Juul to pay $439 million in settlement over marketing to teens

Leonardo Rasaki

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E-cigarette company Juul, which at the height of its success dominated the market with its sweet flavors, has agreed to pay $438.5 million in a settlement with 33 states and one territory over marketing its product to teens.

Connecticut Attorney General William Tong (D), who led the plaintiff effort, said in a statement Tuesday that the settlement will send millions of dollars to programs aimed at reducing tobacco use.

“Juul’s cynically calculated advertising campaigns created a new generation of nicotine addicts,” Tong said. “They relentlessly marketed vaping products to underage youth, manipulated their chemical composition to be palatable to inexperienced users, employed an inadequate age verification process, and misled consumers about the nicotine content and addictiveness of its products.”

The full extent of the company’s harm has yet to be determined, Tong said.

Juul use among teens and young adults spiked from 2018 to 2019, with use among 18-to-20-year-olds doubling, Reuters reported. Juul and other vape companies contributed to an e-cigarette epidemic among youths, the surgeon general at the time said in 2018.

Tuesday’s settlement doesn’t eradicate the problem of e-cigarette use among youth, but it is a significant move to hold Juul accountable for its actions, Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, said in an interview.

“The state attorneys general did what they can do,” he said. “The efforts of attorneys general will succeed only if the FDA takes actions to remove from market the products that are causing the problem,” Myers said.

Juul said in a statement Tuesday that the settlement is part of its commitment to resolve its past issues.

“The terms of the agreement are aligned with our current business practices which we started to implement after our company-wide reset in the Fall of 2019,” Juul said. “With today’s announcement, we have settled with 37 states and Puerto Rico, and appreciate efforts by Attorneys General to deploy resources to combat underage use.”

Before Tuesday’s announcement of the settlement, the company had settled with four states, a spokesperson noted.

Texas Attorney General Ken Paxton (R) said in a statement that when he launched his state’s investigation into Juul two years ago, he wanted the company to be held liable for past wrongdoing and for it to change its practices so they would comply with the law.

“This settlement helps accomplish both of those priorities,” Paxton said. “My commitment to protecting consumers from deceptive business practices is unwavering, and any company that misleads Texans, especially our youth, will be held accountable for their actions.”

The settlement requires Juul to refrain from marketing to youths in a number of ways, including advertising in public transit or on billboards, paying influencers, or depicting anyone under 35 in advertisements.

Connecticut and Texas, which led the investigation, will receive $16.2 million and $42.8 million, respectively.

The settlement leaves many questions unanswered, said Carl Tobias, professor of law at the University of Richmond School of Law.

“Is it the right amount of money? Is this enough to get help to the people who were hurt?” he said, adding that it’s unclear whether the settlement will be enough to deter bad behavior.

Tobias said Juul isn’t the same company it was years ago, thanks to increased scrutiny on the vape industry as more has become known about vaping’s effects on the body.

“I don’t think [Juul] is as troubling now,” he said, referring to the company’s marketing that appeared to be targeting young demographics. “But the company made a lot of money off those products. … More could’ve been done to prevent injuries that didn’t need to arise.”

Juul said in its statement Tuesday that it remains focused on working to transition adult smokers away from cigarettes while combating underage use.

The addictive, flavored products remain a risk for youth, Myers said, citing a National Youth Tobacco Survey that found that nearly 85 percent of current youth e-cigarette users use flavored options.

As important as Tuesday’s decision was, Myers said, it still leaves room for other companies to step into Juul’s place to market and share their own flavored products.

“Juul is already doing a lot of things they agreed not to do,” he said. “In many respects, [the settlement] only prevents marketing Juul has already stopped doing.”

In 2019, Juul, faced with lawsuits and investigations, announced a “reset” designed to regain the trust of the public and regulators, and it took several steps to prevent teenagers from buying its products. The company halted television, print and digital advertising. After it took its sweet and fruity flavors off the market, sales fell, though the company still commands a large share of the market.

The most recent survey of youth tobacco use by the Food and Drug Administration and the Centers for Disease Control and Prevention shows that youth vaping has declined since its peak in 2019. About 11.3 percent of high school students and 2.8 percent of middle school students in the 2021 survey said they had used an e-cigarette at least once in the past 30 days, compared with 27.5 percent of high school students and 10.5 percent of middle school students in 2019. Still, the FDA said, e-cigarette use remains a concern, with more than 2 million middle and high school students reporting they vaped in the past 30 days.

The agency cautioned that changes to the 2021 methodology, prompted by the coronavirus pandemic, made it difficult to compare the results with previous years.

The youth-tobacco survey also showed that Puff Bar, a disposable e-cigarette that is sold in an array of flavored offerings, has become the most popular vaping brand among middle and high school students. Juul was fourth.

In June, the FDA’s Center for Tobacco Products denied Juul’s application to continue selling its e-cigarette device and pre-filled cartridges in menthol and tobacco flavors. The FDA said Juul had provided inadequate or conflicting information on the safety of its products and ordered the company to pull them off the market.

Juul said the FDA mishandled the application and missed or overlooked thousands of pages of data included in the submission. The company got an emergency stay from a federal appeals court delaying the FDA ban.

On July 5, the FDA tweeted that it had suspended the ban pending an internal review, outraging anti-vaping advocates and some lawmakers.

The company said in its statement Tuesday that it should receive marketing authorization from the FDA once the agency does a full review of science and evidence “without political interference.”

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