Buyers Sue E-Cigarette Co. Over 'Harmful' Chemicals - Law360

Buyers Sue E-Cigarette Co. Over 'Harmful' Chemicals - Law360

by Diana Novak Jones

Law360, New York (November 12, 2015, 4:57 PM ET) -- A manufacturer of the nicotine liquid vaporized in e-cigarettes was slapped with a putative class action in California federal court Wednesday filed by three buyers who claim the company failed to disclose two potentially illness-causing chemicals in its products.

E-liquid maker Five Pawns Inc. violated California, New York and Indiana consumer protection laws when it advertised and sold e-liquid flavors that include diacetyl and acetyl propionyl, chemicals that studies have shown can cause scarring in lungs, emphysema and other respiratory problems, the suit claims.

Warnings posted on the Irvine, California-based company’s products and website don’t mention the presence of diacetyl and acetyl propionyl or explain their potential dangers, the buyers said.

“Defendant’s marketing campaign describes its e-liquids as if it were selling wine,” the buyers said in their suit. “Despite defendant’s marketing campaign that boasts its ‘top-notch ingredients’ that makes for a ‘high-end experience,’ defendant’s products are actually laden with harmful chemicals.”

The chemicals in Five Pawns’ products were first pointed out in 2009 after a British e-cigarette store commissioned a laboratory test and found that the e-liquid contained “the highest levels of [acetyl propionyl] that have ever been shown in a laboratory test of e-liquids,” according to the suit.

As a result of that testing, the Electronic Cigarette Trade Association of Canada told Canadian e-cigarette stores to stop selling Five Pawns’ products, the buyers claim.

Five Pawns has done its own testing of its products, which also showed the presence of diacetyl and acetyl propionyl, according to the suit.

Diacetyl and acetyl propionyl are flavorings that are also used in the manufacture of food products, according to the suit.

In a 2011 report, the National Institute for Occupational Safety and Health listed acceptable daily levels of diacetyl and acetyl propionyl exposure. In Five Pawns’ own testing, some of its products exceeded NIOSH’s safe daily amount of acetyl propionyl in a single gram, according to the suit.

According to the suit, when customers called Five Pawns to ask about the chemicals, representatives said either the products had no additives or only trace amounts.

In response to a letter from the buyers ahead of the suit’s filing, the company said it would improve customer service responses when customers call about the chemicals and would post quarterly testing of its products online, according to the suit.

The class action, which would include anyone who ever purchased a Five Pawns product, asks that the company stop its misleading marketing and seeks unspecified damages.

"Five Pawns denies any wrongdoing or liability," the company's attorney, John Bowerbank, told Law360. "Five Pawns will vigorously dispute the allegations and claims, and Five Pawns will respond accordingly."

Requests for comment from attorneys for the buyers went unanswered Thursday.

Five Pawns is represented by John Bowerbank of Garcia Rainey Blank & Bowerbank LLP.

The buyers are represented by Betsy Manifold, Rachele Rickert, Brittany Dejong, Janine Pollack, Michael Jaffe and Gloria Kui Melwani of Wolf Haldenstein Adler Freeman & Herz LLP.

The case is Greene et al v. Five Pawns, Inc., case no. 8:15-cv-01859 in the U.S. District Court for the Southern District of California.

--Editing by Kelly Duncan.