Juul executives face trial after US judge rules racketeering claims ‘plausible’

A major lawsuit in California against Juul Labs and Altria over youth marketing tactics is moving forward after a judge endorsed a new racketeering theory as “plausible”.

The plaintiffs – municipal governments and school districts across the US – lost their first round of racketeering claims last October. But William Orrick, US district judge for the Northern District of California, refused to dismiss the latest claims, which also target five current and former Juul executives.

Orrick said the new claims were legally sufficient, based on added allegations about the individual directors’ “numerical control of the board, knowledge about Juul’s youth appeal and the growth of under-age users, significant involvement in marketing decisions, and unusually active roles in management and decisions from which they profited billions of dollars”.

The 30-page order, issued on 13th April, is a blow to Juul and Altria as the companies battle the multi-district litigation. The lawsuits allege a broad conspiracy to create a new generation of nicotine addicts through a marketing plan that specifically targets children and teenagers.

In February, the judge selected six suits to serve as “bellwethers” by going to trial first. That trial is scheduled to begin in February 2022.


Individuals in the dock


The Juul executives being sued individually are co-founders James Monsees (pictured, left) and Adam Bowen (pictured, right), and directors Riaz Valani, Nicholas Pritzker and Hoyoung Huh. The plaintiffs say all of them were able to “control the resources and instrumentalities” of Juul Labs.

Orrick’s order considered that the strengthened racketeering theory included new allegations about the directors, who in November 2014 “discussed and worked on defining a strategy for how to frame and market their product”.

Assisting Orrick with the case is US magistrate judge Jacqueline Scott Corley, who is managing discovery disputes. She outlined rules for the depositions in a 23rd March ruling, when she also ordered attorneys and witnesses not to vape during questioning.

“Breaks shall be taken as frequently as necessary to accommodate those parties,” according to Corley’s order. “Those breaks shall not count against the presumptive seven-hour deposition limit.”

Attorneys working on the case did not respond to ECigIntelligence’s requests for comment.


What This Means: The case against Juul Labs is a sprawling collection of lawsuits from across the US that have been consolidated before Judge Orrick, whose chambers are in Juul’s home town, San Francisco. As of March 2021, the multi-district litigation involving Juul includes approximately 2,004 cases.

There are 107 defendants, ranging from behemoths Juul, Altria and its previous incarnation Philip Morris USA, plus retailers such as Circle K Stores, Walgreen and Walmart, to local head shops and small vaping entities, but Orrick ruled that only Altria, Juul and the executives can face the racketeering claims.

– Meghann Cuniff ECigIntelligence US legal correspondent

Photos: Wikimedia Commons / Juul

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