On Wednesday, New York, California, and other states announced that they had reached a $462 million settlement with Juul Labs to end litigation alleging the business had targeted minors in its marketing of e-cigarettes, contributing to a widespread epidemic of youth smoking.
The agreements with 47 states and territories, as well as 5,000 people and local governments, put the company’s legal difficulties to an end. Juul’s trial in Minnesota is exceptional in that no agreement has been reached between the parties.
However, the business has already spent about $3 billion attempting to negotiate bargains over the litigation, a huge amount for a corporation still seeking formal regulatory licence to continue selling its medicines.
Claims from seven states and the District of Columbia (D.C.), including New York, California, Colorado, Illinois, Massachusetts, and New Mexico, have been settled as of the most recent settlement. It follows earlier litigation settlements that criticised Juul for not forewarning adolescent users about the addictive qualities of the high doses of nicotine in its e-cigarettes.
After conducting investigations, the attorneys general in those states claimed to have discovered that Juul officials knew that its original marketing enticed teenage users to purchase its stylish vape pens, but did little to address the issue as youth smoking rates skyrocketed.
New York Attorney General Letitia James stated at a news conference on Wednesday that the firm “falsely led consumers to believe that its vapes were safer than cigarettes and contained less nicotine” by throwing lavish parties in Manhattan and the Hamptons.
The largest portion of the settlement, estimated at roughly $176 million, would go to the state of California. At a press conference on Wednesday, Attorney General Rob Bonta claimed that after years of decreases in cigarette smoking among younger Americans, Juul exploited the strategies of Big Tobacco to spark a juvenile nicotine epidemic.
In 2019, Juul’s sales were booming and the firm was valued at an enviable $38 billion thanks to novel flavours like mango and crème brûlée. Federal statistics indicated that 27.5% of high school students reported smoking e-cigarettes, with more than 50% citing Juul as their brand of choice, causing the bubble to begin to burst. When public opinion turned against Juul, the business shifted its marketing to emphasise its role in assisting people in their transition away from conventional cigarettes.
Although the 2019 teen vaping epidemic seems to have subsided, public health experts are nevertheless alarmed by the fact that 2.5 million teens report smoking e-cigarettes, a rate far greater than that of adults.
Approximately 4.5% of individuals are regular users of electronic cigarettes, according to the CDC. In 2022, around 9 percent of students who responded to a yearly poll conducted in middle and high schools said they had used electronic cigarettes over the preceding 30 days. Half as many high school pupils vaped in that study as did during the height of the crisis in 2019, when 29% of students said they did so.
While the recent drop has been celebrated, statistics revealing the frequency of usage has disturbed those who are against e-cigarettes; over half of high school pupils who reported vaping claimed they did so on 20-30 days a month.
Since the company caved to public and regulatory pressure and removed several of its flavoured goods from sale, it is no longer in a leading position in the market.
For a long time last year, many people thought that Juul would eventually have to file for bankruptcy. The Wall Street Journal reported in late November that two of the company’s directors and early investors had offered a financial injection and that the company would be laying off nearly a third of its workforce, or around 400 individuals.
