Juul, Chicago Reach $23.8 Million Settlement

Lawsuit is among many the e-cigarette company has recently resolved
Juul e-cigarette
Photograph: Shutterstock

E-cigarette maker Juul Labs Inc. agreed to pay the city of Chicago $23.8 million in a settlement over a May 2020 lawsuit that alleged Juul engaged in harmful and deceptive business practices by marketing and selling vaping products to underage users.  

“This resolution is another step in our ongoing commitment to resolve issues from the past, place our company on a path forward and fulfill our mission to transition adult smokers away from combustible cigarettes while combating underage use of our products,” a Juul spokesperson told CSP Daily News. Juul did not admit to any wrongdoing in the settlement. “We continue to engage constructively with key stakeholders as we lead with innovation and science in pursuit of an endgame for cigarettes.” 

Juul violated city ordinances by engaging in a widespread marketing campaign that targeted minors and by selling Juul products without implementing strict age verification requirements, Chicago’s Office of the Mayor said on March 10. Juul appealed to youth with their colorful, playful media and social media marketing and used high-nicotine contents to fuel ongoing use, the mayor’s office said. Four years after Juul’s launch, more than a quarter of 10th and 12th graders were using Juul nationally, and in Chicago, youth vaping doubled, according to the mayor's statement.

A $2.8 million payment will come within 30 days of the execution agreement. The city will then receive an additional $21 million payment later this year under the current schedule and could potentially receive another $750,000 in court-awarded payments, the mayor’s office said.

“E-cigarette businesses cannot be allowed to come in our city and boost their profits at the expense of minors. The use of any tobacco products, including e-cigarettes, among youth is a serious public health concern—to CDPH and parents across Chicago,” said Allison Arwady, commissioner of the Chicago Department of Public Health. “We’ve made remarkable progress over the last 20 years in reducing smoking, and now with these resources we’re ready to continue the fight against vaping.”

The city has pursued other actions against multiple sellers of e-cigarettes and e-juices. Since 2018, it filed nine lawsuits against 45 online vaping retailers and served notices and violations on many more. Settlements have been reached with 50 of these companies in exchange for agreements to change their business practice and pay almost $27 million in fines, the city said.

This is also one of many lawsuits Juul settled over the last year. In December, it settled more than 5,000 lawsuits via a consolidation of claims in the U.S. District Court for the Northern District of California. It also agreed in September to pay $438.5 million to 34 states and territories to settle a two-year investigation into its marketing and sales practices.

Altria Group Inc., Richmond, Virginia, exchanged its entire minority economic investment in Juul, San Francisco, in March, for a non-exclusive, irrevocable global license to some of Juul’s heated tobacco intellectual property.

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