Antitrust claims to proceed against JUUL, Altria in federal court

The Direct Purchaser Plaintiffs’ antitrust claims, which allege that JUUL schemed with global cigarette manufacturer Altria Group, Inc. to tighten its grip on the e-cigarette industry, withstood a motion to dismiss on Aug. 19, 2021.

While U.S. District Judge William H. Orrick granted a defense request to compel the direct purchaser class’ three named representatives to arbitration, he allowed time for the class to substitute a proposed plaintiff whose claims would not be subject to arbitration. The remaining motions to dismiss were largely denied, however, allowing the class action to proceed in the Northern District of California.  

Motley Rice filed the first direct purchaser antitrust case in the country. Reece v. Altria Group Inc. et al.

Formerly Philip Morris, Altria is one of the world’s largest cigarette manufacturers. The plaintiffs allege that the company competed with JUUL for years as the second-leading manufacturer of e-cigarettes, but later abandoned its e-cigarette production efforts in 2018 after buying a 35% share of JUUL. The $12.8 billion deal made Altria JUUL’s largest investor, and helped JUUL secure its place as the nation’s largest e-cigarette manufacturer within a few short years of its 2015 launch, plaintiffs allege. 

No longer competitors, JUUL and Altria’s mutually beneficial deal allegedly removed incentives for the companies to keep prices in check, harming consumers. The deal constituted an “unreasonable restraint of trade” in violation of federal antitrust laws, the Federal Trade Commission stated in a press release on April 2020 that announced its filing of an administrative complaint against both companies. The FTC’s trial against JUUL and Altria began June 2021 and is ongoing.

Motley Rice antitrust attorney Michelle Clerkin serves as a member of the Plaintiffs’ Steering Committee for the direct purchaser plaintiffs.

The federal class action for direct purchaser plaintiffs is In re Juul Labs, Inc. Antitrust Litigation, in the Northern District of California.  

Read the order denying JUUL’s motion to dismiss.