The U.S. Judicial Panel on Multidistrict Litigation (JPML) will hear arguments later this month and decide whether it should transfer nine lawsuits over the allegedly deceptive advertising of an energy drink to California.
One of the nine suits that could be transferred comes from the Southern District of Illinois, where Thomas Guarino in January filed a class action complaint against Innovation Ventures, a Michigan corporation doing business as Living Essentials.
Through distributors and retailers, Guarino’s suit states that Innovation Ventures sells and advertises 5-Hour ENERGY as a dietary supplement with a label stating, “Hours of energy now – No crash later.”
He, along with the plaintiffs in the other suits, accuse the company of engaging in unfair and deceptive acts and practices in its advertising and labeling of the product in violation of the state’s Consumer Fraud and Deceptive Practices Act.
“The display and label presents a clear message to consumers of the Product: a message that just two ounces of the Product will provide five hours of sustained energy within minutes, without negative ‘crash’ side effects later,” Guarino asserts in his suit.
Guarino, however, contends that “the claim that the Product has ‘no crash later’ is not true, as admitted on the Defendant’s website and hidden behind the bottles in the display, which reads: ‘No crash means no sugar crash.’”
Not only does he claim that the labeling is deceptive and untrue, but Guarino asserts that Innovation Ventures has knowledge of studies refuting its claim that its product “will provide five hours of energy with no crash later.”
Guarino contends in his suit that he bought 5-Hour ENERGY instead of other similar products based on the allegedly deceptive labeling of the product and “did experience a crash.”
Besides Guarino’s suit, there are eight other similar suits pending in federal courts in Alabama, California, Florida, Louisiana, Missouri and Ohio.
Innovation Ventures in February asked the JPML to transfer all nine of the suits to the Central District of California, where two class action complaints are pending.
The JPML is scheduled to hear arguments over the transfer request on May 30 in Kentucky.
In its memorandum in support of its transfer motion, Innovation Ventures asserts that consolidation of the cases is appropriate and requested that they be transferred to U.S. Judge Philip S. Gutierrez of the Central District of California.
“Each of the nine complaints alleges similar factual allegations and each of them asserts nearly identical claims,” the company states in its February motion. “They implicate common legal and factual issues that, absent consolidation, would entail substantial duplication of effort.”
The company further asserts that California’s federal court would be the most appropriate forum because Gutierrez “is an experienced jurist, and he is familiar with the core facts giving rise to the actions because he already is supervising two of the cases, including the earliest filed case.”
The company states in its memo that in the earliest-filed case in California, Gutierrez has already ruled on a motion to dismiss and discovery has begun, though no depositions have been taken.
That, plus “the media time from filing to disposition of civil cases in the Central District of California, and its accessibility, would make it an efficient and convenient forum for all parties,” the company asserts.
After Innovation Ventures petitioned the JPML for the transfer of these cases, U.S. Chief Judge David Herndon in March granted the company’s motion for a stay in Guarino’s case pending the panel’s decision.
D. Todd Mathews with Gori, Julian & Associates in Edwardsville represents Guarino and Alison C. Conlon of Barnes & Thornburg in Chicago represents Innovation Ventures in the Southern District of Illinois case.
The company’s memo in support of its transfer request was submitted to the JMPL by Los Angeles attorneys Gerald E. Hawxhurst, Daryl M. Crone and Jason M. Zoladz.
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