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A California federal judge said Friday he is likely to certify classes of direct and indirect purchasers accusing Juul Labs Inc. and Altria Group Inc. of antitrust violations, finding that the plaintiffs share sufficient common issues even though Altria warned that class certification could create a “Frankenstein’s monster” of conflicting state damages laws.

U.S. District Judge William Orrick told the parties during a Zoom hearing that he had issued a tentative ruling favoring certification but would hold off on a final decision until addressing several remaining questions. The motion seeks to certify both indirect purchaser and indirect reseller classes who allege Juul and Altria conspired to reduce competition and limit e-cigarette product variety after Altria’s $12.8 billion investment in Juul in 2018.

Judge Orrick said a written order will follow.

Altria Argues Class Certification Would Create a “Frankenstein’s Monster”

Representing Altria, James Rosenthal of Wilkinson Stekloff LLP urged the court not to certify the proposed classes, citing the patchwork of state antitrust laws among the 31 states involved. He said that while California’s Cartwright Act automatically triples damages, other states do not, creating potential inconsistency and unfairness in damage awards.

Rosenthal also objected to the idea of bifurcating the trial—holding one phase for liability and another for damages—arguing that doing so would double the work for defense experts and lead to logistical chaos.

“Can you create this Frankenstein’s monster of different laws?” Rosenthal asked. “I do not think you can do it.”

When Judge Orrick asked whether the alleged conflicts related only to damages and not liability, Rosenthal acknowledged that liability was not in dispute under the same framework.

Plaintiffs Say Differences Among State Laws Don’t Undermine Class

Elana Katcher of Kaplan Fox Kilsheimer LLP, arguing for the plaintiffs, countered that minor variations among state antitrust statutes shouldn’t derail certification. She argued that California’s Cartwright Act could govern all claims because the alleged conspiracy was rooted in California — Juul’s home state and a major market for its products.

“The court’s challenge is to ensure that modest variances in the laws of other states do not stand in the way of plaintiffs’ ability to pursue their antitrust case,” Katcher said.

She noted that requiring 31 separate class representatives would make the case too fragmented and costly to prosecute, frustrating the purpose of class actions.