Tag: lawsuit

  • Florida Sues Juul Labs for Marketing to Youth

    Florida Sues Juul Labs for Marketing to Youth

    Credit: Insurance Journal

    Florida’s attorney general, Ashley Moody, has filed a lawsuit against Juul Labs, alleging that the company improperly marketed its products to children and offered misleading information about its products’ nicotine content, reports WUSF.

    The suit was filed in Hillsborough County Circuit Court. It seeks civil penalties and an injunction to prevent Juul “targeting children through their marketing and product design and from deceiving consumers with respect to the nicotine concentration.”

    “Juul relentlessly marketed to underage users with launch parties, advertisements using trendy-looking and young models, social media posts and free samples,” the lawsuit states. “It created a technology-focused, sleek design that could be easily concealed and sold its product in flavors known to be attractive to underage users. Juul also manipulated the chemical composition of its product to make the vapor less harsh on the throats of the young and inexperienced consumers it courted. To preserve its young customer base, Juul relied on age verification techniques that it knew were ineffective.”

    Juul responded to the lawsuit, stating that “it is disappointing to see the Florida attorney general direct her state’s resources to suing Juul Labs.”

    Juul’s response sets out “a few facts that should be understood,” including that “Florida’s attorney general initially led the negotiations between the state attorneys general and Juul Labs. For reasons that have not been explained to the public, she ultimately decided not to participate in a settlement to which 48 states and territories are now party to. Had she done so, like all those other jurisdictions, Florida would have its share of millions of dollars to help combat underage use and develop cessation programs. Instead, the Florida attorney general has now embarked on a drawn-out, expensive and uncertain legal process.”

    “Second,” the response continued, “Florida today suffers from the highest sales in the nation of illicit and potentially harmful disposable products emanating from China. These products are not in compliance with the [U.S. Food and Drug Administration’s] regulatory regime and, in many cases, are flagrantly targeting the state’s children. By contrast, over the past four years, Juul Labs has taken meaningful steps, including ceasing distribution of nontobacco, nonmenthol products in advance of FDA guidance on flavors, halting mass market product advertising, and restructuring our entire company with an emphasis on combating underage use. In part, due to these efforts, we have seen underage use of Juul products cut by 95 percent.”

    The response went on to allege that “Florida has the highest sales of these mostly foreign-made products in the United States, with over 60 percent of vapor sales dominated by disposables whose companies often disregard responsible practices with inappropriate flavor names and questionable marketing. Over the past months, we have been engaged with the attorney general’s office to help create a best-in-class program to combat illicit products. Even though Juul Labs plans to fight this case vigorously, the company remains ready to help Florida stem the tide of the proliferation of Chinese-made disposable products that have found what amounts to be a safe haven for foreign-made illegal vapor products.”

  • Dunkin Suing Vape Company for Trademark Violation

    Dunkin Suing Vape Company for Trademark Violation

    Credit: Alan

    Doughnut chain Dunkin’ sued an e-cigarette maker in New York federal court on Friday, claiming its “Vapin’ Donuts” products violate the chain’s trademark rights.

    The lawsuit said Singh Handicraft Corp uses branding that is “nearly identical” to Dunkin’s on disposable vaporizers shaped like an iced coffee cup and a glazed doughnut, with a logo in the same “distinctive orange and pink color scheme and rounded font,” Reuters reports.

    Massachusetts-based Dunkin’ also said that Singh sells the vaporizers in identical flavors to some of the chain’s drinks, including White Mocha and Iced Cappuccino. It accused Farmingdale, New York-based Singh of intentionally associating its products with Dunkin’ in a way that is likely to cause consumer confusion.

    Representatives for Dunkin’ and Singh did not immediately respond to requests for comment on the lawsuit.

    The complaint said that Singh’s products are sold through several online and brick-and-mortar vaping outlets. It said buyers of the e-cigarettes have “expressed that the only reason they purchased Defendants’ products is out of an affection for Dunkin’,” citing internet comments.

    Dunkin’ also accused Singh of targeting underaged buyers and said that such “morally reprehensible and illegal conduct” hurts the chain’s reputation.

    Dunkin’ asked the court for an order to stop Singh’s alleged trademark infringement and an unspecified amount of money damages.

    Singh applied for a federal trademark covering “Vapin’ Donuts” in March. Its application is still pending.

  • Class-Action Lawsuit Filed by RLX Investor

    Class-Action Lawsuit Filed by RLX Investor

    RLX Technology is facing a class-action lawsuit started by an investor who claims the Chinese e-cigarette manufacturer overstated its financials and misrepresented potential regulatory risks when it filed the paperwork for its initial public offering (IPO) in the U.S.

    Credit: Zerbor

    The lawsuit, submitted Wednesday by shareholder Alex Garnett in the U.S. District Court for the Southern District of New York, alleges RLX’s registration statement from last October omitted the impact of ongoing efforts by Chinese regulators to tighten sales of electronic cigarettes, according to an article in The Wall Street Journal.

    The case is captioned Garnett v. RLX Technology Inc., No. 21-cv-05125, and is assigned to Judge Paul A. Engelmayer. The RLX Technology class-action lawsuit charges that the company, certain members of its officers and directors, and the underwriters of its IPO with violations of the Securities Act of 1933.

    Companies under rules established by the U.S. Securities and Exchange Commission have to disclose any known events or uncertainties that at the time of an IPO caused or were likely to not represent future earnings. RLX stock fell sharply in March after Chinese authorities announced their intent to more heavily regulate the Chinese vapor market. Garnett filed the lawsuit on behalf of other RLX investors.

    The lawsuit alleges investors purchased RLX shares at artificially inflated prices, in part because the company omitted and misrepresented information in the registration statement. As the stock price dropped, RLX investors lost hundreds of millions of dollars, the lawsuit states.

    At least two other law firms in recent weeks said they are investigating on behalf of investors to determine whether RLX failed to disclose relevant information to investors. Rosen Law Firm and Bronstein, Gewirtz & Grossman, among others, are reportedly seeking RLX investors who want to join the class-action suit.

    RLX on June 2 reported revenue of CNY2.4 billion ($366.1 million), for the quarter ended March 31, up from CNY368.6 million the prior-year period. The company booked a net loss of CNY267 million, compared with a profit of CNY12.1 million during the prior-year quarter.

  • SCOTUS Denies Big Time Vapes a Review of Ruling

    SCOTUS Denies Big Time Vapes a Review of Ruling

    It’s over. After winding it’s way through the court system for nearly two years, the Supreme Court of the United States (SCOTUS) has denied Big Time Vapes a request for a writ of certiorari.

    Credit: Sean Pavone Photo

    On August 19, 2019, Big Time Vapes and United States Vaping Association, an e-cigarette manufacturer and an e-cigarette trade association, filed suit in the U.S. District Court for the Southern District of Mississippi challenging the constitutionality of the U.S. Food and Drug Administration’s (FDA) authority over vaping products.

    The original complaint was dismissed by the U.S. District Court in December 2019, and failed on appeal in the Fifth Circuit Court of Appeals last year. On June 25th, 2020, the Court of Appeals issued its opinion, finding that Congress’ delegation of authority to the Secretary of Health and Human Services to deem additional products subject to the Tobacco Control Act is not unconstitutional, upholding the district court’s decision.

    The nation’s highest court referred the case back to a lower court. Since the court did not accept the petition, the lower court’s decision will stand. SCOTUS accepts 100-150 of the more than 7,000 cases that it is asked to review each year, according to its website. It’s is the first petition for a case involving e-cigarettes to be considered by SCOTUS.

    The suit challenges the Tobacco Control Act, claiming that Congress unconstitutionally ceded its legislative authority to the FDA when it gave the agency the power to “deem” products as tobacco products that were not specified in the 2009 legislation.

    The FDA argued the Tobacco Control Act is constitutional, however, as “Congress laid out intelligible principles with appropriate boundaries for FDA to apply.” The FDA has also cited the public health issues posed by e-cigarettes, particularly to children, in defending the its authority to regulate the industry.

  • Sony Sued for Exploding E-Cig Battery In New York

    Sony Sued for Exploding E-Cig Battery In New York

    law

    On September 24, Bernardino Manuel brought a new product liability action against Sony Corporation in the Southern District of New York. He alleges that the a Sony e-cigarette battery exploded without warning, resulting in severe injuries to the plaintiff as he carried the defendant’s battery in his pocket.

    Manuel claimed that the defendant’s battery was made of lithium-ion, which by its chemical makeup is known to pose a heightened risk of “fire and explosion” when used in e-cigarette systems, according to lawstreetmedia. The plaintiff supported this assertion by referencing a “medical case report of a man in New Jersey, whose e-cigarette exploded in his pocket causing him severe burns,” a “California man (who) recently lost his eye as a result of an e-cigarette exploding near him,” and a “Southern California woman (who) was set on fire after an e-cigarette exploded while she was a passenger in a car.”

    Manuel also noted that cases like the aforementioned ones in New Jersey and California were only further exacerbated by the federal government’s failure to regulate the devices that power, and only the resulting toxins from, e-cigarettes. For example, the plaintiff averred, in October of 2014, a report was released by the federal government that noted that the Food and Drug Administration, U.S. Fire Administration, nor the U.S. Consumer Product Safety Commission regulated any aspect of the “battery or electronic components of the devices.”

    However, Manuel proffered, despite the government’s refusal to regulate, the U.S. Department of Transportation issued a “rule banning e-cigarettes from checked bags on airplanes because they have been known to catch fire,” which supports a claim that there is “mounting evidence the explosions and fires caused by e-cigarettes and lithium-ion batter(ies) are increasing in occurrence.”

    Given all this knowledge, Manuel argued that Sony should be held strictly liable for all damages based off of its defective battery. The plaintiff also alleged that the defendant should have provided consumers with similar “warnings, labels, or instructions” stating that the battery was “designed in a manner such that it should not be stored in a pocket.”

    Manuel sought damages “to compensate…for his injuries, economic losses and pain and suffering sustained as a result of the use of the (defendant’s) battery.” The plaintiff also sought attorney’s fees, court costs, and punitive damages.

  • Firing First

    Firing First

    State of North Carolina sues Juul Labs for its alleged role in the rise of youth vaping.

    North Carolina’s state motto could be changed from “First in Flight” to “First in Fight.” The state is the first in the U.S. to file a lawsuit accusing Juul Labs of targeting teens. Attorney General Josh Stein filed the suit in state court on May 15. It alleges that Juul Labs violated North Carolina’s Unfair and Deceptive Trade Practices Act by distorting the dangers of nicotine in its pod-style products. Stein also contends that Juul Labs designed, marketed and sold its vapor products in a way that attracts youth.

    “Juul has long claimed that its e-cigarettes are intended only for adult smokers seeking to transition away from traditional cigarettes, even though it has not sought nor has the FDA [U.S. Food and Drug Administration] granted a designation as an approved smoking cessation device,” the letter states. “But the facts tell a very different—and sobering—story: Teens aged 15 to 17 are far more likely to use Juul than Juul’s supposed target demographic of 25- to 34-year-olds.”

    Patricia Kovacevic, a former vapor and tobacco industry attorney and a current vapor industry consultant, says that, in her opinion, the North Carolina attorney general (AG) has yet to substantiate that Juul Labs’ alleged actions are “unfair, deceptive and illegal” under North Carolina law.

    “I expect that the AG will amend the complaint and will seek to introduce evidence in support of these claims,” she says. “This is not the first time that an attorney general has challenged the behavior of a manufacturer of tobacco products.”

    In the 1990s, attorneys general of more than 40 U.S. states sued tobacco companies to recover the cost of treating patients with smoking-related illnesses. The result was a Master Settlement Agreement (MSA) that, among other stipulations, imposed monetary obligations on the tobacco companies and restrictions on their behavior.

    The MSA was finalized in November 1998, originally between what were then the four largest U.S. tobacco companies (Philip Morris, R. J. Reynolds, Brown & Williamson and Lorillard) and the attorneys general of 46 states as well as of the District of Columbia, Puerto Rico and the Virgin Islands. (Mississippi, Minnesota, Florida and Texas settled their lawsuits separately with the major tobacco companies.)

    In the agreement, the tobacco companies agreed to limit or cease certain tobacco marketing practices as well as make annual payments to reimburse the states for some of the medical costs associated with smoking-related illnesses. The original participating manufacturers agreed to pay a minimum of $206 billion over the first 25 years of the agreement.

    According to the National Association of Attorneys General (NAAG), the MSA has succeeded in its central objective of lowering combustible cigarette use in the U.S., the level of which has declined at a record rate since the MSA was executed. “Youth smoking has declined even more. Cigarette consumption in the United States is currently at its lowest level since 1951 and per capita consumption has not been this low since the 1930s,” the NAAG website states. “This decline is even more impressive because the United States population has more than doubled since 1951.” The NAAG credits the MSA as making important contributions in the lowering of smoking rates, especially in youth.

    According to a statement on the American Lung Association (ALA) website, during the signing of the MSA settlement, several states made promises concerning how the MSA money would be used to reduce tobacco use. It goes on to state that states such as Alaska, North Dakota and Oklahoma did “the right thing” and set aside portions of their payouts for programs to reduce tobacco use based on the U.S. Centers for Disease Control and Prevention’s “Best Practices for Comprehensive Tobacco Control Programs.” Most states, however, used the funds improperly.

    “The vast majority of states have failed to use the funds for their intended purpose—some have used them to fill budget holes or pay off debts. A couple of states have even in the past used it to benefit the tobacco industry. For instance, South Carolina gave 15 percent of settlement funds to tobacco farmers affected by the drop in prices for their crop, while North Carolina used 75 percent of its settlement funds for tobacco production,” the ALA website states. “Some of those North Carolina funds went to private tobacco producers, covering tobacco curing equipment, a tobacco auction hall, video production for a tobacco museum and plumbing for a tobacco processing plant.”

    States were not the only government entities to sue tobacco companies. “There have also been other suits at the federal level,” Kovacevic says. For example, the U.S. v. Philip Morris Inc. case sought recovery of healthcare expenses under the Medical Care Recovery Act and the Medicare Secondary Payment provisions of the Social Security Act, as well as disgorgement under the Racketeer Influenced Corrupt Organization Act from nine companies and two affiliated organizations involved in the cigarette industry.

    The North Carolina attorney general claims in the Juul Labs suit that in developing its vapor products, Juul Labs “deliberately designed the flavors, the look and even the chemical composition of the e-cigarettes to appeal to youthful audiences, including minors. Belying its claimed ‘corporate mission’ of helping experienced smokers wean themselves from traditional cigarettes.”

    It goes on to allege that Juul Labs “developed dessert- and fruit-like flavors calculated to introduce tobacco in an appealing way to nonsmokers, especially young people. To further ease new smokers into the habit, Juul [Labs] manipulated the chemical content of its e-cigarettes to make the vapor less harsh on the throats of young and inexperienced smokers. Juul [Labs] also created a sleek design for its smoking device that it knew would be attractive to young people, in part because it is easily concealable.”

    Juul Labs’ focus on youth is also evident in its marketing, according to the suit. Stein claims that Juul Labs has “consciously chosen social media platforms and marketing channels that are known to attract minors, has used models who look like teenagers or very young adults, and has sought out and paid youth-oriented sponsors.” He also alleges that Juul Labs used social media “influencers” that are popular among teenagers in order to “spread the popularity of Juul’s youth-focused brand identity among the young.”

    Stein goes on to allege that “after knowingly creating an e-cigarette product that appeals to minors and knowingly marketing that product in a way that attracts minors, Juul pursued a sales strategy with a strong emphasis on internet-based sales, where the seller does not typically see the customer face-to-face and cannot directly confirm her age.” He accuses Juul Labs of relying on age verification techniques that the company knew were ineffective.

    The suit asks that Juul Labs, among other vapor items, refrain from the following actions:

    • Facilitate, assist, or enable any individual or entity in offering, selling, delivering or in any manner providing e-cigarette products to minors within this state
    • Offer, sell, deliver or in any manner provide e-cigarette products within this state in any flavors other than tobacco or menthol through online sales
    • Facilitate, assist, or enable any individual or entity in offering, selling, delivering or in any manner providing e-cigarette products within this state in any flavors other than tobacco or menthol through online sales
    • Engage in or participate in any marketing or advertising activities within this state, including on social media accessed within this state, involving e-cigarette products that are intended to or are known to be likely to appeal to minors, nor shall Juul Labs retain, facilitate, assist, enable, or encourage any other person or entity to engage or participate in such marketing or advertising activities within this state
    • Accordingly, Juul Labs, without limitation, shall not: advertise outdoors (including window advertisement visible from the street or sidewalk) within 1,000 feet of schools and playgrounds in North Carolina, or sponsor sports, entertainment or charity events held in North Carolina

    Stein also asked that the e-cigarette manufacturer hand over to the state a confidential database containing “all customer-related information, including but not limited to names, addresses, email addresses, telephone numbers and any other information in Juul Labs’ possession regarding any individual consumer that is under age 18 or that Juul is unable to confirm is at least 18 years of age.”

    He then asks that Juul Labs delete “all such information in its possession, including but not limited to all account information on Juul’s website and inclusion of such individuals on Juul’s email marketing lists” within 10 days of the state receiving the list.

    Victory in the case is far from certain for North Carolina, according to Kovacevic. “It will be interesting to follow the North Carolina case to understand, among other things, how will the attorney general quantify the alleged harm from which relief is sought,” she says.