The U.S. Court of Appeals for the Ninth Circuit upheld a $311 million judgment against Vital Pharmaceuticals, Inc. (VPX) for violating the Lanham Act through false advertising, finding no abuse of discretion by the district court in excluding certain evidence.
Background
In 2018, Monster Energy Company (Monster), a maker of energy drinks, filed a lawsuit in the U.S. District Court for the Central District of California against VPX, a maker of competing energy drinks, and its founder and CEO, John H. Owoc. Monster alleged that VPX and Owoc had violated Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), by falsely advertising that their energy drink, BANG, contained “Super Creatine,” which allegedly provided significant physical and mental health benefits—despite the fact that the product did not contain actual creatine or deliver such benefits.
At trial, the district court granted Monster's motion to exclude three types of evidence:
- The results of surveys that Monster originally commissioned;
- Monster's own allegedly false advertising regarding its line of products; and
- Monster's conduct unrelated to this litigation that allegedly gave rise to various affirmative defenses.
The jury found in favor of Monster and awarded $270 million in damages, which later increased to approximately $311 million with attorneys' fees, interest, and costs. The court also issued a permanent injunction prohibiting VPX and Owoc from advertising that BANG contained creatine or Super Creatine.
Owoc appealed the judgment and the permanent injunction, challenging the district court's evidentiary rulings, particularly the exclusion of the above evidence.
Decision
The Ninth Circuit reviewed the district court's evidentiary rulings under an abuse of discretion standard and concluded that the court had acted within its discretion in excluding each category of evidence. It therefore affirmed the judgment. The court's reasoning on each evidentiary issue is summarized below:
(i) Consumer Survey Evidence:
Monster had conducted a consumer survey to learn about BANG consumers' preferences. The survey showed that three percent of respondents identified Super Creatine as BANG's most important attribute. Unhappy with these results, Monster asserted that the survey contained hearsay and lacked sufficient guarantees of trustworthiness; accordingly, the court allowed it to be excluded as “standalone evidence.” Owoc attempted to introduce the results of the survey through direct examination of an expert he had engaged to prove that the presence of the words “Super Creatine” on BANG cans had no impact on consumers' purchasing decisions. However, the Ninth Circuit found that Owoc had failed to show that the consumer surveys met generally accepted methodological standards, as Owoc had not identified a single witness who could testify about the surveys' design or methodology. Therefore, the Ninth Circuit upheld the district court's ruling excluding the evidence.
(ii) Evidence of Monster's Allegedly False Advertising:
Owoc offered evidence suggesting that Monster allegedly made unsupported claims about the health benefits of its own line of energy drinks. The Ninth Circuit held that this evidence was irrelevant to the central issues—whether BANG's advertising was false and misleading under the Lanham Act—and risked creating a distracting “mini-trial” over Monster's unrelated marketing that did not involve “creatine” or “Super Creatine.” While Owoc invoked the affirmative defense of unclean hands, the court concluded that Monster's separate advertising practices were irrelevant and insufficient to support that defense. Owoc also argued that this evidence was relevant in light of Monster's alleged development of a creatine-based drink, but because he did not explain how this alleged fact related to his affirmative defenses, the Court deemed this argument waived.
(iii) Evidence of Monster's “Bad” Conduct Allegedly Giving Rise to Various Affirmative Defenses:
Owoc attempted to introduce evidence regarding four types of “bad conduct” by Monster that allegedly provided Owoc with affirmative defenses sufficient to preclude Monster from obtaining relief. However, as detailed below, the court refused to admit such evidence, and the Ninth Circuit affirmed.
First, Owoc claimed that Monster's REIGN product, a new drink introduced around the time Monster sued VPX and Owoc, was a copy of BANG, minus “Super Creatine,” and argued that this supported affirmative defenses of waiver, estoppel, unclean hands, and laches. However, the court found that this evidence was unrelated to the core issue—the false advertising claim—and failed to meet the legal standards required for these defenses. Further, the laches defense was raised for the first time on appeal and was therefore waived. Even if some of the evidence had probative value, the district court had discretion to exclude it to avoid delay and jury confusion.
Second, Owoc alleged that health risks from Monster's products supported an unclean hands defense, but this evidence did not relate to Monster's core false advertising claim in the current litigation. Consequently, the risk of unfair prejudice from introducing this evidence substantially outweighed any probative value.
Third, Owoc presented evidence allegedly showing that Monster frequently brought meritless lawsuits against competitors to harass them and gain an unfair competitive advantage. The court, however, held that such evidence is inadmissible unless it shows prior fraudulent conduct with similar claims. Because Owoc failed to prove that Monster's history of litigation consisted of clearly fraudulent false advertising claims, the evidence was excluded.
Fourth and finally, the court held that Monster's “Truth About Bang” advertising campaign (characterized by Owoc as a “smear campaign”) was irrelevant to the merits of Monster's false advertising claim and did not support any of Owoc's affirmative defenses. Specifically, the court failed to see how the “smear” campaign undermined the “materiality” of the false “Super Creatine” label to a consumer's purchasing decision. Similarly, Owoc failed to develop at trial its claim that the “smear campaign” would have a bearing on the damages in the case, so Owoc had waived this argument. With respect to the affirmative defenses, Owoc failed to establish that Monster's actions somehow barred it from bringing a false advertising claim when those actions consisted solely of waging a campaign to notify the public that BANG did not in fact contain creatine. Therefore, the district court did not err in excluding the evidence of the alleged “smear” campaign.
Having rejected Owoc's challenges to the district court's evidentiary rulings, the 9thCircuit upheld Monster's $311 million verdict.
The case is Monster Energy Co. v. Vital Pharms., Inc., Case No. 5:18-cv-01882-JGB-SHK (9thCir. 2025).
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