JUUL LABS, INC. v. 4X PODS, 2:18-cv-15444

Background:

JUUL Labs, Inc. (JLI) makes ENDS devices and prefilled JUUL pods and owns federally registered trademarks and copyrights for pod packaging and designs.
Defendants marketed "4X PODS" (associated with Eonsmoke, LLC) which JLI alleges copied JUUL packaging, used JUUL-related hashtags (e.g., #juulgang, #doit4juul), and caused marketplace confusion; individual defendants Grishayev and Tolmach are alleged operators.
JLI moved for leave to file an amended complaint to add Eonsmoke (d/b/a 4X PODS) and Tolmach, add a JUUL wordmark claim, plead veil-piercing to reach individuals, and allege additional harm facts.
Defendants opposed on grounds of undue delay, bad faith, undue prejudice, and futility of the new claims (Lanham Act claim and veil-piercing theory).
The Court found the motion was filed before the Court’s extended deadline (so Rule 15 governs), and that any delay was largely due to defendants’ discovery noncompliance (late production of Skype messages and financial records).
The Court granted leave to amend: it found no undue delay, prejudice, or bad faith, and held the proposed Lanham Act and veil-piercing allegations were plausible (not futile) at the pleading stage.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Governing rule for amendment	Motion was filed before court's extended deadline so Rule 15 (liberal leave) applies	Rule 16 good-cause standard should control because schedule/deadline issues	Motion filed before extended deadline; Rule 15 governs
Undue delay	Amendment sought soon after late discovery (Skype, financials); delay due to Defs' noncompliance	JLI delayed and could have amended earlier; waited to take depositions	No undue delay; amendment timely within extended deadline and justified by defendants' discovery delays
Undue prejudice	Most relevant discovery already requested; limited additional burden	Amendment will expand discovery, delay resolution, and increase costs	No undue prejudice; any additional burden is incidental and foreseeable
Bad faith	Veil-piercing and individual claims grounded in produced evidence showing concealment and misconduct	Amendment is harassment/intimidation; veil-piercing is opportunistic	No bad faith; factual allegations and discovery support good-faith basis for claims
Futility — Trademark/Lanham Act	Identical use of JUUL mark in hashtags and packaging paired with product images plausibly causes confusion	Use of mark in hashtags is fair use; claim fails as a matter of law	Not futile; pleadings plausibly state likelihood of confusion under Lanham Act
Futility — Veil piercing	Allegations of façade, undercapitalization, siphoning, concealment, and intent to avoid judgment/FDA regulation support piercing	Undercapitalization alone insufficient; veil-piercing unlikely	Not futile; allegations plausibly satisfy unity-of-interest and injustice elements

Key Cases Cited

Foman v. Davis, 371 U.S. 178 (1962) (standards for granting leave to amend)
Race Tires America, Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57 (3d Cir. 2010) (discusses tension between Rules 15 and 16)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual content permitting plausible inference of liability)
In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997) (futility tested under Rule 12(b)(6) standard)
Ford Motor Co. v. Summit Motor Products, Inc., 930 F.2d 277 (3d Cir. 1991) (elements for Lanham Act trademark infringement)
Scott's Paper Co. v. Scott’s Liquid Gold, Inc., 589 F.2d 1225 (3d Cir. 1978) (likelihood-of-confusion factors)
A&H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198 (3d Cir. 2000) (emphasizes importance of similarity factor)
Craig v. Lake Asbestos of Quebec, Ltd., 843 F.2d 145 (3d Cir. 1988) (factors for unity of interest in veil piercing)
Linus Holding Corp. v. Mark Line Indus., LLC, 376 F. Supp. 3d 417 (D.N.J. 2019) (analysis of veil-piercing factors, including undercapitalization)