Monster Energy's suit against San Francisco City Attorney is thrown out of federal court

RIVERSIDE, Calif., Dec. 16, 2013 /PRNewswire/ -- A U.S. District Court late this morning dismissed a federal lawsuit by Monster Beverage Corporation (NASDAQ: MNST) against San Francisco City Attorney Dennis Herrera that sought to block his investigation and statewide consumer protection litigation against the company for marketing highly-caffeinated energy drinks to children as young as six years old.  Today's dismissal of Monster v. Herrera by U.S. District Court Judge Virginia A. Phillips clears the way for a state court action Herrera filed in May to proceed on allegations that the nation's largest energy drink manufacturer is violating California law by targeting children and teens with products that pediatric studies show "may lead to significant morbidity in adolescents" from elevated blood pressure, brain seizures, and severe cardiac events. 

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"Monster Energy's federal suit was a meritless ploy to stop our state consumer protection case, and I'm grateful to the court for issuing an unequivocal dismissal," said Herrera.  "Despite the known dangers highly-caffeinated products pose to young people's health and safety, Monster deliberately targets children with its marketing.  The U.S. Senate Commerce Committee has expressed grave concerns about aggressive marketing of these products to young people, and the NCAA even prohibits member colleges from giving energy drinks to athletes because of the serious safety risks.  It's my hope that Monster Energy will reform its marketing practices before regulators or courts force them to."

The FDA has received numerous reports of adverse events related to consumption of Monster Energy drinks, including five alleged deaths and multiple reported instances of illness, injury and hospitalizations.  The alleged wrongful death of a 14-year-old Maryland girl from cardiac arrhythmia due to caffeine toxicity after drinking two 24-ounce servings of Monster Energy is the subject of high-profile private litigation currently pending against the company.  Emergency room visits related to energy drink consumption have spiked dramatically in recent years, according to the U.S. Department of Health and Human Services' Drug Abuse Warning Network, which reported a nearly 14-fold increase in medical events for which emergency invention was sought—from 1,494 instances in 2005, to 20,783 in 2011.

Herrera's Consumer Protection Unit launched an investigation into the Corona, Calif.-based beverage manufacturer's business and marketing practices in 2012 in light of mounting scientific evidence about serious health risks to young people.  Lawyers from the San Francisco City Attorney's Office were engaged in negotiations with Monster to secure a voluntary agreement to end an array of marketing practices aimed at children and youth, when the company abruptly filed a pre-emptive federal suit that claimed, among other arguments, a First Amendment right to market its products to children.   

Evidence of actionable marketing tactics uncovered in Herrera's investigation include a "Monster Army" social networking community that featured children as young as six years of age, and its promotion of energy drinks at schools and at school-sponsored sporting events.  Another objectionable tactic involves the "Monster Energy Drink Player of the Game" series, in which high school athletes are awarded and photographed with twin four-packs—eight 16-ounce cans—of Monster Energy Drinks.  At 10 mg of caffeine per ounce, the photos advertise high school athletes, including minors, displaying more than 12-times the generally recommended daily maximum of caffeine for adolescents. 

Herrera's complaint alleges that Monster Beverage Corporation's business and marketing practices violate California's Unfair Competition Law and the Sherman Food, Drug and Cosmetic Law.  If the San Francisco City Attorney's lawsuit is successful, Monster Energy could be enjoined from continuing illegal conduct deemed harmful to consumers and competitors, and forced to pay significant civil penalties and restitution as a result of its unfair business practices.

Herrera's case is: People of the State of California v. Monster Beverages Corporation, San Francisco Superior Court Case No. 531161, filed May 6, 2013.  Monster's dismissed federal action is: Monster Beverage Corporation v. Dennis Herrera, U.S. District Court, Central District of California, Eastern Division, CV-13-00786, filed April 29, 2013.  Additional documentation is available at: http://www.sfcityattorney.org.

SOURCE City Attorney of San Francisco