In re NJOY, Inc. Consumer Class Action Litigation

A court ruled that a lawsuit against e-cigarette maker NJOY could not proceed as a class action. Potential class members had asserted that NJOY: (1) conducted misleading advertising indicating that e-cigarettes are safer than regular cigarettes; and (2) omitted information on its packaging about product ingredients and the risks of such ingredients. The court affirmed an earlier ruling prohibiting the lawsuit from proceeding as a class action, saying that class members failed to demonstrate how damages can be proven for the entire class. Specifically, the court said that the class was not able to show how it could calculate the difference between the price paid by consumers of NJOY and the true market price that reflects the impact of the unfair or fraudulent business practices. Although the ruling means that the case may not proceed as a class action, individuals may sue NJOY independently.  

In re NJOY, Inc. Consumer Class Action Litigation, Case No. CV 14-428-JFW (JEMx), (Feb. 2, 2016).

  • United States
  • Feb 2, 2016
  • U.S. District Court, Central District of California
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Parties

Plaintiff

  • Ben Z. Halberstam
  • Kathryn Thomas

Defendant

  • NJOY, Inc.
  • Sottera, Inc.

Legislation Cited

California Consumers Legal Remedies Act (CRLA)

California Unfair Competition Law (UCL)

Florida Deceptive and Unfair Trade Practices Act (FDUPTA)

Related Documents

Type of Litigation

Tobacco Control Topics

Substantive Issues

Type of Tobacco Product

"As Judge Morrow held, Plaintiffs’ omissions claim “has two distinct components. Plaintiffs allege first that NJOY’s failure to include certain harmful ingredients on the label of NJOY e-cigarettes -- namely, [propylene] glycol and glycerin -- was misleading because a reasonable consumer would want to know that NJOY e-cigarettes contained propylene glycol and glycerin before purchasing them. They also allege that, even when these ingredients are disclosed, the packaging is misleading because it fails to warn of the harmful effects of inhaling such ingredients.” Judge Morrow then concluded: “Because Halberstam admitted that he would have purchased NJOY e-cigarettes even if the packaging had disclosed that it contained propylene glycol and glycerin, he has conceded that he did not suffer injury in fact due to the alleged omission.” August 14 Order at 42. “Halberstam therefore lacks standing to assert an omissions claim based on NJOY’s failure to disclose the fact that propylene glycol and glycerin were among the ingredients in its e-cigarette product.” Id. at 42-43. Judge Morrow, however, concluded that Halberstam has standing to assert an omissions claim based on NJOY’s failure to warn of the harmful effects of inhaling propylene glycol and glycerin."
"Accordingly, the Court concludes that Plaintiffs have not proffered a model capable of calculating damages on a classwide basis, and, despite having been given a second opportunity, have failed to meet their burden of demonstrating that questions of law or fact common to class members predominate over questions affecting only individual members."
"The Court concludes that Dr. Harris’s proposed Bayesian hedonic regression model is simply not designed to measure only those damages attributable to NJOY’s misrepresentations and/or omissions, and thus does not satisfy Comcast. In other words, it is not designed to calculate the fair market value of NJOY’s e-cigarettes absent the misrepresentations and omissions."
"Because Dr. Harris’s “modified” conjoint analysis and direct method continue to focus on a consumer’s subjective valuation, and thus do not permit the court to calculate the true market price of N-JOY cigarettes absent the purported misrepresentations and omissions, they do not satisfy Comcast."