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E-Cigarette Company JUUL Reaches Nearly $440 Million Agreement with Dozens of States Over Alleged Efforts to Capture Youth Vaping Market

LOS ANGELES, CALIFORNIA - JUNE 22: Packages of Juul e-cigarettes are displayed for sale in the Brazil Outlet shop on June 22, 2022 in Los Angeles, California. The Food and Drug Administration (FDA) is reportedly preparing to order Juul Labs Inc. to remove its e-cigarette products from the U.S. market. (Photo by Mario Tama/Getty Images)

Packages of Juul e-cigarettes are displayed for sale in the Brazil Outlet shop on June 22, 2022 in Los Angeles, California.

The makers of a leading cigarette alternative that skyrocketed to popularity in the 2010s has reached a massive settlement with dozens of states over its marketing practices and concerns that children and teens were using its products.

According to a press release, 33 states have reached a $438.5 million agreement with e-cigarette company JUUL Labs following an investigation into the company’s alleged efforts to get kids and teens hooked on its product through misleading marketing campaigns that critics say resulted in a vaping crisis among American youth.

That investigation was launched in 2020.

According to a press release on Tuesday, the investigation revealed that JUUL “willfully engaged in an advertising campaign that appealed to youth, even though its e-cigarettes are both illegal for them to purchase and unhealthy for children.”

“The investigation found that JUUL relentlessly marketed to underage users with launch parties, advertisements using young and trendy-looking models, social media posts and free samples,” the press release said. “It marketed a technology-focused, sleek design that could be easily concealed and sold its product in attractive flavors.”

Moreover, the press release says, JUUL “manipulated the chemical composition” of the vapor so that it was easier on throats of “young and inexperienced users,” and relied on age verification techniques that it “knew were ineffective.”

The states also allege that JUUL’s original packaging was misleading, failing to clearly disclose that it contained nicotine, and that JUUL “misrepresented that its product was a smoking cessation device without FDA approval to make such claims.”

The investigation into JUUL was led by Attorneys General William Tong (D), of Connecticut, Ellen Rosenblum (D), of Oregon, and Ken Paxton (R), of Texas.

Oregon announced that it expects to receive at least $18.8 million and up to $20.5 million, Connecticut will receive a minimum of $16.2 million, and Texas expects to receive $42.8 million.

The total payout is expected to take place over a six- to 10-year timeline, according to representatives from Paxton’s office, but the longer JUUL waits to make payment, the more it will pay overall.

“If JUUL chooses to extend the payment period up to ten years, the final settlement would reach $476.6 million,” the press release says.

Under the settlement, according to multiple state press releases, JUUL has agreed to refrain from:

  • Youth marketing
  • Funding education programs
  • Depicting persons under age 35 in any marketing
  • Use of cartoons
  • Paid product placement
  • Sale of brand name merchandise
  • Sale of flavors not approved by FDA
  • Allowing access to websites without age verification on landing page
  • Representations about nicotine not approved by FDA
  • Misleading representations about nicotine content
  • Sponsorships/naming rights
  • Advertising in outlets unless 85 percent audience is adult
  • Advertising on billboards
  • Public transportation advertising
  • Social media advertising (other than testimonials by individuals over the age of 35, with no health claims)
  • Use of paid influencers
  • Direct-to-consumer ads unless age-verified, and
  • Free samples.

“The agreement also includes sales and distribution restrictions, including where the product may be displayed/accessed in stores, online sales limits, retail sales limits, age verification on all sales, and a retail compliance check protocol,” the press release said.

In a statement, JUUL signaled that the company supports efforts to prevent kids from accessing its products.

“This settlement with 34 states and territories is a significant part of our ongoing commitment to resolve issues from the past,” a company spokesman told Law&Crime in an email. “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. 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.”

In December of 2019, JUUL announced a commitment to “reset the vapor category” following a meeting with then-President Donald Trump that covered topics included the issue of underage vaping.

Pursuant to that reset, according to the company, JUUL “reduced its product portfolio to Tobacco and Menthol, helped implement Tobacco 21 which raised the minimum purchase age from 18, [and] halted television, print, and digital product advertising[.]”

The e-cigarette maker, however, is still fighting an FDA order from June that barred JUUL from selling and distributing its products in the U.S. According to the statement from JUUL:

We remain focused on the future as we work to fulfill our mission to transition adult smokers away from cigarettes – the number one cause of preventable death – while combating underage use. We recently submitted an administrative appeal, based on science and evidence, to FDA, demonstrating that its marketing denial order (MDO) of our products was substantively and procedurally flawed and should be rescinded. We believe that once the FDA does a complete review of all of the science and evidence presented, as required by law, and without political interference, we should receive marketing authorization. As we go through the FDA’s administrative appeals process, we continue to offer our products to adult smokers throughout the U.S.

The FDA stayed the MDO in July pending further review. In its statement regarding Tuesday’s settlement announcement, JUUL said that part of its 2019 “reset” included expanding the company’s “science and evidence-based capabilities” to support its application to the FDA to market products in the U.S.

The states and territories that joined Connecticut, Oregon, and Texas in the investigation are: Alabama, Arkansas, Delaware, Georgia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Maryland, Maine, Mississippi, Montana, North Dakota, Nebraska, New Hampshire, New Jersey, Nevada, Ohio, Oklahoma, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Virginia, Vermont, Wisconsin, and Wyoming.

[Image via Mario Tama/Getty Images]

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