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NEW YORK HAS JURISDICTION OVER OUT-OF-STATE DEFENDANT JUUL LABS, THE MANUFACTURER OF ELECTRONIC CIGARETTES, AND TWO CORPORATE OFFICERS IN AN ACTION ALLEGING DECEPTIVE BUSINESS PRACTICES, FRAUD AND PUBLIC NUISANCE (FIRST DEPT). ​

The First Department determined New York had jurisdiction over the defendant JUUL, the manufacture of electronic cigarettes, and two corporate officers involved JUUL’s marketing campaign in New York. The complaint alleged “causes of action pursuant to General Business Law §§ 349 and 350, for deceptive acts and practices and for false advertising, respectively; pursuant to Executive Law § 63(12), for repeated and persistent fraud and illegal conduct in violation of General Business Law §§ 349 and 350 and section 5 of the Federal Trade Commission Act (15 USC § 45); and, for public nuisance.”:

… [T]he People submitted internal emails and reports demonstrating … that defendants traveled to New York City for investment meetings … ; that defendants personally attended JUUL’s launch party in New York City …, JUUL also sought to arrange in-person meetings between defendants and both “New York targets” and broadcast media organizations; and, that defendants and JUUL considered the New York City launch to have been a success.

… [D]efendants were involved in marketing strategy, which included … months of events in New York; identifying New York as the target of JUUL’s northeastern U.S. marketing efforts, at and after launch; advertising on billboards in Times Square; hosting in-store product samplings at New York vape shops and social events; and escalating marketing efforts in the New York City metropolitan area post-launch. After New York proved to be a substantial market for JUUL’s product, defendants went so far as to describe the efforts as “NYC takeover” and to declare that New York City users should be “the focus of [JUUL’s] branding/marketing.”

This evidence establishes that defendants conducted sufficient in-person activities within New York State related to the People’s claims against them in this action, and sufficiently supports the exercise of specific personal jurisdiction over them pursuant to CPLR 302(a)(1) … . People v JUUL Labs, Inc., 2023 NY Slip Op 00040, First Dept 1-5-22

Practice Point: Here New York demonstrated it had personal jurisdiction over the out-of-state manufacturer of electronic cigarettes and two corporate officers involved in marketing the cigarettes in New York. The complaint alleged deceptive business practices, fraud and public nuisance.

 

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