Juul consumers press judge for class status on economic loss

Lawyers for consumers who say they overpaid for Juul Labs Inc’s e-cigarettes because of the company’s allegedly deceptive marketing on Monday urged a federal judge to certify their claims as a class action, while the company argued that consumers must proceed individually because they bought Juul products under widely differing circumstances.

Juul brand vaping pens are displayed for sale at a Juul shop in Jakarta, Indonesia, December 30, 2019. Picture taken December 30, 2019. REUTERS/Ajeng Dinar Ulfiana

“This is a classic case of disparate categories of individuals who are not similarly situated,” said Gregory Stone of Munger, Tolles & Olson, representing Juul.

“The common answers do predominate over any individualized answers or questions,” countered Dena Sharp of Girard Sharp, a lawyer for the plaintiffs, pointing to the uniformity of the company’s marketing campaigns across the country.

U.S. District Judge William Orrick in San Francisco, who is presiding over multidistrict litigation against Juul, did not rule on the motion. He had said in a tentative opinion on Friday, without explaining his reasoning, that he was inclined to grant class certification.

More than 2,800 cases have been consolidated in the MDL against Juul, its largest shareholder Altria Group and several individual officers and directors. They include both personal injury claims and claims of economic loss by people who say they would have paid less, or not bought the e-cigarettes at all, if Juul had not downplayed their addictiveness and appealed to teenagers through social media campaigns and other means.

Monday’s hearing focused on plaintiffs’ bid to certify classes of economic loss plaintiffs under California consumer protection law and the federal Racketeering Influenced and Corrupt Organizations Act. They are seeking partial refunds for adult purchasers, and full refunds for underage purchasers.

Stone said the plaintiffs’ case rested on whether Juul’s marketing was misleading, whether it targeted teenagers, whether buyers were actually misled and whether the marketing affected their buying decisions.

“The answer to every one of the four questions plaintiffs pose is, it depends,” Stone said. For example, he noted that one proposed class representative said in a deposition that he first learned of Juul not through ads but from his brother.

Sharp said that Juul’s marketing resulted in higher prices for all consumers.

“The beauty of the price premium model ... is that it leaves no class member uninjured,” she said.

She also said that underage purchasers were necessarily entitled to full refunds because those sales were unlawful.

The case is In re Juul Labs Inc, Marketing, Sales Practices, and Products Liability Litigation, U.S. District Court for the Northern District of California, No. 19-md-02913.

For plaintiffs: Dena Sharp and Scott Grzenczyk of Girard Sharp

For Juul: Gregory Stone of Munger, Tolles & Olson; and David Bernick of Kirkland & Ellis