E-cigarette giant Juul Labs has agreed to a $40 million settlement in a North Carolina case alleging the company marketed its products towards children and teenagers.
The company will also be forced to adjust its marketing to avoid potentially marketing towards youngsters.
Jull will now no longer be able to use people under the age of 35 in marketing material, advertise near schools or sell fruit flavors that are popular among teens.
The settlement comes as teen tobacco use is on the rise after a long period of declines, and while products like flavored e-cigarettes are getting targeted by regulators.
Juul, the largest e-cigarette brand in the United States, will pay out a $40 million settlement in a lawsuit alleging it marketed its products towards children
‘North Carolina is now the first state in the nation to hold Juul accountable for its instrumental role in creating a youth vaping epidemic,’ said Josh Stein, North Carolina Attorney General, after the hearing on Monday.
Stein filed the lawsuit on behalf of North Carolina in 2049, making the Tar Heel State the first to bring this type of lawsuit against Juul.
‘Juul sparked and spread a disease, the disease of nicotine addiction,’ Stein said.
‘They did it to teenagers across North Carolina and this country, simply to make money. Their greed is not only reprehensible, it is unlawful and that is why I took action.’
He brought forward the suit after ‘hearing from friends about the devastation that this product had visited on kids’ lives – addiction, depression, bad grades, switching schools, medical treatment and more,’ he said at a news conference.
Teen use of e-cigarettes skyrocketed more than 70 percent after Juul’s launch in 2015, leading the U.S. Food and Drug Administration to declare an epidemic of underage vaping among teenagers.
Health experts said the unprecedented increase risked hooking a generation of young people on nicotine, an addictive chemical that is harmful to the developing brain.
The design of Juul devices make them easy to use, carry and conceal for teens. They also come in fruity and candy flavors that are attractive to younger people
The many flavors of the e-cigarettes, combined with their ease of use and the ability to conceal them since they look like a standard USB device, have made them popular among high school students.
Juul argued that there products actually provide health benefits, as it attracts teens to smoking nicotine rather than the more harmful tobacco, according to the News & Observer.
‘This settlement is consistent with our ongoing effort to reset our company and its relationship with our stakeholders, as we continue to combat underage usage and advance the opportunity for harm reduction for adult smokers,’ Juul said in a statement after the court hearing.
‘We seek to continue to earn trust through action.’
Juul will pay out the first $13 million of the suit in the next 30 days, then pay the remainder over the following six years.
Several states, including Florida, Texas and Oregon, have filed their own lawsuits against Juul.
A group of 39 state attorneys general have been cooperatively investigating the company’s marketing and products since February 2020.
Juul also faces hundreds of personal injury lawsuits from customers and families of young people who said they were hurt or addicted by the company’s products, which have been consolidated in a California federal case.
A target has been placed on e-cigarettes and their manufacturers in recent years.
Last year, sale of all electronic cigarettes was banned in San Francisco and Chicago banned the sale of flavored nicotine.
Teen use of e-cigarattes has increased by 70% since Juul first launched in 2015
The entire state of New York became the first to do so when it banned the sale of flavored tobacco products last year.
A bill in Florida that would have done the same passed through the state legislature in 2020, but was vetoed by Gov Ron DeSantis.
Members of Congress are pressuring the U.S. Food and Drug Administration (FDA) to follow suite, and put a national ban on the devices in place.
Led by Rep Katie Porter of California, the House Oversight and Reform Committee pressured FDA Commissioner Dr Janet Woodcock to ban flavored e-cigarettes.
Woodcock refused to commit to doing so.
Earlier this year, the FDA announced they would work towards pulling menthol cigarettes off the market, as the mint-like flavor of them are also believed to assist in getting teens addicted to tobacco.