By Lauren Berg ·
Law360 — The California federal judge overseeing multidistrict litigation alleging Juul Labs Inc. deceptively advertised their vaping products to young people certified on Tuesday four classes of people who bought the electronic-cigarette company’s products.
U.S. District Judge William H. Orrick in a 94-page order granted the consumers’ request for class certification of two nationwide classes and two California classes, saying the plaintiffs’ fraud, unfair conduct, unjust enrichment and warranty claims, as well as an organized scheme claim under the Racketeer Influenced and Corrupt Organizations Act are all common to the classes.
Judge Orrick certified two nationwide classes — one for adults and one for minors under the age of 18 — who bought a Juul product, and two California classes — one for adults, one for minors — who bought a Juul product in the Golden State, according to the order.
Juul and its parent company Altria Group Inc. argued that the consumers haven’t shown that common issues predominate enough to justify using a class action, noting that adult and underage consumers make individual decisions for trying and continuing to use Juul products, the order states.
The defendants also argued that the relevant facts related to Juul’s alleged conduct varied and changed over time, including the design and flavors of the products, product labeling decisions and marketing campaigns, according to the order.
But Judge Orrick said those differences are “largely immaterial when considering the legal standards for the claims the proposed classes rest on.” The significant questions asserted in the case — including whether Juul’s marketing was “youth-oriented” and how much of the youth-driven consumption can be linked to Juul’s conduct — are subject to each side’s experts’ opinions, the order states.
“Resolution of these fact-driven disputed issues raises common predominant issues that will likely be resolved by the trier of fact,” Judge Orrick said. “Remaining differences can be addressed by well-recognized case management and trial plan strategies.”
To illustrate that class treatment is the superior way to adjudicate the controversy, the consumers proposed a two-phase trial plan, with a combination bench and jury trial to determine liability and award aggregated compensatory damages, according to the order. Then, assuming liability was found, the jury in the second phase will determine punitive damages, the order states.
But Juul and Altria rejected that plan, saying it would violate their due process and Seventh Amendment rights if an aggregate damages award is allowed because it prevents them from contesting each class member’s entitlement to damages, according to the order.
Judge Orrick said the aggregate damages award will be based on Juul’s own available sales data, noting that Juul and Altria can introduce evidence for the amount of reseller activity and illegal purchases by underage users. But any resulting reduction in damages to account for that activity is still a common, not individualized issue, the judge said.
“Plaintiffs have adequately demonstrated the superiority of resolving the economic loss claims collectively through a class process that protects defendants’ ability to fully raise and resolve potential defenses to those economic loss claims,” Judge Orrick said, granting the motion for class certification.