Law360 (April 2, 2026, 1:20 PM EDT) — A Georgia federal judge has tossed a suit against numerous vape sellers and makers alleging they conspired to sell vapes with illegal levels of delta-9 THC, saying her complaint fails to allege any kind of scheme, but rather amounts to describing the normal supply chain.

In an order filed Tuesday, U.S. District Judge Steven D. Grimberg dismissed with prejudice Racketeer Influenced and Corrupt Organizations Act claims from Hannah Ledbetter against the defendants, while declining to keep jurisdiction over the remaining state court claims, dismissing those without prejudice.

According to the order, Ledbetter offers little more than conclusory and unsupported generalizations about the supposed enterprise conducted by defendants Green Rush LLC, Xhale City Franchise Co. LLC, Cloud 9 Online Smoke & Vape LLC, Encore Labs LLC, Savage Enterprises and its principals, L&K Distribution, Cookies Creative Consulting Inc., TheSY LLC and Stiiizy IP LLC.

“Removing hyperbole and legal conclusions, the [second amended complaint] merely describes links in a supply chain connected by ordinary commercial dealings,” the judge wrote.

The complaint fails to allege any specific facts that any of the defendants conspired to sell illegal vape products, the judge wrote, nor that they sought labs that would provide fraudulent certificates of analysis.

The amount of John Doe defendants also shows how much of the complaint leans on speculation, Judge Grimberg wrote, such that Ledbetter is asking the court to allow the claims to proceed based on “unidentified wrongdoing by unidentified wrongdoers.”

The defendants pushed for dismissal of the claims in June, arguing that the complaint fails to meet Class Action Fairness Act pleading standards and that her state law allegations were insufficient to support her RICO claims.

With the RICO claims dismissed, Judge Grimberg on Tuesday turned to the state law claims and found that the complaint fails to establish specific jurisdiction against the lab defendants or all but one of the manufacturer defendants, as Ledbetter failed to allege that they have sufficient connections with Georgia.

Only the claims against Savage Enterprises satisfy the state’s long-arm statute, as Ledbetter alleged that Savage directly sold its products to retailers that primarily do business in Georgia, and her claims stem from that contact, the judge wrote.

However, the court lacks jurisdiction against the individual defendants, who are officers or shareholders of Savage, as Ledbetter didn’t make any specific factual allegations against them as individuals.

Judge Grimberg then found that the court lacks subject matter jurisdiction through the Class Action Fairness Act, as Ledbetter’s allegations fall well short of the $5 million amount in controversy threshold, noting that the class would need 34,000 members if Ledbetter’s alleged damages of $146.74 was the average.

Even if the court counts the trebled damages from a successful RICO claim, the class would still need 11,000 members, well beyond the “hundreds — if not thousands” of purchasers Ledbetter alleged in her complaint, the judge wrote.

Nor would the case fall in federal jurisdiction under traditional diversity of citizenship jurisdiction, given the $75,000 amount in controversy threshold, as Ledbetter can only rely on her own personal damages with that rule, the judge wrote.

Finally, the judge declined to exercise supplemental jurisdiction over the remaining claims, as the dispute depends exclusively on state law issues, and Georgia courts have an interest in deciding whether Ledbetter can “impose potentially existential liability” on a nascent industry in the state.

“We are very pleased with the court’s ruling dismissing all claims against our client, Cookies Creative Consulting,” Vincent R. Russo of Robbins Alloy Belinfante Littlefield LLC said Wednesday. “From the start, we argued that this lawsuit was legally baseless and relied only on speculative allegations against our client. It was clear that Cookies had no business being named as a defendant in this action.”

Taylor L. Leftwich of Leftwich Law, representing Green Rush, Xhale and Cloud 9, said they’re pleased with the ruling.

“As the court’s detailed opinion reflects, plaintiff’s claims lack legal and factual merit, and the court agreed with our position in full,” Leftwich said. “Lawful businesses should not be subjected to unfounded lawsuits and forced to expend significant time and resources defending baseless claims. This order confirms exactly that. Our clients are small businesses — licensed, regulated, compliant taxpayers and employers — who operate within the bounds of the law. Plaintiff’s attempt at a money grab has failed, and this case was rightfully dismissed by the court. We appreciate the court’s careful consideration in granting our motion to dismiss and are proud to have defended our clients, bringing overreaching litigation to its overdue and appropriate close.”

Attorneys for L&K Distribution declined to comment Thursday.

Representatives for the other parties could not immediately be reached for comment.

Ledbetter is represented by Matthew A. Hood and Andrew H. Stuart of Stuart & Johnston LLC and Luther Sutter of Sutter & Gillham PLLC.

Green Rush, Xhale and Cloud 9 are represented by Taylor L. Leftwich of Leftwich Law.

Encore Labs is represented by C. Bradford Marsh and Joseph J. Angersola of Marsh Atkinson & Brantley LLC.

Savage Enterprises and its principals are represented by Michael P. Manfredi and Adam E. Wayne of Wilson Elser Moskowitz Edelman & Dicker LLP.

L&K Distribution is represented by Jeffrey A. Zachman and Nathan L. Garroway of Dentons US LLP.

Cookies Creative Consulting is represented by Richard L. Robbins, Vincent R. Russo, Ed Bedard and Kacey F. Baine of Robbins Alloy Belinfante Littlefield LLC.

TheSY is represented by Holly A. Pierson of Pierson Law LLC and Jennifer Briggs Fisher and Jessica Huang Fuzellier of Goodwin Procter LLP.

Stiiizy is represented by J. Andrew Pratt and Michael D. Roth of King & Spalding LLP.

The case is Ledbetter v. Cloud 9 Online Smoke & Vape LLC et al., case number 1:24-cv-00538, in the U.S. District Court for the Northern District of Georgia.

–Editing

Read more at: https://www.law360.com/georgia/articles/2460716/vape-sellers-makers-evade-ga-woman-s-rico-scheme-suit?copied=1