Colgate v. Juul Labs, Inc.
345 F. Supp. 3d 1178
N.D. Cal.2018Background
- Thirteen plaintiffs (adult and minor users) from seven states sued JUUL Labs alleging false advertising, mislabeled nicotine content, defective design/manufacture, warranty breaches, and related consumer-protection claims arising from JUUL ENDS and prefilled pods.
- Plaintiffs allege JUUL advertises pods as containing 5% nicotine by weight but scientific testing (Pankow study) shows ~6.2% nicotine and that JUUL uses benzoic acid to create nicotine salts that increase nicotine delivery and addictiveness.
- Plaintiffs challenge both product labeling (on packaging/pods) and advertising (multimedia and social media campaigns allegedly targeting youth).
- JUUL moved to dismiss: arguing (1) express preemption under the Tobacco Control Act (TCA)/FDCA for labeling claims; (2) failure to meet Rule 9(b) for fraud-based advertising claims; and (3) failure to state many state-law claims, or to identify specific state statutes for non-California claims.
- Court ruled that TCA preempts claims demanding labeling warnings beyond the FDA-prescribed warnings (including claims that labels must warn about JUUL’s nicotine-salt pharmacokinetics), but claims that labels misstate the nicotine percentage (e.g., 5% vs. alleged 6.2%) are not preempted.
- Advertising-based claims are not preempted (TCA exception) but many fraud/advertising claims were dismissed for lack of Rule 9(b) particularity; several other state-law causes of action survive as to mislabeled nicotine percentage, with some claims dismissed with leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TCA/FDCA preempts state-law claims about labeling content/warnings | Labels should disclose nicotine-salt potency and addictiveness (pharmacokinetics) | TCA/FDA rule prescribes exclusive, detailed labeling requirements for covered tobacco products | Preempted: plaintiff claims seeking additional/ different labeling about pharmacokinetics are barred (dismissed with prejudice) |
| Whether misstatement of nicotine percentage on pods is preempted | Pod labels (5%) are false; actual nicotine is ~6.2% — claims based on mislabeling are state-law actionable | Labeling requirements fall exclusively to FDA; any label-based claim is preempted | Not preempted: claims alleging mislabeling of nicotine percentage survive |
| Whether advertising-based fraud/consumer-protection claims meet Rule 9(b) | Advertising was widely misleading and targeted youth; plaintiffs relied on advertising | Plaintiffs fail to identify the specific ads, content, timing, and reliance as required by Rule 9(b) | Advertising claims are not preempted but dismissed for failure to plead with the particularity Rule 9(b) demands (leave to amend) |
| Pleading sufficiency of other state-law claims (design/manufacture/warranty/unjust enrichment) | Misstated nicotine amount causes design/manufacturing defect, warranty breaches, unjust enrichment, negligent misrepresentation | Allegations are conclusory or fail as a matter of law (merchantability/express warranty) | Design defect, manufacturing defect, implied warranty, negligent misrepresentation, and unjust enrichment claims survive as pleaded regarding nicotine percentage; breach of express warranty and unidentified out-of-state consumer statutes dismissed with leave to amend |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (standard for plausibility on a Rule 12(b)(6) motion)
- Ashcroft v. Iqbal, 556 U.S. 662 (courts accept well-pleaded facts and reject conclusory allegations)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (preemption analysis: start with assumption that states retain police powers absent clear congressional intent)
- Barnett Bank of Marion Cnty., N.A. v. Nelson, 517 U.S. 25 (express preemption requires clear statutory language)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (Rule 9(b) requires particularity in fraud pleadings)
- Barker v. Lull Eng'g Co., 20 Cal.3d 413 (California tests for design-defect: consumer-expectation and risk-benefit)
- Swartz v. KPMG LLP, 476 F.3d 756 (purpose of Rule 9(b): give defendant notice of alleged fraud so it can defend)