Antitrust Law Daily Wrap Up, ADVERTISING—D.D.C.: Suit alleging false advertising against ZYN makers remanded to state court, (Sep 30, 2025)

By Donielle Tigay Stutland, J.D.

Diversity jurisdiction was not met because consumers could bring separate and distinct claims against the tobacco makers.

The U.S. District Court for the District of Columbia granted a motion from Breathe DC, a nonprofit organization, requesting the court remand its suit alleging deceptive and misleading advertising against Swedish Match North America LLC and Philip Morris International Inc., the makers of nicotine pouch brand ZYN. The nonprofit organization sued the tobacco manufacturers in the Superior Court of the District of Columbia for false and deceptive advertising related to the ZYN products under the District of Columbia Consumers Protection Procedures Act (CPPA) in a representative action on behalf of the public. The tobacco makers had the suit removed to federal court. The district court agreed with the nonprofit that the suit should be remanded to state court for lack of subject matter jurisdiction. The court determined that the tobacco makers could not show diversity jurisdiction or federal enclave jurisdiction, nor does the nonprofit have Article III standing (Breathe DC v. Swedish Match North America LLC, No. 1:24-cv-03208-TJK (D.D.C. Sept. 28, 2025)).

Background. The plaintiff, Breathe DC, is a nonprofit corporation dedicated to combatting the negative impact of tobacco and nicotine products in the District of Columbia. Swedish Match North America LLC and Philip Morris International Inc. market and sell nicotine pouches in the District of Columbia under the brand name ZYN. In September 2024, Breathe DC sued Swedish Match North America LLC (“Swedish Match”) and Philip Morris International Inc. in the Superior Court of the District of Columbia under the CPPA, D.C. Code.

The nonprofit alleges that the tobacco companies marketing with respect to the Zyn “pouches” is deceptive and misleading. Specifically the suit alleges that the manufacturers allegedly advertise ZYN as “tobacco free,” even though its nicotine is “tobacco-derived.” And because consumers purportedly “associate health concerns with tobacco,” this “designation” makes consumers less hesitant to buy ZYN pouches, which they (perhaps mistakenly) believe to be “safer” than traditional tobacco products. Further, the nonprofit alleges that the manufacturers market ZYN to “young people” and rely on peer pressure to keep their sales high, and advertise and sell ZYN in ten flavors “to tempt young buyers.” The nonprofit alleges that these practices are deceptive because they “imply[]” that the manufacturers can lawfully sell ZYN to those under age 21 or as a flavored product in the District of Columbia, when in fact they cannot.

The tobacco companies removed the case to federal court claiming that this Court has subject-matter jurisdiction under 28 U.S.C. §§ 1331 and 1332. The nonprofit moved to remand the case to Superior Court arguing that the court lacks subject-matter jurisdiction under those statutes and, in any event, because the nonprofit lacks Article III standing.

Diversity Jurisdiction. The court first rejected the tobacco makers contention that the suit satisfies the requirement for diversity jurisdiction. While the parties acknowledged that they are citizens of different jurisdictions for diversity, the parties disputed whether the diversity jurisdiction threshold amount was reached. The tobacco manufacturer argued that based on the total cost of compliance with the requested injunction—the cost of correcting their allegedly false advertising—as well as the attorneys’ fees sought by the nonprofit, the $75,000 controversy amount would be satisfied. Breathe DC argued that the “consumers on whose behalf [it] bring[s] suit have separate and distinct claims” because “any individual” exposed to the makers’ allegedly deceptive practices “could bring a CPPA suit on the same grounds advanced by” Breathe DC. The court noted that the total cost of compliance is not a proper measure of the amount in controversy because it would violate the non-aggregation rule. The court found that “[t]he key question courts consider with respect to aggregation is not whether an injunction would cost Defendant more or less depending on the number of beneficiaries, but instead whether Plaintiff and the members of the general public have separate and distinct claims.” As such, the court determined that the non-aggregation principle applies. The court also stressed that for cases under the District of Columbia Consumers Protection Procedures Act (CPPA) cases, courts in the District have also applied the non-aggregation principle to attorneys’ fees.

Federal Enclave Jurisdiction. The court also rejected the manufacturers’ argument that the case has federal enclave jurisdiction. No doubt, some parts of the District of Columbia, such as military bases, are federal enclaves. But there is no support for the notion—and Swedish Match does not argue—that the entire District is such an enclave. So for the court to have federal enclave jurisdiction, the tobacco makers must show that their alleged deceptive practices were limited to those portions of the District properly characterized as federal enclaves. The court stressed that it is not enough that “some of the pertinent activity occurred on a federal enclave.

Article III Standing. The court noted that even if it had jurisdiction under either § 1331 or § 1332, it would still have to remand the case, because the tobacco makers had not shown that the nonprofit has suffered an injury-in-fact sufficient to confer Article III standing. The nonprofit itself does not purport to allege in its complaint that it suffered an Article III injury caused by the tobacco makers. The court highlighted that it does not have to do so to file in Superior Court—rather, it relied on the statutory standing provided for in the CPPA that does not require such an injury. Because Breathe DC is bringing a claim against the manufacturers under the CPPA, and it is not attempting to enforce the District’s ban on the sale of flavored tobacco products in the District, the court did not find Article III standing.

The court remanded the case to Superior Court.

The Case is No. 1:24-cv-03208-TJK.

Judge: Kelly, T.

Attorneys: Kim E. Richman (Richman Law & Policy PLLC) for Breathe DC. Bethany Woodard Kristovich (Munger, Tolles & Olson LLP) for Swedish Match North America LLC.

Companies: Breathe DC; Swedish Match North America LLC

Cases: Advertising StateUnfairTradePractices DistrictofColumbiaNews