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Juul Labs Inc. has agreed to pay $40 million to the state of North Carolina to resolve a lawsuit alleging that the vaping startup had targeted underage users.
The lawsuit by the attorney general of North Carolina was slated to go to trial in July, one of hundreds of similar cases brought against the e-cigarette company by state officials, school districts and young people. Those cases are pending.
North Carolina’s lawsuit alleged that Juul designed and marketed its e-cigarettes to attract teenagers and misrepresented the potency of their nicotine.
Juul has said that it didn’t target young people and is working to regain the public’s trust.
As part of the North Carolina settlement, announced by state Attorney General
Josh Stein
on Monday, Juul agreed not to sell sweet and fruity flavors, which the vaping company voluntarily stopped selling in the U.S. in 2019 unless authorized by the Food and Drug Administration.
A trove of internal Juul documents will be deposited at a North Carolina university and will be made available to the public by July 2022. The settlement funds, to be paid over six years, will support scientific research on youth vaping cessation and curbing youth use.
“We look forward to working with Attorney General Stein and other manufacturers on the development of potential industrywide marketing practices based on science and evidence,” a Juul spokesperson said. “In addition, we support the attorney general’s desire to deploy funds to generate appropriate science to support North Carolina’s public health interventions to reduce underage use.”
Juul didn’t admit wrongdoing as part of the settlement.
Widely blamed by parents and government officials for a surge in teen vaping from 2017 to 2018, Juul has faced regulatory crackdowns and federal investigations into its marketing practices.
North Carolina Attorney General Josh Stein after being reelected in November.
Photo:
jonathan drake/Reuters
“Juul sparked and spread a disease, the disease of nicotine addiction. They did it to teenagers across North Carolina and this country simply to make money,” Mr. Stein said at a news conference Monday. “Their greed is not only reprehensible, it is unlawful.”
Juul’s first marketing campaign in 2015, called “Vaporized,” pitched the brand as a cool lifestyle accessory with images of people in their 20s and 30s, which critics say made the brand attractive to teens. Later, as sales of the sleek devices took off in 2017, Juul-related posts exploded on Instagram and
with photos posted by young people using the product.
After a new chief executive took the helm of the e-cigarette maker in 2019, Juul halted most of its U.S. advertising, cut more than 1,500 jobs, stopped selling sweet and fruity flavors in the U.S. and reversed its overseas expansion. The company’s valuation has plummeted to about $4 billion from $38 billion in 2018.
Youth vaping fell in 2020 after federal restrictions raised the legal purchase age for tobacco products to 21 and took fruity-flavored e-cigarette cartridges off the U.S. market.
Juul also is on trial facing charges that it broke antitrust laws when tobacco giant
Altria Group Inc.
took a 35% stake in the startup in 2018. The Federal Trade Commission is pushing to unwind that deal. Testimony in the trial wrapped up last week and a ruling is expected in a few months.
Thirteen other attorneys general have sued Juul, including the District of Columbia.
Write to Jennifer Maloney at [email protected]
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