Juul Labs, the e-cigarette manufacturer, has consented to pay $462 million as a settlement for accusations by six American states, including New York and California, that it illegally promoted its addictive products to underage users, according to a source familiar with the situation.
This agreement brings Juul's total settlement sum with 45 states to over $1 billion. Though Juul did not admit any guilt in the settlement, it encompassed Colorado, Illinois, Massachusetts, New Mexico, and the District of Columbia in addition to the aforementioned states.
Juul remains involved in ongoing litigation in Minnesota, where a trial is in progress. Moreover, the company faces lawsuits or ongoing investigations in Florida, Michigan, Maine, and Alaska. In 2022, Juul agreed to pay $1.7 billion to resolve thousands of lawsuits filed by local government entities and individual customers.
In response to regulatory scrutiny, Juul withdrew most of its flavored products from the market in 2019 and significantly reduced its promotional efforts. The U.S. Food and Drug Administration (FDA) briefly banned the products in June but suspended the ban and agreed to reconsider the action after Juul appealed.
Altria Group Inc., Juul's former largest investor and Marlboro cigarette manufacturer, is also facing allegations regarding its purported involvement in promoting Juul's e-cigarettes and has not yet reached a settlement.
In exchange for some of Juul's intellectual property, Altria announced last month that it had relinquished its investment in the company. As of December, its Juul stake was valued at $250 million, a significant decrease from its $12.8 billion valuation in 2018.
The FDA's tobacco products center director stated last year that adolescent e-cigarette usage in the United States remained at "alarming levels" and posed a severe public health threat. Federal health officials reported in October that an estimated 2.55 million U.S. middle and high school students used e-cigarettes during a four-month period in 2022.
Most e-cigarettes contain nicotine, the addictive substance found in traditional cigarettes, cigars, and other tobacco products. The Centers for Disease Control and Prevention (CDC) has warned that nicotine use during adolescence can damage brain areas responsible for attention, learning, mood, and impulse control. Additionally, the CDC has stated that using nicotine in adolescence may increase the risk of addiction to other substances in the future.
