HARTFORD, Conn. – Electronic cigarette maker Juul Labs has agreed to pay nearly $440 million to settle a two-year investigation by 33 states into the marketing of its high-nicotine vaping products, which have long been blamed for sparking a national surge in teen vaping.
Connecticut Attorney General William Tong announced the deal on behalf of the states plus Puerto Rico, which joined together in 2020 to probe Juul’s early promotions and claims about the benefits of its technology as a smoking alternative.
The settlement, which includes numerous restrictions on how Juul can market its products, resolves one of the biggest legal threats facing the beleaguered company, which still faces nine separate lawsuits from other states. Additionally,
Juul faces hundreds of personal lawsuits brought on behalf of teenagers and others who say they became addicted to the company’s vaping products.
The states’ investigation found that Juul marketed its e-cigarettes to underage teens with launch parties, product giveaways and ads and social media posts using youthful models, according to a statement.
“We think that this will go a long way in stemming the flow of youth vaping,” Tong said at a news conference at his Hartford office according to AP.
“I´m under no illusions and cannot claim that it will stop youth vaping,” he said. “It continues to be an epidemic. It continues to be a huge problem. But we have essentially taken a big chunk out of what was once a market leader, and by their conduct, a major offender.”
The $438.5 million will be paid out over a period of six to 10 years. Tong said Connecticut’s payment of at least $16 million will go toward vaping prevention and education efforts. Juul previously settled lawsuits in Arizona, Louisiana, North Carolina and Washington.
The settlement total amounts to about 25% of Juul´s US sales of $1.9 billion last year. Tong said it was an “agreement in principle,” meaning the states will be finalizing the settlement documents over the next several weeks.
Most of the limits imposed by the settlement won’t immediately affect Juul, which halted use of parties, giveaways and other promotions after coming under scrutiny several years ago. The company currently makes up about one third of the US retail vaping market, down from 75% several years ago.
Teen use of e-cigarettes skyrocketed in the years following Juul´s 2015 launch, leading the US Food and Drug Administration to declare an “epidemic” of underage vaping among young people. Health experts said the unprecedented increase risked hooking a generation of young people on nicotine.
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