The Power Balance bracelet lawsuit in the United States produced a proposed $57.4 million class action settlement in September 2011 that would have refunded the $30 purchase price plus $5 shipping to any buyer who claimed one. Two months later, Power Balance LLC filed for Chapter 11 bankruptcy, and the gap between the settlement figure and the company’s actual assets meant consumers were unlikely to receive anything close to a full refund.1Endurance.biz. Power Balance Files for Bankruptcy2Cleveland.com. Power Balance Seeks Bankruptcy Protection
What the Lawsuits Accused Power Balance of Doing
Power Balance sold silicone wristbands with embedded holograms that the company said would “resonate with and respond to the natural energy field of the body,” improving balance, strength, and flexibility. The bracelets retailed for roughly $30 to $35 and were promoted with the slogan “Performance Technology,” alongside visible use by NBA players including Shaquille O’Neal, Kobe Bryant, and Lamar Odom.
The claims did not survive independent testing. A randomized, double-blind, placebo-controlled study at the University of Wisconsin–La Crosse, published in the Journal of Sports Science & Medicine in 2011, found “no significant difference” between the bracelet and a cheap placebo rubber band across trunk flexibility, balance, strength, and vertical jump.3National Library of Medicine. Can the Power Balance Bracelet Improve Balance, Flexibility, Strength, and Power By late 2010, Power Balance’s Australian arm had already admitted to the Australian Competition and Consumer Commission that there was “no credible scientific basis” for the claims.4ACCC. Power Balance Admits No Reasonable Basis for Wristband Claims That admission set the stage for the U.S. litigation that followed in January 2011.
The Main U.S. Class Action and Proposed Settlement
The lead case, Batungbacal v. Power Balance LLC et al. (Case No. SACV-11-18), was filed in the U.S. District Court for the Central District of California before Judge Cormac J. Carney. The complaint alleged Power Balance marketed the bracelets as scientifically tested performance devices despite having no evidence to back the claims.5CBS News. Power Balance Hit With $57M Settlement, Plans to Declare Bankruptcy
In September 2011, the parties reached a proposed settlement with a potential value of up to $57.4 million. Any purchaser of a wristband was eligible to claim a $30 refund plus $5 for shipping.1Endurance.biz. Power Balance Files for Bankruptcy The settlement had not been finalized when Power Balance’s finances collapsed.
Suits Against Endorsers and Rawlings
A separate federal class action brought by plaintiff Brian Casserly named Shaquille O’Neal and Lamar Odom as defendants alongside company principals Josh Rodarmel, Tony Rodarmel, and Keith Kato. That suit sought statutory and punitive damages for consumer fraud, false advertising, unfair competition, and unjust enrichment, and called the bracelets “nothing short of snake oil” and “biologically incapable” of doing what was advertised.6NBC Sports. Shaq, Odom Sued Over Power Balance Bracelet Endorsement
Rawlings Sporting Goods, which sold its own branded version, faced parallel litigation. In Orlick v. Rawlings Sporting Goods Co. (Case No. 12-cv-06787, C.D. Cal.), Judge George H. King denied Rawlings’ motion to dismiss, finding the allegations plausible because product descriptions on Walmart.com “substantially mirror” those on Rawlings’ own site.7Top Class Actions. Rawlings Power Balance Bracelet Class Action Moves Forward A companion New Jersey case, Steiner v. Rawlings Sporting Goods Company Inc. (Case No. 12-cv-02531, D.N.J.), reached a preliminary settlement in 2013. It created a restitution fund of $50,000 to $100,000: buyers with proof of purchase could recover up to the full retail price, and buyers without receipts could claim $16.50 per bracelet. Rawlings agreed to stop making efficacy claims about the product.8Truth in Advertising. Steiner v. Rawlings Sporting Goods Company Settlement Terms
Chapter 11 Bankruptcy Undercut the Settlement
On November 18, 2011, Power Balance LLC filed for Chapter 11 bankruptcy in federal court in Santa Ana, California. The company reported assets between $1 million and $10 million against debts between $10 million and $50 million, with a net loss exceeding $9 million in the ten months before filing after spending heavily to defend the class actions.9Los Angeles Times. Power Balance Files for Bankruptcy2Cleveland.com. Power Balance Seeks Bankruptcy Protection
The filing exposed how thin the company’s finances were compared to its liabilities. Creditors included the Sacramento Kings ($100,000), the Los Angeles Kings ($250,491), and an entity tied to Kobe Bryant ($400,000). Blake Griffin was owed $20,000, and skateboarder Ryan Sheckler was owed $25,000.10NBC Sports. Power Balance Owes Kobe Bryant, Kings Big Money Bryant was not a listed endorser, though he was frequently seen wearing the bracelet during games.11Orange County Register. Kobe Owed $400,000 by Bankrupt Power Balance
With debts stacked well above available assets, the $57 million refund figure became aspirational. Class members were left competing with sports teams, endorsers, and other creditors for a much smaller pool of money.
Sale to Contec and What Happened Next
Power Balance’s assets were sold through the bankruptcy process to Contec Corp., its Chinese manufacturer, in a deal valued at more than $8 million. Contec used a credit bid backed by debt Power Balance already owed it, and no higher bidder appeared at auction. U.S. Bankruptcy Judge Theodor C. Albert approved the sale.12American Bankruptcy Institute. Power Balance Sold to Chinese Manufacturer The reorganized entity, renamed Power Balance Technologies Inc., said it would focus on Asian markets and continue refunding dissatisfied customers.
The Rodarmel brothers and other principals were named as individual defendants in civil suits, but no public reports indicate any of the company’s principals faced personal criminal charges over the bracelet claims.13Justia. Whitney Ghodsian v. Power Balance LLC et al. Regulators outside the United States, including in Australia, Italy, and Spain, pursued their own actions with fines and refund undertakings; those were separate from the U.S. class action recovery and did not add to it.14CNBC. Sports Product of the Year: Power Balance