E-cigarette giant Juul Labs will pay $14.5 million to Arizona and not market to young people in the state to settle a consumer fraud lawsuit filed by the Arizona Attorney General’s office.
PHOENIX — E-cigarette giant Joule Labs will pay $14.5 million to Arizona and has vowed not to market to young people in the state to settle a consumer fraud lawsuit.
The settlement announced Tuesday by Attorney General Mark Branovich is the second Juul has reached with state prosecutors. This concludes a lawsuit filed in January 2020 by a Republican US Senate candidate against Juul and another manufacturer of electronic cigarettes, alleging that they illegally targeted youth in their marketing.
Arizona previously obtained a $22.5 million judgment against inactive vaping product maker EonSmoke, but is unlikely to collect any money.
Juul Labs did no wrong in settling the matter and called it “another step in our ongoing effort to reset our company.” The company had ceased all advertising and sales of all flavored products except menthol before suing Bronovich.
Juul has faced lawsuits from several states over the marketing of its products, which it describes as a safer alternative to regular tobacco products. In June, it reached a similar deal with the attorney general of North Carolina that included a $40 million payment and pledged not to market to minors and to boost enforcement of retailers selling their products. Litigation remains with a handful of other states.
All except $2 million of the $14.5 million Arizona agreement will be used for programs that discourage the use of vaping products, including cessation and education programs designed to prevent use and nicotine addiction by young people. Juul also agreed in the consent decree to implement a stricter retailer monitoring program, where it would conduct compliance checks of at least 25 stores per month in Arizona for two years and take action against those who illegally Sell to underage smokers.
The agreement requires Juul not to advertise near schools or target anyone under the age of 21 and not to use social media to market. This is not an advertisement at all.
The other $2 million will go to a state account that the attorney general uses to fund consumer fraud investigations.
“Today’s settlement holds Juul responsible for its irresponsible marketing efforts that pushed Arizona minors to nicotine and its subsequent addiction,” Branovich said in a statement. “Combating the youth vaping epidemic remains a priority for our office, thanks to our undercover Counter Strike program and zero tolerance for misleading or deceiving vaping companies.”
Juul said in its statement on the Arizona agreement that it will “continue to work with federal and state stakeholders to advance a fully regulated, science-based marketplace for vapor products.”
It said it would continue to support the “Tobacco 21” anti-smoking group and take back enforcement action against illegal vaping products that “endanger the ability of alternative vaping products to reduce harm.”
The company, which is partly owned by tobacco giant Altria Group, said it is in discussions to settle lawsuits filed by other states.
It exploded among young people in recent years, attracting the concerns of health experts and state and federal regulators. But an FDA report released in September showed that school closures due to the coronavirus pandemic have resulted in a sharp drop in young people.
This was the second straight annual drop in teen vaping and followed the 2019 enactment of a new federal law that raised the purchase age for all tobacco and vaping products from 18 to 21. Shortly after, the FDA banned nearly all flavors from the small, cartridge-based ones. Based on e-cigarettes, products were blamed for the large increase in the use of teenagers.