Marcie Hamilton v. JUUL Labs, Inc.
- Edward Chen
- 3:20-cv-03710
- U.S. District Court · Northern District of California
- 3
In Marcie Hamilton v. JUUL Labs, Judge Chen dismissed the Cartwright Act theory but left Hamilton’s other PAGA theory intact.
Marcie Hamilton’s Fifth Claim against JUUL Labs, Inc. was dismissed only insofar as it relied on the Cartwright Act; the court left intact the portion based on Government Code § 12964.5.
What happened
Marcie Hamilton’s Fifth Claim alleged that JUUL Labs violated California Labor Code § 432.5 through a claim under California’s Private Attorneys General Act. The parties asked the court to clarify whether the portion based on the Cartwright Act remained viable.
The court ruled that Hamilton’s complaint did not plausibly explain how JUUL Labs created an unlawful anticompetitive trust, fixed prices, or willfully excluded competition. It therefore dismissed the Fifth Claim to the extent it relied on the Cartwright Act.
The order did not change the court’s earlier ruling that the Fifth Claim sufficiently alleged a violation based on Government Code § 12964.5. Judge Chen issued the supplemental order on April 27, 2021.
The detailed version
- Marcie Hamilton v. JUUL Labs, Inc. · No. 3:20-cv-03710
- Edward Chen
- Apr. 27, 2021
Background
This supplemental order clarified the scope of Hamilton’s Fifth Claim for relief under California Labor Code § 432.5. That statute addresses an employer’s requiring an employee or applicant to agree in writing to a term or condition that the employer knows is prohibited by law. The claim was brought under California’s Private Attorneys General Act (PAGA) and relied on several possible legal predicates, including the Cartwright Act and Government Code § 12964.5.
In the court’s earlier order, it held that the Fifth Claim survived insofar as Government Code § 12964.5 served as the predicate. It held that the other theories identified in that order did not plausibly state a PAGA claim. The parties then informed the court that the earlier order had analyzed the plausibility of the Cartwright Act theory based on California Business and Professions Code § 16600, while the relevant theory concerned the Cartwright Act, California Business and Professions Code § 16700 et seq.
Cartwright Act analysis
The Cartwright Act generally prohibits combinations or agreements that restrain trade or competition or fix or control prices. The court explained that a Cartwright Act claim requires allegations establishing the formation and operation of a conspiracy, illegal acts carried out under that conspiracy, and damage proximately caused by those acts.
The court noted that some California appellate decisions have held that single-firm monopolization is not actionable under the Cartwright Act, while another decision recognized monopoly as a prohibited restraint of trade. The court did not need to resolve that issue. Even assuming a single-firm monopolization theory could proceed, Hamilton’s First Amended Complaint lacked details about JUUL Labs’s price fixing or willful exclusion of competition in a particular geographic area. It also did not explain the legal theory under which JUUL Labs’s conduct created an unlawful trust in restraint of trade.
Ruling
The court clarified that Hamilton’s Fifth Claim was dismissed to the extent it rested on the Cartwright Act. The order did not alter the earlier ruling that Hamilton sufficiently stated a PAGA violation under Labor Code § 432.5 using Government Code § 12964.5 as the predicate. Judge Edward M. Chen issued the order on April 27, 2021.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.