The state of Minnesota has settled its lawsuit against e-cigarette manufacturer Juul Labs and tobacco company Altria for $60.5m. The settlement sum is the highest per capita of any US state that sued Juul over youth vaping and marketing practices. Minnesota’s lawsuit was the first, and still the only, US case against Juul to go to trial. The settlement was agreed outside of court but kept confidential for 30 days before being filed publicly. Minnesota’s Attorney General Keith Ellison said the size of the compensation shows that the state’s decision to go to trial was correct. He added that the sum was greater than Juul’s earnings in Minnesota from 2015 to 2021.
Many of the thousands of US vaping lawsuits against Juul Labs have settled, including dozens with individual states and territories. Last month, the company agreed to pay $462m to six states and the District of Columbia to settle lawsuits relating to its marketing tactics. As part of the settlement, Juul agreed not to market its products to anyone under the age of 35 and to limit sales in retail outlets and online. Minnesota’s Attorney General, Keith Ellison, set out to secure at least $100m in damages from Juul and Altria, the tobacco giant that owns a 35% share of Juul. Under the terms of the settlement, Minnesota would have received just $15m if it had accepted the same deal as most other states.
Juul and Altria have agreed to pay $60.5 million as part of a settlement with the State of California. The terms of the agreement stipulate that over a third of the settlement amount will be paid within a 30 day period, and more than 60% will be paid within the next year. After settling litigation costs and attorney fees, the state will receive about $43 million. There is currently pending legislation that aims to allocate these funds towards tobacco prevention efforts.
In addition to the internal company documents Juul has disclosed in other settlements, Minnesota will also get documents specific to the state for a total of 10 million documents that researchers and journalists can pore through, Ellison said. “We’re going to have a lot of sunlight,” he said. And unlike the other settlements, he said, Altria will disclose its internal documents on its involvement with Juul.
Walz agreed with Ellison and others at the news conference that Juul’s arrival undid much of the progress that the state had made since its landmark $7.1 billion settlement with the tobacco industry in 1998, which provided money for anti-smoking programs.
“We were within a decade or two of eliminating smoking almost in its entirety, and nicotine addiction amongst the young. That’s how close we got,” the governor said. “And they’re smart. They pivoted to a new product. They marketed it in a very deceptive way. And we have a whole generation of kids (who) got hooked this way.”
The settlement specifically prohibits Juul from marketing to children and young adults in Minnesota, Ellison said, and requires the company to accurately disclose the nicotine content of its products.
One of the lead attorneys in the case, Tara Sutton, of the law firm Robins Kaplan, was a member of the firm’s team that took on Big Tobacco in the 1998 case on behalf of then-Attorney General Skip Humphrey.
“We have won once again,” Sutton said. “Once again the attorney general had the courage to take on the new generation of Big Tobacco, and its name was Juul and its benefactor was Altria.”
Juul declined to say anything about the details of the settlement and stood by a statement it issued when the agreement was announced.
“We have now settled with 48 states and territories, providing over $1 billion to participating states to further combat underage use and develop cessation programs,” the statement said. “This is in addition to our global resolution of the U.S. private litigation that covers more than 5,000 cases brought by approximately 10,000 plaintiffs.”
Attorneys for Minnesota argued during the case that Juul unlawfully targeted young people with vaping products to get a new generation addicted to nicotine. Juul attorneys countered that its purpose was to convert adult smokers of combustible cigarettes to a less-dangerous product — not to lure kids.
Minnesota, which won a landmark $7.1 billion settlement with the tobacco industry in 1998, filed its lawsuit in 2019 and added Altria, which formerly owned a minority stake in Juul, as a co-defendant in 2020. Altria completed its divestiture in March and said it effectively lost its $12.8 billion investment.
Washington, D.C.-based Juul Labs launched in 2015 on the popularity of flavors like mango, mint, fruit medley and creme brulee. Teenagers fueled its rise, and some became addicted to Juul’s high-nicotine pods. Amid a backlash, the company dropped all U.S. advertising and discontinued most of its flavors in 2019, losing popularity with teens. Juul’s share of the now multibillion-dollar market has fallen to about 33% from a high of 75% in 2018.