JPML creates multidistrict litigation over energy drink; transfers Illinois suit and eight others to California

Multidistrict litigation over the allegedly deceptive advertising of an energy drink has been created in California.

After hearing arguments last month, the U.S. Panel on Multidistrict Litigation (JPML) issued an order this week transferring nine suits, including one from southern Illinois’ federal court, to the Central District of California.

The suits accuse Innovation Ventures, a Michigan corporation doing business as Living Essentials, of engaging in unfair and deceptive acts and practices in its advertising and labeling of 5-Hour ENERGY.

The southern Illinois suit was filed in January by Thomas Guarino.

His class action complaint states that through distributors and retailers, Innovation Ventures sells and advertise the energy drink as a dietary supplement with a label stating, “Hours of energy now – No crash later.”

“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 claims that Innovation Ventures has knowledge of studies refuting its claim that its product “will provide five hours of energy with no crash later.”

Guarino states 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.”

D. Todd Mathews with Gori, Julian & Associates in Edwardsville represents Guarino.

Besides his 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 U.S. Judge Philip S. Gutierrez of the Central District of California, where two class action complaints over the energy drink are pending.

The company’s memo in support of its transfer request was submitted by Los Angeles attorneys Gerald E. Hawxhurst, Daryl M. Crone and Jason M. Zoladz.

The JPML states in its recent order that because all of the suits involve common questions of fact, centralization is appropriate and would help eliminate duplicative discovery, prevent inconsistent rulings and conserve the resources of the parties and courts.

While all of the parties in the matter agreed that centralization was appropriate, the JPML notes in its order that they disagreed over what district it should be transferred to.

Innovation Ventures, as well as plaintiffs in four of the suits and four potential tag-along actions, requested the Central District of California while others favored centralization in the Northern District of Ohio.

“We are persuaded that the Central District of California is the most appropriate transferee district for this litigation,” the order states. “It is the only district in which more than one action is pending—currently, there are three actions or potential tag-along actions pending there.”

The panel further noted that Gutierrez has been presiding over the first-filed action for more than a year and as such, “is in the best position to incorporate it into the MDL in a manner that accommodates the progress already made in that action while also addressing the common factual and legal issues raised in the more recently filed actions.”

In addition, the JPML asserts that the Central District of California is “a convenient and accessible forum with the resources to devote to this litigation.