throbber
Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 1 of 313
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`MDL No. 3:19-md-02913-WHO
`
`Plaintiff,
`
`COMPLAINT
`
`REDACTED
`DEMAND FOR JURY TRIAL
`
`ROBBINS GELLER RUDMAN
` & DOWD LLP
`STUART A. DAVIDSON
`MARK J. DEARMAN
`JASON H. ALPERSTEIN
`CHRISTOPHER C. GOLD
`DOROTHY P. ANTULLIS
`120 East Palmetto Park Road, Suite 500
`Boca Raton, FL 33432
`Telephone: 561/750-3000
`561/750-3364 (fax)
`sdavidson@rgrdlaw.com
`mdearman@rgrdlaw.com
`jalperstein@rgrdlaw.com
`cgold@rgrdlaw.com
`dantullis@rgrdlaw.com
`Attorneys for Plaintiff Baltimore County, Maryland
`[Additional counsel appear on signature page.]
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN FRANCISCO DIVISION
`BALTIMORE COUNTY, MARYLAND,
`)
`Case No.
`Individually and on Behalf of All Others
`)
`Similarly Situated,
`)
`)
`)
`)
`)
`)
`)
`)
`)
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`)
`
`JUUL LABS, INC. F/K/A PAX LABS, INC.,
`ALTRIA GROUP, INC., ALTRIA CLIENT
`SERVICES, LLC, ALTRIA GROUP
`DISTRIBUTION COMPANY, PHILIP
`MORRIS USA INC., JAMES MONSEES,
`ADAM BOWEN, NICHOLAS PRITZKER,
`HOYOUNG HUH, and RIAZ VALANI,
`
`vs.
`
`Defendants.
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`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 2 of 313
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`TABLE OF CONTENTS
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`B. 
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`C. 
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`I. 
`II. 
`III. 
`IV. 
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`Page
`INTRODUCTION ...............................................................................................................1 
`JURISDICTION AND VENUE ..........................................................................................5 
`PARTIES .............................................................................................................................6 
`GENERAL FACTUAL ALLEGATIONS .........................................................................11 
`Each Defendant Was Instrumental in Seeking to Develop and Market the
`A. 
`Blockbuster Sequel to Combustible Cigarettes, the “Most Successful
`Consumer Product of All Time.” ...........................................................................11 
`Defendants’ Strategy Was to Create a Nicotine Product that Would
`Maximize Profits Through Addiction ....................................................................20 
`Defendants Understood that the “Magic” Behind
`1. 
`Cigarettes’ Stratospheric Commercial Success Was
`Nicotine Addiction .........................................................................20 
`Following the Cigarette Industry Playbook, Defendants
`Sought to Market a Product that Would Create and Sustain
`Nicotine Addiction, but Without the Stigma Associated
`with Cigarettes ...............................................................................23 
`Defendants Sought to Position JLI for Acquisition by a
`Major Cigarette Company ..............................................................29 
`JLI and Bowen Designed a Nicotine Delivery Device Intended to Create
`and Sustain Addiction ............................................................................................37 
`JLI and Bowen Made Highly Addictive E-Cigarettes Easy
`1. 
`for Young People and Non-Smokers to Inhale ..............................37 
`JLI’s Initial Experiments Measured Non-Smokers’ “Buzz”
`Levels and Perceptions of Throat Harshness .................................38 
`JUULs Rapidly Deliver Substantially Higher Doses of
`Nicotine than Cigarettes .................................................................41 
`JLI and the Management Defendants Knew that JUUL Was
`Unnecessarily Addictive Because It Delivered More
`Nicotine than Smokers Needed or Wanted ....................................48 
`JUUL’s Design Did Not Look Like a Cigarette, Making It
`Attractive to Non-Smokers and Easy for Young People to
`Use Without Detection ...................................................................51 
`JLI Enticed Newcomers to Nicotine with Kid-Friendly
`Flavors Without Ensuring the Flavoring Additives Were
`Safe for Inhalation ..........................................................................55 
`
`2. 
`
`3. 
`
`2. 
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`3. 
`
`4. 
`
`5. 
`
`6. 
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`
`
`COMPLAINT
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`
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`- i -
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`

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`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 3 of 313
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`Page
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`a. 
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`b. 
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`c. 
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`D. 
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`E. 
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`JLI Develops Flavored JUUL Products that Would
`Appeal to Youth .................................................................55 
`Defendants Developed and Promoted the Mint
`Flavor and Sought to Preserve Its Market..........................60 
`JLI’s Youth Surveillance Programs Confirmed that
`Mint JUUL Pods are Preferred by Teens ...........................62 
`Defendants Developed and Implemented a Marketing Scheme to Mislead
`Users into Believing that JUUL Products Contained Less Nicotine than
`They Actually Do and Were Healthy and Safe ......................................................65 
`The Defendants Knowingly Made False and Misleading
`1. 
`Statements and Omissions Concerning JUUL’s Nicotine
`Content ...........................................................................................66 
`JLI, the Management Defendants, and Altria Transmitted,
`Promoted and Utilized Statements Concerning JUUL’s
`Nicotine Content that They Knew Was False and
`Misleading......................................................................................73 
`Defendants Used Food and Coffee Themes to Give False
`Impression that JUUL Products Were Safe and Healthy ...............78 
`JLI’s “Make the Switch” Campaign Intentionally Misled
`and Deceived Users to Believe that JUUL Is a Cessation
`Device ............................................................................................80 
`JLI, Altria, and Others in the E-Cigarette Industry
`Coordinated with Third-Party Groups to Mislead the Public
`About the Harms and Benefits of E-Cigarettes..............................93 
`a. 
`The American Vaping Association ....................................94 
`b. 
`Vaping360 ..........................................................................96 
`c. 
`Foundation for a Smoke-Free World .................................98 
`d. 
`Vapor Technology Association ........................................100 
`e. 
`Retailer Lobbying ............................................................100 
`Altria Falsely Stated that It Intended to Use Its Expertise in
`“Underage Prevention” Issues to JLI ...........................................101 
`Defendants Targeted the Youth Market ...............................................................103 
`1. 
`JLI Emulated the Marketing of Cigarette Companies .................103 
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`2. 
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`3. 
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`4. 
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`5. 
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`6. 
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`COMPLAINT
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`- ii -
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`5. 
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`7. 
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`8. 
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`9. 
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`10. 
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`The Management Defendants Intentionally Marketed JUUL
`to Young People ...........................................................................106 
`JLI Advertising Exploited Young People’s Psychological
`Vulnerabilities ..............................................................................109 
`JLI Pushed the Vaporized Campaign into Youth Targeted
`Channels .......................................................................................115 
`JLI Placed Its Vaporized Ads on Youth Oriented
`a. 
`Websites and Media .........................................................115 
`JLI Used Influencers and Affiliates to Amplify Its
`Message to a Teenage Audience ......................................117 
`JLI Used Viral Marketing Techniques Known to
`Reach Young People ........................................................121 
`JLI Targeted Youth Retail Locations ...........................................124 
`JLI Hosted Parties to Create a Youthful Brand and Gave
`Away Free Products to Get New Users Hooked ..........................126 
`The Management Defendants’ Direction of and
`Participation in JLI and in the Youth Marketing Schemes ..........130 
`The Management Defendants, and in Particular
`a. 
`Pritzker, Valani, and Huh, controlled JLI’s Board at
`relevant times ...................................................................130 
`Pritzker, Huh, and Valani Were Active, Involved
`Board Members ................................................................132 
`The Management Defendants, and in Particular
`Bowen, Monsees, Pritzker, Valani, and Huh,
`Oversaw and Directed the Youth Marketing Scheme ......134 
`Pritzker, Huh, and Valani Were Able to Direct and
`Participate in the Youth Marketing Because They
`Seized Control of the JLI Board of Directors ..................141 
`Pritzker, Valani, and Huh Continued to Exercise Control
`over and Direct the Affairs of JLI Even After a New CEO
`Was Appointed .............................................................................147 
`Pritzker and Valani Directed and Controlled JLI’s
`Negotiations with Altria ...............................................................150 
`JLI and the Management Defendants Knew Their Efforts
`Were Wildly Successful in Building a Youth Market and
`
`b. 
`
`c. 
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`d. 
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`
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`COMPLAINT
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`
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`- iii -
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`

`

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`Page
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`11. 
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`12. 
`13. 
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`14. 
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`F. 
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`Took Coordinated Action to Ensure that Youth Could
`Purchase JUUL Products .............................................................152 
`a. 
`JLI’s Strategy Worked .....................................................152 
`b. 
`JLI Closely Tracked Its Progress in Reaching
`Young Customers Through Social Media and
`Online Marketing .............................................................153 
`JLI Worked with Veratad Technologies to Expand Youth
`Access to JUUL Products ............................................................158 
`JLI Engaged in a Sham “Youth Prevention” Campaign ..............168 
`The FDA Warned JUUL and Others that Their Conduct Is
`Unlawful ......................................................................................171 
`In Response to Regulatory Scrutiny, Defendants Misled the
`Public, Regulators, and Congress that JLI Did Not Target
`Youth............................................................................................173 
`Altria Provided Services to JLI to Expand JUUL Sales and Maintain
`JUUL’s Position as the Dominant E-Cigarette ....................................................180 
`Before Altria’s Investment in JLI, Altria Knew JLI Was
`1. 
`Targeting Youth ...........................................................................180 
`Altria Worked with Pritzker and Valani to Secure Control
`of JLI and to Exploit JLI for Their Mutual Benefit .....................182 
`Altria Participated in and Directed the Fraudulent Acts of
`JLI Designed to Protect the Youth Market for JUUL ..................193 
`Altria Participated in and Directed JLI’s Make the
`a. 
`Switch Campaign .............................................................193 
`Altria Participated in and Directed JLI’s Fraudulent
`Scheme to Keep Mint on the Market ...............................194 
`JLI, the Management Defendants and Altria Coordinated to
`Market JUUL in Highly-Visible Retail Locations .......................196 
`Altria Works with the Management Defendants to Direct
`JLI’s Affairs and Commit Fraud ..................................................197 
`Altria Installs Its Own Executives into Leadership
`a. 
`Positions to Direct the Affairs of JLI ...............................199 
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`2. 
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`3. 
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`4. 
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`5. 
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`b. 
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`COMPLAINT
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`- iv -
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`

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`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 6 of 313
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`G. 
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`H. 
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`V. 
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`VI. 
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`Altria Furthered the JLI Enterprise by Participating
`in and Directing the Marketing and Distribution of
`JUUL Products .................................................................205 
`JLI, Altria, and Others Have Successfully Caused More Young People to
`Start Using E-Cigarettes, Creating a Youth E-Cigarette Epidemic and
`Public Health Crisis .............................................................................................214 
`Defendants’ Scheme Caused Users, Including Minors, to
`1. 
`Be Misled into Believing that JUUL Was Safe and Healthy .......215 
`Use of JUUL by Minors Has Skyrocketed ..................................216 
`2. 
`JLI Thrived Due to Extensive Efforts to Delay Meaningful Regulation of
`Its Products...........................................................................................................222 
`E-Cigarette Manufacturers Successfully Blocked the Types
`1. 
`of Regulations that Reduced Cigarette Sales, Creating the
`Perfect Opportunity for JLI ..........................................................222 
`JLI, the Management Defendants, and Altria Defendants
`Successfully Shielded the Popular Mint Flavor from
`Regulation ....................................................................................226 
`In Response to the Public Health Crisis Created by JUUL,
`the FDA Belatedly Tried to Slow the Epidemic ..........................235 
`The Government’s Efforts to Address the JUUL Crisis
`Were Too Late and the Damage Has Already Been Done ..........237 
`GOVERNMENT ENTITY FACTUAL ALLEGATIONS ..............................................238 
`A. 
`E-cigarette Use in Schools ...................................................................................238 
`B. 
`Impact of the Youth E-Cigarette Crisis on Plaintiff Baltimore County ...............250 
`C. 
`No Federal Agency Action, Including by the FDA, Can Provide the Relief
`Plaintiff Seeks Here .............................................................................................258 
`CAUSES OF ACTION ....................................................................................................258 
`COUNT I Violations of Maryland Public Nuisance Law ................................................258 
`COUNT II Violations of the Racketeer Influenced and Corrupt Organizations Act
`(“RICO”) ..............................................................................................................263 
`1. 
`Violations of 18 U.S.C. §1962(c) ................................................263 
`JLI Is an Enterprise Engaged in, or Its Activities
`a. 
`Affect, Interstate or Foreign Commerce ..........................263 
`
`
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`Page
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`2. 
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`3. 
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`4. 
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`COMPLAINT
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`- v -
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`

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`Page
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`VII. 
`VIII. 
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`b. 
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`c. 
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`d. 
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`e. 
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`“Conduct or Participate, Directly or Indirectly, in
`the Conduct of Such Enterprise’s Affairs” ......................264 
`Pritzker, Huh, and Valani Exercised Control and
`Direction over the JLI Enterprise .....................................268 
`Bowen, Monsees, Pritzker, Huh and Valani
`Exercised a Firm Grip over JLI .......................................269 
`In 2017, Altria Conspired with Pritzker and Valani
`to Influence and Indirectly Exercise Control over
`JLI ....................................................................................270 
`Altria Directly Exercises Control and Participates in
`of the JLI Enterprise.........................................................271 
`“Pattern of Racketeering Activity” ..................................280 
`Plaintiff Has Been Damaged by the Enterprise
`Defendants’ RICO Violations ..........................................291 
`Violations of 18 U.S.C. §1962(d) ................................................293 
`2. 
`COUNT III Violation of the Maryland Consumer Protection Act ..................................296 
`COUNT IV Negligence ...................................................................................................297 
`COUNT V Gross Negligence ..........................................................................................301 
`PRAYER FOR RELIEF ..................................................................................................305 
`JURY TRIAL DEMANDED ...........................................................................................305 
`
`f. 
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`g. 
`h. 
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`
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`COMPLAINT
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`- vi -
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`

`

`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 8 of 313
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`
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`I.
`
`INTRODUCTION
`1.
`The battle to end nicotine addiction and its associated diseases and death has
`consumed our nation’s public health resources for more than half a century. After five decades of
`tireless efforts by public health advocates, litigators, and regulators, the war on tobacco was on the
`path to victory. By 2014, rates of smoking and nicotine addiction in this country were finally at an
`all-time low, particularly among teenagers. Until now. The United States, closer than ever to
`consigning the nicotine industry to the dustbin of history, now faces a youth nicotine epidemic of
`historic proportions.
`2.
`JUUL products are rampant in the nation’s schools, with the percentage of 12th
`graders who reported consuming nicotine almost doubling between 2017 and 2018. In 2019, more
`than five million middle and high school students reported current use of e-cigarettes, including
`more than one in every four high schoolers. Consistent with this national trend, youth in Baltimore
`County, Maryland (“Baltimore County” or “Plaintiff”) are using e-cigarettes at high rates – rates
`which continue to climb. While the percentage of youth in Baltimore County who have tried or
`currently use cigarettes is at an all-time low, the percentage of youth in the county who have tried
`or currently use e-cigarettes has increased dramatically during the same period. The Surgeon
`General has warned that this new “epidemic of youth e-cigarette use” could condemn a generation
`to “a lifetime of nicotine addiction and associated health risks.” The swift rise in a new generation
`of nicotine addicts has overwhelmed parents, schools, and the medical community (including
`county public health departments) on the front lines dealing with this crisis, drawing governmental
`intervention at nearly every level – but it’s too little, too late.
`3.
`This public health crisis is no accident. What had been lauded as progress in curbing
`cigarette use, JUUL Labs Inc.’s (JLI) co-founders Adam Bowen and James Monsees viewed as
`opportunity. Seizing on the decline in cigarette consumption and the lax regulatory environment
`for e-cigarettes, Bowen, Monsees, and investors in their company sought to introduce nicotine to
`a whole new generation, with JLI as the dominant supplier. To achieve that common purpose, they
`knew they would need to create and market a product that would make nicotine cool again, without
`any of the stigma associated with cigarettes. With help from their early investors and board
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`COMPLAINT
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`- 1 -
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`

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`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 9 of 313
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`
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`members, who include Nicholas Pritzker, Riaz Valani, and Hoyoung Huh (together, the
`“Management Defendants”), they succeeded in hooking millions of youth, and, of course, earning
`billions of dollars in profits.
`4.
`Every step of the way, JLI, by calculated intention, adopted the cigarette industry’s
`playbook, in coordination with one of that industry’s innovators, cigarette giant Altria. JLI was
`created in the image of the iconic American cigarette companies, which JLI founders praised for
`creating “the most successful consumer product of all time. . . . an amazing product.” The secret
`to that “amazing product”? Nicotine, a chemical that has deleterious effects on developing young
`brains, is the fundamental reason that people persist in using tobacco products even though they
`can cause pulmonary injuries, cardiovascular disease and other serious, often fatal, conditions.
`Through careful study of decades of cigarette industry documents, JLI knew that the key to
`developing and sustaining addiction was the amount and the efficiency of the nicotine delivery.
`5.
`Three tactics were central to decades of cigarette industry market dominance:
`product design to maximize addiction; mass deception; and targeting of youth. JLI and its co-
`conspirators adopted and mastered them all. First, JLI and Bowen designed JUUL products to
`create and sustain addiction, not break it. JLI and Bowen were the first to design an e-cigarette that
`could compete with combustible cigarettes on the speed and strength of nicotine delivery. Indeed,
`JUUL products use nicotine formulas and delivery methods much stronger than combustible
`cigarettes, confirming that what JLI and Bowen designed was a starter product designed for youth,
`not a cessation or cigarette replacement product. JLI and Bowen also innovated by making an e-
`cigarette that was smooth and easy to inhale, practically eliminating the harsh “throat hit,” which
`otherwise deters nicotine consumption, especially among nicotine “learners,” as R.J. Reynolds’
`chemist Claude Teague called new addicts, primarily young people.
`6.
`Second, JLI and the Management Defendants, just like cigarette companies before
`them, targeted kids as their customer base. One of JLI’s “key needs” was the need to “own the
`‘cool kid’ equity.” JUUL products were designed to appear slick and high-tech like a cool gadget,
`including video-game-like features like “party mode.” JLI offered kid-friendly flavors like mango
`and cool mint, and partnered with Altria to create and preserve the market for mint-flavored
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`COMPLAINT
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`- 2 -
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`

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`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 10 of 313
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`products – all because Defendants knew that flavors get young people hooked. Under the guise of
`youth smoking prevention, JLI sent representatives directly to schools to study teenager e-cigarette
`preferences.
`7.
`Third, JLI, the Management Defendants and Altria engaged in a campaign of deceit,
`through sophisticated mass media and social media communications, advertisements and
`otherwise, about the purpose and dangers of JUUL products. JUUL products’ packaging and
`advertising grossly understates the nicotine content in its products. Advertising campaigns featured
`JUUL paired with food and coffee, positioning JUUL as part of a healthy meal, a normal part of a
`daily routine, and as safe as caffeine. In partnership with Altria, JLI adopted a “Make the Switch”
`campaign to mislead the public into thinking that JLI products were benign smoking cessation
`devices, even though JUUL was never designed to break addictions. JLI, the Management
`Defendants, and Altria also concealed the results of studies that revealed that JUUL products were
`far more powerfully addictive than was disclosed. JLI’s deceptive marketing scheme was carried
`out across the country through broad distribution channels: veteran cigarette industry wholesalers,
`distributors and retailers ensured that JUUL products would become widely available to a new
`market of nicotine-newcomers, especially youth. JLI and the Management Defendants joined with
`these veteran cigarette industry marketers to secure premium shelf space for vivid displays at
`convenience stores, like 7-11, and gas stations, including Chevron, that would lure e-cigarette
`users, particularly young people, who would become long-term customers. These marketing
`efforts have been resounding successes – when JUUL products were climbing in sales, most youth
`– and their parents – believed that e-cigarettes did not contain nicotine at all.
`8.
`JLI and the Management Defendants reached their intended demographic through
`a diabolical pairing of notorious cigarette company advertising techniques (long banned for
`cigarettes because they cause young people to start smoking) with cutting-edge viral marketing
`campaigns and social media. They hired young models and advertised using bright, “fun” themes,
`including on media long barred to the cigarette industry, such as billboards, on children’s websites
`such as “Nick Junior” and Cartoon Network, and on websites providing games and educational
`tools to students in middle school and high school. JLI and the Management Defendants also
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`COMPLAINT
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`- 3 -
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`

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`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 11 of 313
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`
`employed young social-media “influencers” and celebrities popular with teenagers. When the
`public, regulators, and Congress caught onto JLI’s relentless focus on children, JLI and the
`Management Defendants simply lied, even though they knew well that they had purposefully
`targeted youth in their marketing and those efforts had been breathtakingly successful.
`9.
`It should come as little surprise that JLI and the Management Defendants’
`misconduct, expressly patterned after decades of cigarette company practices, could not have been
`carried out without the involvement and expertise of an actual cigarette company. In December
`2018, Altria paid $12.8 billion to acquire a 35% stake in JLI. Nicholas Pritzker and Riaz Valani
`led the negotiations for JLI and worked closely with Altria’s executives to secure Altria’s
`agreement to pull its own competing e-cigarette product off the market and instead throw its vast
`resources and cigarette industry knowledge behind JUUL. Altria thus supported and ultimately
`directed JLI, working to ensure its continued success despite Altria’s knowledge that JLI and the
`Management Defendants’ had misled the public and targeted youth. JUUL’s market dominance
`was established, positioning Altria and the Management Defendants to share in JLI’s profits.
`Defendants’ conduct prompted the Federal Trade Commission to sue JLI and Altria on April 1,
`2020 alleging violations of the antitrust laws and seeking to unwind the JLI/Altria transaction. But
`even well before Altria announced its investment in JLI, the connections between the two
`companies ran deep. With the assistance and direction of the Management Defendants, Altria
`collaborated with JLI to maintain and grow JUUL sales, despite its knowledge that JUUL was
`being marketed fraudulently to all consumers and targeted to youth, including by sharing data and
`information and coordinating marketing activities, including acquisition of key shelf space next to
`top-selling Marlboro cigarettes. Altria’s investment in JLI is not merely a financial proposition,
`but a key element of Defendants’ plan to stave off regulation and public outcry and keep their most
`potent and popular products on the market. JLI (and the Management Defendants) have benefitted
`from Altria’s expertise in designing and marketing addictive products, and in thwarting regulation.
`10.
`There is no doubt about it – JLI, the Management Defendants, Altria, and their co-
`Defendants have created this public health crisis. At the heart of this disastrous epidemic are the
`concerted efforts of JLI, its co-conspirators, and all those in JUUL’s supply and distribution chain
`
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`
`
`COMPLAINT
`
`
`
`- 4 -
`
`

`

`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 12 of 313
`
`
`
`to continuously expand their market share and profits by preying upon a vulnerable young
`population and deceiving the public about the true nature of the products they were selling.
`Nicotine is not benign like coffee, contrary to what many JUUL users believe. Nor is the aerosol
`as harmless as puffing room air. Worse, the flavors in JUUL products are themselves toxic and
`dangerous, and have never been adequately tested to ensure they are safe for inhalation. According
`to the most recent scientific literature, JUUL products cause acute and chronic pulmonary injuries,
`cardiovascular conditions, and seizures. Yet JUUL products and advertising contain no health risk
`warnings at all. And a generation of kids is now hooked, ensuring long-term survival of the nicotine
`industry because, today just as in the 1950s, 90% of smokers start as children.
`II.
`JURISDICTION AND VENUE
`11.
`This case is being direct-filed into this Court pursuant to Case Management Order
`No. 3 – Direct Filing Order, In re Juul Labs, Inc., Mktg., Sales Practices, and Prods. Liab. Litig.,
`Case No. 19-md-02913-WHO, ECF No. 309 (N.D. Cal. Dec. 13, 2019). In the absence of direct
`filing, Plaintiff would have filed its Complaint in the United States District Court for the District
`of Maryland.
`12.
`This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.
`§1331 because Plaintiff’s racketeering claim arises under the laws of the United States, 18 U.S.C.
`§1961 et seq., and pursuant to 28 U.S.C. §1332(a) because: (i) the amount in controversy exceeds
`$75,000, exclusive of interests and costs, and (ii) the plaintiff and defendants are citizens of
`different states. This Court has supplemental jurisdiction over the state law claims pursuant to 28
`U.S.C. §1367.
`13.
`The Court has personal jurisdiction over Defendants because they do business in
`the District of Maryland and have sufficient minimum contacts with the District. Defendants
`intentionally avail themselves of the markets in this State through the promotion, marketing, and
`sale of the products at issue in this lawsuit in Maryland, and by retaining the profits and proceeds
`from these activities, to render the exercise of jurisdiction by this Court permissible under
`Maryland law and the U.S. Constitution.
`
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`COMPLAINT
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`
`
`- 5 -
`
`

`

`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 13 of 313
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`
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`14.
`All Defendants have materially participated in conduct that had intended and
`foreseeable effects on Plaintiff such that the forum Court could exercise personal jurisdiction over
`defendants. Defendants’ conduct was purposefully directed at Plaintiff and similarly situated
`plaintiffs throughout the United States and in each forum.
`15.
`The Court also has personal jurisdiction over JLI, the Management Defendants, and
`Altria under 18 U.S.C. §1965, because at least one of these Defendants has sufficient minimum
`contacts with the District.
`16.
`Venue is proper in the District of Maryland pursuant to 28 U.S.C. §1391 (b)(2) and
`(3) because a substantial part of the events or omissions giving rise to the claims at issue in this
`Complaint arose in this District and Defendants are subject to the Court’s personal jurisdiction
`with respect to this action.
`III.
`PARTIES
`Plaintiff
`17.
`Plaintiff Baltimore County, Maryland is a county in the State of Maryland with a
`estimated population of 828,431.
`JUUL Labs, Inc.
`18.
`Defendant JUUL Labs, Inc. (“JLI”) is a Delaware corporation, having its principal
`place of business in San Francisco, California. Ploom, Inc., a predecessor company to JLI, was
`incorporated in Delaware on March 12, 2007. In 2015, Ploom, Inc. changed its name to PAX Labs,
`Inc. In April 2017, PAX Labs, Inc. changed its name to JUUL Labs, Inc., and formed a new
`subsidiary corporation with its old name, PAX Labs, Inc. That new subsidiary, PAX Labs, Inc.
`(“PAX”), was incorporated in Delaware on April 21, 2017 and has its principal place of business
`in San Francisco, California.
`19.
`JLI designs, manufactures, sells, markets, advertises, promotes and distributes
`JUUL e-cigarettes devices, JUUL pods and accessories (collectively “JUUL” or “JUUL
`products”). Prior to the formation of separate entities PAX Labs, Inc. and JLI in or around April
`2017, JUUL designed, manufactured, sold, marketed, advertised, promoted, and distributed JUUL
`under the name PAX Labs, Inc.
`
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`COMPLAINT
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`
`
`- 6 -
`
`

`

`Case 3:20-cv-09268-WHO Document 1 Filed 12/21/20 Page 14 of 313
`
`
`
`20.
`Together with its predecessors, JUUL Labs, Inc is referr

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