Illinois to get $67.6 million from $462 million multistate settlement with Juul
CHICAGO (CBS/AP) -- Embattled electronic cigarette-maker Juul Labs will pay $67.6 million to the state of Illinois, as part of a $462 million settlement with six states and the District of Columbia, marking the largest settlement the company has reached so far for its role in the youth vaping surge, Illinois Attorney General Kwame Raoul announced Wednesday.
In 2019, Illinois sued Juul, accusing the company of marketing its nicotine products to minors.
The agreement with Illinois, California, Colorado, Massachusetts, New Mexico, New York, and Washington, D.C. marks the latest in a string of recent legal settlements Juul has reached across the country with cities and states.
"Juul has intentionally targeted minors for the sale of its e-cigarettes. After inappropriately marketing its product as a smoking cessation device, Juul products actually served as a gateway to cigarette use for youth who had never smoked before," Raoul said in a press release. "This settlement is a step toward holding Juul accountable, and I am committed to continuing to partner with advocates, lawmakers, and state and federal regulators to enact policies that protect minors from e-cigarettes and other addictive tobacco products."
The $462 million settlement also includes the following agreements, according to Raoul's office:
- Juul shall not take any action that directly or indirectly targets youth within Illinois in the promotion of its products.
- Juul shall not use social media influencers to promote its products.
- Juul must require consumers to be age verified at the first point of access to its website before the consumer can view any content.
- Juul shall not promote products in any media unless 85% or more of the individuals comprising the audience of the media are 21 and older.
- Juul shall not use billboards in Illinois.
- Juul shall not include anyone in its marketing distribution lists who is not age verified.
- Juul shall not sell Juul Pods at a nominal price.
- Any statement about the nicotine content of Juul's products in any promotional materials must disclose the amount of nicotine measured by both weight and volume.
- Juul shall not in any promotional materials make a claim that its products are safer or healthier than combustible cigarettes or smoking cessation devices, unless the company receives written authorization from the FDA to make such claims or representations.
- Juul must maintain a retailer compliance program that includes specific requirements, checks and consequences for compliance failures.
Juul and its co-defendants also must make all documents from the case available to the public through a a repository, and pay $5 million to cover those costs.
It's just the latest settlement for Juul over claims it marketed its products to children.
On Monday, the vaping company agreed to pay $7.9 million to settle a lawsuit alleging the company violated West Virginia's Consumer Credit and Protection Act by marketing its products to underage users. Last month, the company agreed to a $23.8 million with the city of Chicago.
Minnesota's case against Juul went to trial last month with the state's Attorney General Keith Ellison asserting that the company "baited, deceived and addicted a whole new generation of kids after Minnesotans slashed youth smoking rates down to the lowest level in a generation."
Juul has laid off hundreds of employees since last fall, and plans to slash its operations by 30% to 40%, Reuters reported.
Like some other settlements reached by Juul, the latest agreement includes various restrictions on the marketing, sale and distribution of the company's vaping products. For example, it is barred from any direct or indirect marketing that targets youth, which includes anyone under age 35. Juul is also required to limit the amount of purchases customers can make in retail stores and online.
Public health crisis
"Juul lit a nationwide public health crisis by putting addictive products in the hands of minors and convincing them that it's harmless," New York Attorney General Letitia James said in a statement. "Today they are paying the price for the harm they caused."
New York sued Juul in 2019, accusing the e-cigarette maker of lying about the nicotine content of its products, falsely depicting them as safer than cigarettes and spurring a surge of youth nicotine addiction.
James said the $112.7 million due to New York will pay for underage smoking abatement programs across the state. The company will pay in eight annual installments, James said.
District of Columbia Attorney General Brian Schwalb said in a statement that Juul "knew how addictive and dangerous its products were and actively tried to cover up that medical truth."
A spokesperson for the Washington D.C.-based Juul said that with Wednesday's settlement, "we are nearing total resolution of the company's historical legal challenges and securing certainty for our future."
The spokesperson added that underage use of Juul products has declined by 95% since 2019 based on the National Youth Tobacco Survey. According to the CDC, though, since surveys were administered online instead of on school campuses during the pandemic, the results cannot be compared to prior years.
In September, Juul agreed to pay nearly $440 million over a period of six to 10 years to settle a two-year investigation by 33 states into the marketing of its high-nicotine vaping products to young people. That settlement amounted to about 25% of Juul's U.S. sales of $1.9 billion in 2021.
Three months later, the company said it had secured an equity investment to settle thousands of lawsuits over its e-cigarettes brought by individuals and families of Juul users, school districts, city governments and Native American tribes.
Juul rocketed to the top of the U.S. vaping market about five years ago with the popularity of flavors like mango, mint and crème brûlée. But the startup's rise was fueled by use among teenagers, some of whom became hooked on Juul's high-nicotine pods.
Parents, school administrators and politicians have largely blamed the company for a surge in underage vaping.
