Minnesota is latest to settle with e-cigarette maker Juul

By STEVE KARNOWSKI
Associated Press

MINNEAPOLIS (AP) — Minnesota announced a settlement Monday in its lawsuit against Juul Labs and tobacco giant Altria — the first of thousands of cases against the e-cigarette maker to reach trial — just ahead of closing arguments. It comes only days after Juul announced its biggest settlement ever over the way it marketed its highly addictive products.

The terms will be kept confidential until formal papers are publicly filed with the court in 30 days, Minnesota Attorney General Keith Ellison said in a statement. If it’s like Juul’s other settlements, the Minnesota settlement could include a multimillion-dollar payment and various restrictions on the marketing, sale and distribution of the company’s vaping products. Ellison said ahead of the trial that he was seeking more than $100 million in damages.

“After three weeks of trial highlighting and bringing into the public record the actions that JUUL and Altria took that contributed to the youth vaping epidemic, we reached a settlement in the best interest of Minnesotans,” Ellison said.

Juul said it would work with the state to finalize the details over the coming weeks.

“We have now settled with 48 states and territories, providing over $1 billion to participating states to further combat underage use and develop cessation programs,” the company said in a statement. “This is in addition to our global resolution of the U.S. private litigation that covers more than 5,000 cases brought by approximately 10,000 plaintiffs.”

Attorneys for the state argued at the trial’s start that Juul unlawfully targeted young people with vaping products to get a new generation addicted to nicotine. Juul attorneys countered that its purpose was to convert adult smokers of combustible cigarettes to a less-dangerous product — not to lure kids.

Juul has faced thousands of lawsuits nationwide but most have settled, including dozens with other states and U.S. territories. The largest settlement came last week when it was announced that Juul Labs will pay $462 million to six states and the District of Columbia to settle lawsuits related to its marketing tactics. As part of that deal, Juul pledged not to market its products to anyone under the age of 35 and to limit the amount customers can purchase in retail stores and online.

Minnesota, which won a landmark $7.1 billion settlement with the tobacco industry in 1998, was the first state to take Juul to trial. It filed its lawsuit in 2019 and added Altria, which formerly owned a minority stake in Juul, as a co-defendant in 2020. Altria completed its divestiture last month and says it effectively lost its $12.8 billion investment.

During opening statements in March, Ellison accused Juul of using “slick products, clever ads and attractive flavors” to hook children on nicotine.

“They baited, deceived, and addicted a whole new generation of kids after Minnesotans slashed youth smoking rates down to the lowest level in a generation,” Ellison said. “Now, big tobacco is back with a new name but the same game.”

David Bernick, an attorney for Juul, countered during opening statements that Juul’s purpose was always to convert adult smokers to a less-dangerous product that would still provide a satisfying nicotine experience. He said Juul did nothing to intentionally drive youth demand, suggesting the growth in youth vaping was a secondhand result of increased adult demand.

William Geraghty, an attorney for Altria, denied Ellison’s assertions that Altria invested heavily in Juul because it ultimately wanted to hook kids on its cigarettes, which include Marlboro.

Washington D.C.-based Juul Labs launched in 2015 on the popularity of flavors like mango, mint, fruit medley and creme brulee. Teenagers fueled its rise, and some became addicted to Juul’s high-nicotine pods. Amid a backlash, the company dropped all U.S. advertising and discontinued most of its flavors in 2019, losing popularity with teens. Juul’s share of the now multibillion-dollar market has fallen to about 33% from a high of 75% in 2018.

In September, Juul agreed to pay nearly $440 million over 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. The 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 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 as it struggles to move forward while facing increased competition, recently agreed to pay West Virginia $7.9 million to settle a lawsuit alleging the company violated the state’s Consumer Credit and Protection Act by marketing to underage users. And last month, the company paid Chicago $23.8 million to settle a lawsuit.

After last week’s settlement, a Juul spokesperson said the company was “nearing total resolution of the company’s historical legal challenges and securing certainty for our future.”

Juul is currently appealing the Food and Drug Administration’s rejection of its application to keep selling its vaping products as a smoking alternative for adults.