Juul reaches $462 million settlement with New York, California and other states
California, New York and several other states announced a $462 million settlement with Juul Labs on Wednesday, resolving lawsuits claiming that the company aggressively marketed its e-cigarettes to young people and fueled the nation’s vaping crisis.
The agreement brings much of the company’s legal woes to a conclusion, with settlements reached with 47 states and territories as well as 5,000 individuals and local governments. Juul is in the middle of a trial in Minnesota, an unusual case in which a settlement was not reached. But the company’s efforts to broker deals over the lawsuits have cost it nearly $3 billion so far, a massive sum for a company still seeking official regulatory approval to keep selling its products.
The latest settlement resolved the claims of California, Colorado, the District of Columbia, Illinois, Massachusetts, New Mexico and New York. It follows others that took the company to task for failing to warn young users that the high levels of nicotine in their e-cigarettes would prove addictive.
California contended in its lawsuit that for months, Juul did not disclose in its advertising that its devices contained nicotine. It detailed the company’s early marketing efforts, which included handing out free samples of the e-cigarettes in 2015 at trendy events, including one called Nocturnal Wonderland in San Bernardino and a “Movies All Night Slumber Party” in Los Angeles. The New York lawsuit noted that the company embraced the use of social media hashtags like #LightsCameraVapor.
Attorneys general in those states conducted investigations that they said had found that Juul executives were aware that their initial marketing lured teenage users into buying its sleek vaping pens, but did little to address the problem as the adolescent vaping rate exploded.
A spokesman for Juul, Austin Finan, said that underage use of its products had declined by about 95%, citing federal data, since a companywide reset in the fall of 2019. The settlement, Finan said, represents a near “total resolution of the company’s historical legal challenges and securing certainty for our future.”
“The terms of the agreement, like prior settlements, provide financial resources to further combat underage use and develop cessation programs and reflect our current business practices,” Finan said.
Letitia James, New York’s attorney general, said in a statement: “Too many young New Yorkers are struggling to quit vaping and there is no doubt that Juul played a central role in the nationwide vaping epidemic.”
Juul has repeatedly denied marketing directly to minors. In other rounds of settlements, the company has not admitted wrongdoing. In those agreements, the payments to plaintiffs are to provide financial resources to combat underage use and develop cessation programs. Juul has framed the deals as part of its effort to “resolve issues from the company’s past.”
Last year, Juul resolved thousands of lawsuits by individuals and other plaintiffs.
In December, the company agreed to pay $1.7 billion over lawsuits by more than 5,000 individuals, school districts and local governments. In September, the company settled lawsuits filed by more than 30 states for $438.5 million.
This month, Juul settled claims filed by West Virginia for $7.9 million.
In the Minnesota trial that began a few weeks ago, Keith Ellison, the state attorney general, opened the proceedings by accusing the company of getting teenagers hooked on e-cigarettes “so they could make money.”
“They baited, deceived, and addicted a whole new generation of kids after Minnesotans slashed youth smoking rates down to the lowest level in a generation,” Ellison said.
Like other settlements, the latest requires Juul to refrain from marketing to youths. The agreement also requires Juul to stop offering free or “nominally priced” products to consumers, and from using the marketing technique of “product placement” in virtual reality systems.
This article originally appeared in The New York Times.