Juul Agrees To Pay $462 Million To 6 States And District Of Columbia

Embattled electronic cigarette-maker Juul Labs will pay $462 million to six states and the District of Columbia, marking the largest settlement the company has reached so far for its role in the youth vaping surge, New York Attorney General Letitia James said Wednesday.

The agreement with New York, California, Colorado, Illinois, Massachusetts, New Mexico and Washington, D.C. marks the latest in a string of recent legal settlements Juul has reached across the country with cities and states.

On Monday, the vaping company agreed to pay $7.9 million to settle a lawsuit alleging the company violated West Virginia's Consumer Credit and Protection Act by marketing its products to underage users. Last month, the company paid Chicago $23.8 million.

Minnesota's case against Juul went to trial last month with the state's Attorney General Keith Ellison asserting that the company "baited, deceived and addicted a whole new generation of kids after Minnesotans slashed youth smoking rates down to the lowest level in a generation."

Juul has laid off hundreds of employees since last fall, and plans to slash its operations by 30% to 40%, Reuters reported.

Like some other settlements reached by Juul, the latest agreement includes various restrictions on the marketing, sale and distribution of the company's vaping products. For example, it is barred from any direct or indirect marketing that targets youth, which includes anyone under age 35. Juul is also required to limit the number of purchases customers can make in retail stores and online.

Public health crisis

"Juul lit a nationwide public health crisis by putting addictive products in the hands of minors and convincing them that it's harmless," James said in a statement. "Today they are paying the price for the harm they caused."

New York sued Juul in 2019, accusing the e-cigarette maker of lying about the nicotine content of its products, falsely depicting them as safer than cigarettes and spurring a surge of youth nicotine addiction.

James said the $112.7 million due to New York will pay for underage smoking abatement programs across the state. The company will pay in eight annual installments, James said.

District of Columbia Attorney General Brian Schwalb said in a statement that Juul "knew how addictive and dangerous its products were and actively tried to cover up that medical truth."

A spokesperson for the Washington D.C.-based Juul said that with Wednesday's settlement, "we are nearing total resolution of the company's historical legal challenges and securing certainty for our future."

The spokesperson added that underage use of Juul products has declined by 95% since 2019 based on the National Youth Tobacco Survey. According to the CDC, though, since surveys were administered online instead of on school campuses during the pandemic, the results cannot be compared to prior years.

In September, Juul agreed to pay nearly $440 million over a period of six to 10 years to settle a two-year investigation by 33 states into the marketing of its high-nicotine vaping products to young people. That settlement amounted to about 25% of Juul's U.S. sales of $1.9 billion in 2021.

Three months later, the company said it had secured an equity investment to settle thousands of lawsuits over its e-cigarettes brought by individuals and families of Juul users, school districts, city governments and Native American tribes.

Juul rocketed to the top of the U.S. vaping market about five years ago with the popularity of flavors like mango, mint and crème brûlée. But the startup's rise was fueled by use among teenagers, some of whom became hooked on Juul's high-nicotine pods.

Parents, school administrators and politicians have largely blamed the company for a surge in underage vaping.

First published on April 12, 2023 / 2:41 PM

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