Juul Labs, the e-cigarette giant, will pay $22.5 million to settle a lawsuit brought by Washington state that alleged it intentionally targeted teenagers with its products, while deceiving consumers about the addictiveness of its vaping products, Attorney General Bob Ferguson announced Wednesday.
“Juul’s conduct harmed Washingtonians,” Ferguson said. “Juul violated the law; they did it over and over again.”
Ferguson said that the company “fueled a staggering rise in vaping use” that “reversed decades of progress in fighting youth nicotine addiction.”
Under the terms of the settlement Juul admits no wrongdoing or liability, and says it settled “for the purpose of compromising” and to avoid further litigation.
Juul must also stop all advertising that appeals to youth and stop most social media advertising, with limited exceptions. It can continue to run Twitter, YouTube and LinkedIn ads that feature adults who were habitual cigarette smokers giving testimony about Juul products.
Juul had already, in 2019, announced the suspension of all print, broadcast and digital advertising in the United States.
Juul also must conduct a “secret shopper” program in Washington to confirm the ages of its customers, with at least 25 checks per month for at least two years. The secret shopper program, described by Ferguson as the “most robust” in the country, requires the shoppers to confirm retailers are complying with age and product limits and then report back to the attorney general.
The settlement money will be paid out over four years. Ferguson’s office will use it to establish a new “health equity” unit to respond to “deceptive and discriminatory health care practices that disproportionately impact vulnerable communities and communities of color.”
Austin Finan, a Juul spokesperson, said the company supports efforts to address underage use, including future monitoring and enforcement.
“This settlement is another step in our ongoing effort to reset our company and resolve issues from the past,” Finan said. “The terms of the settlement are consistent with our current business practices and past agreements to help combat underage use while offering adult smokers access to our products as they transition away from combustible cigarettes.”
Juul currently faces similar lawsuits in at least 12 other states, Ferguson said.
Ferguson’s lawsuit, filed in 2020 in King County Superior Court, alleged that beginning in 2015, Juul used a social media campaign of young models, with bright colors and “concepts of being ‘cool,’ ‘smooth,’ and ‘hip.'”
Juul used “youth friendly flavors” in an introductory starter pack that included cool mint, fruit medley and crème brûlée, Ferguson wrote, alleging that Juul “knew that these flavors were the most popular with underage consumers.”
The marketing worked. In 2019, more than 20% of high school sophomores reported using vape products in the previous 30 days, according to a New England Journal of Medicine study. Juul, at the time, had more than 70% of the e-cigarette market, Ferguson wrote.
But teenager e-cigarette use has seen declines more recently. In 2020, 19.6% of high schoolers reported recent e-cigarette use, according to the CDC’s National Youth Tobacco Survey. Last year, that number fell to 11.3%.
Juul stopped selling fruit and dessert flavors in October 2019 as it attempted to quell political backlash, although the discontinued flavors accounted for less than 10% of the company’s sales.
The company also deceptively marketed its e-cigarettes to all consumers, not just kids and teenagers, Ferguson alleged. The company represented one Juul pod as having about the same nicotine content as a pack of cigarettes, Ferguson wrote, when one pod can actually deliver twice as much nicotine as a pack of cigarettes.
Juul also marketed its products as a quit-smoking device despite not having the requisite FDA approval to make such claims, Ferguson alleged.
“The existing evidence is insufficient to demonstrate JUUL products are effective to help users quit smoking,” Ferguson wrote. “By contrast, the opposite concern is very real: that people (especially youth) begin using e-cigarettes and transition to traditional cigarettes.”
The settlement is the latest in a series between Juul and states that alleged the company had engaged in deceptive practices and marketed its e-cigarettes to kids.
In November, the company agreed to pay Arizona $14.5 million and vowed not to market to young people in the state. Last June the company agreed to pay North Carolina $40 million, even as it denied any wrongdoing or liability. The company also said it has reached a settlement with Louisiana.