In April, Juul Labs Inc. settled another case that was brought against them by state prosecutors. The company has agreed to pay $462 million to six U.S. states, including New York and California.
In the initial filing, the Attorneys General claimed Juul unlawfully marketed its addictive products to consumers under the age of 18 and fueled a vaping crisis among young people. Over several years, prosecution conducted in-depth investigations and found that Juul executives were aware that their initial marketing lured teenage users into buying its sleek vaping pens. However, executives, who were named in the suit, did little to address or change these marketing practices.
California’s share of the new payout is the biggest at $175.8 million with New York following at $112.7 million. During the news conference, Rob Bonta, the attorney general of California, said Juul “used the tactics of Big Tobacco to reignite a youth nicotine epidemic, after years of declines in cigarette smoking among younger Americans.” Juul will make these payments over an eight-year period and California and New York will use this money to fund programs to deter underage smoking.
The company has not admitted to any wrongdoing in the settlement which also included Colorado, Illinois, Massachusetts, New Mexico as well as the District of Columbia. To date, this is the largest multi-state settlement reached by Juul. States involved in the deal, were not part of an earlier agreement Juul reached seven months ago to pay a total of $439 million to 33 states.
As part of this settlement, Juul will adhere to stringent restrictions on how they market their products. Restrictions include:
- Retailers will have to secure Juul products behind counters.
- Verify the age of consumers.
- Juul must also stop using people under 35 years of age in marketing materials.
- Limit the number of products customers can buy in retail locations and online.
- Perform regular compliance checks at retail stores that sell products for at least four years.
- Treat synthetic nicotine as nicotine.
- Refrain from providing free or nominally priced Juul pods as samples to customers.
- Exclude product placement in virtual reality systems.
- Increase funding to a document depository by up to $5 million and add millions of relevant documents to inform the public how Juul created a public health crisis.
Other Juul Lawsuits
This new settlement with some of the nation’s largest states has positioned Juul to resolve thousands of lawsuits by individuals and other plaintiffs in the last few years. Earlier this month, Juul also settled claims by West Virginia for $7.9 million.
Even though Juul has reached settlements with over 45 states and territories, they continue to face legal trouble. A trial was underway in Minnesota when Juul ended up reaching another settlement. Details will be released in the next 30 days.
Florida, Michigan, Maine and Alaska still have lawsuits and open investigations pending. In addition to the state settlements, the company also agreed to pay $1.7 billion to school districts, local governments and individual consumers in December 2022. This settlement was also related to claims that e-cigarettes were more addictive than advertised. With billions in settlements, it is estimated that claims will continue to grow against Juul.