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Altria, Juul Top Leaders Must Face Most Claims Over Teen Vaping

July 23, 2021, 4:46 PM

Eighteen teenagers and young adults who say they became addicted to Juul Labs Inc. e-cigarettes have adequately alleged most remaining claims against stakeholder Altria Group Inc. and five of Juul’s top leaders, the federal court in California overseeing the test cases ruled.

But the five individual Juul defendants—two founders and three directors—won’t face strict liability claims because the law doesn’t extend such liability to them, Judge William H. Orrick III said Thursday for the U.S. District Court for the Northern District of California. The court didn’t address claims against Juul itself in this ruling.

Altria took a 35% stake in Juul in 2018 and is fighting a government antitrust lawsuit over the deal.

Orrick oversees multidistrict litigation that brings together personal injury, class action, and government suits alleging Juul improperly marketed its vaping product to teenagers and conspired with Altria in a racketeering scheme. The founders and board directors are also a focus of the racketeering claims.

Orrick allowed many claims across the litigation to proceed in an April ruling.

The bellwether plaintiffs, who hail from 14 states, dropped some claims against Altria and the individuals, but continued to assert claims for strict liability, negligence, fraud and misrepresentation, and medical monitoring.

The young people have adequately alleged the individual defendants’ personal participation, Orrick said, declining to throw out all the claims against the directors and founders. But the strict liability claims against them must be dismissed, he said.

Negligence claims may proceed, but gross negligence isn’t a stand-alone claim under some states’ laws, Orrick said.

Orrick also trimmed some fraud-based claims under the laws of certain states.

Altria asked the court to dismiss the claims against it for lack of jurisdiction, but Orrick said a recent U.S. Supreme Court decision, Ford Motor Co. v. Mont. Eighth Judicial Dist. Court, supports jurisdiction over it because of meetings in California and other allegations.

The case is In re: JUUL Labs, Inc. Mktg. Sales Practice & Prods. Liab. Litig., 2021 BL 276108, N.D. Cal., No. 19-MD-02913-WHO, 7/22/21.

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

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