Source: https://pl.scribd.com/doc/289626827/Five-Pawns-Class-Action-Lawsuit
Timestamp: 2017-06-24 10:29:56
Document Index: 153212979

Matched Legal Cases: ['§ 1332', '§ 1332', '§ 1367', '§ 1391', '§ 17200', '§ 1750', '§ 24', '§ 349', '§ 1750', '§ 1750', '§ 1770', '§ 1780', '§\n17200', '§ 17200', '§ 17500', '§ 24', '§ 24', '§ 24', '§ 24', '§ 349', '§ 349', '§ 349', '§ 349', '§ 349', '§ 349', '§ 349', '§ 349', '§ 349', 'art 2']

Five Pawns Class Action Lawsuit | Electronic Cigarette | Wellness
Five Pawns Class Action LawsuitUploaded by Russ WishtartRelated InterestsElectronic CigaretteWellnessRating and Stats5.0 (1)Document ActionsDownloadShare or Embed DocumentEmbedDescription: Multi-million dollar lawsuit filed against Five Pawns.View MoreMulti-million dollar lawsuit filed against Five Pawns.Copyright: © All Rights ReservedDownload as PDF, TXT or read online from ScribdFlag for inappropriate contentCase 8:15-cv-01859 Document 1 Filed 11/11/15 Page 1 of 46 Page ID #:11
BRITTANY N. DEJONG (258766)
jaffe@whafh.com
melwani@whafh.com
Facsimile: 212/545-4653
DUANE ROBERT GREENE, SHAWN ) Case No.
RANDALL THOMAS and JAMES ) COMPLAINT FOR VIOLATIONS
HIRTZEL, on behalf of themselves and all ) OF: (1) CAL. CONSUMERS
) LEGAL REMEDIES ACT;
) (2) CAL. UNFAIR COMPETITION
(3) CALIFORNIA FALSE
) LAW;
) (4) INDIANA DECEPTIVE
) CONSUMER SALES ACT; (5) N.Y.
) GEN. BUS. LAW; (6) BREACH OF
) EXPRESS WARRANTY
FIVE PAWNS, INC.,
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 2 of 46 Page ID #:2
Plaintiffs Duane Robert Greene (“Plaintiff Greene”), Shawn Randall
Thomas (“Plaintiff Thomas”) and James Hirtzel (“Plaintiff Hirtzel”) (collectively,
“Plaintiffs”), by and through their undersigned attorneys, bring this action on
behalf of themselves and all others similarly situated, and the general public, based
upon personal knowledge as to themselves and their activities, and on information
and belief as to all other matters, against defendant, Five Pawns, Inc. (“Five
Pawns” or “Defendant”), and allege as follows:
Diversity subject matter jurisdiction exists over this class action
pursuant to the Class Action Fairness Act of 2005, Pub. L. No. 109-2, 119 Stat. 4
(2005), amending 28 U.S.C. § 1332, at new subsection (d), conferring federal
jurisdiction over class actions involving: (a) 100 or more members in the proposed
class; (b) where at least some members of the proposed class have different
citizenship from some defendants; and (c) where the claims of the proposed class
members exceed the sum or value of five million dollars ($5,000,000) in the
aggregate. 28 U.S.C. §§ 1332(d)(2) and (6).
While the exact number of members in each of the proposed classes is
unknown at this time, Plaintiffs have reason to believe that thousands of consumers
purchased Defendant’s vapor liquids (“e-liquids”) for electronic cigarettes (or “e-
cigarettes”)1 throughout California, Indiana, and New York during the relevant
The number of class members could be discerned from the records
While the exact damages to Plaintiffs and the members of the classes
are unknown at this time, Plaintiffs reasonably believe that their claims exceed five
million dollars ($5,000,000) in the aggregate.
E-liquids are sometimes used in devices called personal vaporizers, which
are products that include, but are not synonymous to, electronic cigarettes.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 3 of 46 Page ID #:3
Jurisdiction over the New York and Indiana Plaintiffs is proper
pursuant to 28 U.S.C. § 1367, which provides, in relevant part, that: (a) “in any
action of which the district courts have original jurisdiction, the district courts shall
have supplemental jurisdiction over all other claims that are so related to claims in
the action within such original jurisdiction that they form part of the same case or
controversy under Article III of the United States Constitution . . . includ[ing]
claims that involve the joinder . . . of additional parties.”
Defendant is a resident of the State of California and has purposefully availed itself
of the privilege of conducting business in the State of California.
Venue is proper in this Court pursuant to 28 U.S.C. § 1391 because
many of the acts and transactions giving rise to this action occurred in this District
and because Defendant:
has intentionally availed itself of the laws and markets within
this District through the promotion, marketing, distribution and
sale of its products in this District;
its principal place of business in this district; and
is subject to personal jurisdiction in this District.
Venue is proper in this Court as to the New York and Indiana
Plaintiffs and Claims under the doctrine of pendant venue.
does substantial business in this District, including maintaining
Defendant is a manufacturer of e-liquids, which are used in electronic
cigarettes. Defendant’s e-liquids contain hazardous substances known as diacetyl
(“DA”) and acetyl propionyl (“AP”) (also known as 2,3-pentanedione), in addition
to propylene glycol, glycerin, nicotine, and flavorings. As detailed herein, the DA
and AP levels detected for certain particular flavors of Defendant’s e-liquids
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 4 of 46 Page ID #:4
represent the highest concentration that has ever been seen in any e-liquid. Some e-
liquids manufactured by other companies are sold without DA and AP, propylene
glycol, nicotine, or flavors, as it is possible to source ingredients that do not
contain these toxic ingredients.2
DA and AP are compounds of diketone and are responsible for the
buttery and creamy taste of many foods and beverages, most famously, popcorn.
While DA and AP are safe to eat or drink, inhalation is known to cause certain
lung conditions, including Bronchiolitis Obliterans, a condition in which
irreversible scarring to the lungs is produced, in serious cases requiring lung-
transplants. A number of cases of Bronchiolitis Obliterans in popcorn factory
workers exposed to DA and/or AP led authorities to create very strict limits on the
amount of these chemicals that workers may be exposed to. Similar cases of
Bronchiolitis Obliterans have since been discovered in workers in other types of
10. It is also known that DA and/or AP are contributing factors to both
chronic obstructive pulmonary disease (“COPD”) and emphysema.3
11. Defendant does not warn its customers about the dangers of inhaling
DA and AP, neither on its product packaging nor on its website. Instead,
Defendant’s marketing campaign describes its e-liquids as if it were selling wine.
For example, the Company describes its “Bowden’s Mate” e-liquid as “crisp mint
with subtle chocolate undertones and a French vanilla finish,” while its “Absolute
For example, Virgin Vapor, Halo Cigs, Fireband, and Mt. Baker Vapor all
produce e-liquids that are DA and AP free. Five Pawns also recently began selling
a DA and AP free flavor of e-liquid called Symmetry Six.
S. Costigan, C. Meredith, An Approach To Ingredient Screening And
Toxicological Risk Assessment of Flavours in E-Liquids, 72 REG. TOX. AND
PHARM. 361 (July 2015).
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 5 of 46 Page ID #:5
Pin” e-liquid has an “intense complexity of Irish cream, cinnamon spice, and
caramel with subtle absinthe undertones.” Some special edition flavors in its line of
products are described as having been aged in oak barrels.
12. 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.
13. Sometime in 2009, users of electronic cigarettes began to become aware
of the presence of DA and AP in e-liquids and that those substances pose serious
health hazards, particularly health hazards associated with respiratory diseases.
Some e-liquid manufacturers took the issue seriously enough to make efforts to
halt usage of flavorings that contain DA and/or AP in their e-liquids. See ¶ 8 n.2,
14. From the Company’s inception in November 2012, it has manufactured
and sold high-end e-liquids in a variety of flavors, all containing various amounts
of DA and AP, depending on the flavor. While Defendant claimed on its website
that it “moved to source solely diacetyl-free ingredients,” it subsequently
discovered that “trace amounts of diacetyl” were found in its products. A number
of tests done on Defendant’s e-liquids, including one performed by a laboratory
retained by Defendant in September 2014, show that Defendant’s e-liquids contain
DA and AP, some at substantially more than trace amounts,4 thus directly
contradicting its claim that its e-liquids contain diacetyl-free flavorings.
15. Defendant did not disclose these results until June 2015, and it did so at
that time only in an attempt to rebut the testing that had been conducted by an e-
cigarette store in England called Cloud 9 Vaping (“Cloud9”). The Cloud9 test
results showed that some of Defendant’s line of products contain the highest levels
Trace amounts of DA and/or AP are amounts lower than 5 μg/ml.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 6 of 46 Page ID #:6
of AP that have ever been shown in a laboratory test of e-liquids. In light of these
test results, Cloud9 proceeded to withdraw the entire line of Five Pawns products
from its inventory. Shortly thereafter, the Electronic Cigarette Trade Association of
Canada (“ECTA”) notified Canadian vendors of e-liquids to withdraw and cease
sales of Defendant’s e-liquids.
16. Defendant’s e-liquids also contain varying levels of nicotine (in 0mg,
3mg, 6mg, 12mg, and 18 mg levels). The Cloud9 laboratory testing has also
shown that Defendant disclosed inaccurate nicotine levels on its packaging.
17. Defendant has employed numerous methods to convey to consumers
throughout the United States its deceptive, false and misleading message about its
e-liquids, including its packaging, product inserts, communications with its
customers via e-mail or internet forums, and its website through which it sells its
products directly to the public, https://fivepawns.com/blog/html (last visited
18. As a result of Defendant’s deceptive, false and misleading claims in its
advertising, consumers – including Plaintiffs and the other members of the
proposed classes – have purchased Defendant’s e-liquids without being advised
that they contain a variety of toxins, impurities, and related potential health hazards
as found by various studies discussed in more detail below.
disclosed these material facts, Plaintiffs would not have purchased Defendant’s e-
liquids. Defendant was able to charge more than what its e-liquids would have
been worth had it disclosed the truth about them. In fact, Defendant charges one of
the highest prices for e-liquids in the e-liquid industry, at $27.50 for each 30ml
bottle of juice and $37.50 for its limited edition Castle Long Reserve.
Had Defendant
19. Plaintiffs bring this class and private attorney general action against
Defendant, on behalf of themselves, the proposed classes, and the general public,
in order to: (a) halt the dissemination of Defendant’s deceptive advertising
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 7 of 46 Page ID #:7
message; (b) correct the false and misleading perception Defendant has created in
the minds of consumers through its representations and omissions; and (c) secure
redress for consumers who have purchased one or more of Defendant’s e-liquids.
Plaintiffs, on behalf of themselves and the proposed classes, allege violations of
California Business & Professions Code §§ 17200, et seq. (“UCL”), the
Consumers Legal Remedies Act, California Civil Code §§ 1750, et seq. (“CLRA”),
breach of express warranty, breach of the Indiana Deceptive Consumer Sales Act,
Ind. Code § 24-5-0.5 et seq., and violations of the New York General Business
Law § 349 (“GBL”).
20. Plaintiff Greene is an individual who resides in Indianapolis, Indiana
and who is a citizen of Indiana.
21. Plaintiff Thomas is an individual who resides in Kings County and is a
22. Plaintiff Hirtzel is an individual who resides in Sacramento, California
and is a citizen of California.
23. Members of the putative classes reside in California, Indiana, New
York, and other states in the United States.
24. During the relevant period, Plaintiffs, while in the states of Indiana,
New York, and California, were exposed to and saw Defendant’s material,
deceptive marketing claims and packaging. Plaintiffs, relying on Defendant’s
misleading marketing and labeling of Defendant’s products, believed that
Defendant’s products did not carry dangers or risks associated with DA and/or AP.
While in the states of Indiana New York, and California, Plaintiffs purchased
Defendant’s e-liquids, at local retailers and online. Had Defendant disclosed that
its e-liquids contain a variety of toxins, impurities, and related potential health
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 8 of 46 Page ID #:8
hazards which was, or should have been known to Defendant, and as found by
various studies discussed in more detail below, Plaintiffs would not have
purchased Defendant’s e-liquids. Thus, as a result of Defendant’s material
deceptive claims and omissions, Plaintiffs suffered injury in fact and lost money.
25. Plaintiff Greene first purchased Defendant’s e-liquids in May 2014. He
purchased three varieties of Five Pawns Kings e-liquids – Castle Long with 24mg
Nicotine Strength, Fifth Rank with 24mg Nicotine Strength, and Gambit at 24mg
Nicotine Strength. He thereafter intermittently purchased additional Five Pawns e-
liquids. In total, Plaintiff Greene purchased approximately seven 30-ml bottles of
Five Pawns e-liquid for which he paid the retail market price for each bottle, which
was, upon information and belief, $27.50 at all relevant times. Plaintiff Greene
ceased purchasing Defendant’s products when the Cloud9 test results were posted
26. Plaintiff Thomas purchased Defendant’s e-liquids at a store called
Beyond Vape in New York County, New York in or around March 2015 for which
he paid the retail market price for each. Plaintiff Thomas ceased purchasing
Defendant’s products when the Cloud9 test results were posted on the Internet.
27. Plaintiff Hirtzel fist purchased Defendant’s e-liquids at a store called
Planet of the Vapes in Sacramento County, Carmichael, California in November
2013. Plaintiff Hirtzel purchased one bottle of Five Pawns Castle Long Reserve
with 12mg Nicotine Strength for $37.50. He thereafter intermittently purchased
additional Five Pawns e-liquids in various flavors for which he paid the retail
market price of between $27.50 and $37.50 for each 30ml bottle. Plaintiff Hirtzel
28. Five Pawns is incorporated in California, and has its corporate
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 9 of 46 Page ID #:9
headquarters at 17145 Von Karman Avenue, Suite 105, Irvine, California 92614.
Defendant carries premium, “handcrafted,” artisan-style e-liquid that is mainly sold
in high-end, boutique vape shops. Defendant currently offers two separate e-juice
lines, the Mixology Edition and Signature Series, each consisting of five unique
and complex flavor choices. The company appears to be following the lead of the
beer and liquor industries, branding itself as a sort of microbrewery, or craft
distiller of e-liquid.
29. Launched in November 2012, Defendant’s products are sold in
hundreds of retail locations in the United States. Defendant’s products are also sold
in 43 other countries.
30. Plaintiffs allege, on information and belief, that at all times herein,
Defendant’s agents, employees, representatives, executives, directors, partners,
and/or subsidiaries were acting within the course and scope of such agency,
employment, and representation, on behalf of Defendant.
31. This action concerns e-liquids sold by Defendant.
32. An electronic cigarette, or e-cigarette, is a device that is an alternative
to tobacco smoking. E-cigarettes are designed to deliver a smoking-like “hit” of e-
liquid vapor, usually containing nicotine, which is inhaled by the user. They work
through the use of a battery operated heating mechanism, which typically converts
the e-liquid that may contain DA, AP, glycerin, glycol, natural and artificial flavors
and, in most electronic cigarettes, various proportions of nicotine, into vapor.
When a person inhales (“vapes”) from an e-cigarette, this mimics the taking of a
“drag” on a traditional tobacco cigarette. A heating device is activated, the e-liquid
is converted into vapor, and the consumer inhales the vapor.
33. According to a 2011 study by the Centers for Disease Control and
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 10 of 46 Page ID #:10
Prevention (“CDC”), as of that year, more than one fifth of smokers in the United
States had tried electronic cigarettes, and 6% of all adults had tried them.5
34. According to a subsequent study by the CDC, nearly 1.8 million middle
and high school students tried e-cigarettes in 2011 and 2012, including
approximately 160,000 students who had never used conventional cigarettes.6 The
study also found that the number of U.S. middle and high school student e-smokers
doubled between 2011 and 2012.7
35. According to analysts, sales of e-cigarettes in America in 2012 were
between $300 million and $500 million.8 This was approximately double what
they were in the preceding year, and sales were projected to double again in 2013.9
36. E-cigarettes and e-liquids are commonly marketed as a “safer”
alternative to traditional cigarettes. However, the CDC published a report in 2014
that the number of calls to poison centers involving e-liquids containing nicotine
rose from one per month in September 2010 to 215 per month in February 2014.
CDC Director Tom Frieden, M.D., M.P.H. commented, “This report raises another
Press Release, Centers for Disease Control and Prevention, About One in
Five U.S. Adult Smokers Have Tried an Electronic Cigarette (Feb. 28, 2013),
visited Nov. 9, 2015).
Prevention, Notes from the Field: Electronic Cigarette Use Among Middle and
High School Students — United States, 2011–2012 (Sept. 6, 2013),
http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6235a6.htm (last visited Nov.
E-cigarettes: Vape ‘Em if You Got ‘Em, THE ECONOMIST, (Mar. 23, 2013),
www.economist.com/news/business/21573985-challenge-big-tobacco-vape-em-ifyou-got-em (last visited Nov. 10, 2015).
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 11 of 46 Page ID #:11
red flag about e-cigarettes – the liquid nicotine used in e-cigarettes can be
hazardous .”10
37. Aware of the growing popularity and the potential dangers in e-
cigarettes, the United States Food and Drug Administration (the “FDA”) proposed
rules in April 2014 that would require e-cigarettes, including liquid nicotine and
devices, to be approved by the agency. The rules would also ban sales to minors
and require e-cigarette and e-liquid companies to disclose its ingredients. The rules
were expected to be in place by the end of the summer of 2015.
38. Defendant sells what is reportedly premium, high-end e-liquids using
“top notch ingredients”.11 Defendant sells its e-liquids at a high premium, because
the Company uses “natural ingredients” that are “sourced locally,” according to its
Chief Executive Officer (“CEO”), Rodney Jerabek.12
39. Defendant’s e-liquids were introduced to the market with a retail price
of $27.50 and have remained that price, except for its limited edition Castle Long
Reserve, which sells for $37.50. As of the filing of this Complaint, individual Five
Pawns Kings can be purchased at stores across the country including various stores
in California, New York and Indiana. Defendant also sells its products on its own
website, www.fivepawns.com.
40. Defendant’s products are more expensive than those of most of its
For example, Space Jam, a competitor, offers 15ml bottles for
Press Release, Centers for Disease Control and Prevention, New CDC Study
Finds Dramatic Increase in E-Cigarette-Related Calls to Poison Centers (Apr. 3,
(last visited Nov. 10, 2015) (emphasis added).
Five Pawns President Interview, FIVE PAWNS, (May 31, 2013),
http://fivepawns.com/five-pawns-president-interview/ (last visited Nov. 10, 2015).
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 12 of 46 Page ID #:12
$11.99.13 Another competitor, Ossington by MOSHI, offers 30ml bottles for
$22.00.14 Like Five Pawns, both Space Jam and MOSHI market themselves as
high-end e-liquid brands using quality ingredients.
41. On information and belief, most members of the proposed classes have
bought more than one of Defendant’s products.
PUBLISHED STUDIES DEMONSTRATE THE DANGERS AND
EXPOSURE TO HEALTH RISKS OF E-LIQUIDS
42. Because of the rapid growth in the use of electronic cigarettes by
consumers in recent years, an increasing number of government agencies, research
facilities, and e-cigarette/e-liquid retailers have begun to conduct studies
concerning the potential health impact and risks of these devices. These studies
have found, inter alia, including with respect to Defendant’s e-liquids: (a)
measurable amounts of DA and/or AP in e-liquids that are, or potentially are,
disease-causing, (b) harmful potential side effects of inhaling e-liquids, and (c) that
more study is needed to determine the full range of health dangers of inhaling eliquids.
43. Recently, on June 28, 2015, a UK e-cigarette and e-liquid seller called
Cloud9 hired a laboratory to conduct tests of e-liquids supplied by Defendant as
well as other manufacturers for potentially dangerous chemicals. The results
showed Five Pawns, along with 2 other brands, had dangerously high numbers of
DA and AP, with Five Pawns showing the highest levels Cloud9 had ever seen.
Jam-Starship
(15ml),
VAPORDNA,
http://www.vapordna.com/Space-Jam-Starship-1-p/sj0009.htm (last visited Nov.
Ossington by MOSHI, ELIQUID.COM, http://www.eliquid.com/collections/
moshi/products/moshi-ossington (last visited Nov. 10, 2015).
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 13 of 46 Page ID #:13
44. Defendant sent a cease and desist letter to Cloud9, and Cloud9 removed
the test results from its website “pending legal advice.”15
45. Notably, the results show that nicotine content varies from 1.8mg to
3.7mg on ostensibly 3mg samples, and much of the propylene glycol and vegetable
glycerin ratios do not match with what Defendant lists on the bottles. As a result,
Cloud9 immediately stopped selling these products.16
46. As an attempt to conduct damage control, in early July 2015, Defendant
released previously unreleased test results on its products that were done in
September 2014 by Newport Scientific, Inc., a laboratory Defendant hired. The
tests showed that the products do in fact contain amounts of DA and AP, contrary
to Defendant’s representations to the public:
http://www.cremedevape.com/Blog/Liquid-test-results (last visited Nov. 11, 2015).
Five Pawns Bring Out Legal Big Guns – Cloud 9 Removes Testing Results,
THE GRUMPY VAPER, http://thegrumpyvaper.com/five-pawns-bring-out-legal-bigguns-cloud-9-removes-testing-results/ (last visited Nov. 10, 2015).
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 14 of 46 Page ID #:14
47. Specifically, a customer contacted Defendant to inquire if Defendant’s
products contain DA or AP, and a Five Pawns representative name Annoushka
Lyvers replied that “[n]one of our handcrafted flavors use diacetyl or acetone.”
Another customer asked the same question and received a response from the CEO,
who responded: “We use absolutely no Dicetyl or additives of any kind in our
liquids.”17
48. In addition, Russell Wishtart (“Wishtart”), consumer activist, vaping
guru, and host of the popular podcast Click, Bang! that is devoted to issues
regarding vaping, broadcasted a telephone conversation on its July 1, 2015 episode
between Wishtart and a Five Pawns representative. Wishtart telephoned Five
Pawns to ask if their e-liquids, specifically, the Absolute Pin and Bowden’s Mate
flavors, contain AP. The Five Pawns employee answered that the liquids in
question contain trace amounts and then clarified that their test results contain ND
(not detectable levels of AP). However, Defendant’s own test results show that
Cloud 9 Removes Five Pawns Testing Results Pending Legal Advice,
VAPEMESTOOPID, http://vapemestoopid.co/2015/06/cloud-9-removes-five-pawnstesting-results-pending-legal-advice/ (last visited Nov. 10, 2015).
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 15 of 46 Page ID #:15
Absolute Pin contains 290 μg/ml of AP and that Bowden’s Mate contains 627.7
49. Cloud9 had initially asked Defendant to provide its own test results
when Cloud9 commenced trading with the Company in the beginning of 2015 but
Defendant declined, at a time when Defendant had conducted testing on its
products and knew the levels of AP and DA in its products.
50. The other two e-liquid companies that carry e-liquids containing high
levels of DA and/or AP, Suprem-e and Mystic Vapor, both began work on
reformulating their products. Mystic Vapor’s reformulated version of a particular
flavor, Vanilla Custard, recently tested free of both DA and AP.18
51. The National Institute for Occupational Safety and Health (“NIOSH”)
released a report dated August 12, 2011 stating the acceptable levels of DA and/or
AP for e-liquids as 65 μg for DA and 137 μg per day for AP (1 μg = 1 millionth of
a gram).19 Both Cloud9’s and Five Pawns’s test results show DA and AP levels
that far exceed these limits. In particular, Absolute Pin tested at 40 μg/ml of DA
and an astonishing 2,500 μg/ml of AP. This means, if a person inhales just 2ml of
Absolute Pin e-liquid they will be over the recommended intake for DA and more
than 36 times over the recommended daily limit for AP. Moreover, almost all of
the e-liquids levels disclosed by Defendant in its own test results are higher than
137 μg per day for AP.
52. On June 30, 2015, the ECTA notified 50 vendors via email to withdraw
and cease sales of Five Pawns e-liquids. According to ECTA’s standards, an e-
See ¶ 47 n.17, supra.
Criteria for a Recommended Standard: Occupational Exposure to Diacetyl
and 2,3-Pentanedione, DEPARTMENT OF HEALTH AND HUMAN SERVICES (Aug. 12,
2011) (draft), http://www.cdc.gov/niosh/docket/archive/pdfs/NIOSH-245/0245081211-draftdocument.pdf (last visited Nov. 10, 2015).
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 16 of 46 Page ID #:16
liquid with AP levels of more than 45 μg/ml but less than 100 μg/ml requires
disclosure to the public, and e-liquids with levels of more than 100 μg/ml cannot
be sold by ECTA members and immediate stop sale is required.20
http://www.ectaofcanada.com/pagedisp.php?section=E-Liquid_Testing (last visited
Nov. 10, 2015).
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 17 of 46 Page ID #:17
53. In order to create positive spin on the detrimental publicity these test
results have caused, Defendant released a statement on its website containing false
assertions such as “[H]igh levels of both diacetyl and AP are present in cigarettes,
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 18 of 46 Page ID #:18
yet there has been no link to bronchial obliterates,” and “AP has not been linked to
any health concerns related specifically to vaping . . . its relative safety or harm is
unknown.”21 However, studies have shown that DA and AP do cause lung
damage.22
54. E-cigarettes are a subject of concern to major international entities. The
ECTA took action and ordered a stop sale for five Five Pawns e-liquids and
ordered disclosure of DA and/or AP levels for three Five Pawns e-liquids. A
similar trade association in the United Kingdom has taken similar measures
regarding Defendant’s products.
55. Numerous other studies have been performed by universities and other
research centers, and have reported similar concerns about the potential for health
risks associated with electronic cigarettes.
III. DEFENDANT’S ADVERTISING OF ITS FIVE PAWNS E-LIQUIDS
IS MATERIALLY DECEPTIVE, FALSE AND MISLEADING
56. Defendant has carried out a consistent and widespread campaign of
deceptively promoting its e-liquids. Its core marketing statement indicating that its
products contain quality ingredients or similar variations, and its repeated
statements that its products do not contain DA and AP, are false and misleading
given the studies discussed above that have found DA and AP in Defendant’s eliquids and that DA and AP are found to be hazardous to one’s health. It is also
false and misleading given the content of Defendant’s products because there is
still insufficient research for Five Pawns to assert or convey that its products do not
pose long term health dangers.
Defendant’s statements and omissions have
Five Pawns – Be Informed, FIVE PAWNS (June 29,
http://fivepawns.com/five-pawns-test-results/ (last visited Nov. 10, 2015).
See Farsalinos, Konstantinos E., et al., Evaluation of Electronic Cigarette
Liquids and Aerosol for the Presence of Selected Inhalation Toxins, J. OF NICOTINE
& TOBACCO RESEARCH (Aug. 18, 2014); see also ¶ 52 n.20, supra.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 19 of 46 Page ID #:19
occurred in at least three forms, all of which constitute “advertising.” These
include: its packaging, inserts to its packaging and shipping materials, and its
website through which it directly sells its e-liquids to the public. Defendant’s
pervasive advertising message conveys the impression and false statement that its
e-liquids do not contain DA and/or AP, and when it felt compelled to release its
test results, that the amounts of DA and/or AP that are in fact in its products do not
carry any risk of disease. As demonstrated above in Section II, however, this is
materially deceptive, false and misleading given the information revealed by
studies that not only do Defendant’s e-liquids contain DA and AP, but they are
potentially dangerous to consumers’ health and they also may carry many risks of
disease, including COPD, emphysema, and Bronchiolitis Obliterans. Information
regarding the effects of inhaling such substances must be disclosed to ensure that a
reasonable consumer is not misled.
57. Defendant’s packaging on its e-liquids only discloses the amount of
nicotine, propylene glycol and vegetable glycerin. It does not state that its products
contain AP and/or DA, nor does it contain a warning regarding the hazardous
effects on the human body of inhaling AP and DA.
58. Defendant’s pattern of deceptive marketing continues today, including
false, misleading and deceptive statements, as discussed in Section II, supra.
59. Defendant’s current packaging and advertising conveys the impression
that the product contains no meaningful health risks other than possibly those that
are a direct result of nicotine:
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 20 of 46 Page ID #:20
60. While Defendant does disclose that its e-liquids contain certain levels
of nicotine (selected by the customer) and that the ratio of propylene glycol and
vegetable glycerin is 50/50, nowhere on the packaging does it mention the
existence of DA and AP. By omitting these ingredients from the label, Defendant
denies consumers at the point of sale the opportunity to decide for themselves
whether they are willing to take the risk of inhaling these chemicals. For example,
by omitting the ingredients, Defendant hides the fact that its e-liquids contain DA
and/or AP, chemicals found to cause various lung diseases and thus no longer used
by certain of its competitors in their e-cigarettes. Moreover, as discussed below,
omitting the ingredients on the package conceals the dangers associated with the
chemicals contained in its e-liquids, which are described in the studies referenced
61. The text of the warning on Defendant’s website reads, in its entirety:
WARNING: This product is not a smoking cessation
product and has not been tested as such. The FDA has
not evaluated the safety of this product or any of the
statements made by the manufacturer. This product is
intended for use by persons of legal age or older, and
not by children, women who are pregnant or breast
feeding, or persons with or at risk of heart disease, high
blood pressure, diabetes, or taking medicine for
depression or asthma. Nicotine is addictive and habit
forming, and can be toxic if in contact with skin, or if
swallowed. Nicotine can increase your heart rate and
blood pressure and cause dizziness, nausea, and
stomach pain. Inhalation of this product may aggravate
existing respiratory conditions. Ingestion of the non- 19 -
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 21 of 46 Page ID #:21
vaporized concentrated ingredients can be poisonous.
This product is not intended to diagnose, treat, cure or
prevent any condition, disorder, disease or physical or
CA Proposition 65 WARNING: This product contains
nicotine, a chemical known to the State of California to
cause birth defect or other reproductive harm.
Glycerin, Propylene Glycol, and Natural and Artificial
Use only as intended - Under age sales to minors are
prohibited and subject to criminal and civil penalties.23
62. The text on a bottle of Five Pawns e-liquid is as follows24:
63. By warning of risks relating to nicotine, and the risks that may arise if
FIVE PAWNS, http://fivepawns.com (last visited Nov. 10, 2015).
Actual bottle of Five Pawns e-liquid purchased by Plaintiff Thomas.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 22 of 46 Page ID #:22
the concentrated contents of the cartridge are swallowed without being vaporized,
this packaging implies that those are the only health-related risks that relate to
Defendant’s e-liquids. The website warning is more substantial compared to the
warning label on the product packaging, but still inadequate. Warnings regarding
inhalation of the products and that it “may aggravate existing respiratory
conditions” is misleading as studies show that inhaling DA and AP causes
respiratory conditions, rather than merely aggravating them. Further, the website
and the packaging omit reference to the other toxins and impurities, including DA
and AP found in Defendant’s e-liquids, and inaccurate levels of nicotine, as
representing that its products are of high quality and the levels of DA and AP
contained therein are materially deceptive, false and misleading given the studies
discussed above in Section II and fail to disclose that such research and studies
have raised significant concerns about the health risks of Defendant’s e-liquids,
the harmful impact to lung capacity as a result of the chemicals,
including DA, AP, and propylene glycol, that are present in
Defendant’s e-liquids; and
other potentially dangerous but unknown health effects caused by the
long term use of e-cigarettes and e-liquids, including Defendant’s e-
65. On June 29, 2015, in the “News” section of its website, Defendant told
its customers and potential customers:
In response to the diacetyl concern in 2014, some vapor industry
flavor suppliers began using acetyl propionyl (AP), Also known as 2,3
pentanedione, as a substitute for diacetyl. While AP has not been
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 23 of 46 Page ID #:23
linked to any health concerns related specifically to vaping, and it is
not banned by the FDA or any International body, its relative safety or
harm is unknown.25
66. Defendant also stated:
Five Pawns does not feel there is any concern with diacetyl or AP in
our e-liquids at current levels. AP can be an important flavor
enhancer for flavor profiles that are creamy in nature, and is used
widely in the food and beverage industries.26
67. Again, this is false and misleading because, as shown in Section II,
supra, DA and AP are harmful to the user’s health. The fact that AP is approved by
the FDA as an ingredient in food for ingestion is irrelevant as it is proven, as
described in Section II, that ingesting AP is safe but inhaling AP is not.
68. By stating that the FDA has yet to ban DA and AP, and only including
a warning regarding the harmful effects of ingestion on its product packaging,
Defendant creates the false and misleading impression that these substances carry
no risk and are safe as used for inhalation, as discussed above. However, the
gastrointestinal system processes foreign matter differently than the respiratory
system, and ingredients that may be safe when digested may not be safe when
inhaled, especially with long term use. The additional statement that AP “is not
banned by the FDA or any International body” is itself misleading in the absence
of reference to the studies finding that these ingredients may not be safe when
inhaled, including, but not limited to, the studies referenced in Section II above.
For example, the study conducted by Professor Farsalinos stated: “Although the
majority of flavourings are ‘Generally Recognized As Safe’ (GRAS) for food use,
See ¶ 53 n.21, supra.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 24 of 46 Page ID #:24
these substances have not been adequately tested for safety when inhaled.” See ¶
53 n.22 at 3, supra. Farsalinos continued:
[T]here are some chemicals which, although approved for ingestion,
have already established adverse health effects when inhaled. A
characteristic example of this is diacetyl [DA]. This substance, also
known as 2,3-butanedione, is a member of a general class of organic
compounds referred to as diketones . . . [DA] has been associated with
decline in respiratory function, manifested as reduced Forced
Expiratory Volume in . . . subjects exposed to it through inhalation.
Additionally it has been implicated in the development of
bronchiolitis obliterans . . . .
69. Also found in the June 29, 2015 blog post in the “News” section on
Defendant’s website, Defendant states, with respect to DA that it “can naturally
occur in vapor liquids, just as with beer and wine, and some fruits such as
strawberries.”27
70. To draw a parallel between DA in e-liquids and beer, wine, and
strawberries is deceptive and misleading, as demonstrated by the studies cited
supra in Section II.
71. Finally, Defendant lists the other ingredients of its e-liquids as
unspecified “Natural and Artificial Flavors.” This is deceptive and misleading
because the website does not disclose what those “Flavors” are or, if they contain
AP and/or DA nor does it acknowledge that safety for use in food products does
not denote safety for use in inhaled products, as described above.
72. On July 9, 2015, Plaintiffs, through their attorneys, sent Defendant a
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 25 of 46 Page ID #:25
pre-suit demand letter describing the allegations in this complaint.
73. On July 21, 2015, Defendant released its latest test results on its current
ten vapor liquid flavors. Results for five of those ten flavors were identical to the
results from the test performed on October 2014. After numerous comments on
social media regarding the virtual impossibility of obtaining the same results down
to the tenth of a μg/ml, on July 24, 2015, Defendant was compelled to insert
asterisks in the “new” test results explaining that, five of those ten flavors, were in
fact, not retested at all. The Company is therefore continuing to deceive its
consumers. In fact, the post dated July 21, 2015 continues to state that “Five Pawns
is pleased to release the latest test results on our current 10 vapor liquid flavors.”28
The disclaimer that Defendant inserted can only be seen if you click on the pdf
document embedded in the blog post.
74. On August 7, 2015, counsel for Defendant sent a letter to counsel for
the Class and Subclasses. In the letter, counsel described the actions purportedly
taken by Defendant to cure the violations in Plaintiffs’ pre-suit demand letter.
Defendant claimed that it had “taken proactive steps to ensure proper
communication, correction, and clarification of any prior inaccurate statements,
including removing all outdated responses from all customer service computers,”
as an effort to correct its “inadvertent mistaken responses” to “specific inquiries by
a handful of individuals.”
75. Counsel for Defendant also stated that moving forward, Defendant will
post results from DA and AP testing “on all of its liquids” on its website on a
quarterly basis. Id.
76. The letter also stated that Defendant had contacted recipients of the
Five Pawns 3Q 2015 & Past 12 Months Test Results, FIVE PAWNS (July 21,
2015), http://fivepawns.com/fivepawns-2015-test-results/ (last visited Nov. 10,
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 26 of 46 Page ID #:26
communications at issue and had offered refunds as compensation.
77. These actions fail to cure the defects as alleged in this Complaint.
Defendant continues to misrepresent to its customers the adverse health effects of
its products. Its website continues to state that Defendant “source[s] solely
diacetyl-free ingredients, only to discover that trace amounts of diacetyl can
naturally occur in vapor liquids . . . .”29 This statement is false as the results from
Defendant’s own testing show, that some of Defendant’s e-liquids contain levels of
diacetyl that exceed amounts that are naturally occurring.
78. Defendant also states that “AP has not been linked to any health
concerns related specifically to vaping . . . and its relative safety or harm is
unknown.”30 This statement is false as studies have demonstrated that AP (as well
as DA) causes significant damage to the lungs. 31
79. Moreover, contrary to the letter, Defendant does not post test results of
“all of its liquids.” Defendant, in a footnote contained in a document embedded on
its website, admitted that some of its e-liquids have not been tested since
80. The fact that Defendant contacted a “handful of individuals” by email
does not cure the violations outlined in this Complaint. Not only does the email
contain more false statements and misrepresentations – i.e., that the diacetyl found
in Defendant’s e-liquids are naturally occurring, and that Defendant will “post test
results quarterly on all of its liquids – but contacting a few individuals is
NIOSH Alert: Preventing Lung Disease in Workers Who Use or Make
Flavorings, DEP’T OF HEALTH AND HUMAN SERVICES (Dec. 2003),
http://www.cdc.gov/niosh/docs/2004-110/pdfs/2004-110.pdf (last visited Nov. 10,
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 27 of 46 Page ID #:27
insufficient to cure the alleged violations for the proposed Class and Subclasses.
81. On August 21, 2015, Defendant announced on its website that it is
ceasing production on five of its e-liquid flavors – Absolute Pin, Sixty-Four, Fifth
Rank, Lucena, and Perpetual Check, and consolidating the other five flavors,
Castle Long, Grandmaster, Gambit, Queenside, and Bowden’s Mate, into a
collection called The Insignia Series.32 These actions are also insufficient to cure
the alleged violations for the proposed Class and Subclasses.
82. On September 9, 2015, counsel for Plaintiffs responded to the August 7,
2015 letter asserting that the actions Defendant had taken to date do not cure the
defects alleged herein. Enclosed with the letter was a draft copy of this complaint
and an invitation to confer regarding the outstanding violations.
CLASS ACTION AND PRIVATE ATTORNEY GENERAL ALLEGATIONS
83. Plaintiffs bring this action as a class action pursuant to Rule 23(a) and
(b)(2) and/or (b)(3) of the Federal Rules of Civil Procedure (“Rule”) for the
purpose of asserting the claims alleged in this Complaint on a common basis.
Plaintiffs bring this action on behalf of themselves and all members of the
following class comprised of:
All persons, exclusive of Defendant and its employees, who
purchased in the United States, one or more Five Pawns e-liquids sold
by Defendant from November 2012 to the present (the “Class”).
84. Plaintiff Greene brings this action on behalf of himself and all members
of the following subclass comprised of:
purchased in Indiana one or more Five Pawns e-liquids sold by
http://fivepawns.com/updated-tasting-notes/ (last visited Nov. 10, 2015).
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 28 of 46 Page ID #:28
Defendant from November 2012 to the present (the “Indiana
Subclass”).
85. Plaintiff Thomas brings this action on behalf of himself and all
members of the following subclass comprised of:
purchased in New York State one or more Five Pawns e-liquids sold
by Defendant from November 2012 to the present (the “New York
86. The Indiana Subclass and the New York Subclass are collectively
referred to herein as the “Subclasses,” and the Class and Subclasses are
collectively referred to herein as the “Classes.”
87. Plaintiffs reserve the right to modify or amend the definitions of the
Classes after they have had an opportunity to conduct discovery.
88. Numerosity.
The members of the Classes are so
numerous that their individual joinder is impracticable. Plaintiffs are informed and
believe that the proposed Classes contain at least thousands of purchasers of
Defendant’s e-liquids who have been damaged by Defendant’s conduct as alleged
herein. The number of Class members is unknown to Plaintiffs but could be
discerned from the records maintained by Defendant.
89. Existence of Common Questions of Law and Fact. Rule 23(a)(2).
This action involves common questions of law and fact, which include, but are not
Whether the statements made by Defendant as part of its
advertising for Defendant’s e-liquids discussed herein are true,
or are reasonably likely to deceive, given the omissions of
material fact described above;
Whether Defendant’s conduct described herein constitutes a
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 29 of 46 Page ID #:29
deceptive act or practice in violation of the CLRA;
Whether Defendant’s conduct described herein constitutes an
unlawful, unfair, and/or fraudulent business practice in
violation of the UCL;
Whether Defendant’s conduct described herein constitutes
unfair, deceptive, untrue or misleading advertising in violation
of the UCL;
Whether Defendant’s conduct constitutes a breach of express
unconscionable, deceptive, or unfair act or practice in violation
of the Indiana Deceptive Consumer Sales Act;
deceptive act or practice in violation of the GBL;
Whether Plaintiffs and the other members of Classes are
entitled to damages; and
Whether Plaintiffs and the Classes are entitled to injunctive
relief, restitution or other equitable relief and/or other relief as
90. Typicality. Rule 23(a)(3). All members of the Classes have been
subject to and affected by the same conduct and omissions by Defendant. The
claims alleged herein are based on the same violations by Defendant that harmed
Plaintiffs and members of the Classes. By purchasing Five Pawns e-liquids during
the relevant time period, all members of the Classes were subjected to the same
wrongful conduct. Plaintiffs’ claims are typical of the Classes’ claims and do not
conflict with the interests of any other members of the Classes. Defendant’s
unlawful, unfair, deceptive, and/or fraudulent actions and breaches of warranty
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 30 of 46 Page ID #:30
concern the same business practices described herein irrespective of where they
occurred or were experienced.
91. Adequacy. Rule 23(a)(4). Plaintiffs will fairly and adequately protect
the interests of the members of the Classes.
Plaintiffs have retained counsel
experienced in complex consumer class action litigation, and Plaintiffs intend to
prosecute this action vigorously.
interests to those of the Classes.
Plaintiffs have no adverse or antagonistic
92. Injunctive and Declaratory Relief. Rule 23(b)(2). Defendant’s actions
regarding the deceptions and omissions regarding Five Pawns e-liquids are
uniform as to members of the Classes. Defendant has acted or refused to act on
grounds that apply generally to the Classes, so that final injunctive relief as
requested herein is appropriate respecting the Classes as a whole.
93. Predominance and Superiority of Class Action.
Questions of law or fact common to the Classes predominate over any questions
affecting only individual members, and a class action is superior to other methods
for the fast and efficient adjudication of this controversy, for at least the following
Absent a class action, members of the Classes as a practical
matter will be unable to obtain redress, Defendant’s violations
of their legal obligations will continue without remedy,
additional consumers will be harmed, and Defendant will
continue to retain its ill-gotten gains;
It would be a substantial hardship for most individual members
of the Classes if they were forced to prosecute individual
When the liability of Defendant has been adjudicated, the Court
will be able to determine the claims of all members of the
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 31 of 46 Page ID #:31
A class action will permit an orderly and expeditious
administration of the claims of each member of the Classes and
foster economies of time, effort, and expense;
A class action regarding the issues in this case does not create
any problems of manageability; and
Defendant has acted on grounds generally applicable to the
members of the Classes, making class-wide monetary relief
94. Plaintiffs do not contemplate class notice if the Classes are certified
under Rule 23(b)(2), which does not require notice, and notice to the putative
Classes may be accomplished through publication, signs or placards at the point-
of-sale, or other forms of distribution, if necessary; if the Classes are certified
under Rule 23(b)(3); or if the Court otherwise determines class notice is required.
Plaintiffs will, if notice is so required, confer with Defendant and seek to present
the Court with a stipulation and proposed order on the details of a class notice
(Cal. Civil Code §§ 1750, et seq.)
95. Plaintiffs repeat and reallege the allegations contained in the paragraphs
96. This cause of action is brought pursuant to the Consumers Legal
Remedies Act, California Civil Code §§ 1750, et seq. (the “CLRA”), which
provides that enumerated listed “unfair methods of competition and unfair or
deceptive acts or practices [including those listed below in ¶ 101] undertaken by
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 32 of 46 Page ID #:32
any person in a transaction intended to result or which results in the sale or lease of
goods or services to any consumer are unlawful,” Cal. Civ. Code § 1770, and that
“[a]ny consumer who suffers any damage as a result of the use or employment by
any person of a method, act, or practice declared to be unlawful by Section 1770
may bring an action against that person to recover or obtain,” various forms of
relief, including an injunction and damages. Cal. Civ. Code § 1780. This cause of
action is seeks both injunctive relief and damages on behalf of the Class.
97. On July 9, 2015, prior to the filing of this Complaint, Plaintiffs sent
Defendant a CLRA notice letter providing the notice required by California Civil
Code section 1782(a). Plaintiffs sent the letter via certified mail, return receipt
requested, to Defendant’s principal place of business in Irvine, California advising
Defendant that it is in violation of the CLRA and must correct, replace or
otherwise rectify the goods and/or services alleged to be in violation of section
1770. Defendant was further advised that in the event the relief requested was not
provided within thirty (30) days, Plaintiffs would file their Complaint that would
include a request for monetary damages pursuant to the CLRA. A true and correct
copy of Plaintiffs’ letter is attached hereto as Exhibit A.
98. On August 7, 2015, Defendant, by its attorneys, responded to Plaintiffs’
A true and correct copy of Defendant’s letter is attached hereto as
Exhibit B. As set forth in Defendant’s letter, Defendant did not correct, replace, or
otherwise rectify the goods and/or services alleged in Plaintiffs’ letter.
Accordingly, Plaintiffs seek monetary damages pursuant to the CLRA.
99. Plaintiffs were deceived by Defendant’s unlawful practices as described
more fully above, which included carrying out an advertising campaign, directed at
Plaintiffs and the Class, conveying the message that Defendant’s e-liquids are free
of DA and AP and variations of that statement. This advertising campaign was
deceptive, false and misleading given: the ingredients and characteristics of
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 33 of 46 Page ID #:33
Defendant’s products which were known or should have been known to Defendant;
and the test results and studies that have found DA and AP and other harmful
impurities in Defendant’s e-liquids, and that inhaling these substances could be
harmful to health, none of which was disclosed. Also undisclosed was the lack of
research required to assess the potential danger of electronic cigarettes, especially
100. Defendant’s actions, representations and conduct have violated, and
continue to violate, the CLRA because they extend to transactions that are intended
to result, or which have resulted, in the sale of goods to consumers.
101. Defendant marketed, sold and distributed its e-liquids in California
and throughout the United States during the relevant period.
102. Plaintiffs and members of the Class are “consumers” as that term is
defined by the CLRA in California Civil Code section 1761(d).
103. Defendant’s e-liquids were and are “good[s]” within the meaning of
California Civil Code section 1761(a) & (b).
104. Defendant violated the CLRA by engaging in at least the following
practices proscribed by California Civil Code section 1770(a) in transactions with
Plaintiffs and the Class which were intended to result in, and did result in, the sale
of Defendant’s e-liquids:
(5) Representing that [Five Pawns e-liquids] have . . . approval,
characteristics . . . uses [or] benefits . . . which they do not have . . . .
(7) Representing that [Five Pawns e-liquids] are of a particular standard,
quality or grade . . . if they are of another.
(9) Advertising goods . . . with intent not to sell them as advertised.
105. As such, Defendant’s conduct constitutes unfair methods of
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 34 of 46 Page ID #:34
competition and unfair or fraudulent acts or practices because it does not sell, and
because it intends not to sell, the e-liquids as advertised and instead misrepresents
the particulars by, in its marketing, representing its e-liquids as described above
when it knew, or should have known, that the representations and advertisements
were deceptive, false and misleading in light of the omissions of material facts as
106. The omitted information would have been material to a reasonable
customer in his or her decision as to whether to purchase Defendant’s e-liquids
and/or purchase Defendant’s e-liquids at the price at which they were offered.
107. Defendant had a duty to disclose this information to Plaintiffs and the
members of the Class for several reasons. First, Defendant repeatedly made the
representation that its products are free of DA and AP and that even if they do,
they do contain those ingredients, they do not pose a health risk, or closely
analogous representations, as detailed above.
information, including information in the studies referred to supra in Section II,
was necessary to avoid the false impression of safety provided by that tagline.
Second, Defendant was in a position to know of the omitted information, both from
its own product knowledge and creation decisions and the studies of the presence
of DA and AP in its e-liquids, especially as described in the studies and test results,
including Defendant’s own test results referenced supra in Section II, while
consumers were not reasonably in a position to be aware of Defendant’s internal
product information or such studies. Third, Defendant actively failed to disclose
these material facts to, or actively concealed these material facts from, Plaintiffs
and the Class. Finally, while Defendant made representations about the risks
associated with its e-liquids, stating that its products contain nicotine and that
consumers bear risks related thereto, those representations were misleading half-
truths because they implied that those are all of the risks relating to the product,
Disclosure of the omitted
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 35 of 46 Page ID #:35
when, in fact, they are not.
108. Defendant provided Plaintiffs and the other Class members with eliquids that did not match the quality portrayed by its marketing.
109. As a result, Plaintiffs and members of the Class have suffered
proximately caused by Defendant’s conduct as alleged herein.
individually and on behalf of all other Class members, seek entry of an order
enjoining Defendant from continuing to employ the unlawful methods, acts and
practices alleged herein pursuant to California Civil Code section 1780(a)(2),
awarding exemplary and punitive damages against Defendant pursuant to
California Civil Code sections 1780(a)(1) and (a)(4), and ordering the payment of
costs and attorneys’ fees, and such other relief as deemed appropriate and proper
by the Court under California Civil Code section 1780(a)(2). If Defendant is not
restrained from engaging in these practices in the future, Plaintiffs and the Class
will continue to suffer harm.
Plaintiffs’ and the other Class members’ injuries were
110. Pursuant to section 1780(d) of the CLRA, attached hereto as Exhibit C
is an affidavit showing that this action has been commenced in the proper forum.
Violations of the Unfair Competition Law
111. Plaintiffs repeat and reallege the allegations contained in the
paragraphs above, as if fully set forth herein.
112. The Unfair Competition Law, Cal. Business & Professions Code §§
17200, et seq. (“UCL”), prohibits any “unlawful,” “unfair,” or fraudulent, business
act or practice and any false or misleading advertising.
113. In the course of conducting business, Defendant committed unlawful
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 36 of 46 Page ID #:36
business practices by, inter alia, making the representations (which also constitute
advertising within the meaning of § 17200) and omissions of material facts, as set
forth more fully herein, and violating California Civil Code sections 1750, et seq.,
114. Plaintiffs, individually and on behalf of other Class members, reserve
the right to allege other violations of law which constitute other unlawful business
acts or practices. Such conduct is ongoing and continues to this date.
115. Defendant’s actions constitute “unfair” business acts or practices
because, as alleged above, inter alia, Defendant engages in deceptive and false
advertising, and misrepresents and omits material facts regarding its e-liquids, and
thereby offends an established public policy, and engages in immoral, unethical,
oppressive, and unscrupulous activities that are substantially injurious to
consumers. This conduct constitutes violations of the unfair prong of Business &
Professions Code sections 17200, et seq.
116. Business & Professions Code sections 17200, et seq., also prohibits
any “fraudulent business act or practice.”
117. Defendant’s
statements, as alleged in this Complaint, also constitute “fraudulent” business
practices in violation of the UCL because, among other things, they are false,
misleading, and/or likely to deceive reasonable consumers within the meaning of
Business & Professions Code sections 17200, et seq.
118. There were reasonably available alternatives to further Defendant’s
legitimate business interests, other than the conduct described herein.
As a result of Defendants’ pervasive false marketing, including
deceptive and misleading acts and omissions as detailed in this Complaint,
Plaintiffs and other members of the Class have in fact been harmed as described
above. If Defendant had disclosed the information discussed above about its e-
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 37 of 46 Page ID #:37
liquids and otherwise been truthful about their safety, Plaintiffs would not have
purchased Defendant’s products. Defendant was also able to charge more than
what its e-liquids would have been worth had it disclosed the truth about them.
120. As a result of Defendant’s unlawful, unfair, and fraudulent practices,
Plaintiffs and the other Class members have suffered injury in fact and lost money.
121. As a result of its deception, Defendant has been able to reap unjust
revenue and profit in violation of the UCL.
122. Unless restrained and enjoined, Defendant will continue to engage in
the above-described conduct. Accordingly, injunctive relief is appropriate for
123. As a result of Defendant’s conduct in violation of the UCL, Plaintiffs
and members of the Class have been injured as alleged herein in amounts to be
proven at trial because they purchased Defendant’s e-liquids without full
disclosure of the material facts discussed above.
124. As a result, Plaintiffs individually, and on behalf of the Class, and the
general public, seek restitution and disgorgement of all money obtained from
Plaintiffs and the other members of the Class collected by Defendant as a result of
its unlawful, unfair, and/or fraudulent conduct, and seek injunctive relief, and all
other relief this Court deems appropriate, consistent with Business and Professions
Code section 17203.
125. Plaintiffs are also suing on behalf of the general public as defined in
Business and Professions Code section 17204 in order to enjoin and remedy the
ongoing unlawful, unfair, and fraudulent business practices alleged herein and to
obtain declaratory, injunctive, and other appropriate relief on behalf of all those
members of the general public who have been victimized by Five Pawns’s actions.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 38 of 46 Page ID #:38
Violations of the False Advertising Law
(Cal. Bus. & Prof. Code §§ 17500 et seq.)
126. Plaintiffs repeat and reallege the allegations contained in the
127. Plaintiffs have standing to pursue this claim as Plaintiffs suffered
injury in fact as a result of Defendant’s actions as set forth herein. Specifically,
prior to the filing of this action, Plaintiffs purchased Defendant’s e-liquids in
reliance upon Defendant’s marketing claims. Plaintiffs used Defendant’s e-liquids
believing that the products were of a higher quality and safer to consume than as
128. Defendant’s business practices as alleged herein constitute unfair,
deceptive, untrue, and misleading advertising pursuant to California Business and
Professions Code sections 17500, et seq., because Defendant has advertised its
Products in a manner that is untrue and misleading, or that Defendant knew was
untrue or misleading, or omitted material information from its advertising which
Defendant had a duty to disclose.
129. Defendant’s wrongful business practices have caused injury to
Plaintiffs and the Class, in the form of the lost purchase price of the e-juices.
Plaintiffs and the Class purchased the products after being exposed to Defendant’s
false or deceptive advertising claims, as described herein.
130. Defendant’s conduct caused and continues to cause substantial injury
to Plaintiffs and the other members of the Class. Plaintiffs and the Class continue
to be exposed to Defendant’s false and/or misleading advertising every time they
shop for e-liquids and encounter Defendant’s false or deceptive advertising on
store shelves or on the internet. Defendant’s competitors will also continue to
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 39 of 46 Page ID #:39
suffer from Defendant’s unfair or deceptive business conduct if injunctive relief is
not afforded.
131. Pursuant to section 17535 of the California Business and Professions
Code, Plaintiff and the Class seek an order of this Court enjoining Defendant from
continuing to engage in deceptive business practices, false advertising, and any
other act prohibited by law, including those set forth in this Complaint.
132. Plaintiff and the Class also seek an order for the disgorgement and
restitution of all monies from the sale of Defendant’s e-liquids, which were
unjustly acquired through acts of unlawful, unfair, and/or fraudulent competition.
Breach of the Indiana Deceptive Consumer Sales Act
(Ind. Code §§ 24-5-0.5, et seq.)
(On Behalf of Plaintiff Greene and the Indiana Subclass)
133. Plaintiff Greene repeats and realleges the allegations contained in the
134. This cause of action is brought pursuant to the Indiana Deceptive
Consumer Sales Act, Ind. Code §§ 24-5-0.5, et seq. (the “IDCSA” or the “Act”).
The stated purpose of the Act is to “protect consumers from supplies who commit
deceptive and unconscionable sales acts” and to “encourage the development of
fair consumer sales practices.” Ind. Code § 24-5-0.5-1(b).
135. This cause of action is for damages pursuant to Indiana Code section
24-5-0.5-4(a). Pursuant to the Act, a consumer may bring an action “for the
damages actually suffered . . . as a result of the deceptive act or [$500], whichever
is greater.” Ind. Code § 24-5-0.5-4(a).
136. Plaintiff Greene and each member of the Indiana Subclass are
consumers and purchased Defendant’s e-liquids during the period of Defendant’s
pervasive false advertising.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 40 of 46 Page ID #:40
137. Defendant is engaged in trade or commerce within the meaning of the
138. Indiana Code section 24-5-0.5-2(a)(8) defines “incurable deceptive
act” as “a deceptive act done by a supplier as part of a scheme, artifice, or device
with intent to defraud or mislead.” The wrongs complained of herein are “incurable
deceptive acts” as Plaintiffs gave Defendant sufficient notice and an opportunity to
cure, as alleged more fully infra.
139. Defendant has violated the Act by engaging in the unfair and
deceptive practices as described herein, which included carrying out an advertising
campaign, directed at Plaintiff Greene and the Indiana Subclass, conveying the
message that Defendant’s e-liquids are free of DA and/or AP and that they are not
harmful even if those ingredients do exist in their products, and variations of that
statement, which were deceptive, false and misleading given the studies that have
found carcinogens, toxins, and other potentially harmful impurities in Defendant’s
e-liquids and in e-liquids generally. Also undisclosed was the lack of additional
research which such studies have determined is required to assess the potential
danger of e-liquids, especially in long term users, which failure to disclose offends
public policies and is immoral, unethical, unscrupulous and substantially injurious
140. Plaintiff Greene and the members of the Indiana Subclass have been
aggrieved by Defendant’s unfair and deceptive practices in that they purchased
Defendant’s e-liquids. As a result of Defendant’s unfair and deceptive acts, and
unlawful conduct, Plaintiff Greene and the other members of the Indiana Subclass
have in fact been harmed. If Defendant had disclosed the information discussed
above about Defendant’s e-liquids and had been otherwise truthful about their
safety, Plaintiff Greene would not have purchased Defendant’s products. In fact,
Defendant was able to charge more than what its e-liquids would have been worth
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 41 of 46 Page ID #:41
had it disclosed the truth about them.
141. The damages suffered by Plaintiff Greene and the Indiana Subclass
were directly and proximately caused by Defendant’s unfair and deceptive
practices, as more fully described herein.
142. On July 9, 2015, prior to the filing of this Complaint, Plaintiffs sent
Defendant a notice letter pursuant to Indiana Code section 24-5-0.5-4(a) providing
the required notice. Plaintiffs sent the letter via certified mail, return receipt
Defendant that it is in violation of the Act and must correct, replace or otherwise
rectify the goods and/or services alleged to be in violation of the Act. Defendant
was further advised that in the event the relief requested has not been provided
within thirty (30) days, Plaintiffs would file their Complaint that would include a
request for monetary damages pursuant to the Act. A true and correct copy of
Plaintiffs’ letter is attached hereto as Exhibit A.
143. On August 7, 2015, Defendant, by its attorneys, responded to
Plaintiffs’ letter. A true and correct copy of Defendant’s letter is attached hereto as
otherwise rectify the goods and/or services alleged to be in violation of the Act in
Plaintiffs’ letter. Accordingly, Plaintiff Greene seeks monetary damages pursuant
144. Pursuant to Indiana Code section 24-5-0.5-4(c) Plaintiff Greene, on
behalf of himself and the Indiana Subclass, seeks a declaratory judgment and a
court order enjoining the above-described wrongful acts and practices of
Defendant and for restitution and disgorgement.
145. Additionally, pursuant to Indiana Code section 24-5-0.5-4, Plaintiff
Greene, on behalf of himself and the Indiana Subclass, seeks damages, attorneys’
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 42 of 46 Page ID #:42
Violations of the New York General Business Law
(N.Y. GBS Law § 349)
(On Behalf of Plaintiff Thomas and the New York Subclass)
146. Plaintiff Thomas repeats and realleges the allegations contained in the
147. This cause of action is brought pursuant to the New York General
Business Law section 349 (“GBL § 349”), which prohibits deceptive acts or
practices in the conduct of any business, trade or commerce or in the furnishing of
any service in New York State.
148. The conduct of Defendant alleged herein violates GBL § 349 in that
Defendant engaged in the unfair and deceptive practices as described herein, which
included carrying out an advertising campaign, directed at Plaintiff Thomas and
the New York Subclass, conveying the message that Defendant’s e-liquids are free
of DA and/or AP and that they are not harmful even if those ingredients do exist in
their products, and variations of that statement, which were deceptive, false and
misleading given the studies that have found carcinogens, toxins, and other
potentially harmful impurities in Defendant’s e-liquids and in e-liquids generally.
Also undisclosed was the lack of additional research which such studies have
determined is required to assess the potential danger of e-liquids, especially in long
term users, which omissions offend public policies and are immoral, unethical,
unscrupulous and substantially injurious to consumers. Such conduct is inherently
and materially deceptive and misleading, and Defendant knew, or by the exercise
of reasonable care should have known, that its misstatements and omissions were
untrue, deceptive or misleading.
149. The materially misleading conduct of Defendant alleged herein was
directed at the public at large.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 43 of 46 Page ID #:43
150. Defendant’s acts and practices described above are likely to mislead a
reasonable consumer acting reasonably under the circumstances.
151. Defendant has willfully and knowingly violated GBL § 349 because,
in order to increase its own profits, Defendant intentionally engaged in deceptive
and false advertising, misrepresentations and omission of material facts regarding
its e-liquids as discussed above.
152. As a result of Defendant’s deceptive and misleading acts, Plaintiff
Thomas and the other members of the New York Subclass have been injured
because they purchased Defendant’s e-liquids without full disclosure of the
material facts discussed above.
153. As a result of Defendant’s conduct in violation of GBL § 349,
Plaintiff Thomas and the other members of the New York Subclass have been
injured as alleged herein in amounts to be proven at trial because if Defendant had
disclosed the information discussed above about its e-liquids and otherwise been
truthful about their safety, Plaintiff Thomas would not have purchased Defendant’s
products. Defendant was also able to charge more than what its e-liquids would
have been worth had it disclosed the truth about them.
154. As a result, pursuant to GBL § 349, Plaintiff Thomas and the New
York Subclass are entitled to make claims against Defendant for actual or statutory
damages to be determined at trial, but for not less than fifty (50) dollars per New
York Subclass member, such damages to be trebled.
155. Additionally, pursuant to GBL § 349, Plaintiff Thomas and the New
York Subclass make claims for
attorneys’ fees, costs, and injunctive relief
requiring Defendant to adequately disclose the omitted information described
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 44 of 46 Page ID #:44
156. Plaintiffs repeat and reallege the allegations contained in the
157. Plaintiffs bring this claim individually and on behalf of the Class.
158. Plaintiffs, and each member of the Class, formed a contract with
Defendant at the time Plaintiffs and the other members of the Class purchased
Defendant’s e-liquids or related paraphernalia. The terms of that contract include
the promises and affirmations of fact made by Defendant on its e-liquids packaging
and inserts and through the Five Pawns marketing campaign, as described above.
This product packaging and advertising constitutes express warranties, became part
of the basis of the bargain, and is part of a standardized contract between Plaintiffs
and the members of the Class on the one hand, and Defendant on the other.
159. Plaintiffs and the Class members performed their obligations under the
160. Defendant breached the terms of this contract, including the express
warranties, with Plaintiffs and the Class by not providing Defendant’s e-liquids that
offered a product free of DA and AP (or similar variations) and otherwise omitted
material information about potential health risks associated with the product. Such
express warranties breached by Defendant include the representations set forth
above in Sections II and III.
161. As a result of Defendant’s breach of its contract, Plaintiffs and the
Classes have been damaged in the amount of the purchase price of the Five Pawns
e-liquids they purchased.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 45 of 46 Page ID #:45
Wherefore, Plaintiffs, on behalf of themselves, all others similarly situated,
and the general public, pray for a judgment:
Certifying each of the Classes as requested herein, appointing
Plaintiffs Greene, Thomas and Hirtzel as class representatives for the
Class and respective Subclasses;
Requiring Defendant to disgorge or return all monies, revenues and
profits obtained by means of any wrongful act or practice to Plaintiffs
and the members of the Classes under each cause of action where such
relief is permitted;
Enjoining Defendant from continuing the unlawful practices as set
forth herein, including marketing or selling its e-liquids without
disclosing the potential health risks relating thereto, and directing
Defendant to engage in corrective action, or providing other injunctive
or equitable relief;
Awarding damages pursuant to California Civil Code section 1780,
the Indiana Deceptive Consumer Sales Act, and GBL § 349 including
exemplary and punitive damages to prevent and deter Defendant from
future unlawful conduct;
Awarding damages for breach of express warranty;
Awarding all equitable remedies available pursuant to California Civil
Code section 1780, Indiana Code section 24-5-0.5-4(c), GBL § 349
and other applicable law;
Awarding attorneys’ fees and costs;
Awarding pre-judgment and post-judgment interest at the legal rate;
Providing such further relief as may be just and proper.
Case 8:15-cv-01859 Document 1 Filed 11/11/15 Page 46 of 46 Page ID #:46
/s/ Rachele R. Rickert
ANDERSEN & SLEATER LLC
jessica@andersensleater.com
Telephone: 212/878-3697
Counsel for Plaintiffs Duane Robert Greene
Shawn Randall Thomas, and James Hirtzel
FIVEPAWNS:22386
Recommended DocumentsDocuments Similar To Five Pawns Class Action LawsuitSkip carouselLeaked (?) FDA Industry Guidance for E-Cigarette / E-Liquid PMTAs -- *Legitimacy Not Confirmed*Diacetyl and acetyl propionyl testing on Suicide Bunny (Sucker Punch and Mother's Milk)VaporShark E-Liquid TestingDr. Farsalinos study on diacetyl in e-liquidFive Pawns Absolute Pin BD25743Dr. Farsalinos' study on diacetyl and acetyl propionyl in e-liquidFive Pawns Fifth Rank BD25746Vaping Civil Disobedience Protest in Central ParkNicotine and Health Bound By The Crown, Claim Your Throne, Fight Your FateA Letter To Costa Constantinides From Dr. Konstantinos Farsalinos, M.D.Summary of the civil disobedience protest in Central Park against the Bloomberg vaping ban in NYCAtf Ex Parte MotionBibra EU Classification of Nicotine Mixtures Acute Oral and Dermal ToxicityRevlon ColorSilk Black #10Correspondence Between McKee and Davies Aug 15 to Oct 15Hoosier Vapers Inc vs IndianaCTFK - Letter to Dr Christopher RusselSB Lab ReportMotion for Preliminary InjunctionSB AP ResultsThe NYC Flavored e-Liquid Ban ToolkitFiled Fisher v. Kealoha Opening BriefCross ComplaintHelp Stop Mayor Bloomberg's Ban On E-cig UsageMotion for Temporary Restraining Orderecigwizard sbClint Part 2 PDFDocuments About Electronic CigaretteSkip carouselA Letter To Costa Constantinides From Dr. Konstantinos Farsalinos, M.D.Vaping Civil Disobedience Protest in Central ParkNYC Ecig BanThe NYC Flavored e-Liquid Ban ToolkitCruel and Unusual Punishment - Please help Utah Vapers fight against bullying bureaucrats Exhibit s - Local Law 15205-06-16 EditionFontem Ventures et. al. v. Ballantyne Brands04-07-142011-09-08E-Cigarette, Cigar, Hookah Restrictions Laid Out in New FDA RulesTobacco and HealthFontem Ventures et. al. v. Spark IndustriesFontem Ventures et. al. v. Logic Technology DevelopmentThe Daily Tar Heel for March 1, 2017The Daily Tar Heel for Feb. 23, 2016Affirmation in Support of Defendants Motion for Summary JudgmentExhibit c - Local Law 152Sam Kazman - E-Cigarette Ban Comments to DOTNJOY v. Victory Electronic Cigarettes et. al.Exhibit a - PleadingsExhibit m - Additional 12-4-13 TestimonyFDA E-cigarette Proposal 042514SENATE HEARING, 113TH CONGRESS - AGGRESSIVE E-CIGARETTE MARKETING AND POTENTIAL CONSEQUENCES FOR YOUTHAsbury Park Press front page Sunday, May 29 2016Fontem Ventures et. al. v. Loec04-02-1301-28-15 EditionMore From Russ WishtartSkip carouselSSV Production Report 4-27-2016Dr. Farsalinos' study on diacetyl and acetyl propionyl in e-liquidFive Pawns Bowdens Mate BD25748Five Pawns Fifth Rank BD25746Five Pawns Queenside BD25745FivePawns Gambit BD25744Five Pawns Castle Long BD25742Five Pawns Grandmaster BD25741NYPD Website - Stop and FriskNYPD Patrol Guide - Public ContactNYPD Patrol Guide - ID CardNYPD Patrol Guide - Photography in SubwayNYS Penal Code 140.50 Stop and IdentifyMTA Website - Photography PolicyNotice of MotionAffirmation in Support of Defendants Motion for Summary JudgmentExhibit a - ComplaintExhibit b - AnswerExhibit c - Local Law 152Memorandum of Law in SupportExhibit d - Legislative Details for Ll152 of 2013Notice of motionAffidavit in Support of MotionExhibit a - PleadingsExhibit b - StipulationExhibit c - 1988 CiaaExhibit d - 1995 Sfaa