Juul will pay $462 million to six states and Washington, according to the terms of its latest settlement for the electronic-cigarette company’s alleged role in contributing to the youth vaping epidemic. The agreement is the largest multistate settlement with Juul, New York Attorney General Letitia James said, and places stringent restrictions on Juul’s marketing, sales and distribution practices to prevent minors from vaping.
Juul will be required to secure its products behind retail store counters and verify the age of consumers that directly sell or promote its products online, James said in a news release Wednesday.
“Juul lit a nationwide public health crisis by putting addictive products in the hands of minors and convincing them that it’s harmless—today they are paying the price for the harm they caused,” said James, who co-led the multistate agreement with California Attorney General Rob Bonta. “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. Today’s agreement will help young New Yorkers put their vapes down for good and ensure that future generations understand the harms of vaping.”
The other states are Colorado, Illinois, Massachusetts and New Mexico.
This is one of many like settlements Juul, San Francisco, has reached in the past year.
“With this settlement, we are nearing total resolution of the company’s historical legal challenges and securing certainty for our future,” a Juul spokesperson told CSP Daily News. “We have now settled with 47 states and territories, providing over $1 billion to participating states, in addition to our global resolution of the U.S. private litigation. Since our company-wide reset in the fall of 2019, underage use of Juul products has declined by 95% based on the National Youth Tobacco Survey.”
Juul is fighting to keep its e-cigarette products on retailers’ shelves after the Food and Drug Administration issued marketing denial orders (MDOs) on the company’s premarket tobacco product applications (PMTAs) for the Juul device and four types of Juulpods—Virginia tobacco-flavored pods at nicotine concentrations of 5% and 3% and menthol-flavored pods at nicotine concentrations of 5% and 3%. The denial was later stayed, and products can legally be sold until the Food and Drug Administration (FDA) reaches a final determination.
“Now we are positioned to dedicate even greater focus on our path forward to maximize the value and impact of our product technology and scientific foundation,” Juul said. “Our priorities remain to secure authorization of our PMTAs based on the science and lead the category with innovation to accelerate our mission and advance tobacco harm reduction for over 31 million adult smokers in the U.S. and over 1 billion adult smokers worldwide.”
New York’s Case
Attorney General James sued Juul in November 2019 claiming it used deceptive and misleading marketing that glamorized vaping with colorful ads featuring young models using fruity, sweet and minty flavors that appealed to youth. Juul also misled consumers about the nicotine content of its products, James said, among other violations of New York’s General Business Laws.
After Juul launched in 2015, e-cigarette use in New York City high school students increased from 8.1% in 2014 to 23.5% by 2018, she said.
New York will receive $112.7 million from Juul over an eight-year period. Juul must make its first payment to the six states and the district within 90 days of the effective date of the agreement, followed by seven annual payments.
Under the settlement, Juul is also required to:
- Refrain from any marketing that directly or indirectly targets youth, including using anyone under the age of 35 in promotional material or funding, operating youth education/prevention campaigns, or sponsoring school related activities.
- Limit the amount of retail and online purchases an individual can make.
- Perform regular retail compliance checks at 5% of New York’s retail stores that sell Juul products for at least four years.
- Treat synthetic nicotine as nicotine.
- Refrain from providing free or nominally priced Juul pods as samples to consumers.
- 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 the depository to inform the public on how Juul created a public health crisis.
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