Juul Labs has agreed in principle to pay at least $438.5 million to 33 U.S. states (and Puerto Rico) to settle allegations the company deceived consumers and engaged in youth-oriented advertising and marketing. The settlement also requires Juul to adhere to certain standards in its future marketing.
The settlement is the result of a two-year investigation led by the attorneys general of Connecticut, Oregon and Texas. The $438.5 million figure is based on a six-year payment schedule. It could go as high as $470 million if the company spreads payments to the states over 10 years, according to Texas Attorney General Ken Paxton.
The allegations made by the attorneys general will be familiar to anyone who has followed vaping news over the last four years. According to Connecticut AG William Tong, Juul Labs “relentlessly marketed vaping products to underage youth…and misled consumers about the nicotine content and addictiveness of its products.”
“With a technology-focused, sleek design that could easily be concealed, JUUL sold its products in flavors known to be attractive to underage users,” says Paxton’s press release. “JUUL also manipulated the chemical composition of its product to make the vapor less harsh on the throats of young and inexperienced users. To preserve its underage customer base, JUUL relied on age verification techniques that it knew were ineffective.”
The states and territories that joined the settlement, according to Texas AG Paxton, are: Alabama, Arkansas, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Maryland, Maine, Mississippi, Montana, North Dakota, Nebraska, New Hampshire, New Jersey, Nevada, Ohio, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont, Wisconsin, and Wyoming.
Juul settled earlier with some individual states, including a $40 million agreement with North Carolina in June 2021, and later (for lesser amounts) with Arizona, Louisiana and Washington. The company still faces several lawsuits by other state attorneys general, and a huge multi-district litigation (MDL) that consolidates hundreds of complaints by individuals, municipalities, school districts and Indian tribes.
The agreement requires Juul to end any marketing to persons under age 35, limits in-store displays and access, sets online and retail sales limits and a retail compliance check protocol, and requires age verification for all sales, among other requirements. Most if not all of the agreed practices listed in the settlement have been standard at Juul for years, and some others have been federally mandated since 2016 under provisions of the FDA’s Deeming Rule.
The allegations surrounding what Connecticut AG Tong describes as Juul’s “cynically calculated advertising campaigns [that] created a new generation of nicotine addicts” stem from Juul’s first ad campaign, which was active for a short period in 2015—more than two years before the first rumblings of the so-called “youth vaping epidemic” began to grab headlines.
In addition, Juul withdrew most of its flavored products from the market in 2018—more than a year before the FDA mandated removal of flavored pod-based vape products in January 2020, and two years before the AG’s investigation began. More recently, the company eliminated all U.S. advertising.
Middle and high school-aged vaping has declined by 60 percent since its high-water mark in 2019, and the most recent teen vaping survey showed that Juul is a bit player in adolescent vaping at this point.
On June 23, the FDA issued a marketing denial order (MDO) to Juul Labs, ordering the company to pull its products from retail shelves immediately. A day later, Juul sought and received a temporary stay from a federal court, allowing the company to continue selling products. Less than two weeks later, the FDA itself put the MDO on hold, admitting it had missed 6,000 pages of evidence in Juul’s marketing application.