As reported by Law360 (subscription), on March 26, 2021, U.S. District Judge William H. Orrick of the Northern District of California issued a tentative ruling indicating he will deny all the motions to dismiss, except for certain state claims with no class representatives, in multidistrict injury and fraudulent advertising litigation against e-cigarette manufacturer Juul. Complaints in the cases against Juul allege the company deliberately and deceptively marketed its devices to addict underage teens to nicotine, in the process unleashing a nationwide youth vaping epidemic.
As Law360 notes, in Thursday’s ruling, Judge Orrick said that plaintiffs — who also named as defendants Philip Morris USA and Altria Group Inc., which holds a 35% stake in Juul — brought reworked claims under the Racketeer Influenced and Corrupt Organizations (“RICO”) Act along with other new allegations against Altria and the individual defendants. Those combined allegations “are plausible and sufficient for pleading purposes to allege a RICO enterprise,” Judge Orrick said.
“Whether [Juul] could be the enterprise given its own alleged fraudulent conduct and whether defendants were acting primarily in [Juul’s] corporate interests may be revisited on summary judgment,” he added. “I have already held that the predicate acts of mail and wire fraud were sufficiently alleged and am not inclined to revisit that issue.”
Judge Orrick also noted that the plaintiffs sufficiently alleged that individual director defendants Nicholas Pritzker, Hoyoung Huh and Riaz Valani had personal participation in RICO conduct, noting “the trio allegedly knew about Juul’s youth appeal and the growth of underage users.” According to the tentative order, they also allegedly “were involved in significant marketing decisions and were unusually active in management and decisions from which they profited billions of dollars.”
The plaintiffs are represented by Lieff Cabraser partner Sarah London and co-counsel.
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