Washington v. Living Essentials, LLC, NO. 14-2-19684-9 (King
County Super. Ct. Oct. 10, 2016)
The state sued Living Essentials seeking injunctive and
declaratory relief under Washington’s Consumer Protection Act. While the court found that some of the
challenged 5-Hour Energy claims had not been shown to be unsubstantiated
(specifically, claims that the vitamins in the product offered benefits and
that the product wouldn’t cause a sugar crash), the court found violations of
the CPA relating to claims that (1) 5-Hour Energy lasts longer than a cup of
coffee because of the synergistic or interactive effects of caffeine, B vitamins
and nutrients in the product; (2) Decaf 5-Hour Energy would provide energy,
alertness and focus that lasts for hours; and (3) doctors recommended 5-Hour
Energy.
Vitamin claims included the tag lines “B Vitamins for
Energy; Amino Acids Focus & Better Mood.” The ads expressly claimed that the
vitamins and nutrients in 5-Hour Energy played a role in providing energy,
alertness and focus and worked synergistically with caffeine to make the
biochemical or physiological effects last longer than caffeine alone. The court found that Living
Essentials didn’t downplay or minimize the effects of caffeine. Rather, Living
Essentials claimed that the duration of the recognized physiological benefits
of caffeine would be extended because of the non-caffeine ingredients in 5-Hour
Energy.
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| Vitamins/amino acids taglines |
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| vitamin claims |
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| more vitamin claims |
In addition, Living Essentials introduced a decaf version, marketing it with a press release claiming that the decaf
product provides “a sustained energy boost” for people sensitive to caffeine. The
Living Essentials website claimed that Decaf 5-Hour Energy “gently” works to
provide alertness, which it attributes to the presence of choline. These were
objective claims about physiological benefits.
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| Decaf claims |
And Living Essentials also claimed to avoid the “crash”
effect of combining sugar and caffeine, leading consumers to experience a
glucose drop when they consumed competing, sugary caffeinated beverages. After NAD investigation, Living Essentials
modified its advertisements to qualify the “no crash” language by including an
asterisk directing consumers to a small print disclaimer saying “No crash means
no sugar crash.”
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| Does your energy drink make you crash? |
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| sugar and caffeine are to blame! |
Finally, Living Essentials created an “Ask Your Doctor” ad
campaign. Living Essentials retained
Thomas Maronick, Ph.D., a professor of marketing at Towson University in
Maryland and the former Director of Impact Evaluation in the Bureau of Consumer
Protection at the FTC to create an online survey of 503 physicians. Instead of
asking doctors their general opinions about energy drinks/supplements, the
survey asked whether they’d recommend a low calorie/low sodium energy drink for
patients who already consumed such products. “Not surprisingly, the majority of
doctors said ‘Yes’”—73.6%, to be exact.
The survey also showed respondents a 5-Hour Energy label and a brief
description of the product, and asked them if they would recommend 5-Hour Energy
to their healthy patients who use energy drinks; 47.7% of the doctors said yes,
while about 25% said no.
Living Essentials also conducted a follow-up paper survey done
in connection with sales staff’s in-person promotional visits to doctors’
offices, in which they’d leave samples of the product and brochures describing
5-Hour Energy’s ingredients. Dr. Maronick wasn’t involved in the paper survey
process and had concerns about whether such a method would suffer from biased
responses. Living Essentials received 2,659
paper surveys in which about 90% of the respondents indicated that they would
recommend a low-calorie energy supplement to patients who use energy
supplements, and 74% would specifically recommend 5-Hour Energy. Living
Essentials created ads with scripts such as:
We asked over 3,000 doctors to
review 5-Hour Energy. And what they said was amazing. Over 73 percent who
reviewed 5-Hour Energy said they would recommend a low calorie energy
supplement to their healthy patients who use energy supplements. Seventy-three
percent. 5-Hour Energy has four calories and it’s used over nine million times
a week. Is 5-Hour Energy right for you? Ask your doctor. We already asked
3,000.
Placed next to the ad spokeswoman was a large stack of
papers, which she flipped through or gestured to while speaking. ABC and NBC refused to run the ads without
some changes, and consumers also complained.
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| Ask your doctor ad |
The court considered evidence about the effects of the
various ingredients, including evidence developed after the ads aired, which
could “shed light on pre-claim studies” used to substantiate claims. The state
argued that caffeine was the sole active ingredient in 5-Hour Energy, in the
sense of having a physiological effect on the human body. The court disagreed,
because B vitamins, taurine, tyrosine and choline are bioactive. However, that didn’t mean that these bioactive
ingredients, in the amounts found in 5-Hour Energy, would provide the
advertised benefits of “energy, alertness, and focus.” There was disagreement
among the experts about whether healthy, well-nourished adults could benefit
from the vitamins and amino acids or whether they’d simply be excreted. The court found that the state hadn’t shown
there was no benefit whatsoever from these ingredients. However, the state did show that claims that
the other ingredients had a synergistic effect with caffeine for the promised
benefits of “energy, alertness and focus” were unsubstantiated; the evidence
Living Essentials offered was incapable of distinguishing the effects of
caffeine from the overall effects of the product. Likewise, the study of the decaf product was
insufficiently reliable to substantiate Living Essentials’ claims.
Living Essentials presented evidence that it complied with
industry standards in substantiating its ad claims, first, by having its
advertising director conduct internet research on the formula’s ingredients,
then by instituting a process for legal and regulatory review by an outside law
firm, followed by retaining others to perform literature reviews, and finally
by commissioning clinical studies. The
advertising director’s internet research was not adequate substantiation
because he “had no ability or training to assess the scientific reliability of
anything he read online.” Nor was
regulatory or legal review reasonable substantiation. “There is simply no evidence in the record
that anyone with any science training ever assessed the ad claims and the
science backing up those claims against the FTC substantiation guidelines.” Nor was there any evidence that anyone in the
company ever looked at the literature reviews.
Living Essentials did act reasonably in undertaking clinical studies,
but the key question was whether the studies were adequate to support the ads’
claims.
Living Essentials also submitted the expert testimony of J.
Howard Beales, III, the former Director of the Consumer Protection Division of
the Federal Trade Commission. He testified
that the claims in Living Essentials’ ads were all subjective, rather
than objective, and thus could not be deceptive. The court disagreed:
The company intentionally promoted
the product’s ingredients as changing the way the body functioned. It promoted
the product as a healthy way to achieve these physiological results. The
company spent a significant amount of money on clinical studies to establish
that 5-Hour Energy was having a biochemical or physiological effect on the
bodies of its consumers. As Dr. Beale admitted, if an advertiser claims that a
product will change or affect the physiological functioning of the body, that
is an objective claim for which scientific substantiation [can] exist.
The Washington CPA follows FTC interpretations, including
the substantiation requirement. “Where
implied claims are conspicuous and reasonably clear from the face of the
advertisement, extrinsic evidence is not required to prove the existence of
implied claims.” Also, the FTC can show
misleadingness either through showing (1) actual falsity of express or implied
claims; or (2) that the advertiser lacked a reasonable basis for asserting that
the message was true. And here we get a little weird, because the court cited a
case relying on the execrable In re GNC (not
an FTC case) for the proposition that the FTC could show literal falsity “if
all reasonable scientists would agree that the claims do not provide the
benefits as asserted. The FTC may do this by showing the advertiser’s expert
opinions are unreasonable or that no expert believes in the assertion.”
But the state was relying on the lack of reasonable basis theory, so the In re GNC dicta gets just a little worse without affecting this case, because the court declined to apply the “all reasonable scientists” standard to Living Essentials’ substantiation evidence. “The advertiser has the burden of establishing what substantiation it relied on for a claim, and the State has burden of establishing that that substantiation is inadequate.”
Under FTC guidance to advertisers of dietary supplements,
claims about the efficacy of dietary supplements must be supported by
“competent and reliable scientific evidence,” defined as “tests, analyses,
research, studies or other evidence, based on the expertise of professionals in
the relevant area, that have been conducted and evaluated in an objective
manner by persons qualified to do so, using procedures generally accepted in
the profession to yield accurate and reliable results.” The FTC weighs multiple
factors to establish the appropriate substantiation, including type of product,
type of claim, benefits of truthful claims, costs of false claims, expert opinion
about what substantiation is reasonable, and the cost or feasibility of
developing substantiation. The court noted that “[t]his does not mean, however,
that an advertiser can make any claim it wishes without substantiation, simply
because the cost of research is too high.”
The FTC also tells advertisers not to cherry-pick studies
and to ensure that studies are relevant to the claims made in ads, including
consideration of the dosage and formulation of the advertised product compared
to what was studied.
Under this standard, Living Essentials’ claims that that B
vitamins promote energy and amino acids promote alertness and focus were not
deceptive. However, it was deceptive to claim that these ingredients worked
synergistically with caffeine to enhance caffeine-derived energy, alertness,
and focus. None of the studies Living
Essentials submitted reliably tested that question. Likewise, the decaf ads
were deceptive in claiming that the decaf product would generate energy and
alertness that “lasts for hours.” Living
Essentials’ substantiation relied on studies involving daily dietary
supplementation of taurine in 3000 mg or more; Decaf 5-Hour Energy contains
only 483 mg of taurine. And studies of
the actual product didn’t show significant benefits at the 3-hour mark.
The “no crash” claims were ok, though, because Living
Essentials switched to specifying “sugar crash,” and there was no empirical
evidence of caffeine-related crashes in habituated users.
The “ask your doctor” ads were deceptive, because they were
misleading. An expert in the science of
consumer behavior and persuasion tactics testified credibly that the clear
takeaway from these ads was that “doctors would recommend” 5-Hour Energy. But
the surveys didn’t ask doctors if they thought 5-Hour Energy was healthy or
safe. Instead, they told doctors that 5-Hour Energy was a low fat, low calorie,
low sodium, sugar-free drink and asked if the doctors would recommend 5-Hour Energy
for healthy patients who already use energy supplements. These questions were “biased, leading, and designed to elicit a
limited response. Due to the phrasing of the questions that preceded this
question, a ‘no’ response to this question suggested that the responding doctor
would instead recommend a high fat, high calorie, or high sodium energy
supplement, rather than allowing doctors the option of saying they do not
recommend energy supplements at all.”
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| question to doctors |
Another problem was that the 73% claim in the ad was based
on the online survey of 503 doctors, but the reference to “3,000 doctors” was a
combination of both surveys. The survey methods used for the online survey and
the paper survey “differed so dramatically that the surveys could not
reasonably be combined and represented as the same survey.” The doctors who
participated in the paper survey weren’t randomly selected.
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