NJOY Brings Sweeping Litigation Against Illicit Disposable Vapor Manufacturers

Rhea-AI Summary

Altria's operating company NJOY files litigation against 34 manufacturers, distributors, and retailers of illicit disposable e-vapor products in California.

Positive

• The litigation seeks a nation-wide injunction against the import, marketing, and sale of these illicit products and significant compensatory and punitive damages.
• The study commissioned by Altria found that flavored vapor products make up more than 97% of the California market, despite a ban on the sale of flavored tobacco products.
• NJOY is the only e-vapor manufacturer to receive market authorizations from the FDA for a pod-based e-vapor product.

Negative

• The current state of the illicit e-vapor market is described as intolerable.
• The Defendants named in the suit have not received premarket authorization from the FDA and have not filed the required application for premarket approval.
• The lawsuit highlights the need for more action from the FDA and others.

RICHMOND, Va.--(BUSINESS WIRE)-- Altria Group, Inc. (Altria) announces today its operating company NJOY, LLC (NJOY) has filed sweeping litigation against 34 foreign and domestic manufacturers, distributors and online retailers of illicit disposable e-vapor products that are unlawfully marketed and sold in the State of California and elsewhere. The suit alleges that these companies manufacture, distribute, market and sell products that violate California’s flavor ban law, are unlawful under federal law and subject to FDA action, and illegally compete against companies that comply with state and federal laws.

The suit seeks a nation-wide injunction against the import, marketing and sale of these illicit products and significant compensatory and punitive damages.

“These companies knowingly violate federal and state laws and need to be held accountable,” said Murray Garnick, Altria’s Executive Vice President and General Counsel. “Today there are two markets – one for those who play by the rules and one for those who flagrantly ignore them. We are taking this action because the current state of the illicit e-vapor market is intolerable, and we must see more action from FDA and others.”

The litigation, filed in the United States District Court for the Central District of California, is brought under four claims: unfair competition, false advertising, false advertising in violation of the Lanham Act and violation of the Prevent All Cigarette Trafficking Act of 2009.

Named Defendants in the suit manufacture and distribute illicit disposable e-vapor products which include, but are not limited to, brands such as: Breeze, Elf Bar, EB, EB Create, Esco Bar, Flum, Juice Box, Lava Plus, Loon, Lost Mary, Mr. Fog and Puff Bar. Domestic Defendants include companies doing business in Arizona, California, Delaware, Florida, Michigan, Minnesota, New Jersey, New York and Texas. Foreign Defendants are all based in China.

None of the Defendants has received premarket authorization from the FDA. In many instances, Defendants also have not filed the required application for premarket approval. Several of these Defendants have already received warning letters from the FDA stating that their products are adulterated and misbranded and cannot be sold without a marketing authorization. Additionally, some of these Defendants are subject to an FDA-ordered import alert authorizing U.S. Customs and Border agents to seize their products.

NJOY may add additional manufacturers, distributors and retailers to this complaint and will consider further litigation activity.

Despite a ban on the sale of flavored tobacco products that went into effect in December 2022, flavored vapor products make up more than 97 percent of the California market according to a recent study commissioned by Altria and available on altria.com. Conducted by an independent research firm WSPM Group, the study collected 15,000 empty discarded cigarette packs and 4,529 e-vapor product packages from May 1st through June 28th in 10 California cities.

Altria’s Profile

We have a leading portfolio of tobacco products for U.S. tobacco consumers age 21+. Our Vision is to responsibly lead the transition of adult smokers to a smoke-free future (Vision). We are Moving Beyond Smoking™, leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices - believing it is a substantial opportunity for adult tobacco consumers, our businesses and society.

Our wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, we own Philip Morris USA Inc. (PM USA), the most profitable U.S. cigarette manufacturer, and John Middleton Co. (Middleton), a leading U.S. cigar manufacturer. Our smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Company LLC (USSTC), the leading global moist smokeless tobacco (MST) manufacturer, Helix Innovations LLC (Helix), a leading manufacturer of oral nicotine pouches, and NJOY, LLC (NJOY), currently the only e-vapor manufacturer to receive market authorizations from the U.S. Food and Drug Administration (FDA) for a pod-based e-vapor product.

Additionally, we have a majority-owned joint venture, Horizon Innovations LLC (Horizon), for the U.S. marketing and commercialization of heated tobacco stick products and, through a separate agreement, we have the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System® and Marlboro HeatSticks® through April 2024.

Our equity investments include Anheuser-Busch InBev SA/NV (ABI), the world’s largest brewer, and Cronos Group Inc. (Cronos), a leading Canadian cannabinoid company.

The brand portfolios of our tobacco operating companies include Marlboro®, Black & Mild®, Copenhagen®, Skoal®, on!® and NJOY®. Trademarks and service marks related to Altria referenced in this release are the property of Altria or our subsidiaries or are used with permission.

Learn more about Altria at www.altria.com and follow us on Twitter, Facebook and LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231019276660/en/

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Source: Altria Group, Inc.

FAQ

What is the lawsuit filed by NJOY against manufacturers, distributors, and retailers of illicit disposable e-vapor products?

The lawsuit filed by NJOY seeks to hold these companies accountable for manufacturing, distributing, marketing, and selling products that violate California's flavor ban law and are unlawful under federal law. It also alleges unfair competition, false advertising, false advertising in violation of the Lanham Act, and violation of the Prevent All Cigarette Trafficking Act of 2009.

What does the litigation seek?

The litigation seeks a nation-wide injunction against the import, marketing, and sale of illicit disposable e-vapor products. It also seeks significant compensatory and punitive damages.

What percentage of the California market do flavored vapor products make up?

According to a study commissioned by Altria, flavored vapor products make up more than 97% of the California market.

Has NJOY received market authorizations from the FDA for its e-vapor products?

Yes, NJOY is currently the only e-vapor manufacturer to receive market authorizations from the FDA for a pod-based e-vapor product.

What is the current state of the illicit e-vapor market?

The current state of the illicit e-vapor market is described as intolerable, and more action is needed from the FDA and others.