Ninth Circuit Agrees to Review District Court’s Attempt to Extend California Antitrust Law Nationwide

“Anointing California as the nation’s antitrust enforcer undermines federalism and offends due process.”
—Cory L. Andrews, WLF General Counsel & Vice President of Litigation

(Washington, DC)—Earlier today the U.S. Court of Appeals for the Ninth Circuit granted Altria Group Inc. leave to appeal a district court’s class-certification order under Federal Rule of Civil Procedure 23(f). The ruling was a victory for Washington Legal Foundation (WLF), which submitted an amicus brief contending that the order violates federalism and due process by improperly applying California’s Cartwright Act to out-of-state transactions and harms.

The case stems from Altria’s 2018 investment in Juul Labs after independently shuttering its uncompetitive e-cigarette division amid losses and FDA scrutiny. Private plaintiffs allege that the investment and a related non-compete unfairly reduced competition. The district court certified a nationwide direct-purchaser class under federal antitrust law and two multistate indirect-purchaser classes under the Cartwright Act across 27 jurisdictions.

In its amicus brief, WLF argued that the certification order flouts California’s presumption against extraterritoriality and choice-of-law rules by imposing California’s policies on other states. It also threatens due process by applying California law to claims with insufficient ties to the state. The state-by-state variations in antitrust laws pose insuperable obstacles rendering class litigation both unmanageable and unconstitutional.