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.

“Defendants’ argument that differences in enhanced damages should suffice to derail California from applying its law is not cognizable under California law,” she added.

Background: A Long-Running E-Cigarette Antitrust Fight

The litigation began in 2020, when consumers alleged Juul and Altria colluded to stifle competition in the e-cigarette market. Plaintiffs claim Altria’s 2018 investment in Juul — later sold off in March 2023 — effectively eliminated competition between the companies and consolidated market control.

The Federal Trade Commission initially challenged the deal but dropped its case after Altria divested its stake. Plaintiffs argue, however, that the companies could recombine in the future, keeping their injunctive claims alive alongside requests for damages.

Judge Orrick previously dismissed the injunction claim as moot following the divestment and has also sent some claims to arbitration.

Representation

Plaintiffs are represented by:

• Betsy C. Manifold, Kate M. McGuire, and Thomas H. Burt, Wolf Haldenstein Adler Freeman & Herz LLP

• Fred T. Isquith Sr., Isquith Law PLLC

• Merle C. Meyers and Michele Thompson, Meyers Law Group PC

• Robin F. Zwerling and Justin M. Tarshis, Zwerling Schachter & Zwerling LLP

• Andrew Dirksen, Cera LLP

• Elana Katcher, Kaplan Fox Kilsheimer LLP

• Joseph Saveri, Itak Moradi, Ronnie Seidel Spiegel, and David Seidel, Joseph Saveri Law Firm LLP

• John D. Radice, Radice Law Firm PC

• Michael Buchman, Motley Rice LLC

Juul Labs Inc. is represented by David I. Gelfand, Jeremy J. Calsyn, and Nowell D. Bamberger of Cleary Gottlieb Steen & Hamilton LLP.

Altria Group Inc. is represented by James M. Rosenthal, Jeremy Scott Barber, and Jennifer Pavelec of Wilkinson Stekloff LLP.

The case is In re Juul Labs Inc. Antitrust Litigation, Case No. 3:20-cv-02345, in the U.S. District Court for the Northern District of California.