JUUL: Now in Certified Class Action Flavor

On June 28, 2022, the United States District Court for the Northern District of California certified four separate plaintiff classes in the nationwide JUUL electronic cigarette litigation. Certification of a plaintiff class is necessary for a class action lawsuit to proceed. The lawsuit alleges teen injury, fraud, and RICO violations against JUUL Labs and others, for the allegedly addictive and harmful effects of JUUL’s products.

In opposition to class certification, the JUUL Defendants argued that the proposed class lacked “commonality” because each potential plaintiff made an individual decision to purchase products containing nicotine or other addictive ingredients. The JUUL Defendants also attempted to argue that not all of them participated in every stage of the alleged fraud and racketeering. The court rejected the JUUL Defendants’ arguments. It ruled that it is unnecessary for all defendants who participated in the conspiracy enterprise to personally participate in every aspect to be liable for the entire injury caused by the illegal conduct.

The message from this ruling is that businesses should be wary that by participating in merely one aspect of a fraudulent or illegal scheme, even if they did not have knowledge of its illegality, they could still be held liable for damages in expensive class action lawsuits. Businesses who regularly join in concerted efforts with other businesses to manufacture, market, and distribute their products should rely on the expertise of their lawyers to determine whether the prospective activity may ultimately subject them to liability for the illegal or fraudulent actions taken by their business counterparts.