Under a Legal Cloud, Juul Jostles Over Which Judge Should Decide Lawsuits
Juul Labs Inc. is hoping to send more than 30 lawsuits brought over its e-cigarettes to San Francisco, but some plaintiffs lawyers have suggested judges in New Jersey and Maryland.
September 05, 2019 at 04:47 PM
6 minute read
The original version of this story was published on The Recorder
Juul Labs Inc. is hoping to move a steady stream of lawsuits brought over its e-cigarettes to a federal courtroom in San Francisco—but first, it has to snuff out some competition.
So far, more than 30 lawsuits allege that Juul, founded in 2015, has targeted teenagers and young adults with misleading marketing that fails to disclose the actual nicotine content of its e-cigarettes. Juul, based in San Francisco, filed a motion asking the U.S. Judicial Panel on Multidistrict Litigation to send all the lawsuits to U.S. District Judge William Orrick of the Northern District of California.
"The cases are very, very similar to one another," said Adam Gutride, of San Francisco's Gutride Safier, a plaintiffs lawyer who supports Juul's motion. "They involve the same thing, which is that Juul unfairly and unlawfully marketed this product to young people without disclosing the severe risks of the product and, in addition, it had a defective product design that was likely to increase harm to users."
Other plaintiffs lawyers, however, have pushed for New Jersey or Maryland, where a federal judge issued a groundbreaking ruling earlier this year against the U.S. Food and Drug Administration over the timeline of its approval of e-cigarettes.
The panel set arguments for its Sept. 26 hearing in Los Angeles.
Juul's devices look like USB drives and require disposable nicotine cartridges called "JUULpods." The e-cigarettes, heavily advertised on social media platforms, come in various flavors, like cucumber and mango, prompting concerns that Juul has targeted minors and contributed significantly to a nicotine addiction epidemic sweeping America's youth.
In July, Juul executives testified before a U.S. House subcommittee. The FDA and state regulators also are looking at e-cigarettes: North Carolina Attorney General Josh Stein has sued Juul, and Connecticut Attorney General William Tong launched an investigation.
The cases span a dozen states. In addition to those in federal courts, about a dozen are pending in California state courts, and one in Ohio. About half the cases are class actions filed on behalf of consumers asserting Juul misled them about the nicotine levels in its products, while the remaining lawsuits come from individuals, mostly minors, who claim they suffered injuries such as strokes and collapsed lungs after using Juul's products.
In the July 29 motion before the panel, Juul attorney Austin Schwing, a partner at Gibson, Dunn & Crutcher in San Francisco, insisted that his client's products helped smokers quit cigarettes and did not entice young people to become addicts.
"JLI's mission is to improve the lives of the world's 1 billion adult smokers by eliminating cigarettes," he wrote. "Nevertheless, some, like the plaintiffs in these lawsuits, have mounted sweeping, policy-based attacks on JLI and its products simply because they contain nicotine, disregarding the enormous public health benefit Juul products can offer when used as intended by adult smokers as an alternative to combustible cigarettes."
Last year, Philip Morris USA parent company Altria Group Inc. purchased a 35% share in Juul. About half the lawsuits now name Altria as an additional defendant, and some allege a conspiracy under the U.S. Racketeer Influenced and Corrupt Organizations Act. Altria, represented by John Massaro of Arnold & Porter Kaye Scholer in Washington, D.C., has joined in Juul's transfer motion.
Several plaintiffs lawyers support Juul's transfer motion, including Gutride, who filed the first case, a nationwide class action, in April 2018. On Oct. 30, Orrick found that the Federal Food, Drug, and Cosmetic Act, as amended by the Tobacco Control Act, preempted claims in the class action about Juul's labeling but that those involving its advertising and marketing could go forward, if amended. On Aug. 23, after plaintiffs attorneys filed a new complaint, Orrick allowed most of the claims to go forward and denied Juul's motion to compel arbitration as to some of the named plaintiffs.
"We are the ones who developed this case, and we filed it months before anyone else did," said Gutride, whose firm is co-lead counsel. "We have actively been litigating the case, so Judge Orrick is intimately familiar with this case at this point and made substantive rulings."
A competing proposal from Scott Schlesinger, of Schlesinger Law Offices in Fort Lauderdale, Florida, suggested the Juul cases go to U.S. District Judge Paul Grimm of the District of Maryland. Grimm is overseeing a separate case brought by several public health organizations challenging the FDA's decision to extend the deadline to 2020 for e-cigarette companies to comply with the Tobacco Control Act.
On May 15, Grimm found that the FDA had violated the Administrative Procedure Act and vacated the agency's 2017 guidance. He updated that order July 11 to require manufacturers to submit applications for premarket authorization of their products within 10 months. Several vaping industry groups have indicated plans to appeal the ruling, and the Vapor Technology Association last month filed a lawsuit against the FDA. It added a motion for injunction this week, seeking to halt the new deadline to avoid a "mass exit of vapor products from the U.S. market."
"Thus, Judge Grimm is familiar with and is actively considering some of the central issues that are common to all the cases subject to Juul's transfer motion," wrote Schlesinger, who has a pending injunction motion in his own case to stop the sale of Juul's e-cigarettes.
Another plaintiffs lawyer, Andy Birchfield, of Beasley, Allen, Crow, Methvin, Portis & Miles, proposed a "novel approach" to the "extraordinary nature of the Juul epidemic." In an Aug. 20 motion, he suggested that the panel send the class actions to Orrick and the individual personal injury lawsuits to New Jersey, before U.S. District Judge Brian Martinotti.
"There is little doubt that the Juul litigation will be vast and complex," he wrote. "Intermingling multiple nationwide class actions and individual-plaintiff personal injury claims would unnecessarily exacerbate the complexity."
In particular, he wrote, class action issues would delay justice for individual plaintiffs with injuries if the panel combined both cases before a single judge. Birchfield's firm has filed eight individual suits and is investigating hundreds of injury claims.
Juul, in an Aug. 27 reply filed before the panel, called the New Jersey proposal an "invitation to engage in forum or judge-shopping," and the idea of splitting the cases a "logistical nightmare."
Gutride also was skeptical the panel would approve two MDLs.
"I'm not aware of the MDL panel doing anything like that before," he said, "and I don't think it will happen here."
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