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Hearing Date: No hearing scheduled
Location: <>
Judge: Calendar, 3
FILED
7/8/2022 3:31 PM
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS IRIS Y. MARTINEZ
COUNTY DEPARTMENT, CHANCERY DIVISION CIRCUIT CLERK
COOK COUNTY, IL
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
2020CH04183
CITY OF CHICAGO, a municipal ) Calendar, 3
corporation, ) 18601369
)
Plaintiff, )
Case No. 2020-CH-04183
)
v. )
Hon. Allen P. Walker
)
JUUL LABS, INC., et al., )
)
Defendants. )
DEFENDANT JUUL LABS, INC.’S MOTION TO COMPEL
THE CITY OF CHICAGO TO PRESENT RULE 206 WITNESSES FOR DEPOSITION
Pursuant to Illinois Supreme Court Rules 206 and 219(a), Defendant Juul Labs, Inc.
(“JLI”), by and through its undersigned attorneys, states as follows in support of its Motion:
INTRODUCTION
The City brought two claims against JLI under M.C.C. § 2-25-090, for which it seeks a
fine that could exceed $370 million. The City alleges that JLI engaged in (i) an unfair method of
competition by marketing e-cigarettes to youth and failing to take adequate steps to prevent
underage online sales, and (ii) deceptive practices, including certain of JLI’s marketing practices.
Compl. ¶¶ 118-24, 129-33.
Causation and damages are highly-relevant factors under both claims, and may also be
relevant to the Court’s discretionary assessment of any fine (if the Court ever gets that far).
Specifically, whether JLI’s business practices caused consumers to suffer a “substantial injury” is
relevant to the City’s unfair method of competition claim, and whether JLI misled consumers in a
“material” respect is relevant to the City’s deceptive practices claim. See Beardsall v. CVS Pharm.,
Inc., 953 F.3d 969, 973 (7th Cir. 2020); G.M. Sign, Inc. v. Elm St. Chiropractic, Ltd., 871 F. Supp.
2d 763, 769 (N.D. Ill. 2012).
On May 2, 2022, JLI served its Rule 206(a)(1) deposition notice on the City (and
supplemented that notice after the City moved for summary judgment). JLI’s topics are tailored
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
to the core issues of causation and damages and require the City to fully explain the basis of its
ever-evolving claims, including:
● the City’s allegations regarding the adequacy of JLI’s age verification procedures;
● the City’s knowledge—if any—about the reach and impact of JLI advertising in
Chicago;
● the reasons for youth vaping in Chicago;
● the fines and remedies the City is seeking against JLI; and
● what the City did to investigate JLI (as the City alleged in its Complaint).
The City is a large municipal corporation, and vaping-related issues were addressed by
multiple departments within the City. Rule 206(a)(1) is therefore an especially important
discovery tool in this case because it allows JLI to determine the City’s positions on these core
issues. See Ill. S. Ct. R. 206(a)(1) (“The persons so designated shall testify as to matters known
or reasonably available to the organization.”).
Yet the City has largely refused to cooperate. The City first objected to providing a witness
on all but three topics. And, even after numerous meet and confer conferences, the City is refusing
to present a witness to testify on the vast majority of topics. 1 For almost all of the topics in dispute,
the City stands on a relevance objection. The City’s objections to JLI’s two Rule 206(a)(1)
deposition notices are attached as Exhibits A and B.
1
Pursuant to Supreme Court Rule 201(k), the parties engaged in numerous meet and confers,
including a two-hour call on May 20, 2022 and an almost hour-long call on July 5, 2022. The
parties narrowed their issues, but significant disputes remain. In accordance with Rule 201(k),
counsel responsible for the trial of the case have tried in good faith to resolve the issues raised
in this motion but were unable to reach agreement.
2
“Great latitude” is given when determining relevance. Tomczak v. Ingalls Mem’l Hosp.,
359 Ill. App. 3d 448, 456 (1st Dist. 2005). JLI’s 206(a)(1) topics are undoubtedly relevant. The
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
City cannot file suit, claim significant harm from JLI’s advertising and sales practices, seek to
impose a nine-figure fine against JLI, and then refuse to disclose, among other things, its own pre-
litigation views on JLI’s conduct and the bases for the fines it is seeking.
For these reasons, the Court should compel the City to provide a witness who is adequately
prepared to testify on JLI’s 206(a)(1) Topics 1-3, 6-8, 24, 26-28, and 31-48.
ARGUMENT
The “proper basis” for granting a motion to compel is “whether the information sought is
relevant to the pending matter.” Vitacco v. Eckberg, 271 Ill. App. 3d 408, 412 (1st Dist. 1995).
As discussed below, JLI has met that bar under the “liberal pretrial discovery” allowed by the
Illinois Rules. Dufour v. Mobil Oil Corp., 301 Ill. App. 3d 156, 160 (1st Dist. 1998). The Court
should compel the City to present a witness on the following six categories of discovery.
A. JLI’s Age Verification Procedures (Topics 2-3, 38-48)
Thirteen of JLI’s Topics focus on the City’s claims about JLI’s age verification practices
and procedures.
From the outset of this litigation, the City has claimed that “JUUL failed to implement
adequate age verification procedures, resulting in significant sales to young people in Chicago.”
Compl. ¶ 1; see also id. ¶¶ 9, 76-86, 121-22 (similar allegations). Relevant to that claim is whether
JLI’s conduct offended a public policy in Chicago or otherwise caused consumers substantial
injury. See City of Chicago v. Purdue Pharma L.P., 211 F. Supp. 3d 1058, 1074 (N.D. Ill. 2016)
(discussing the elements of an unfair practices claim under M.C.C. § 2-25-090). It was not until
the City filed its summary judgment motion last month, however, that the City gave any
meaningful basis for its claim, finally asserting that JLI had allowed customers to have JUUL
3
Products delivered to a different address or recipient than on their accounts. See generally City’s
Motion for Partial Summary Judgment (“MSJ”). The City claimed that JLI’s online sales practices
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
created a “significant loophole that could allow sales to minors,” and seeks to levy a fine against
JLI that could exceed $370 million. Id. 4, 6-7, 10. In the same motion, the City also claimed that
JLI sold its products online to 175 underage consumers in violation of M.C.C. § 4-64-345. Id. 1-
2, 4, 10.
Here, each of Topics 2-3 and 38-48 directly bear upon the adequacy of JLI’s age
verification efforts, and each Topic is intended to explore what evidence—if any—the City has
that JLI violated any Chicago ordinances. See Ill. S. Ct. R. 571 (“Except as specifically stated
herein or in existing statutes, the Code of Civil Procedure shall apply in all ordinance prosecutions
to which these rules apply.”); Ill. S. Ct. R. 578 (“The prosecuting entity must prove the ordinance
violation by a preponderance of the evidence; meaning it is more likely true than not that the
violation occurred.”). Collectively, JLI expects to explore the following topics that are relevant to
the City’s $370 million claims.
First, JLI should be entitled to test the basis for the City’s claim that JLI’s age-verification
practices improperly created a “significant loophole” in facilitating youth access. To that end, JLI
will ask the City representative about any “harm that is occurring or will occur if JLI is not enjoined
from selling JUUL Products online.” See Topic 45; see also Topic 43 (similar). Further, in light
of the City’s claim that “JUUL shipped its products to an end user without performing any age
verification,” City’s MSJ at 1 (emphasis added), JLI will ask the City representative about the
City’s evaluation of JLI’s age verification practices and procedures as compared to JLI’s
competitors and the City’s own criteria, if any.
4
Second, JLI should be entitled to explore whether the City believes that JLI’s conduct
violated any Chicago public policy or ordinance. There is no ordinance in Chicago that prohibits
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
consumers from having tobacco products delivered to an address not listed on their account, such
as to their office or a new apartment. JLI will ask whether there was any “consideration or
deliberation” by the Mayor’s Office or City Council “about requiring that (i) the shipping name or
address match (ii) the account and/or billing name or address, respectively, for online sales of
ENDS [Electronic Nicotine Delivery Systems].” See Topic 44. JLI will also ask a City
representative whether the City gave prior notice to JLI or other e-cigarette retailers that “shipping
products to addresses or names other than the account or billing address or name constitutes an
unfair or deceptive practice,” which is relevant to the City’s claim that JLI’s conduct violated
Chicago public policy. See Topic 48.
The remainder of JLI’s topics similarly seek discovery of the evidence the City may rely
on to support its age-verification claims. See Topics 2-3, 38-42, 46-47.
For these reasons, the Court should compel the City to present a witness on Topics 2-3 and
38-48.
B. Whether JLI’s Advertising Reached Chicago (Topics 6-8)
Three of JLI’s Topics focus on the City’s knowledge of JLI’s advertising in Chicago
(Topics 6 and 8) and whether any Chicago residents actually saw those advertisements (Topic 7).
The City claims that JLI violated MCC § 2-25-090 by engaging in both unfair and
deceptive marketing practices. Compl. ¶¶ 118–24, 129–33. However, the City ordinance’s reach
is expressly limited to “trade or business in the city.” M.C.C. § 2-25-090(a) (emphasis added).
Therefore, it is only JLI’s activities in Chicago that are relevant to the City’s unfair and deceptive
practices claims, regardless of JLI’s marketing practices in other cities. See Compl. ¶ 65 (depicting
a JLI post with a San Francisco location), ¶ 72 (depicting invitations to JUUL events in Los
5
Angeles and New York City). Here, however, the City has identified more than 1,000 separate
advertisements that it claims violate M.C.C. § 2-25-090, including on TV, radio, newspapers, and
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
billboards, but it has not provided evidence establishing that all of those advertisements ran in
Chicago.
Further, one of the relevant considerations for the City’s unfair practices claim is whether
JLI’s conduct caused “substantial injury to consumers.” Purdue Pharma, 211 F. Supp. 3d at 1074.
Injury is also a relevant consideration if the Court were to reach the issue of fines, which it then
has the discretion to set. See People ex rel. Raoul v. Lincoln, Ltd., 2021 IL App (1st) 190317-U,
¶ 30 (duration and gravity of violation were considered in determining fines for violations of the
Illinois Environmental Protection Act).
For these reasons, JLI is entitled to discover the City’s factual basis for claiming that the
advertisements ran in Chicago, and whether the City has any evidence about the actual reach of
those advertisements on Chicago residents. 2
C. Reasons for any Youth Vaping Crisis in Chicago (Topics 24, 26-28)
Four of JLI’s Topics focus on the City’s attempts to address youth vaping in Chicago.
The City claims there was a youth vaping “epidemic.” Compl. ¶ 3. The City then blames
JLI for the epidemic, claiming “JUUL hooked a generation on e-cigarettes.” Id. ¶ 1. The City has
therefore put at issue JLI’s purported role in any youth vaping epidemic, and JLI accordingly
intends to explore the following topics with a City representative:
2
The City claims most of its knowledge on these topics comes from its counsel’s review of JLI’s
documents. However, JLI is entitled to test that assertion. Even the City’s corporate
representative confirming that the City has no independent factual information about the reach
of JLI advertisements will be instructive. That admission will preclude the City from later
claiming that other evidence exists, and also support JLI’s argument that the City never
contemporaneously singled out JLI for purportedly unfair or deceptive marketing practices.
6
● Topics 24 and 28. Any efforts of the City to combat youth vaping.
● Topic 26. The enforcement actions the City has taken against other e-cigarette
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
manufacturers.
● Topic 27. The amount of money the City has requested or spent for purposes of
addressing JUUL Products specifically.
These Topics are all relevant to whether JLI’s practices were a cause of youth vaping in
Chicago. For these reasons, the Court should compel the City to present a witness on Topics 24
and 26-28.
D. The City’s Remedies (Topics 31-37)
Seven of JLI’s Topics ask the City to reveal what should have been disclosed a long time
ago: the complete basis for the City’s claim that JLI violated Chicago ordinances and the fine the
City is seeking to impose.
Despite having conducted a “year-long investigation,” Compl. ¶ 27, the City has never
disclosed the total fine it is seeking for JLI’s allegedly deceptive marketing practices. Today, JLI
still does not know either the exact fine at issue (a dollar-and-cents number), or the complete
factual basis for that fine. Instead, the City has continually refused to disclose the total number of
advertising violations and claims, changing its reasons for not disclosing that information at each
turn.
In June 2021, the City first objected to JLI’s interrogatory requesting that information on
the grounds that it was “premature since the City is still in the process of investigating its claims
and has not received or reviewed any documents from JUUL or taken any depositions in this
litigation.” See Ex. C, City’s Response to Interrogatory No. 6. However, months later and after
having received millions of documents from JLI, the City still will not provide that information,
now claiming the “City will determine the number of violations following expert discovery.” See
id., Second Supplemental Response to Interrogatory No. 6.
7
It has now been more than three years since the City first commenced its investigation. At
this point, the City should be required to reveal the fine it is seeking to impose against JLI and the
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
complete basis for that fine. Put another way, the City cannot file a complaint alleging that JLI is
liable for a fine and then, when asked, refuse to identify the basis for that fine and hide behind
spurious claims of privilege or the need for expert discovery. See Avnet, Inc. v. Motio, Inc., No.
12 cv 2100, 2016 U.S. Dist. LEXIS 29534, at *23-25 (N.D. Ill. Mar. 4, 2016) (excluding expert
opinion on damages where litigant had failed to disclose damages theory during discovery).
E. The City’s Investigation into JLI (Topic 1)
Topic 1 seeks witness testimony regarding the non-privileged aspects of the City’s
investigation of JLI.
In its Complaint, the City highlighted the fact that this action stemmed from a “year-long
investigation of JUUL,” during which the City “reviewed tens of thousands of documents.”
Compl. ¶ 27. The clear import of this statement is that the City’s claims against JLI are credible
because they are the result of a robust, thorough, and lengthy investigation. Thus, JLI expects the
City to put on testimony about the steps it took to investigate JLI’s conduct. JLI anticipates the
City will use its investigation as a defense as well. For example, in response to JLI’s argument
that the City failed to provide adequate notice of any purported misconduct, the City may rely on
its investigation and claim that it could not provide notice during a pending investigation.
The City also claims that questions about its investigation will be privileged because the
investigation was conducted by and at the direction of counsel. However, privilege objections are
better handled on a question-by-question basis. For that simple reason, courts routinely find
privilege to be an improper basis for refusing to produce a corporate representative, including in
8
the context of governmental investigations. 3 That approach aligns with the Illinois Supreme
Court’s mandate that “the burden of showing facts which give rise to the privilege rests on the one
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
who claims the exception.” Consolidation Coal Co. v. Bucyrus-Erie Co., 89 Ill. 2d 103, 119
(1982).
Moreover, during the deposition, JLI will ask procedural questions about the City’s
investigation that do not require the disclosure of privileged information—e.g., its length, the
number of hours spent, the number of people involved, the number of interviews conducted, and
the number of documents reviewed. None of those questions invades the City’s asserted privilege.
Once the City chose to make its investigation part of this case, JLI became entitled to obtain
discovery about it. The City must therefore designate a witness to provide testimony about the
non-privileged aspects of its investigation.
CONCLUSION
For all of these reasons, the Court should grant JLI’s motion to compel, requiring the City
to designate a witnesses (or witnesses) on JLI 206(a)(1) Topics 1-3, 6-8, 24, 26-28, and 31-48,
within 28 days of the Court’s order.
[Remainder of Page Intentionally Left Blank]
3
Among the other cases to reach this conclusion, see Baxter Int’l, Inc. v. Becton, Dickinson &
Co., No. 17 C 7576, 2019 U.S. Dist. LEXIS 125098, at *20-21, 24 (N.D. Ill. July 26, 2019)
(compelling a corporate representative because the assumption that all questions would solicit
privileged information was speculative); EEOC v. Burlington Northern, No. CIV-07-734-D,
2008 U.S. Dist. LEXIS 93320, at *9-11 (W.D. Okla. June 23, 2008) (denying in relevant part
a motion for protective order and allowing a corporate representative deposition of the EEOC
to proceed, with privilege questions being addressed at the deposition); EEOC v. Albertson’s,
LLC, No. 06-cv-01273-WYD-BNB, 2007 U.S. Dist. LEXIS 32003, at *6-7, 10-11, 13 (D.
Colo. May 1, 2007) (denying EEOC’s blanket protective order, because the EEOC can assert
privilege objections in response to specific deposition questions); City of Chicago v. Wolf, No.
91 C 8161, 1993 U.S. Dist. LEXIS 4456 at *10-11 (N.D. Ill. Apr. 9, 1993) (overruling the
City’s efforts to block a deposition on privilege grounds, because to the “extent there is any
claim of privilege, plaintiffs will have to object to particular questions at the deposition”).
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Dated: July 8, 2022 Respectfully submitted,
William E. Arnault
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
Renee D. Smith, P.C.
William E. Arnault
KIRKLAND & ELLIS LLP
300 N. LaSalle Street
Chicago, IL 60654
Telephone: 312.862.2000
renee.smith@kirkland.com
warnault@kirkland.com
Taj J. Clayton, P.C.
KIRKLAND & ELLIS LLP
1601 Elm Street
Dallas, TX 75201
Telephone: 214.972.1774
taj.clayton@kirkland.com
Byron Pacheco
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, NY 10022
Telephone: 212.909.3247
byron.pacheco@kirkland.com
Attorneys for Defendant Juul Labs, Inc.
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CERTIFICATE OF SERVICE
TO: See attached Service List
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
I, the undersigned, do hereby state under oath that I caused to be served a copy of
Defendant Juul Labs, Inc.’s Motion to Compel the City of Chicago to Present Rule 206
Witnesses for Deposition, via electronic mail on July 8, 2022.
Dated: July 8, 2022 Respectfully submitted,
William E. Arnault
William E. Arnault
KIRKLAND & ELLIS LLP
300 N. LaSalle Street
Chicago, IL 60654
Telephone: 312.862.2000
warnault@kirkland.com
/x/ Under penalties as provided by law pursuant to 735 ILCS 5/1-109, I certify that the statements set forth herein
are true and correct.
11
SERVICE LIST
Stephen J. Kane
FILED DATE: 7/8/2022 3:31 PM 2020CH04183
Rebecca A. Hirsch
Elie T. Zenner
City of Chicago Department of Law
121 North LaSalle Street, Room 600
Chicago, IL 60602
Telephone: (312) 744-6934
Fax: (312) 744-5185
Stephen.Kane@cityofchicago.org
Rebecca.Hirsch2@cityofchicago.org
Elie.Zenner@cityofchicago.org
Mimi Liu
Paige Boggs
MOTLEY RICE LLC
401 9th Street NW, Suite 1001
Washington, D.C. 20004
Telephone (202) 386-9625
Fax: (202) 386-9622
mliu@motleyrice.com
pboggs@motleyrice.com
Attorneys for Plaintiff
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Preview
Hearing Date: No hearing scheduled Location: <> Judge: Calendar, 3 FILED 7/8/2022 3:31 PM IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS IRIS Y. MARTINEZ COUNTY DEPARTMENT, CHANCERY DIVISION CIRCUIT CLERK COOK COUNTY, IL FILED DATE: 7/8/2022 3:31 PM 2020CH04183 2020CH04183 CITY OF CHICAGO, a municipal ) Calendar, 3 corporation, ) 18601369 ) Plaintiff, ) Case No. 2020-CH-04183 ) v. ) Hon. Allen P. Walker ) JUUL LABS, INC., et al., ) ) Defendants. ) DEFENDANT JUUL LABS, INC.’S MOTION TO COMPEL THE CITY OF CHICAGO TO PRESENT RULE 206 WITNESSES FOR DEPOSITION Pursuant to Illinois Supreme Court Rules 206 and 219(a), Defendant Juul Labs, Inc. (“JLI”), by and through its undersigned attorneys, states as follows in support of its Motion: INTRODUCTION The City brought two claims against JLI under M.C.C. § 2-25-090, for which it seeks a fine that could exceed $370 million. The City alleges that JLI engaged in (i) an unfair method of competition by marketing e-cigarettes to youth and failing to take adequate steps to prevent underage online sales, and (ii) deceptive practices, including certain of JLI’s marketing practices. Compl. ¶¶ 118-24, 129-33. Causation and damages are highly-relevant factors under both claims, and may also be relevant to the Court’s discretionary assessment of any fine (if the Court ever gets that far). Specifically, whether JLI’s business practices caused consumers to suffer a “substantial injury” is relevant to the City’s unfair method of competition claim, and whether JLI misled consumers in a “material” respect is relevant to the City’s deceptive practices claim. See Beardsall v. CVS Pharm., Inc., 953 F.3d 969, 973 (7th Cir. 2020); G.M. Sign, Inc. v. Elm St. Chiropractic, Ltd., 871 F. Supp. 2d 763, 769 (N.D. Ill. 2012). On May 2, 2022, JLI served its Rule 206(a)(1) deposition notice on the City (and supplemented that notice after the City moved for summary judgment). JLI’s topics are tailored FILED DATE: 7/8/2022 3:31 PM 2020CH04183 to the core issues of causation and damages and require the City to fully explain the basis of its ever-evolving claims, including: ● the City’s allegations regarding the adequacy of JLI’s age verification procedures; ● the City’s knowledge—if any—about the reach and impact of JLI advertising in Chicago; ● the reasons for youth vaping in Chicago; ● the fines and remedies the City is seeking against JLI; and ● what the City did to investigate JLI (as the City alleged in its Complaint). The City is a large municipal corporation, and vaping-related issues were addressed by multiple departments within the City. Rule 206(a)(1) is therefore an especially important discovery tool in this case because it allows JLI to determine the City’s positions on these core issues. See Ill. S. Ct. R. 206(a)(1) (“The persons so designated shall testify as to matters known or reasonably available to the organization.”). Yet the City has largely refused to cooperate. The City first objected to providing a witness on all but three topics. And, even after numerous meet and confer conferences, the City is refusing to present a witness to testify on the vast majority of topics. 1 For almost all of the topics in dispute, the City stands on a relevance objection. The City’s objections to JLI’s two Rule 206(a)(1) deposition notices are attached as Exhibits A and B. 1 Pursuant to Supreme Court Rule 201(k), the parties engaged in numerous meet and confers, including a two-hour call on May 20, 2022 and an almost hour-long call on July 5, 2022. The parties narrowed their issues, but significant disputes remain. In accordance with Rule 201(k), counsel responsible for the trial of the case have tried in good faith to resolve the issues raised in this motion but were unable to reach agreement. 2 “Great latitude” is given when determining relevance. Tomczak v. Ingalls Mem’l Hosp., 359 Ill. App. 3d 448, 456 (1st Dist. 2005). JLI’s 206(a)(1) topics are undoubtedly relevant. The FILED DATE: 7/8/2022 3:31 PM 2020CH04183 City cannot file suit, claim significant harm from JLI’s advertising and sales practices, seek to impose a nine-figure fine against JLI, and then refuse to disclose, among other things, its own pre- litigation views on JLI’s conduct and the bases for the fines it is seeking. For these reasons, the Court should compel the City to provide a witness who is adequately prepared to testify on JLI’s 206(a)(1) Topics 1-3, 6-8, 24, 26-28, and 31-48. ARGUMENT The “proper basis” for granting a motion to compel is “whether the information sought is relevant to the pending matter.” Vitacco v. Eckberg, 271 Ill. App. 3d 408, 412 (1st Dist. 1995). As discussed below, JLI has met that bar under the “liberal pretrial discovery” allowed by the Illinois Rules. Dufour v. Mobil Oil Corp., 301 Ill. App. 3d 156, 160 (1st Dist. 1998). The Court should compel the City to present a witness on the following six categories of discovery. A. JLI’s Age Verification Procedures (Topics 2-3, 38-48) Thirteen of JLI’s Topics focus on the City’s claims about JLI’s age verification practices and procedures. From the outset of this litigation, the City has claimed that “JUUL failed to implement adequate age verification procedures, resulting in significant sales to young people in Chicago.” Compl. ¶ 1; see also id. ¶¶ 9, 76-86, 121-22 (similar allegations). Relevant to that claim is whether JLI’s conduct offended a public policy in Chicago or otherwise caused consumers substantial injury. See City of Chicago v. Purdue Pharma L.P., 211 F. Supp. 3d 1058, 1074 (N.D. Ill. 2016) (discussing the elements of an unfair practices claim under M.C.C. § 2-25-090). It was not until the City filed its summary judgment motion last month, however, that the City gave any meaningful basis for its claim, finally asserting that JLI had allowed customers to have JUUL 3 Products delivered to a different address or recipient than on their accounts. See generally City’s Motion for Partial Summary Judgment (“MSJ”). The City claimed that JLI’s online sales practices FILED DATE: 7/8/2022 3:31 PM 2020CH04183 created a “significant loophole that could allow sales to minors,” and seeks to levy a fine against JLI that could exceed $370 million. Id. 4, 6-7, 10. In the same motion, the City also claimed that JLI sold its products online to 175 underage consumers in violation of M.C.C. § 4-64-345. Id. 1- 2, 4, 10. Here, each of Topics 2-3 and 38-48 directly bear upon the adequacy of JLI’s age verification efforts, and each Topic is intended to explore what evidence—if any—the City has that JLI violated any Chicago ordinances. See Ill. S. Ct. R. 571 (“Except as specifically stated herein or in existing statutes, the Code of Civil Procedure shall apply in all ordinance prosecutions to which these rules apply.”); Ill. S. Ct. R. 578 (“The prosecuting entity must prove the ordinance violation by a preponderance of the evidence; meaning it is more likely true than not that the violation occurred.”). Collectively, JLI expects to explore the following topics that are relevant to the City’s $370 million claims. First, JLI should be entitled to test the basis for the City’s claim that JLI’s age-verification practices improperly created a “significant loophole” in facilitating youth access. To that end, JLI will ask the City representative about any “harm that is occurring or will occur if JLI is not enjoined from selling JUUL Products online.” See Topic 45; see also Topic 43 (similar). Further, in light of the City’s claim that “JUUL shipped its products to an end user without performing any age verification,” City’s MSJ at 1 (emphasis added), JLI will ask the City representative about the City’s evaluation of JLI’s age verification practices and procedures as compared to JLI’s competitors and the City’s own criteria, if any. 4 Second, JLI should be entitled to explore whether the City believes that JLI’s conduct violated any Chicago public policy or ordinance. There is no ordinance in Chicago that prohibits FILED DATE: 7/8/2022 3:31 PM 2020CH04183 consumers from having tobacco products delivered to an address not listed on their account, such as to their office or a new apartment. JLI will ask whether there was any “consideration or deliberation” by the Mayor’s Office or City Council “about requiring that (i) the shipping name or address match (ii) the account and/or billing name or address, respectively, for online sales of ENDS [Electronic Nicotine Delivery Systems].” See Topic 44. JLI will also ask a City representative whether the City gave prior notice to JLI or other e-cigarette retailers that “shipping products to addresses or names other than the account or billing address or name constitutes an unfair or deceptive practice,” which is relevant to the City’s claim that JLI’s conduct violated Chicago public policy. See Topic 48. The remainder of JLI’s topics similarly seek discovery of the evidence the City may rely on to support its age-verification claims. See Topics 2-3, 38-42, 46-47. For these reasons, the Court should compel the City to present a witness on Topics 2-3 and 38-48. B. Whether JLI’s Advertising Reached Chicago (Topics 6-8) Three of JLI’s Topics focus on the City’s knowledge of JLI’s advertising in Chicago (Topics 6 and 8) and whether any Chicago residents actually saw those advertisements (Topic 7). The City claims that JLI violated MCC § 2-25-090 by engaging in both unfair and deceptive marketing practices. Compl. ¶¶ 118–24, 129–33. However, the City ordinance’s reach is expressly limited to “trade or business in the city.” M.C.C. § 2-25-090(a) (emphasis added). Therefore, it is only JLI’s activities in Chicago that are relevant to the City’s unfair and deceptive practices claims, regardless of JLI’s marketing practices in other cities. See Compl. ¶ 65 (depicting a JLI post with a San Francisco location), ¶ 72 (depicting invitations to JUUL events in Los 5 Angeles and New York City). Here, however, the City has identified more than 1,000 separate advertisements that it claims violate M.C.C. § 2-25-090, including on TV, radio, newspapers, and FILED DATE: 7/8/2022 3:31 PM 2020CH04183 billboards, but it has not provided evidence establishing that all of those advertisements ran in Chicago. Further, one of the relevant considerations for the City’s unfair practices claim is whether JLI’s conduct caused “substantial injury to consumers.” Purdue Pharma, 211 F. Supp. 3d at 1074. Injury is also a relevant consideration if the Court were to reach the issue of fines, which it then has the discretion to set. See People ex rel. Raoul v. Lincoln, Ltd., 2021 IL App (1st) 190317-U, ¶ 30 (duration and gravity of violation were considered in determining fines for violations of the Illinois Environmental Protection Act). For these reasons, JLI is entitled to discover the City’s factual basis for claiming that the advertisements ran in Chicago, and whether the City has any evidence about the actual reach of those advertisements on Chicago residents. 2 C. Reasons for any Youth Vaping Crisis in Chicago (Topics 24, 26-28) Four of JLI’s Topics focus on the City’s attempts to address youth vaping in Chicago. The City claims there was a youth vaping “epidemic.” Compl. ¶ 3. The City then blames JLI for the epidemic, claiming “JUUL hooked a generation on e-cigarettes.” Id. ¶ 1. The City has therefore put at issue JLI’s purported role in any youth vaping epidemic, and JLI accordingly intends to explore the following topics with a City representative: 2 The City claims most of its knowledge on these topics comes from its counsel’s review of JLI’s documents. However, JLI is entitled to test that assertion. Even the City’s corporate representative confirming that the City has no independent factual information about the reach of JLI advertisements will be instructive. That admission will preclude the City from later claiming that other evidence exists, and also support JLI’s argument that the City never contemporaneously singled out JLI for purportedly unfair or deceptive marketing practices. 6 ● Topics 24 and 28. Any efforts of the City to combat youth vaping. ● Topic 26. The enforcement actions the City has taken against other e-cigarette FILED DATE: 7/8/2022 3:31 PM 2020CH04183 manufacturers. ● Topic 27. The amount of money the City has requested or spent for purposes of addressing JUUL Products specifically. These Topics are all relevant to whether JLI’s practices were a cause of youth vaping in Chicago. For these reasons, the Court should compel the City to present a witness on Topics 24 and 26-28. D. The City’s Remedies (Topics 31-37) Seven of JLI’s Topics ask the City to reveal what should have been disclosed a long time ago: the complete basis for the City’s claim that JLI violated Chicago ordinances and the fine the City is seeking to impose. Despite having conducted a “year-long investigation,” Compl. ¶ 27, the City has never disclosed the total fine it is seeking for JLI’s allegedly deceptive marketing practices. Today, JLI still does not know either the exact fine at issue (a dollar-and-cents number), or the complete factual basis for that fine. Instead, the City has continually refused to disclose the total number of advertising violations and claims, changing its reasons for not disclosing that information at each turn. In June 2021, the City first objected to JLI’s interrogatory requesting that information on the grounds that it was “premature since the City is still in the process of investigating its claims and has not received or reviewed any documents from JUUL or taken any depositions in this litigation.” See Ex. C, City’s Response to Interrogatory No. 6. However, months later and after having received millions of documents from JLI, the City still will not provide that information, now claiming the “City will determine the number of violations following expert discovery.” See id., Second Supplemental Response to Interrogatory No. 6. 7 It has now been more than three years since the City first commenced its investigation. At this point, the City should be required to reveal the fine it is seeking to impose against JLI and the FILED DATE: 7/8/2022 3:31 PM 2020CH04183 complete basis for that fine. Put another way, the City cannot file a complaint alleging that JLI is liable for a fine and then, when asked, refuse to identify the basis for that fine and hide behind spurious claims of privilege or the need for expert discovery. See Avnet, Inc. v. Motio, Inc., No. 12 cv 2100, 2016 U.S. Dist. LEXIS 29534, at *23-25 (N.D. Ill. Mar. 4, 2016) (excluding expert opinion on damages where litigant had failed to disclose damages theory during discovery). E. The City’s Investigation into JLI (Topic 1) Topic 1 seeks witness testimony regarding the non-privileged aspects of the City’s investigation of JLI. In its Complaint, the City highlighted the fact that this action stemmed from a “year-long investigation of JUUL,” during which the City “reviewed tens of thousands of documents.” Compl. ¶ 27. The clear import of this statement is that the City’s claims against JLI are credible because they are the result of a robust, thorough, and lengthy investigation. Thus, JLI expects the City to put on testimony about the steps it took to investigate JLI’s conduct. JLI anticipates the City will use its investigation as a defense as well. For example, in response to JLI’s argument that the City failed to provide adequate notice of any purported misconduct, the City may rely on its investigation and claim that it could not provide notice during a pending investigation. The City also claims that questions about its investigation will be privileged because the investigation was conducted by and at the direction of counsel. However, privilege objections are better handled on a question-by-question basis. For that simple reason, courts routinely find privilege to be an improper basis for refusing to produce a corporate representative, including in 8 the context of governmental investigations. 3 That approach aligns with the Illinois Supreme Court’s mandate that “the burden of showing facts which give rise to the privilege rests on the one FILED DATE: 7/8/2022 3:31 PM 2020CH04183 who claims the exception.” Consolidation Coal Co. v. Bucyrus-Erie Co., 89 Ill. 2d 103, 119 (1982). Moreover, during the deposition, JLI will ask procedural questions about the City’s investigation that do not require the disclosure of privileged information—e.g., its length, the number of hours spent, the number of people involved, the number of interviews conducted, and the number of documents reviewed. None of those questions invades the City’s asserted privilege. Once the City chose to make its investigation part of this case, JLI became entitled to obtain discovery about it. The City must therefore designate a witness to provide testimony about the non-privileged aspects of its investigation. CONCLUSION For all of these reasons, the Court should grant JLI’s motion to compel, requiring the City to designate a witnesses (or witnesses) on JLI 206(a)(1) Topics 1-3, 6-8, 24, 26-28, and 31-48, within 28 days of the Court’s order. [Remainder of Page Intentionally Left Blank] 3 Among the other cases to reach this conclusion, see Baxter Int’l, Inc. v. Becton, Dickinson & Co., No. 17 C 7576, 2019 U.S. Dist. LEXIS 125098, at *20-21, 24 (N.D. Ill. July 26, 2019) (compelling a corporate representative because the assumption that all questions would solicit privileged information was speculative); EEOC v. Burlington Northern, No. CIV-07-734-D, 2008 U.S. Dist. LEXIS 93320, at *9-11 (W.D. Okla. June 23, 2008) (denying in relevant part a motion for protective order and allowing a corporate representative deposition of the EEOC to proceed, with privilege questions being addressed at the deposition); EEOC v. Albertson’s, LLC, No. 06-cv-01273-WYD-BNB, 2007 U.S. Dist. LEXIS 32003, at *6-7, 10-11, 13 (D. Colo. May 1, 2007) (denying EEOC’s blanket protective order, because the EEOC can assert privilege objections in response to specific deposition questions); City of Chicago v. Wolf, No. 91 C 8161, 1993 U.S. Dist. LEXIS 4456 at *10-11 (N.D. Ill. Apr. 9, 1993) (overruling the City’s efforts to block a deposition on privilege grounds, because to the “extent there is any claim of privilege, plaintiffs will have to object to particular questions at the deposition”). 9 Dated: July 8, 2022 Respectfully submitted, William E. Arnault FILED DATE: 7/8/2022 3:31 PM 2020CH04183 Renee D. Smith, P.C. William E. Arnault KIRKLAND & ELLIS LLP 300 N. LaSalle Street Chicago, IL 60654 Telephone: 312.862.2000 renee.smith@kirkland.com warnault@kirkland.com Taj J. Clayton, P.C. KIRKLAND & ELLIS LLP 1601 Elm Street Dallas, TX 75201 Telephone: 214.972.1774 taj.clayton@kirkland.com Byron Pacheco KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022 Telephone: 212.909.3247 byron.pacheco@kirkland.com Attorneys for Defendant Juul Labs, Inc. 10 CERTIFICATE OF SERVICE TO: See attached Service List FILED DATE: 7/8/2022 3:31 PM 2020CH04183 I, the undersigned, do hereby state under oath that I caused to be served a copy of Defendant Juul Labs, Inc.’s Motion to Compel the City of Chicago to Present Rule 206 Witnesses for Deposition, via electronic mail on July 8, 2022. Dated: July 8, 2022 Respectfully submitted, William E. Arnault William E. Arnault KIRKLAND & ELLIS LLP 300 N. LaSalle Street Chicago, IL 60654 Telephone: 312.862.2000 warnault@kirkland.com /x/ Under penalties as provided by law pursuant to 735 ILCS 5/1-109, I certify that the statements set forth herein are true and correct. 11 SERVICE LIST Stephen J. Kane FILED DATE: 7/8/2022 3:31 PM 2020CH04183 Rebecca A. Hirsch Elie T. Zenner City of Chicago Department of Law 121 North LaSalle Street, Room 600 Chicago, IL 60602 Telephone: (312) 744-6934 Fax: (312) 744-5185 Stephen.Kane@cityofchicago.org Rebecca.Hirsch2@cityofchicago.org Elie.Zenner@cityofchicago.org Mimi Liu Paige Boggs MOTLEY RICE LLC 401 9th Street NW, Suite 1001 Washington, D.C. 20004 Telephone (202) 386-9625 Fax: (202) 386-9622 mliu@motleyrice.com pboggs@motleyrice.com Attorneys for Plaintiff 12