The Celsius Conundrum: Beverage Maker Served a $7.8M Cocktail in Mislabeling Settlement

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As a legal news contributor with USA Herald, I recently had the opportunity to delve into an intriguing case that resulted in a $7.8 million settlement for mislabeling allegations against a prominent fitness drink company.

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On Wednesday, a New York federal judge gave final approval to the multi-million-dollar deal, which includes $2.6 million in counsel compensation, effectively concluding a class-action lawsuit asserting that Celsius deceived consumers with claims of “no preservatives” in its product, despite containing citric acid.

U.S. District Judge Jennifer H. Rearden expressed her approval of the settlement, stating that it “provides substantial and meaningful monetary benefits to the settlement class.” The order she issued authorized $2.64 million in attorney fees and $242,294 in reimbursement for counsel expenses. She commended the Clarkson Law Firm PC for executing the case with “skill and diligence” after dedicating approximately 3,494 hours to the matter.

The three primary plaintiffs in the lawsuit will divide a $20,000 sum. As for the larger class, each buyer of Celsius products—including beverages Celsius Live Fit, Celsius Heat, Celsius BCAA+Energy, and Celsius with Stevia, along with powdered drink mixes Celsius On-The-Go and Flo Fusion—will receive $1 for each can and $5 for every 14 powder packs, according to the settlement terms.

This agreement translates to an average of around $4.60 per consumer who purchased a product since January 2015. Almost a million people have applied for the benefit, with an estimated 60,000 expected to receive over $23 and about 100,000 receiving just above $14, according to the plaintiffs’ counsel.

Under the terms of the settlement, Celsius will also remove the “no preservative” claim from these products. The $7.8 million nonreversionary common fund is one of the largest food and beverage false advertising class-action settlements on record, and the largest ever involving a “no preservatives” claim, according to class counsel.

The lawsuit, filed in November 2021, alleged that Celsius included citric acid as an ingredient in several of its drinks while claiming they were preservative-free. The Food and Drug Administration and others consider citric acid to be a preservative, the suit stated.

The lawsuit claimed that the purpose of adding citric acid to the drinks was not to provide a tart flavor but to extend the shelf life of the product. Furthermore, it likely wasn’t even naturally occurring citric acid found in fruit but chemically manufactured. The plaintiffs’ food science expert confirmed that the quantity of citric acid in the product was sufficient to have a preservative effect, regardless of the defendant’s purported intent to use it for flavoring.

Celsius admitted no wrongdoing as part of this deal, according to the court’s order.

“In the ever-evolving world of consumer products, transparency is no longer a luxury, but an essential ingredient in the recipe for success” Samuel Lopez.

Reported by Samuel Lopez, Legal News Contributor for USA Herald.