Formerly San Francisco-based e-cig maker Juul Labs has just settled one of a slew of lawsuits that it's still facing over the marketing of its products to young people, and over the potential harms of its products.
The latest settlement is with the State of Connecticut, 32 other states, and Puerto Rico, and as part of it, Juul has agreed to cease a number of its business practices that have largely already ceased, and to pay out $438.5 million which states say they will use for vape-cessation and nicotine-reduction campaigns.
"JUUL’s cynically calculated advertising campaigns created a new generation of nicotine addicts," says Connecticut Attorney General William Tong in a statement.
"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 public health ramifications of this misconduct are yet unknown."
The settlement ends a two-year, multi-state investigation. Juul has additionally agreed to refrain from any sponsorship or naming-rights agreements, to cease marketing to all youth demographics, and to refrain from depicting anyone using their products in advertising who looks under the age of 35.
Juul continues to be able to sell its products in the U.S. following a June court appeal and under a temporary agreement with the Food and Drug Administration (FDA), but the company's market share in the e-cig industry has dwindled considerably amid its FDA and legal troubles. Back in May 2019, Juul had a dominant 75% share of the market, but VaporVoice reported that as of June 22 that was down to around 34.4%, with competitor Vuse having overtaken Juul in the U.S. by a slim margin. This came as the FDA tried to make Juul pull all of its products off of U.S. shelves that same month, and the agency continues to conduct its own thorough safety review of those products.
A spate of illnesses across the U.S. linked to black-market vape cartridges did not help Juul's PR cause, and rates of teen vaping are, at least according to one survey, down significantly due to a year plus of at-home schooling in the pandemic — though it's not clear if it has since rebounded.
In 2019, Juul Labs infamously abandoned an $11.6 million campaign to overturn San Francisco's ban on vape-pod sales, and by June of 2020 the company announced it was moving its headquarters out of San Francisco to Washington, D.C., saying it wanted to distance itself from Silicon Valley startup culture. But being closer to the politicians and regulators that will decide the future of its stateside business probably doesn't hurt.
As the Associated Press reports, Juul still faces nine separate lawsuits from other states. Those include one filed in November 2019 by the state of California and Los Angeles County, which focuses on its youth advertising campaigns and its alleged failure to warn young consumers about the health risks of vaping. A federal judge in San Francisco in June certified four classes as being eligible to sue Juul Labs and parent company Altria Group Inc. over various issues surrounding misleading marketing.
The AP notes that the company continues to also face hundreds of separate lawsuits brought by individual consumers, as well.
In a statement to the AP, a Juul spokesperson said, "We remain focused on our future as we fulfill our mission to transition adult smokers away from cigarettes — the number one cause of preventable death — while combating underage use."