Category: Litigation

  • U.S. FDA Commissioner Califf Laments Lawsuits

    U.S. FDA Commissioner Califf Laments Lawsuits

    Image: Tobacco Reporter archive

    U.S. Food and Drug Administration Commissioner Robert Califf has lamented the FDA’s ongoing tobacco industry litigation following the agency’s attempt to regulate e-cigarettes, according to Politico. The FDA is facing over 40 lawsuits from companies whose premarket tobacco product applications have been denied.

    “We are in a legal battle every single day, and it’s draining on the agency,” Califf said at the annual public meeting of the Reagan-Udall Foundation. “It has a big impact and a much bigger impact than I thought.”

    “None of us expected 27 million applications for vaping,” he said.

    Califf also noted that enforcement is difficult when it comes to illegal product. “I find myself in the midst of really an epic struggle … when I think of how to enforce when you have an industry that is amazingly creative.”

    Califf hinted that the FDA would meet with the Department of Justice soon to discuss enforcement but declined to say more: “Stay tuned on that one.”

  • Juul Labs’ Minnesota Settlement Tops $60 Million

    Juul Labs’ Minnesota Settlement Tops $60 Million

    Credit: Ontronix

    Leaders in the U.S. state of Minnesota reported a $60.5 million settlement with Juul Labs over youth vaping on Wednesday, one month after the state abruptly ended a Hennepin County jury trial before closing arguments were set to begin.

    The money, which is front-loaded, according to Attorney General Keith Ellison and Gov. Tim Walz, is expected to go toward fighting tobacco use, vaping and smoking. Under the settlement, the terms weren’t public for 30 days, according to the Star Tribune.

    In opening statements on March 28, Ellison made the state’s case, saying youth smoking was nearly eliminated before the e-cigarette maker lured teens with fruity flavors, fun ads and sleek, colorful designs. He portrayed the suit as a continuation of the earlier fight against Big Tobacco.

    Many states sued Juul Labs in recent years over their marketing to teens, but Minnesota was the only one to take the manufacturer to trial. Before trial, Ellison said he wasn’t satisfied with the settlement offers made by the manufacturer.

  • U.S. Supreme Court Asked to Review Avail Case

    U.S. Supreme Court Asked to Review Avail Case

    Avail Vapor has asked the U.S. Supreme Court to examine a lower court’s refusal to review a marketing denial order issued by the Food and Drug Administration to Avail products.

    In its petition, known as a Writ of Certiorari, Avail asks the Supreme Court to consider the lower court’s legal reasoning and decision.

    Among other things, Avail argues in its petition that the FDA’s decisionmaking was arbitrary and capricious; that another court sided with a different petitioner against the FDA on the same basic arguments; and that the case is significant not only for Avail but for the entire industry and its customers.

    The Supreme Court has not yet decided whether it will hear Avail’s case.

  • Altria Agrees to Pay $235 Million to End San Fran Suit

    Altria Agrees to Pay $235 Million to End San Fran Suit

    Credit: Bill Oxford

    Altria has reportedly struck a $235 million deal to end a lawsuit brought by the San Francisco public school system one day after the plaintiff’s lawyers ended closing arguments.

    This settlement represents a positive step forward in addressing the harmful impacts of vaping on the public,” said Girard Sharp partner Dena Sharp, Co-Lead Counsel for Plaintiffs in the litigation. “The settlement funds will compensate JUUL purchasers, young people, parents, and governmental organizations across America, and avoids the delay and uncertainty of continued court proceedings. We are proud of our clients and the federal court system that made this result possible. The legal system worked in this case, and we thank the jurors who devoted their time to this trial over the past few weeks.”

    The Altria settlement brings a final resolution to the personal injury, consumer class action, and government entity cases brought in the MDL and the JCCP brought on behalf of children, families, and JUUL purchasers everywhere in the U.S.

    Much of the school district’s argument in its case against Altria involved the distraction which occurred when vaping became “endemic,” interfering not only with teachers’ abilities to control their classrooms but nearly all levels of student life.

    The bellwether trial forced Altria to publicly defend itself solo for the first time as it faces thousands more cases that were brought against the company and Juul. In December, Juul Labs agreed to pay more than $1.2 billion to settle more than 5,000 suits blaming the company for a youth vaping epidemic across the U.S.

    Juul and Altria defended the first trial that started in March over a case brought by Minnesota over deceptive marketing of e-cigarettes. The companies settled the state’s case earlier this year.

    In April, Juul agreed to pay $462 million to six states and the District of Columbia to resolve lawsuits and investigations into the marketing of addictive vaping products to children.

  • Logic Challenges Marketing Denial Of Its Menthol Product

    Logic Challenges Marketing Denial Of Its Menthol Product

    E-cigarette maker Logic filed papers in court on May 9 that challenge the U.S. Food and Drug Administration’s marketing denial orders (MDO) that it issued against two brands: Logic Pro Menthol E-Liquid Package and Logic Power Menthol E-Liquid Package, reports Bloomberg Law.

     Logic called the FDA’s MDOs “arbitrary and capricious.”

    The 3rd Circuit Court entered a stay on the FDA’s MDOs in December 2022. The MDOs were the FDA’s first-ever MDOs directed at menthol e-cigarette products.

  • Altria’s Juul Usage Trial Continues Into Second Week

    Altria’s Juul Usage Trial Continues Into Second Week

    Credit: Stand AP

    The trial of the San Francisco Unified School District’s lawsuit against Marlboro maker Altria continues this week. At the end of the first week, jurors heard testimony that use of vape pens by students had declined before more than doubling from 2017 to 2019.

    Only a little more than 7 percent of students throughout the district had reported using vape pens in 2017, former district health administrator Erica Lingell testified Friday. By 2019, she said, that figure had more than doubled to 16 percent.

    Lingell said students were using Juul and the district was scrambling to build support systems and give guidance to teachers and staff about them, according to Courthouse News.

    “We didn’t have anything for this new substance that the kids were using,” Lingell said in answer to questioning by the school district’s attorney Dena Sharp. “We didn’t have lessons. We didn’t have enough research except for what experts were telling us.”

    The school district was building systems to combat Juul from scratch, the attorney claimed. Even after the San Francisco Board of Supervisors banned the sale of e-cigarettes in the city — the corporate home of Juul Labs — in 2019, youth use continued.

    For school district officials, it was a scramble to pull together the resources needed to combat Juul’s growth among students. “It was like flying the plane while we were building it,” said Lingrell.

    For other substance use issues in the district, there were materials lesson plans, and support groups in place to help teachers tackle the problem. Students leaving class to smoke would interfere with teaching time for the rest of the kids, she said. “Teachers have an incredibly hard and busy schedule already. One kid being gone affects everybody.”

    Much of the school district’s argument in its case against Altria involves the distraction which occurred when vaping became “endemic,” interfering not only with teachers’ abilities to control their classrooms but nearly all levels of student life.

    The bellwether trial forces Altria to publicly defend itself solo for the first time as it faces thousands more cases that were brought against the company and Juul. In December, Juul Labs agreed to pay more than $1.2 billion to settle more than 5,000 suits blaming the company for a youth vaping epidemic across the U.S.

    Juul and Altria defended the first trial that started in March over a case brought by Minnesota over deceptive marketing of e-cigarettes. The companies last month settled the state’s case, though details are yet to be disclosed.

    In April, Juul agreed to pay $462 million to six states and the District of Columbia to resolve lawsuits and investigations into the marketing of addictive vaping products to children.

  • Cannabis Company not Violating Smoore Patents

    Cannabis Company not Violating Smoore Patents

    The U.S. International Trade Commission on Monday ruled definitively in favor of U.S. the cannabis vapor products manufacturer Advanced Vapor Devices (AVD) after a year-long patent infringement case brought by China-based e-cigarette maker Shenzhen Smoore Technology Limited.

    The commission affirmed an administrative law judge’s February 2023 finding of no violation of Smoore’s CCELL’s coil patents. Under the ruling, there is no violation by AVD’s cartridges, components, or products.

    “Today is an enormous victory for the U.S. cannabis vaping sector,” stated AVD Co-Founder and CEO Alex Kwon in a release. “AVD’s disruptive technology, reliability, and exceptional service will enable us to safeguard our rights and innovate for our clients’ benefit.”

    “We are grateful to the International Trade Commission for exposing CCELL’s bullying of U.S. companies,” said Michael Brosgart, AVD chief operating officer. “AVD shouldered the burden of this litigation because we are committed to our industry, and believe consumers deserve the highest quality products. We can’t wait to share our upcoming innovations.”

    Out of nearly 7 million premarket tobacco product applications (PMTAs), only 23 e-cigarette-style products have been approved for marketing by the U.S. Food and Drug Administration. Most of the approved products have been manufactured by Smoore International Holdings, through its subsidiary, Shenzhen Smoore Technology, which manufactures the Njoy Ace, Njoy Daily, Logic Power and Logic Pro devices.

    Cannabis vaping products are not regulated on a federal level.

  • Altria Tells Jury of ‘No Benefit’ from Juul Investment

    Altria Tells Jury of ‘No Benefit’ from Juul Investment

    Credit: JHVE Photo

    Lawyers for Altria Group Inc. told a jury that the company didn’t benefit from its 2021 $12.8 billion investment in Juul Labs Inc. in a trial over whether Altria helped Juul Labs promote sales that led to a rise in youth vaping. The trial is a test case brought by the San Francisco school system.

    Altria played a passive role in Juul’s efforts to market e-cigarettes to young users and “hasn’t received a penny for this investment, they haven’t benefited,” Beth Wilkinson, an attorney for the company, argued as the trial kicked off Monday in San Francisco federal court, according to Bloomberg News.

    The 2018 investment vaporized to $250 million, she said, referring to the value of the Juul investment at the end of 2022 that Altria announced earlier this year when the company exchanged that investment for rights to heated-tobacco product technology.

    Attorneys representing the San Francisco Unified School District told U.S. District Judge William Orrick that Wilkinson’s statements on the Juul investment to the jury were “prejudicial” to plaintiffs and violated ground rules on excluding certain information at trial.

    The judge said he’ll take up the objection Tuesday morning before the trial resumes.

    The bellwether trial forces Altria to publicly defend itself solo for the first time as it faces thousands more cases that were brought against the company and Juul. In December, Juul Labs agreed to pay more than $1.2 billion to settle more than 5,000 suits blaming the company for a youth vaping epidemic across the US.

    Altria’s “going to say, ‘We didn’t market the product,’” Thomas Cartmell, a lawyer representing the school district, told jurors. “That’s true, but it’s very important for you all to know what Altria knew as they pursued and partnered with Juul,” he said, adding that Altria knew Juul’s marketing tactics would appeal to and hook young people, including kids.

    Juul sales “skyrocketed” after Altria’s 2018 investment and the tobacco company helped the startup market its products and set up 10,000 new stores, Cartmell said. Altria knew Juul’s plans to boost sales would frustrate the U.S. Food and Drug Administration’s efforts to curb youth e-cigarette use, he said.

    The sprawling litigation in San Francisco federal court includes about 4,270 personal injury suits and more than 1,434 complaints brought by government entities and native Indian tribes, in addition to a proposed class-action fight, according to a recent court filing.

    Juul and Altria defended the first trial that started in March over a case brought by Minnesota over deceptive marketing of e-cigarettes. The companies last month settled the state’s case, though details are yet to be disclosed.

    In April, Juul agreed to pay $462 million to six states and the District of Columbia to resolve lawsuits and investigations into the marketing of addictive vaping products to children.

  • Insurance Agent Sued for ‘Quietly’ Excluding Batteries

    Insurance Agent Sued for ‘Quietly’ Excluding Batteries

    A federal lawsuit has been filed by four companies that sell vaping devices against Kinsale Insurance Co., claiming the insurer dropped coverage for batteries but failed to fully inform the policyholders before denying a claim.

    If the case goes to trial and appeal, it could potentially help clarify insurers’ and insureds’ responsibilities when policy wording is changed or exclusions are added.

    “Defendant owed a fiduciary duty to plaintiffs based on trust and good faith that required defendant to act in the best interest of plaintiffs, its customers,” reads the lawsuit complaint, filed last week in U.S. District Court in Nashville. “It is reasonable for the insured to assume the policies provided the requested coverage.”

    Kinsale Insurance, based in Richmond, Virginia, offers casualty and specialty casualty insurance for cannabis, transportation and other industries. It has not yet filed an answer to the complaint, according to the Insurance Journal.

    Industry experts, however, said that the practice of changing coverage without fully notifying customers is not uncommon, and is rarely challenged. And Tennessee law may be less than crystal-clear on how far an insurer must go in notifying policyholders of changes and how specific notifications should be.

    Battery fires from nicotine and cannabis vape devices are relatively uncommon but have become a worldwide concern for consumers, fire departments and insurers. In October 2022, Michael and Elisha Schmidt suffered a fire, reportedly from a vape pen battery, and sued the four vape companies over the damage.

    The companies, Isabella Industries, Maelynn Industries, Sancia Industries and Illumivaption Inc., all had umbrella and general liability policies with Kinsale for seven years. But when the vape sellers renewed their policies in October 2022, Kinsale excluded batteries and battery-fire claims from the policies, while raising premiums, the suit claims.

    “Defendant led plaintiffs to believe that the batteries were covered after the renewal,” the complaint reads. “Defendant did not inform plaintiffs that it had removed batteries from the coverage and did not ask Plaintiffs prior to doing so.”

    The plaintiffs also argue that the policy wording was ambiguous and illusory, and thus, unenforceable under Tennessee law. The companies had always paid their premiums on time and had been loyal customers to Kinsale, they noted.

    When the Schmidts filed their lawsuit, the vape companies filed claims with Kinsale. But the insurer denied the claims, arguing that the policies did not cover batteries. Kinsale would not provide a legal defense for the insureds.

    The vape sellers argue that Kinsale’s refusal amounted to bad faith and unfair trade practices, and has cost the companies damages and attorney fees. They are asking for compensatory damages, punitive damages, legal fees and a declaration that the insurer must provide coverage and a defense.

  • Altria Group’s Youth Marketing Trial to Begin Monday

    Altria Group’s Youth Marketing Trial to Begin Monday

    Altria sign

    Altria Group Inc is set to face trial Monday in a lawsuit by San Francisco’s public school district accusing the company of fueling a teen vaping epidemic, along with e-cigarette maker Juul Labs Inc.

    The San Francisco Unified School District says teachers and staff “have had to go to extreme lengths to respond to the ever-growing number of students using e-cigarettes on school grounds,” and is seeking to force Altria to pay for the cost of tackling the problem, Reuters reports.

    Altria, which held a 35 percent stake in Juul from 2018 until earlier this year, faces thousands of similar cases from individuals, local government entities and states.

    The San Francisco school district’s case was chosen by U.S. District Judge William Orrick in San Francisco, who is presiding over much of the litigation, as a bellwether or test case.

    Next week’s trial before Orrick will mark the second time one of those cases goes before a jury. An earlier trial, in a case brought by the state of Minnesota, ended in a settlement on Monday as it was nearing its end, although the terms have yet to be disclosed.

    “Most of the allegations raised in this suit occurred years before we made a minority economic investment in Juul,” Altria said in a statement on Thursday. “We believe this case lacks merit and will defend ourselves vigorously.”