NJOY E-Cigarette Class Action Lawsuit Denied Certification Again

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Plaintiffs in the NJOY e-cigarette class action lawsuit alleging that NJOY misled customers by advertising its e-cigarettes as safer than traditional cigarettes lost their second bid for certification of a Class last week.

Lead plaintiffs claimed that NJOY violated Florida’s unfair trading laws, California’s consumer protection and unfair competition laws, when the company allegedly misled consumers by advertising that its e-cigarettes were safer than traditional cigarettes.

According to the NJOY electronic cigarette class action lawsuit, NJOY misleads consumers by omitting and only partially disclosing the health risks of consuming the product on the packaging. NJOY has moved for dismissal of the lawsuit in the past.

The plaintiffs’ first motion to certify their proposed Class in their NJOY class action lawsuit was denied by U.S. District Court Judge Margaret M. Morrow. Judge Morrow found that the plaintiffs’ proposed model for determining damages fell short. The judge also found that one of the plaintiffs failed to establish that he would not have bought NJOY’s e-cigarettes even if the packaging listed the allegedly dangerous ingredients, including propylene glycol and glycerin that the plaintiffs claim are known carcinogens.

Last week, a new judge, stepping in due to Judge Morrow’s retirement, denied the plaintiffs second motion for certification. The plaintiffs claimed that they had addressed the problems with their first bid, but U.S. District Court Judge John F. Walter disagreed. Specifically, the judge found that the plaintiffs’ damages model was still inadequate.

The NJOY e-cigarette class action lawsuit relied on a professor of economics from the Massachusetts Institute of Technology, Dr. Harris, who proposed a “Bayesuab hedonic regression” model to determine damages in the class action. The plaintiffs claimed that this new model took into account the factors lacking in their first motion for certification.

Judge Walter remained unconvinced, stating “[a]lthough Dr. Harris conveniently attempts to distance himself from his original opinions and claims that his new model solves certain problems arising out of classical hedonic regression, he never satisfactorily explains how Bayesian hedonic regression is capable of calculating the price premium attributable to NJOY’s use of the misleading advertisements and product labeling omissions,” in his order.

The judge also pointed out that the plaintiffs in the NJOY class action lawsuit had still not successfully countered testimony from one of the plaintiffs that he would not have purchased NJOY e-cigarettes had the allegedly carcinogenic ingredients been listed. “Indeed, none of this testimony changes the fact that Halberstam would have purchased NJOY’s e-cigarettes even if the ingredients were included on the label,” wrote the judge in his order. “Accordingly,” he stated. “The court concludes that there is no basis to change or modify Judge Morrow’s ruling that Halberstam lacks standing.”

The plaintiffs are represented by Stephanie Bartone and Shannon Hopkins of Levi & Korsinsky LLP, Demet Basar and Francis Gregorek of Wolf Haldenstein Adler Freeman & Herz LLP and Jerusalem F. Beligan of Bisnar & Chase LLP, among others.

The NJOY E-Cigarette Class Action Lawsuit is In Re: NJOY INC Consumer Class Action Litigation, Case No. 2:14-cv-00428 consolidated with 2:14-cv-00427, in the U.S. District Court for the Central District of California.