The Joseph Saveri Law Firm is Interim Lead Counsel for Direct Purchaser Plaintiffs in e-cigarette antitrust lawsuits against Altria Group, Inc., (“Altria”) and Juul Labs, Inc., (“JLI”) on behalf of individuals and businesses who purchased JUUL e-cigarette devices directly from JLI between December 7, 2018 and the present.
The first suit, Martinez v. Altria Group, Inc. and Juul Labs, Inc., is in the United States District Court, Northern District of California. Plaintiff and the Class seek damages recovery for violations of Section 1 of the Sherman Act, 15 U.S.C. § 1, and Section 7 of the Clayton Act, 15 U.S.C. § 18. Additional suits have subsequently been filed, seeking similar damages recovery in the same District. On May 7, 2020, the Court consolidated all cases under Reese v. Altria Group, Inc., et al., 3:30-cv-02345-WHO.
The e-cigarette antitrust claims stem from an allegedly anticompetitive agreement (“agreement”) between Altria and JLI, whereby Altria agreed to acquire an ownership interest in JLI in exchange for over $12 billion in cash. Altria also allegedly agreed not to compete with JLI and to provide JLI valuable retail shelf space in the e-cigarette market. Through this agreement, JLI was able to maintain its dominance in the e-cigarette market and earn monopoly profits. Altria then shared these profits through its ownership stake in JLI.
Altria is one of the world’s largest tobacco companies, with popular brands like Marlboro and approximately 25.1 billion dollars in revenue in 2019. But fears over the health effects of nicotine, social stigma, and laws banning smoking in public places cut into Altria’s success in the traditional U.S. cigarette market. Due to declining sales, Altria attempted to enter the e-cigarette market in 2013 through its subsidiary Nu Mark LLC, and products such as the MarkTen and MarkTen Elite.
In 2015, JLI entered the e-cigarette market and quickly captured over 70% market share by 2018, stunning Altria and other competitors. JLI accomplished this by developing a chemical breakthrough that increased the speed of nicotine delivery, and offering a stylish device and innovative tobacco flavors.
JLI’s swift rise posed a grave competitive threat to Altria in the e-cigarette and traditional cigarette markets. To eliminate that threat, Altria began a two-prong strategy of attempting to acquire JLI, while continuing to compete against it. Its initial efforts to acquire JLI were unsuccessful. But in the fall of 2018, JLI agreed to negotiate with Altria, under the condition that Altria withdraw its products and stop competing with JLI in the market for e-cigarettes. At first, Altria refused. In October 2018, however, Altria agreed and began to withdraw its e-cigarette products from the market. Two months later, Altria announced its intention to cease competing in the market. Approximately two weeks after this announcement, Altria disclosed that it had entered into the agreement with JLI.
On April 1, 2020, the Federal Trade Commission (“FTC”) filed a complaint against Altria and JLI, alleging their agreement violated federal antitrust law. The FTC alleged that Defendants’ conduct unreasonably restrained competition, and that the agreement substantially lessened competition in the U.S. e-cigarette market by eliminating competition between Altria and JLI on price, innovation, promotional activity, and shelf space.
Please contact the firm if:
- You have knowledge of the alleged anticompetitive agreement that Altria would stop competing with JLI in the e-cigarette market;
- You have purchased JUUL e-cigarette devices directly from JLI between December 7, 2018 and the present and are interested in becoming a class representative; or
- You would like to learn more about this e-cigarette antitrust litigation or our other antitrust cases and investigations.
Any information you provide will be kept strictly confidential as provided by law unless and until you agree to publicly disclose the information.