Juul Labs Inc’s largest stakeholder, Altria Group Inc, has asked a federal judge to order the e-cigarette company to turn over details of its settlement with about 10,000 plaintiffs seeking to hold it responsible for an epidemic of youth vaping.
In a motion filed Wednesday in federal court in San Francisco, the Virginia-based company said the settlement, reported by The Wall Street Journal to be worth $1.7 billion, remains “shrouded in secrecy” even from other parties in the litigation.
Marlboro cigarette maker Altria, which took a 35% stake in Juul in 2018, was not part of the settlement and remains a defendant in mass tort litigation consolidated before U.S. District Judge William Orrick. Plaintiffs, including individuals and local government entities, accuse it of taking part in shaping Juul’s strategy to market e-cigarettes to minors.
Altria said it needed to see details of the settlement, and the negotiations leading up to it, in order to evaluate its own potential remaining liability and explore potential claims against third parties.
While there may be reasons for keeping the settlement out of public view, the company said, Juul’s refusal to share it with Altria “goes far beyond the protections needed to address those concerns, lack any legal basis, and would severely prejudice” Altria.
Juul and a lawyer for the plaintiffs did not immediately respond to requests for comment.
In a separate motion Wednesday, Altria also asked Orrick to put on hold a class action seeking refunds on behalf of all Juul purchasers nationwide while Altria appeals the judge’s order certifying the class. The class action is one part of the larger consolidated mass tort before Orrick.
The company said it would be heavily burdened by continued discovery related to the class, which potentially includes millions of people. It said the fact that the 9th U.S. Circuit Court of Appeals agreed to hear the appeal of class certification before a final judgment in the case showed that Altria had a “substantial case on the merits” and was entitled to a stay.
In addition to the mass tort settlement, Juul in September agreed to pay $439 million to settle claims over its marketing practices brought by 34 U.S. states and territories. The company has not admitted wrongdoing as part of the settlements and has said it has taken steps to prevent sales to underage buyers.
The case is In re Juul Labs Inc, Marketing, Sales Practices, and Products Liability Litigation, U.S. District Court for the Northern District of California, No. 19-md-02913.
For plaintiffs: Sarah London of Lieff Cabraser Heimann & Bernstein; Dena Sharp of Girard Sharp; Dean Kawamoto of Keller Rohrback; and Ellen Relkin of Weitz & Luxenberg
For Juul: Gregory Stone of Munger, Tolles & Olson; and David Bernick of Kirkland & Ellis
For Altria: John Massaro of Arnold & Porter Kaye Scholer
Brendan Pierson – Reuters – 2023-01-05.
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