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Juul Antitrust Claims

Time: 2021-08-21

Views: 682

Juul and Altria must face most of the antitrust claims in the 2018 deal

On August 21, according to Reuters, a US federal judge allowed e-cigarette buyers to file most claims in antitrust lawsuits, accusing JUULLabs Inc and Altria Group Inc of cooperating to suppress competition in the e-cigarette market.


U.S. District Judge William Orrick of San Francisco ruled on Thursday that the plaintiffs-representing the categories of proposed direct purchasers, individual indirect purchasers, and distributor indirect purchasers-can claim that they are affected by Altria's 2018 The harm of anti-competitive behavior related to the acquisition of 35% of the equity in the year.


David Gelfand of the law firm Cleary Gottlieb Steen & Hamilton declined to comment. Altria and its attorney, Beth Wilkinson of Wilkinson Steklov, did not immediately respond to a request for comment.


Joseph Saveri of Joseph Saveri Law Firm is an attorney for direct purchasers, while Robert Kaplan of Kaplan Fox & Kilsheimer is an attorney for indirect purchasers and distributors, and they did not immediately respond to a request for comment.


Direct buyers are consumers who order Juul products through its website, while indirect buyers buy from retailers. Distributors are companies that indirectly purchase Juul products.


The plaintiff claimed that Altria was threatened by Juul's popular e-cigarette competition and agreed to stop its MarkTen Elite e-cigarette series in exchange for investment in Juul, enabling it to profit from the success of its competitors. They said that reduced competition in the e-cigarette market has resulted in fewer choices and higher prices.


These allegations are similar to those in a lawsuit filed by the US Federal Trade Commission in April 2020, which is still in its early stages.


The 2018 investment transaction also played a key role in a separate product liability cross-regional lawsuit that accused Juul and Altria of contributing to the prevalence of addiction among minors. The plaintiff's claim record in this case shows that Altria knew that Juul's marketing target was teenagers.


When seeking to dismiss the antitrust case, the defendant argued that real data showed that Juul actually lowered the price and lost market share to other competitors after the transaction, which meant that the plaintiff was unlikely to suffer antitrust damage.


However, the plaintiff stated that the short-term loss of market share was due to Juul's withdrawal of fruit-flavored products under pressure from the US Food and Drug Administration.


Altria also argued that it has withdrawn MarkTen because of the FDA's pressure on youth e-cigarettes. The plaintiff retorted that this was just an excuse.


Orrick wrote on Thursday that in the defense stage, it is too early to accept the defendant’s interpretation of the evidence.


Orrick did make a ruling in favor of the defendant on several issues. He discovered that the three direct purchaser plaintiffs had agreed to arbitration when purchasing from Juul's website, and therefore could not represent this category. However, the judge cited his earlier ruling in the case stating that the plaintiff who purchased before August 9, 2018, at that time Juul changed its website to make the arbitration agreement more prominent, and was not obligated to conduct arbitration, and gave the plaintiff 30 Change the appropriate class representative every day.


Orrick also dismissed the request for injunctive relief and found that the plaintiff had not contested future injuries, although he allowed the plaintiff to make amendments.



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