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Juul to pay $462 million to six states over youth addiction claims

Posted On: Apr. 12, 2023 12:42 PM CST


(Reuters) — E-cigarette maker Juul Labs Inc. has agreed to pay $462 million to settle claims by six U.S. states, including New York and California, that it unlawfully marketed its addictive products to minors, the states announced Wednesday.

With the deal, Juul has now settled with 45 states for more than $1 billion. The company did not admit wrongdoing in the settlement, which also includes Colorado, Illinois, Massachusetts and New Mexico as well as the District of Columbia.

The states had accused Juul of falsely marketing its e-cigarettes as less addictive than cigarettes and targeted minors with glamorous advertising campaigns.

“Juul's lies led to a nationwide public health crisis and put addictive products in the hands of minors who thought they were doing something harmless,” New York Attorney General Letitia James said at a news conference.

The company said that use of its products by people under age 18 had fallen by 95% since the fall of 2019, when it changed its marketing practices as part of a “companywide reset.”

“With this settlement, we are nearing total resolution of the company's historical legal challenges and securing certainty for our future,” Juul said in a statement.

Juul is still facing a lawsuit by Minnesota, where a trial is currently underway, as well as lawsuits or open investigations by Florida, Michigan, Maine and Alaska. In addition to the state settlements, the company last year agreed to pay $1.7 billion to settle thousands of lawsuits by local government entities and individual consumers.

Under pressure from regulators, Juul in 2019 pulled most of its flavors from the market and halted much of its advertising. The U.S. Food and Drug Administration last June briefly banned the products, though it put the ban on hold and agreed to reconsider the action after the company appealed.

Juul's former largest investor, Marlboro cigarette maker Altria Group Inc., is also facing claims over its alleged role in marketing Juul's e-cigarettes and has not settled.

Altria last month announced that it had given up its investment in Juul in exchange for some of Juul's intellectual property. As of December, its share of Juul was valued at $250 million, down from $12.8 billion in 2018.