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Colgate v. Juul Labs, Inc.

United States District Court for the Northern District of California

August 23, 2019, Decided; August 23, 2019, Filed

Case No. 18-cv-02499-WHO

Opinion

 [*735]  ORDER GRANTING MOTION TO DISMISS IN PART AND DENYING IN PART; DENYING MOTION TO COMPEL; DISCOVERY LETTER; MOTION TO SEAL

Re: Dkt. No. 98, 99, 115, 116

 [*736]  Defendant JUUL Labs, Inc. ("JUUL") produces an electronic nicotine delivery system ("ENDS") consisting of an electronic cigarette and a nicotine [**3]  cartridge called a JUULpod ("pod"). Consolidated Class Action Complaint ("CAC") [Dkt. No. 82]. According to plaintiffs, forty-four individuals from twenty-two different states, JUUL has used research from the tobacco industry to target youth and design a product that delivers more nicotine and is more addictive than combustible cigarettes. Plaintiffs seek to represent a nationwide class and numerous subclasses in claims for false advertising, fraud, unjust enrichment, several forms of product liability, several types of negligence, violation of Magnuson-Moss Warranty Act, breach of express and implied warranty, and violation of the unfair and unlawful prongs of various state consumer protection statutes.

JUUL moves to dismiss the CAC and to compel certain plaintiffs to arbitrate their claims. Defendant JUUL Labs, Inc.'s Motion to Dismiss Plaintiffs' Consolidated Amended Complaint ("MTD") [Dkt. No. 99]; Defendant JUUL Labs, Inc.'s Notice of Motion and Motion [to] Compel Arbitration ("MTC") [Dkt. No. 98]. For the reasons stated below, JUUL's motion to dismiss is granted in part and denied in part. Its motion to compel arbitration is denied because plaintiffs did not have inquiry or actual [**4]  notice of the arbitration provision.

BACKGROUND

I. PROCEDURAL BACKGROUND

On October 30, 2018, I partially granted JUUL's motion to dismiss and denied its motion to strike as premature. Order Partially Granting Motion to Dismiss and Denying Motion to Strike ("Order") [Dkt. No. 66]. I found that some but not all of the plaintiffs' claims were preempted by the Federal Food, Drug, and Cosmetic Act ("FDCA") as amended by the Tobacco Control Act, 21 U.S.C. § 387 et seq. ("TCA"), which provides the Food and Drug Administration ("FDA") with exclusive authority to promulgate regulations on ENDS labeling. Id. at 7-11. Specifically, I held that only claims based on the allegation that the JUUL's labelling fails to warn consumers that its nicotine formulation is more addictive than other methods of nicotine ingestion were expressly preempted, and dismissed those claims with prejudice. Id. at 10-11. But claims based on the mislabeling of the percentage of nicotine per pod were not preempted because the plaintiffs had sufficiently alleged that plaintiff Bradley Colgate relied on JUUL's representation that the pods contained a formulation of 5% nicotine when the pods were alleged to contain a formulation of 6.2% nicotine. Id. In addition,  [*737]  a clause [**5]  in the TCA expressly excepts advertisements from preemption, so claims based on JUUL's advertisements failure to warn consumers about the potency and addictiveness of JUUL's benzoic acid and nicotine salt formulation or the amount of nicotine could be repleaded. Id.

I also dismissed claims based on JUUL's advertising for failure to meet Rule 9(b)'s pleading requirements, claims based on unidentified state consumer protection laws, and the breach of express warranty claim. Id. at 11-14, 18. Plaintiffs sufficiently stated claims based on identified state consumer protection statutes, unjust enrichment, design defect, manufacturing defect, breach of implied warranty of merchantability, and negligent misrepresentation. Id. at 13-19.

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402 F. Supp. 3d 728 *; 2019 U.S. Dist. LEXIS 144027 **; 104 Fed. R. Serv. 3d (Callaghan) 993; CCH Prod. Liab. Rep. P20,709; 2019 WL 3997459

BRADLEY COLGATE, et al., Plaintiffs, v. JUUL LABS, INC., et al., Defendants.

Prior History: Colgate v. JUUL Labs, Inc., 345 F. Supp. 3d 1178, 2018 U.S. Dist. LEXIS 185919 (N.D. Cal., Oct. 30, 2018)

CORE TERMS

JUUL, nicotine, cigarettes, advertising, warranty, addictive, consumers, media, arbitration, tobacco, pods, users, flavors, hyperlink, website, labeling, youth, e-cigarette, notice, manufacturer, hashtags, combustible, unfair, pack, adults, smoke, licensing, targeting, preempted, Sign-Up