DENVER (Legal Newsline) - Colorado can’t sue individual JUUL officers over their company’s nationwide e-cigarette marketing practices, the state’s highest court ruled, citing the U.S. Supreme Court’s longstanding doctrine limiting personal jurisdiction over out-of-state defendants.
Colorado Attorney General Philip J. Weiser, like AGs in other states, sued JUUL in state court in July 2020, accusing the California company of creating a “public nuisance” by targeting teenagers with marketing that violated state consumer protection laws by downplaying the addictive properties of nicotine. Weiser had the support of the Colorado Trial Lawyers Association.
A trial court dismissed the public nuisance claim but allowed the others to proceed. Colorado then added JUUL executives and directors Adam Bowen, James Monsees, Nicholas Pritzker and Riaz Valan to the suit, citing internal e-mails and other documents showing they were aware of and participated in the marketing strategy. The trial judge allowed the case to procced.
The individual defendants then filed an appeal to the Colorado Supreme Court, arguing that as California residents the state had no personal jurisdiction over them. They relied upon a string of U.S. Supreme Court decisions starting with the landmark International Shoe v. Washington, which held states can only exercise jurisdiction over non-residents when they have “certain minimum contacts” with the state.
The Colorado Supreme Court reversed the trial court’s finding of jurisdiction in a Sept. 26 decision, ruling that the AG’s office had failed to identify specific activities the individual defendants had directed at state residents. Bowen and Monsees founded Pax Labs, where they launched the JUUL e-cigarette. Monsees became chief product officer in 2015 and Pritzker and Valani served on an executive committee that ran the company for a few years.
By 2018, 27% of Colorado high school students said they vaped in the past 30 days, almost double the national rate. To support its claims against the individual defendants, the state included an e-mail from JUUL’s former chief operating officer in which he said “our board members are more involved than most, and likely crazier than most, given the depth of experience they have in this industry.” The state also cited the involvement of Pritzker and others in meetings where youth “influencer” marketing was discussed and executives talked about “debunking” scientific studies that suggested e-cigs were dangerous.
‘Notably, none of the foregoing allegations show any direct connection between defendants and the state of Colorado. Nor do any of these allegations suggest that any of defendants purposefully aimed their activities at Colorado,” the state Supreme Court ruled, however
The court said it was less than impressed by a California decision asserting jurisdiction over the Juul officials. It cited favorably the New York Supreme Court’s decision in July, in which Monsees and Bowen were found to have specifically targeted the state, including holding board meetings in New York and telling the marketing team to increase the number of state residents trying JUUL e-cigs. The New York court released Pritzker and Valani, however, for lack of state contacts.
Citing the support AG Weiser got from trial lawyers and others, the court said “nothing in our decision today suggests that non-resident defendants can claim immunity merely because `they have not physically set foot’ in Colorado.”
“As discussed above, the proper inquiry is whether defendants expressly aimed any conduct here,” the court concluded.