Yahoo Finance Juul to pay $462 million in deceptive ads settlement with 6 US states and DC
Six U.S. states and the District of Columbia reached a $462 million settlement with e-cigarette giant Juul Labs.
The settlement represents the company's largest multi-state agreement to date to end one of a string of disputes over its allegedly deceptive ads targeting children.
Announced Wednesday, the settlement ends lawsuits against the company brought starting in 2019 by California, Colorado, Illinois, Massachusetts, New Mexico, New York, and the District of Columbia. The suits accuse Juul of violating their respective state laws that prohibit harmful and deceptive marketing practices.
Juul, owned in part by tobacco giant Altria (MO), did not admit wrongdoing in entering the settlement.
“Taking a page out of Big Tobacco’s playbook, Juul misled consumers about the health risk of their products,” New York Attorney General Letitia James said during a press conference Wednesday.
“The e-cigarette company falsely led consumers to believe that its vapes were safer than cigarettes and contained less nicotine. However, just one pod of Juul contains as much nicotine as a whole pack of cigarettes.”
James went on to criticize Juul for allegedly glamorizing its flavored nicotine products using ads featuring young models smoking the e-cigarettes at parties in New York’s ritzy Hamptons, and for direct outreach to high school students in at least one New York City school.
In addition to financial settlements to be apportioned between the states and D.C., the settlement also places restrictions on how and where Juul’s e-cigarette vaping products can be sold.
The accord also requires the company to secure its products behind retail store counters and verify the age of those who directly sell or promote its products online. Additional restrictions will prohibit the company from participating in giveaways and sponsorships that involve minors and from using minors in ads.
The attorneys general said their respective settlement funds will be used to assist minors harmed by e-cigarette use, and for research, education, and enforcement related to nicotine health risks.
Juul's settlement will be paid to the sates over an eight-year period. New York is slated to receive $112.7 in settlement funds. Massachusetts will get $41 million. The District of Columbia will receive $15.2 million, $175.8 million will go to California, $32 million will be paid to Colorado, $67.6 will be paid to Illinois, and approximately $17 million will go to New Mexico.
In a statement emailed to Yahoo Finance, District of Columbia Attorney General Brian Schwalb said: “JUUL preyed on children for profit, implementing an intentionally deceptive, manipulative marketing campaign targeting underage users with the intention of creating addicted customers. JUUL knew how addictive and dangerous its products were and actively tried to cover up that medical truth.”
The settlement is also binding on Juul’s former directors and executives, Adam Bowen, Hoyoung Huh, James Monsees, Nicholas Pritzker, and Riaz Valani, and any business those former executives control that sell nicotine products.
In a statement concerning the settlement with the seven attorneys general, Juul said the agreement represents another critical part in its "ongoing commitment to resolve issues from the company’s past," and moves the company to near total resolution of its historical legal challenges.
According to Juul, the company has now settled with 47 states and territories, providing over $1 billion to participating states. The figure is addition to its effort to resolve more than 5,000 private U.S. lawsuits involving approximately 10,000 plaintiffs.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
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