Energy, Defendant was enriched, at the expense of the Plaintiff

7 and each member of the putative Class, through the payment of the purchase price for 5-Hour

8 Energy products.

9 82. Under the circumstances, it would be against equity and good conscious to permit

I0 Defendant to retain the ill-gotten benefits that it received from Plaintiff and members of the Class

11 in light of the fact that the 5-Hour Energy products purchased by PlaintifT and members of the

12 Class were not as Defendant purports them to be, as alleged above.

13 83. It would be unjust and inequitable for Defendant to retain the benefit without

14 restitution or disgorgement of monies paid to Defendant for 5-Hour Energy products, or such

15 other appropriate equitable remedy as appropriate, to the Plaintiff and other members of the

16 Class.

17

18

19

20
21

22

23

24
25 Ill

26 1;,'1

27 ,,
I 'I

28

- 19- CLASS ACTIO!': CO:v!PLAINT

 RELIEF REQUESTED

2
WHEREFORE, Plaintiff, on behalf of himself and on behalf of the Class, prays for

judgment, as follows:
4
A. For an Order certifying this case as a class action against Defendant and
5
appointing Plaintiff as Representative of the Class;
6
B. For an order of compensatory damages, statutory damages, restitution, and all
7
other forms of monetary and non-monetary relief recoverable under California law;
8
C. For costs of suit incurred herein;
9
D. For prejudgment interest to the extent allowed by law;
10
For penalties as allowed by law;
11
F. For permanent injunctive relief to enjoin further violations of the law; and
12
G. For such other and further relief as this Court may deem just and proper.
13
JURY TRIAL DEMANDED
14

15 Plaintiff hereby demands a trial by jury on all iss s triable of righ

16 By:
Laure ce D. King (SBN
a 23)
17 Dated: Feb. 19,2013 Linda M. Pong (SBN 12 _ 2)
KAPLAN FOX & KJLSHEJMER LLP
18 350 Sansome Street, Suite 400
San Francisco, CA 94104
19 Telephone: (415) 772-4700
Facsimile: (415) 772-4 707
20 lking@kaplanfox.com
lfong@kaplanfox.com
21
Justin B. Farar (SBN 211556)
22 KAPLAN FOX & KILSHEIMER LLP
11111 Santa :'vfonica Blvd, Suite 620
23 Los Angeles, CA 90025
Telephone: (31 0) 575-8670
24 Facsimile: (31 0) 575-8697
j farar@kaplanfox.com
25
Attorneys for Plaintiff
26

27

28

- 20- CLASS ACTION COMPLAINT