Juul Labs Reaches $438.5M Settlement Over Youth Marketing

This week, electronic cigarette manufacturer Juul Labs Inc. announced a $438.5 million settlement agreement with over 30 states, requiring changes to the company's allegedly youth-targeted marketing practices. However, it does not address the separate lawsuits brought by hundreds of school districts claiming harm from the rapid rise of student e-cigarette use.

The school district lawsuit has been consolidated in the San Francisco Federal District Court, considered the "lead" case in its category, and the case brought forth by the San Francisco Unified School District is scheduled for trial in November.

Another type of lawsuit, known as multi-district litigation, involves personal injury claims made by Juul users. A trial for one such case was scheduled this month, involving a Tennessee teenager who began using the company's e-cigarettes at the age of 12.

Georgetown University law professor Heidi Li Feldman stated, "Settlements are made by the parties involved, so reaching a settlement with certain states will not affect lawsuits brought by other entities such as school boards and cities, who may claim different harms." Feldman is an expert in the field of product liability and infringement lawsuits. This statement was made in the Washington D.C. area.

The separate lawsuits filed by school districts indicate that a lesson has been learned from the large multistate settlement agreement reached with tobacco companies in the 1990s, which centralized funds at the state government level but neglected cities, counties, and school districts.

I believe that the lingering issues of tobacco litigation have prompted municipal authorities and school boards to be more vigilant in ensuring that any harm caused specifically to them is addressed by resolving any lawsuits against corporations," said Feldman.

Connecticut Attorney General William Tong on Tuesday announced a settlement agreement between Juul and 33 states and Puerto Rico. According to Tong, investigations in each state revealed that the San Francisco-based company "ruthlessly marketed e-cigarette products to minors, manipulated their chemical composition to be more palatable to inexperienced users, employed inadequate age verification procedures, and misled consumers about the nicotine content and addictive nature of their products.

As part of a settlement agreement, Juul has agreed to avoid using cartoons, depicting individuals under the age of 35 in advertisements, hiring young social media influencers, and offering free samples as a form of marketing towards youth.

E-cigarette company Juul has reached settlements with four states and is facing additional cases brought by nine state attorneys general. The company has also appealed a June order from the FDA to remove its products from the market.

However, this settlement "is completely separate from the ongoing federal multidistrict litigation (MDL), in which hundreds of lawsuits filed by school districts are still pending," stated Wagstaff & Carter, a Missouri-based law firm representing many school district lawsuits.

The lawsuit alleges that Juul and certain other defendants "targeted children as their customer base." "The design of Juul products appears sleek and high-tech, like a cool gadget, with features like 'party mode' video games, and offers flavors such as mango and cool mint that are attractive to children... All of this because the defendants knew that flavors would appeal to young people. They masqueraded under the guise of preventing youth smoking, sending representatives directly to schools to research teenagers' e-cigarette preferences.

According to evidence cited in a complaint, Juul allegedly told ninth-grade students during a 2018 speech that their products were "much safer than cigarettes" and completely safe.

According to the lawsuit, the San Francisco school district had to create a plan to address the issue of students using e-cigarettes and redirect personnel to monitor areas such as school bathrooms for safety purposes.

Juul argues that the lawsuit filed by the San Francisco school district lacks evidence. In a motion for summary judgment filed in August regarding the school case, Juul stated that a revised complaint filed by the San Francisco area indicates that the initial allegations of the lawsuit are unsupported by evidence.

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