throbber
Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 1 of 30
`
`
`
`GREGORY P. STONE (SBN 78329)
`gregory.stone@mto.com
`DANIEL B. LEVIN (SBN 226044)
`daniel.levin@mto.com
`BETHANY W. KRISTOVICH (SBN 241891)
`bethany.kristovich@mto.com
`JOHN M. GILDERSLEEVE (SBN 284618)
`john.gildersleeve@mto.com
`MUNGER, TOLLES & OLSON LLP
`350 South Grand Avenue, 50th Floor
`Los Angeles, CA 90071-3426
`Telephone: (213) 683-9100
`Facsimile: (213) 687-3702
`
`RENEE D. SMITH (pro hac vice)
`renee.smith@kirkland.com
`KIRKLAND & ELLIS LLP
`300 North LaSalle
`Chicago, IL 60654
`Telephone: (312) 862-2000
`Facsimile: (312) 862-2200
`
`PETER A. FARRELL, P.C. (pro hac vice)
`peter.farrell@kirkland.com
`KIRKLAND & ELLIS LLP
`1301 Pennsylvania Ave., N.W.
`Washington, DC 20004
`Telephone: (202) 389-5000
`Facsimile: (202) 389-5200
`
`Attorneys for Defendant Juul Labs, Inc.
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`
`IN RE: JUUL LABS, INC., MARKETING,
`SALES PRACTICES, AND PRODUCTS
`LIABILITY LITIGATION
`
`
`
`This Document Relates to:
`
`(1) Tucson Unified School District v. JUUL
`Labs, Inc.,et al.; (2) County of Santa Cruz,
`Individually And on Behalf of The People of
`The State of California v. JUUL Labs, Inc., et
`al.; (3) The Livermore Valley Joint Unified
`School District v. JUUL Labs, Inc., et al.; (4)
`The School Board of Broward County, Florida
`v. JUUL Labs, Inc., et al.; (5) The School
`
` Case No. 19-md-02913-WHO
`
`Reply Memorandum in Support of Motion
`to Dismiss Bellwether Government Entity
`Complaints
`
`Judge: Hon. William H. Orrick
`Date:
`September 21, 2020
`Time:
`9:00 a.m.
`Ctrm.:
`2
`
`
`
`
`
`Case No. 19-md-02913-WHO
`
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 2 of 30
`
`
`
`Board of Escambia County, Florida, et al. v.
`JUUL Labs, Inc., et al.; (6) Three Village
`Central School District v. JUUL Labs, Inc., et
`al.; (7) Central Bucks School District, Bucks
`County, Pennsylvania v. JUUL Labs, Inc., et
`al.
`
`
`
`
`
`
`
`
`
`
`Case No. 19-md-02913-WHO
`
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 3 of 30
`
`
`
`
`
`I.
`II.
`
`III.
`
`TABLE OF CONTENTS
`
`C.
`
`Page
`INTRODUCTION1 ................................................................................................................1
`ALL CLAIMS MUST BE DISMISSED ................................................................................2
`A.
`The Municipal Cost Recovery Rule Bars Plaintiffs’ Damages ..................................2
`B.
`Plaintiffs Fail to State a Public Nuisance Claim ........................................................3
`1.
`Plaintiffs Fail to Plead Interference with a Public Right ................................5
`2.
`Plaintiffs Fail to Plead that JLI Had Control over the Nuisance ....................7
`3.
`Plaintiffs Fail to Plead a Special Injury ..........................................................9
`Plaintiffs Fail to State Negligence-Based Claims ....................................................10
`1.
`The Economic Loss Rule Bars Plaintiffs’ Negligence Claims ....................10
`2.
`JLI Did Not Owe a Duty to Plaintiffs ..........................................................13
`(a)
`A Special Relationship is Required, but is Lacking Here ................13
`(b)
`Foreseeability Does Not Alone Establish A Duty Under
`California, Florida, and Pennsylvania Law ......................................15
`The California and Pennsylvania Gross Negligence Claims Fail ................17
`3.
`Plaintiffs Fail to Plead Proximate Cause ..................................................................17
`The Statutory Consumer Protection Claims Must Be Dismissed ............................18
`1.
`Three Village CSD Does Not Allege “Actual Damages” ............................18
`2.
`The Florida School Boards Do Not Allege “Actual Damages” ...................19
`CONCLUSION ....................................................................................................................20
`
`D.
`E.
`
`
`1 By email agreement, Plaintiffs have stipulated to a 20-page limit for this reply brief.
`Case No. 19-md-02913-WHO
`
`-i-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 4 of 30
`
`
`
`
`
`FEDERAL CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`
`Allegheny Gen. Hosp v. Philip Morris, Inc.,
`228 F.3d 429 (3d Cir. 2000) .......................................................................................................17
`
`Alvarado v. Fed. Express Corp.,
`2008 WL 2340211 (N.D. Cal. June 5, 2008) ...............................................................................5
`
`Amerisure Mut. Ins. Co. v. Auchter Co.,
`673 F.3d 1294 (11th Cir. 2012) ..................................................................................................11
`
`Ashley Cty. v. Pfizer, Inc.,
`552 F.3d 659 (8th Cir. 2009) ......................................................................................................17
`
`Ass’n of Wash. Pub. Hosp. Districts v. Philip Morris, Inc.,
`241 F.3d 696 (9th Cir. 2001) ......................................................................................................17
`
`Baptiste v. Bethlehem Landfill Co.,
`965 F.3d 214 (3d Cir. 2020) ...................................................................................................9, 10
`
`Blue Cross & Blue Shield of New Jersey, Inc. v. Philip Morris USA Inc.,
`344 F.3d 211 (2d Cir. 2009), certified question accepted, 100 N.Y.2d 636 (2003),
`certified question answered, 3 N.Y.3d 200 (2004) ....................................................................18
`
`Bradshaw v. Rawlings,
`612 F.2d 135 (3d Cir. 1979) .......................................................................................................14
`
`Camden Cty. Board of Chosen Freeholders v. Beretta, U.S.A. Corp.,
`273 F.3d 536 (3d Cir. 2001) .........................................................................................................4
`
`City of Flagstaff v. Atchison, Topeka & Santa Fe Ry. Co.,
`719 F.2d 322 (9th Cir. 1983) ........................................................................................................2
`
`City of Philadelphia v. Beretta U.S.A. Corp.,
`126 F. Supp. 2d 882 (E.D. Pa. 2000) ...............................................................................4, 7, 8, 9
`
`Cook v. MillerCoors, LLC,
`829 F. Supp. 2d 1208 (M.D. Fla. 2011) .....................................................................................15
`
`Cty. of Erie, N.Y. v. Colgan Air, Inc.,
`2012 WL 1029542 (W.D.N.Y Mar. 26, 2012), aff’d, 711 F.3d 147 (2d Cir. 2013)
` ..................................................................................................................................................2, 3
`
`Cty. of Suffolk v. Long Island Lighting Co.,
`728 F.2d 52 (2d Cir. 1984) .........................................................................................................12
`
`
`
`
`
`Case No. 19-md-02913-WHO
`-ii-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 5 of 30
`
`
`
`
`
`TABLE OF AUTHORITIES
`(Continued)
`
`Page(s)
`
`Del Webb Communities, Inc. v. Partington,
`652 F.3d 1145 (9th Cir. 2011) ......................................................................................................4
`
`Douglas Asphalt Co. v. QORE, Inc.,
`657 F.3d 1146 (11th Cir. 2011) ................................................................................................1, 4
`
`In re Facebook, Inc., Consumer Privacy User Profile Litig.,
`402 F. Supp. 3d 767 (N.D. Cal. 2019) .......................................................................................17
`
`Fresh Air for the Eastside, Inc. v. Waste Mgmt. of New York, L.L.C.,
`405 F. Supp. 3d 408 (W.D.N.Y. 2019) ........................................................................................9
`
`Gordon v. Hain Celestial Grp., Inc.,
`2017 WL 213815 (S.D.N.Y. Jan. 18, 2017) ...............................................................................13
`
`Guest v. Hansen,
`2007 WL 4561104 (N.D.N.Y. Dec. 18, 2007) ...........................................................................14
`
`Guttmann v. Nissin Foods (U.S.A.) Co.,
`2015 WL 4309427 (N.D. Cal. 2015) ............................................................................................5
`
`Ileto v. Glock Inc.,
`349 F.3d 1191 (9th Cir. 2003) ................................................................................................4, 16
`
`Johnson v. Bryco Arms,
`304 F. Supp. 2d 383 (E.D.N.Y. 2004) ........................................................................................14
`
`Jordan v. City of Philadelphia,
`66 F. Supp. 2d 638 (E.D. Pa. 1999) ...........................................................................................17
`
`Kleinknecht v. Gettysburg Coll.,
`989 F.2d 1360 (3d Cir. 1993) .....................................................................................................16
`
`McCarthy v. Olin Corp.,
`119 F.3d 148 (2d Cir. 1997) .......................................................................................................14
`
`McMahan v. Toto,
`311 F.3d 1077 (11th Cir. 2002) ....................................................................................................8
`
`In re Methyl Tertiary Butyl Ether (MTBE) Prod. Liab. Litig.,
`2015 WL 4092326 (S.D.N.Y. July 2, 2015) ............................................................................4, 8
`
`In re Nat’l Prescription Opiate Litig.,
`__ F. Supp. 3d. __, 2020 WL 1669655 (N.D. Ohio Apr. 3, 2020) .............................8, 16, 17, 19
`
`In re Nat’l Prescription Opiate Litig.,
`440 F. Supp. 3d 773 (N.D. Ohio 2020) ..................................................................................9, 10
`Case No. 19-md-02913-WHO
`-iii-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 6 of 30
`
`
`
`
`
`TABLE OF AUTHORITIES
`(Continued)
`
`Page(s)
`
`Nucal Foods v. Quality Egg LLC,
`918 F. Supp. 2d 1023 (E.D. Cal. 2013) ......................................................................................12
`
`Resnick v. Hyundai Motor Am., Inc.,
`2017 WL 1531192 (C.D. Cal. Apr. 13, 2017) ............................................................................12
`
`Rhodes v. E.I. du Pont de Nemours & Co.,
`636 F.3d 88 (4th Cir. 2011) ..........................................................................................................6
`
`Rose Fuel Oil & Heating Co. v. Kia Motors of Am., Inc.,
`2004 WL 1202901 (E.D. Pa. June 1, 2004) ...............................................................................11
`
`Sommer v. Premier Nutrition Corporation,
`962 F.3d 1072 (9th Cir. 2020) ....................................................................................................20
`
`Time Warner Entm’t-Advance/Newhouse P’ship v. Carteret-Craven Elec.
`Membership Corp., 506 F.3d 304 (4th Cir. 2007) ........................................................................4
`
`Tioga Pub. Sch. Dist. No. 15 of Williams Cty., State of N.D. v. U.S. Gypsum Co.,
`984 F.2d 915 (8th Cir. 1993) ....................................................................................................5, 7
`
`In re Tribune Co. Fraudulent Conveyance Litig.,
`2019 WL 294807 (S.D.N.Y. Jan. 23, 2019) ...............................................................................13
`
`Vision Church v. Vill. of Long Grove, 468 F.3d 975, 1004 (7th Cir. 2006) ......................................4
`
`Whitaker v. Herr Foods, Inc.,
`198 F. Supp. 3d 476 (E.D. Pa. 2016) .........................................................................................13
`
`STATE CASES
`
`Aas v. Superior Court,
`24 Cal. 4th 627 (2000) ................................................................................................................13
`
`Abad v. G4S Secure Sols. (USA), Inc.,
`293 So. 3d 26 (Fla. Dist. Ct. App. 2020) ..............................................................................14, 15
`
`Biakanja v. Irving,
`49 Cal. 2d 647 (1958) .................................................................................................................13
`
`Bloxham v. Glock Inc.,
`203 Ariz. 271 (Ct. App. 2002) ...................................................................................................14
`
`City of Chicago v. Beretta U.S.A. Corp.,
`213 Ill. 2d 351 (2004) .......................................................................................................3, 6, 8, 9
`
`
`
`
`
`Case No. 19-md-02913-WHO
`-iv-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 7 of 30
`
`
`
`
`
`TABLE OF AUTHORITIES
`(Continued)
`
`Page(s)
`
`City of Chicago v. Latronica Asphalt and Grading, Inc.,
`346 Ill. App. 3d 264 (2004) ..........................................................................................................5
`
`City of Modesto Redevelopment Agency v. Superior Court,
`119 Cal. App. 4th 28 (2004) .........................................................................................................5
`
`City of New Haven v. Purdue Pharma, L.P.,
`2019 WL 423990 (Conn. Super. Ct. 2019) ..................................................................................7
`
`City of New York v. Smokes-Spirits.com,
`12 N.Y.3d 616 (2009) ..........................................................................................................18, 19
`
`Commonwealth v. Barnes & Tucker Co.,
`319 A.2d 871 (Pa. 1974) ..............................................................................................................4
`
`Connor v. Great W. Sav. & Loan Ass’n.,
`69 Cal. 2d 850 (1968) .................................................................................................................13
`
`In re Firearm Cases,
`126 Cal. App. 4th 959 (2005) .......................................................................................................5
`
`Gabriel v. Giant Eagle, Inc.,
`2015 Pa. Dist. & Cnty. Dec. LEXIS 15245 (Pa. Com. Pl. June 30, 2015) ................................12
`
`Hamilton v. Beretta U.S.A. Corp.,
`96 N.Y.2d 222 (2001) ..........................................................................................................13, 15
`
`Hoffman v. Sun Pipe Line Co.,
`394 Pa. Super. 109 (1990) ..........................................................................................................16
`
`J’Aire Corp. v. Gregory,
`24 Cal. 3d 799 (1979) .................................................................................................................13
`
`Jimenez v. 24 Hour Fitness USA, Inc.,
`237 Cal. App. 4th 546 (2015) .....................................................................................................17
`
`Keystone Airpark Auth. v. Pipeline Contractors, Inc.,
`266 So. 3d 1219 (Fla. Dist. Ct. App. 2019), review denied, 2019 WL 1371949
`(Fla. Mar. 27, 2019) ...................................................................................................................20
`
`Koch v. Consol. Edison Co. of New York,
`62 N.Y.2d 548 (1984) ..................................................................................................................3
`
`Lane v. City of Mount Vernon,
`38 N.Y.2d 344 (Ct. App. 1976) ....................................................................................................2
`
`
`
`
`
`Case No. 19-md-02913-WHO
`-v-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 8 of 30
`
`
`
`
`
`TABLE OF AUTHORITIES
`(Continued)
`
`Page(s)
`
`In re Lead Paint Litig.,
`191 N.J. 405 (2007) ......................................................................................................................7
`
`O’Neil v. Crane Co.,
`53 Cal. 4th 335 (2012) ................................................................................................................15
`
`In re Opioid Litigation,
`2018 WL 3115102 (N.Y. Sup. Ct. June 18, 2018) .......................................................................6
`
`Penelas v. Arms Tech., Inc.,
`1999 WL 1204353 (Fla. Cir. Ct. Dec. 13, 1999) ..........................................................................8
`
`Phillips v. Cricket Lighters,
`576 Pa. 644 (2003) ...............................................................................................................15, 16
`
`Pompano Motor Co. v. Chrysler Ins. Co.,
`875 So. 2d 754 (Fla. Dist. Ct. App. 2004) ..................................................................................16
`
`Quiroz v. Alcoa Inc.,
`243 Ariz. 560 (2018) ............................................................................................................14, 15
`
`S. Cal. Gas Leak Cases,
`7 Cal. 5th 391 (2019) ................................................................................................11, 12, 13, 15
`
`Schauer v. Morse Operations, Inc.,
`5 So. 3d 2 (Fla. Dist. Ct. App. 2009) ..........................................................................................20
`
`Seebold v. Prison Health Servs. Inc.,
`618 Pa. 632 (2012) .....................................................................................................................15
`
`State Ex Rel. Stenehjem v. Purdue Pharma L.P.,
`2019 WL 2245743 (N.D. Dist. May 10, 2019) ........................................................................7, 8
`
`State v. Lead Indus., Ass’n, Inc.
`951 A.2d 428 (R.I. 2008) .............................................................................................................7
`
`Taylor v. Elliott Turbomachinery Co.,
`171 Cal. App. 4th 564 (2009) .....................................................................................................16
`
`Thing v. La Chusa,
`48 Cal. 3d 644 (1989) .................................................................................................................16
`
`United States v. Stevens,
`994 So. 2d 1062 (Fla. 2008) .......................................................................................................15
`
`Weimer v. Nationstar Mortg., LLC,
`47 Cal. App. 5th 341 (2020) .......................................................................................................12
`Case No. 19-md-02913-WHO
`-vi-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 9 of 30
`
`
`
`
`
`STATUTES
`
`TABLE OF AUTHORITIES
`(Continued)
`
`Page(s)
`
`Fla. Stat. § 501.211(2) ......................................................................................................................19
`
`New York General Business Law § 349 ....................................................................................18, 19
`
`New York General Business Law § 350 ..........................................................................................18
`
`TREATISES
`
`Restatement (Second) of Torts § 821C ..............................................................................................9
`
`Restatement (Second) of Torts § 832B .............................................................................................6
`
`Restatement (Second) of Torts § 834 .................................................................................................8
`
`Restatement (Third) of Torts § 8 ........................................................................................................4
`
`
`
`
`
`
`
`Case No. 19-md-02913-WHO
`-vii-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 10 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`I.
`
`INTRODUCTION
`Plaintiffs urge this Court to stretch the boundaries of public nuisance, negligence, and
`statutory consumer protection law to allow school districts and a county government that never
`purchased Electronic Nicotine Delivery System (“ENDS”) products to sue JLI for economic
`damages allegedly resulting from others’ ENDS use. Plaintiffs’ claims depend on theories of alleged
`defects in JLI’s products and allegedly misleading advertising, yet Plaintiffs assert neither products
`liability nor fraud claims—presumably because they neither purchased nor used the products nor
`relied on any advertising. Plaintiffs’ inability to plead products liability or fraud claims does not
`give Plaintiffs a license to expand nuisance or negligence law, or to seek damages that are
`unrecoverable under statutory consumer protection law. Plaintiffs’ claims should be dismissed.
`At every turn, Plaintiffs ask this Court to cabin or disregard well-established state-law limits
`on nuisance and negligence claims. But this Court, sitting in diversity, must proceed cautiously.
`E.g., Douglas Asphalt Co. v. QORE, Inc., 657 F.3d 1146, 1154 (11th Cir. 2011) (“It is not the
`function of federal courts to expand state tort doctrine in novel directions absent state authority
`suggesting the propriety of doing so.”). This Court should decline Plaintiffs’ invitations to cast
`caution aside and expand state-law doctrines:
` Every jurisdiction at issue here applies the municipal cost recovery rule, but Plaintiffs
`ask the Court to distinguish their claims on policy grounds that other courts have rejected.
` Every jurisdiction here has recognized limits on public nuisance claims, but Plaintiffs
`ask the Court to cast aside those limits and to permit a nuisance claim out of what is
`effectively a claim of deceptive marketing or distribution of an allegedly defective
`product.
` Every jurisdiction here has either adopted the economic loss rule or limited the tort duty
`of care to plaintiffs who can show some special relationship with a defendant, but
`Plaintiffs ask the Court to disregard those limits and permit a negligence claim on policy
`grounds that would allow negligence claims by essentially any plaintiff that could assert
`some downstream economic injury from a defendant’s product.
` Florida and New York permit recovery only of “actual damages” under their consumer
`
`
`
`
`
`Case No. 19-md-02913-WHO
`-1-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 11 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`protection statutes, but Plaintiffs ask this Court to let them pursue consequential and
`derivative economic injuries, in disregard of settled law in both jurisdictions.
`Because Plaintiffs have failed to plead cognizable causes of action, the bellwether
`government entity complaints should be dismissed.
`ALL CLAIMS MUST BE DISMISSED
`II.
`The Municipal Cost Recovery Rule Bars Plaintiffs’ Damages
`A.
`Plaintiffs do not dispute that they seek to recover money that the school districts and Santa
`Cruz County allegedly spent responding to increased ENDS use. Opp. 58. Recovery of such costs
`is barred in each jurisdiction by the well-established municipal cost recovery rule. Mot. 7-8.
`Plaintiffs’ arguments against application of this rule fail.
`First, Plaintiffs wrongly urge the Court to exempt public nuisance claims from the municipal
`cost recovery rule. Opp. 56. The authority Plaintiffs cite rejects this argument, because “[i]f such
`an exception were recognized, it would be the exception that swallows the rule, since many
`expenditures for public services could be re-characterized by skillful litigants as expenses incurred
`in abating a public nuisance.” Cty. of Erie, N.Y. v. Colgan Air, Inc., 2012 WL 1029542, at *4
`(W.D.N.Y Mar. 26, 2012) (citation omitted), aff’d, 711 F.3d 147, 152 (2d Cir. 2013). Public
`plaintiffs may be able to recover only “distinct, well-defined categories” of costs of abating a public
`nuisance that are “unrelated to the normal provision” of public services or occur on private property.
`City of Flagstaff v. Atchison, Topeka & Santa Fe Ry. Co., 719 F.2d 322, 324 (9th Cir. 1983); see
`Colgan, 2012 WL 1029542, at *4. Examples of these costs include cleaning up groundwater,
`Atchison, 719 F.2d at 324, removing abandoned bridge piers, id., or removing a burned building that
`was in danger of collapsing, Lane v. City of Mount Vernon, 38 N.Y.2d 344, 347 (Ct. App. 1976).
`None of the alleged costs here—whether for counseling, training, educating, or disciplining
`students, or increased costs for physical modifications to schools or disposing of waste—are akin to
`the abatement costs for which courts have permitted recovery. All of these alleged extra costs relate
`to the ordinary costs of educating students or maintaining school property. As in Colgan, the
`government entities seek to recover additional costs allegedly incurred for performing their “own
`duty” of educating students; those extra costs are unrecoverable under the municipal cost recovery
`
`
`
`
`
`Case No. 19-md-02913-WHO
`-2-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 12 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`rule, even if the costs arose from the actions of a third party. See 711 F. 3d at 153, 154.2
`Second, relying on decisions from the opioids litigation, Plaintiffs wrongly argue that, as a
`policy matter, the rule should be limited to “single, discrete incidents requiring a single emergency
`response” and should exclude conduct that is continuous or ongoing. Opp. 56-57 & n.27. In
`rejecting this same policy argument as “not . . . persuasive,” the Supreme Court of Illinois explained
`that this logic has it exactly backwards: “when the need for emergency services in response to an
`alleged nuisance is ongoing, the municipal cost recovery rule is stronger, not weaker, because the
`legislature is better able to consider the need for cost-recovery legislation than in cases of sudden
`disaster.” City of Chicago v. Beretta U.S.A. Corp., 213 Ill. 2d 351, 430 (2004) (applying municipal
`cost recovery rule to bar damages). The opioid cases (none of which is binding on this Court) fail
`to grapple with this policy analysis, but instead draw a false distinction between continuous and
`one-time events that finds no support in case law from the relevant jurisdictions.
`It is irrelevant that Plaintiffs may not have expected the need to spend more resources or
`provide programming to respond to ENDS use. In analyzing the municipal cost recovery rule, “no
`consideration is given to the extraordinary nature of the incident that necessitates the public service
`response.” Colgan, 2012 WL 1029542, at *2. Plaintiffs also provide no authority to support their
`theory that application of the rule depends on whether the public entity Plaintiffs themselves have
`the power to levy taxes, Opp. 58 n.30, and the distinction makes little sense. The rule applies to bar
`recovery of expenses by police and fire departments that depend on government funding, even when
`the relevant taxing authority is a municipal government. E.g., Koch v. Consol. Edison Co. of New
`York, 62 N.Y.2d 548, 560 (1984) (increased police, fire, sanitation, and hospital costs from citywide
`blackout not recoverable from utility by plaintiff city and public benefit corporations).
`The municipal cost recovery rule applies in each jurisdiction at issue to bar Plaintiffs from
`seeking reimbursement from JLI for their costs of providing educational and community services.
`Plaintiffs Fail to State a Public Nuisance Claim
`B.
`When sitting in diversity and attempting to determine how state courts would rule, this court
`
`
`2 Even if Plaintiffs were correct that the municipal cost recovery rule excludes damages from public
`nuisance, the rule would still bar the negligence-based damages Plaintiffs seek.
`Case No. 19-md-02913-WHO
`
`-3-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity Complaints
`
`
`
`

`

`Case 3:19-md-02913-WHO Document 881 Filed 08/17/20 Page 13 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`“should proceed cautiously” and “choose the narrower path.” City of Philadelphia v. Beretta U.S.A.
`Corp., 126 F. Supp. 2d 882, 906 (E.D. Pa. 2000); see also Del Webb Communities, Inc. v.
`Partington, 652 F.3d 1145, 1154 (9th Cir. 2011) (“Federal courts should hesitate prematurely to
`extend [state] law”) (internal quotation marks omitted); Douglas Asphalt Co., 657 F.3d at 1154
`(similar); Time Warner Entm’t-Advance/Newhouse P’ship v. Carteret-Craven Elec. Membership
`Corp., 506 F.3d 304, 314 (4th Cir. 2007) (similar); Vision Church v. Vill. of Long Grove, 468 F.3d
`975, 1004 (7th Cir. 2006) (same for supplemental jurisdiction). Plaintiffs have not shown that the
`relevant state courts would recognize these novel nuisance claims.
`Plaintiffs admit that the crux of their claims is the alleged “manufacture or deceptive
`marketing” of JLI products to underage users. Opp. 15. As the Third Restatement explains (see
`Mot. 12-13), theories of public nuisance “against the makers of products that have caused harm”
`have been “rejected by most courts . . . because the common law of public nuisance is an inapt
`vehicle for addressing the conduct at issue.” Restatement (Third) of Torts § 8 cmt. g. This Court,
`sitting in diversity, should not adopt expansive new theories of public nuisance that threaten to
`convert a slew of product-based claims, from car emissions to sugary foods, into putative public
`nuisance claims. See Camden Cty. Board of Chosen Freeholders v. Beretta, U.S.A. Corp., 273 F.3d
`536, 541-42 (3d Cir. 2001) (“While it is of course conceivable that the Supreme Court of New Jersey
`may someday choose to expand state public nuisance law in the manner that the County urges, we
`cannot predict at this time that it will do so.”).
`Plaintiffs invoke inapt cases to justify applying public nuisance law to their product-based
`claims here. Opp. 14. Commonwealth v. Barnes & Tucker Co., 319 A.2d 871 (Pa. 1974), addressed
`discharge from a shuttered mine; it did not endorse converting products liability or consumer fraud
`into nuisance claims. See Beretta, 126 F. Supp. 2d at 908-09 (rejecting Barnes as “readily
`distinguishable” as it did not concern distribution of a product); see In re Methyl Tertiary Butyl
`Ether (MTBE) Prod. Liab. Litig., 2015 WL 4092326, at *4 (S.D.N.Y. July 2, 2015) (“In
`Pennsylvania, courts do not impose liability for public nuisance ‘in the context of injuries caused
`by defective product design and distribution.’”). Likewise, Plaintiffs cite the Ninth Circuit’s
`decision in Ileto v. Glock Inc., 349 F.3d 1191, 1211 (9th Cir. 2003), but two California courts of
`
`
`
`
`
`Case No. 19-md-02913-WHO
`-4-
`Reply Memorandum in Support of Motion to Dismiss Bellwether Government Entity

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket