Electronic cigarette-maker Juul Labs Inc. will pay US$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, the attorneys general in several states announced Wednesday.
The agreement with New York, California, Colorado, Illinois, Massachusetts, New Mexico and Washington, D.C. is the latest in a string of recent legal agreements Juul has reached to settle lawsuits related to the way it marketed addictive nicotine products. Critics said Juul was trying to lure children too young to smoke.
Like some other settlements reached by Juul, this latest includes restrictions on the marketing 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 will also limit the amount of purchases customers can make in retail stores and online.
"Juul lit a nationwide public health crisis by putting addictive products in the hands of minors and convincing them that it's harmless," New York Attorney General Letitia James said in a statement. "Today they are paying the price for the harm they caused."
A spokesperson for Juul said with Wednesday's settlement, the Washington D.C.-based company was "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 per cent 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.
Juul rocketed to the top of the U.S. vaping market about five years ago with the popularity of flavors like mango, mint and creme brulee. 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.
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."
In September, Juul agreed to pay nearly US$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 per cent of Juul's U.S. sales of US$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.
The vaping company, which has laid off hundreds of employees, recently agreed to pay West Virginia US$7.9 million to settle a lawsuit alleging the company violated the state's Consumer Credit and Protection Act by marketing to underage users, West Virginia Attorney General Patrick Morrisey announced Monday. Last month, the company paid Chicago US$23.8 million to settle a lawsuit.
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" as youth cigarette smoking rates fell.
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