By David Yucht, J.D.
If in the future, the FDA enacts more rules under the Family Smoking Prevention and Tobacco Control Act, there could be additional preemption issues that will need to be addressed by the courts.
A federal judge in California found that, other than labelling claims concerning nicotine addiction, claims brought in a class action complaint against manufacturers, distributors and retailers of JUUL® ecigarettes were not preempted by the Family Smoking Prevention and Tobacco Control Act (TCA). Consequently, the court denied a motion to dismiss these claims as part of a lengthy, multi-issue opinion (In Re: Juul Labs, Inc., Marketing, Sales Practices, and Products Liability Litigation, October 23, 2020, Orrick, W.).
JUUL® ecigarette class action. The JUUL ecigarette device is an electronic nicotine delivery system (ENDS). According to a class action complaint, this product was designed to avoid the "stigma" associated with traditional cigarettes and to capture a market including youthful users who had not previously used nicotine. The main defendants are JUUL Labs, Inc. and its founders and directors (JLI), and the Altria group. Other defendants included retailers, distributors, and e-liquid nicotine manufacturers. These parties allegedly achieved their goal of market dominance by creating a highly addictive product that produced high "buzz" levels with low throat discomfort. Additionally, it was claimed that they maximized addiction, practiced mass deception and targeted young people. The complaint alleged violations of several California state statutes, common law fraud, federal RIC0, breach of warranty, and unjust enrichment. Among other defenses, the various entities moved to dismiss the complaint based on federal preemption arguing that the state law claims were preempted by the TCA which gave the FDA broad authority to regulate tobacco products, including the ENDS products at issue here.
Preemption related to product liability claims. Other than claims for failure to provide adequate warnings, the court refused to dismiss product liability claims on preemption grounds. Under the Supremacy Clause of the U.S. Constitution if a state law conflicts with federal law, the federal law takes precedence and the state law is preempted. The court noted here that the only relevant area where federal law conflicted with state law rights to product liability compensation, involved FDA regulations imposing nicotine warning requirements. Consequently, claims that sought to impose labelling requirements different from or in addition to nicotine addictiveness warnings regarding only nicotine and addiction were preempted. If in the future, the FDA were to enact more rules pursuant to the TCA, there could be additional preemption issues. Additionally, the court noted that the TCA contained an express savings clause which expressly preserved state law products liability claims. This clause saved most claims asserted here that sounded in product liability under state law. Also, non-product liability claims related to product design standards were not preempted. The defendants argued that such claims were expressly preempted. Although, design and product standards, like nicotine yields, components, ingredients, additives, and tobacco product properties were committed to the authority of the FDA, the FDA had not yet proscribed any design or product standards for ENDS.
Packaging and labelling claims. Labeling claims based on the presence or absence of false and misleading disclosures about nicotine addiction and failure to warn theories were preempted to the extent that they implicated the nicotine addiction warning specifically approved and required by the FDA. However, the preempted claims were limited to disclosures or lack of disclosures on the product labels themselves and did not extend to "advertising" more generally. The only misbranding or labelling requirement that the FDA adopted for ENDS is the "minimum" nicotine addiction warning. Claims that JLI falsely or misleadingly mislabeled the dosage of nicotine on its labels were not preempted by Congress which entrusted the FDA to regulate labelling. Omissions of "deadly safety defects" that should have been made under state laws were not expressly preempted, other than those related to the minimum nicotine addiction warning labels. Moreover, claims pertaining to information contained on websites, were not preempted. The pertinent federal statute defined "labeling" to mean "all labels and other written, printed, or graphic matter upon any article or any of its containers or wrappers or accompanying such article." Information contained on websites is not information that "accompany[ies]" the product at issue. Additionally, the defendants’ assertion that the advertising claims were preempted under the labelling regulations was rejected by the court. The preemptive "different from, or in addition to" language of the express preemption provision that included "misbranding" did not apply to advertising.
Retailers. Anadditional argument in the retailers’ motion to dismiss was denied rejected. They pointed to a "safe harbor" provision in the TCA which provides that a retailer will not be in violation for packaging that contains health warnings supplied by the tobacco product manufacturer, which are not altered by the retailer. They argued that in light of this provision they could not be liable for any inclusion or omission of any health warning on a product’s packaging unless the warning was specifically required by the FDA and they altered it. The Retailer-specific arguments were derivative from the only FDA mandated warning currently imposed on ENDS, the nicotine-addiction warning. Advertising is expressly exempted from the TCA’s express preemption clause.
The case is No. 3:19-md-02913-WHO.
Attorneys: Adam Gutride (Gutride Safier LLP) for Bradley Colgate, Kaytlin McKnight and Anthony Smith. David M. Bernick (Paul Weiss Rifkind Wharton & Garrison LLP) for JUUL Labs, Inc. Beth Wilkinson (Wilkinson Walsh LLP) for Altria Group, Inc. and Altria Client Services LLC.
Companies: JUUL Labs, Inc.; Altria Group, Inc.; Altria Client Services LLC
MainStory: TopStory CaseDecisions AdvertisingNews LabelingNews PreemptionNews TobaccoNews CaliforniaNews
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