A jury in California returned a verdict for $293 million for Monster Energy in its case against competitor VPX Pharmaceuticals, the manufacturer of energy drink Bang, relying on and using dagrs calculations made by Hemming Morse, to which partner Christian Tregillis testified. The award included $272 million of lost profits relating to advertising of Bang as containing “super creatine,” which was found to have been false, as well as claims for interference with Monster Energy’s contracts for specific shelf space at retailer locations, and theft of Monster Energy’s trade secrets when former Monster Energy employees took electronic information with them and used it after joining VPX.
Mr. Tregillis used a survey, among other information, to estimate what portion of Bang sales would have been Monster sales in a “but-for world” of no false advertising, presenting three alternative scenarios to the jury, ranging from 19% to 34% sales being wrongful, and a portion of those going to Monster. The jury ultimately selected the highest of the lost profits figures presented by Mr. Tregillis. There remains open the issue if whether Monster Energy will be entitled to a disgorgement of VPX’s profits on the rest of the alleged wrongful sales that did not go to Monster Energy, with the district court judge to decide that issue in the second phase of the trial.
The award is believed to be the largest false advertising jury verdict in the history of American jurisprudence.
For the trade secret damages, Mr. Tregillis estimated the “over-performance” of Bang sales in Georgia, a state in which certain Monster trade secret information was used by a sales representative who left Monster Energy to join VPX, compared to other states, indexing to December of 2018, the month prior to the departure of that employee.