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Colgate v. Juul Labs, Inc. - 2019 U.S. Dist. LEXIS 144027, 2019 WL 3997459

Rule:

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss if a claim fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the claimant must allege "enough facts to state a claim to relief that is plausible on its face." A claim is facially plausible when the plaintiff pleads facts that "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." There must be "more than a sheer possibility that a defendant has acted unlawfully." While courts do not require "heightened fact pleading of specifics," a claim must be supported by facts sufficient to "raise a right to relief above the speculative level."

Facts:

Defendant JUUL Labs, Inc. produces an electronic nicotine delivery system. In this Class Action Complaint, plaintiffs (42 individuals from 22 states) alleged that 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 complaint and to compel certain plaintiffs to arbitrate their claims.

Issue:

Did Plaintiffs' claim alleging fraud meet the standards set by Rule 9(b)?

Answer:

Yes (in part)

Conclusion:

The District Court for the Northern District of California granted JUUL’s motion in part but denied it in part. JUUL's motion to compel arbitration is denied because plaintiffs did not have inquiry or actual notice of the arbitration provision. The Court dismissed the plaintiffs’ “false advertising, CLRA and laws of similar states, fraud, and UCL and laws of similar states claims” for failure to meet Federal Rule of Civil Procedure Rule 9(b)’s heightened pleading requirements for claims sounding in fraud. The district court agreed with plaintiffs that their allegations regarding the “who”, “what”, “when”, and “how were sufficient to meet Rule 9(b)’s requirements, but many of the allegations still fall short on the question of “where.” They were not able to describe which ads they saw, and the plaintiffs’ authority did not persuade the Court that the representative ads are sufficient.

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