Antitrust Law Daily Wrap Up, ANTITRUST NEWS: JUUL, Altria gain support in challenge to class certification, (Jul 31, 2026)

By Patricia K. Ruiz, J.D.

States, business and public-interest groups argue California antitrust law cannot govern out-of-state purchases and contend the lower court’s Rule 23 analysis was flawed.

Four amicus briefs filed in the Ninth Circuit urge reversal of a California federal court order certifying multistate indirect-purchaser classes in the JUUL antitrust litigation. The amici contend that the district court improperly applied California's Cartwright Act to transactions occurring outside California and failed to conduct the predominance analysis required by Rule 23. They also argue that the certification order improperly combined California liability standards with the damages laws of multiple states (In Re Juul Labs, Inc. Antitrust Litigation, No. 26-2626 (9th Cir. Jul. 28, 2026)).

Background. In February 2026, the federal district court in Sacramento, California certified a direct-purchaser class and several indirect-purchaser and indirect-reseller classes in antitrust litigation alleging that Altria Group, Inc.'s 2018 acquisition of a 35% stake in Juul Labs, Inc. and related agreements unlawfully restrained competition in the e-cigarette market. The court concluded that California's Cartwright Act could be applied to indirect-purchaser claims in numerous states with Illinois Brick repealer laws but declined to certify indirect-purchaser classes for Arkansas, South Carolina, Tennessee, and Virginia because those states do not permit indirect-purchaser antitrust class actions (see Antitrust Law Daily, Feb. 27, 2026). Defendants Juul and Altria subsequently sought Ninth Circuit review of the class-certification order.

Washington Legal Foundation. The Washington Legal Foundation argued that the district court created a legal regime that no legislature enacted by applying California's Cartwright Act liability standards to indirect-purchaser claims spanning 27 jurisdictions while incorporating the separate damages rules of individual states. According to the foundation, the Cartwright Act does not apply extraterritorially to purchases made outside California by nonresidents, and Rule 23 cannot be used to create a hybrid substantive law to facilitate class certification. The foundation further argued that the certification order improperly imposed California antitrust policy on other states, threatened multiple layers of enhanced damages, and relied on the court's "faith" that jurors could manage differences among state damages laws rather than the rigorous predominance analysis required by Rule 23.

Attorneys general. Iowa Attorney General Brenna Bird and attorneys general from 13 other states argued that the Cartwright Act does not authorize regulation of purchases occurring entirely outside California and that the district court failed to conduct the required extraterritoriality analysis before certifying the classes. The states contended that purchases made by residents in their home states are governed by those states' sovereign policy choices regarding antitrust liability, remedies, and enforcement. They maintained that applying California law to such transactions would displace those policy choices, raise federalism and dormant Commerce Clause concerns, and undermine Rule 23 predominance because claims would necessarily be governed by materially different state antitrust laws.

Goldwater Institute. The Goldwater Institute argued that California's Cartwright Act materially differs from federal antitrust law and the antitrust regimes of many states because, in the institute's view, California law does not consistently adhere to the consumer welfare standard. The institute asserted that many states whose residents are included in the certified classes apply antitrust standards focused on consumer welfare and economic efficiency, whereas California antitrust law incorporates broader policy considerations, including protection of smaller competitors. According to the institute, extending the Cartwright Act to out-of-state purchasers would impose California's policy choices on other states, create conflicts with federalism principles, and support reversal of the certification order under the Ninth Circuit's prior decision in Stromberg v. Qualcomm Inc.

U.S. Chamber of Commerce. The Chamber of Commerce of the United States argued that the district court certified the 27-state indirect-purchaser class without satisfying Rule 23's predominance requirement. The Chamber said the court improperly applied California law extraterritorially, inverted California's presumption against extraterritorial application, and created a "hybrid" antitrust regime by applying California liability rules while leaving in place the separate damages laws of the 27 states. The Chamber also argued that the district court failed to conduct the required predominance analysis, instead expressing confidence that jury instructions and special verdict forms could address material differences among state damages regimes. According to the Chamber, the certification order creates uncertainty for businesses, encourages forum shopping, and exerts settlement pressure inconsistent with Rule 23 and the Rules Enabling Act.

The Case is No. 26-2626.

Judge: Orrick, W.

Attorneys: Joseph R. Saveri (Saveri Law Firm, LLP) for Devin Black. Beth A. Wilkinson (Wilkinson Stekloff, LLP) for Altria Group, Inc. David I. Gelfand (Cleary Gottlieb Steen & Hamilton, LLP) for Juul Labs, Inc.

Companies: Altria Group, Inc.; Juul Labs, Inc.

News: Antitrust