Juul Vaping Settlements to Total $1.7 Billion

By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team
Published on December 14, 2022

Juul’s market dominance collapsed beneath lawsuits: At one time, Juul stood above all other e-cigarette brands, but as people started to pay more attention to safety and their impact on teens, things changed. It hit Juul particularly hard since people felt it was marketing its products to teens, which has led to years of legal battles and previous settlements. But now, the once-dominant brand has settled a massive amount of lawsuits, which includes over 5,000 cases started by more than 10,000 plaintiffs.

The settlements are expected to total $1.7 billion, with Juul looking to resolve cases brought by school districts, local governments, and individuals. The large amount for the deal is over three times that for settlements in other states and local cases to this point.

  • The claims made against the company include the fact that the e-cigarettes were more addictive than advertised.
  • The deal covers a number of cases centered in Northern California.

Juul agreed to settle a case over marketing to teens earlier this year. The agreement saw the e-cigarette brand agreeing to pay nearly $440 million after an investigation launched by 33 states into its marketing practices. As a result of the settlement, the brand was prohibited from marketing its products to youths.

  • Part of the backlash was the use of young models in the marketing campaigns. There was also the fact that the fruit and dessert flavors offered appealed to a young market.
  • Juul has denied marketing to teens, saying that it did not target them specifically and refusing to admit wrongdoing when reaching settlement agreements.

It started due to the youth-vaping epidemic. In 2021, the US Food and Drug Administration (FDA) suggested that Juul played a major role in the epidemic, which took place when the company held dominance in the market. There were multiple companies under investigation, but the focus was on Juul.

The lawsuits almost bankrupted the brand, which announced layoffs last month under the mounting pressure of the legal action against it. However, it has secured an equity investment to fund the settlements, allowing it to continue operations.

  • According to a company spokesperson, “These settlements represent a major step toward strengthening Juul Labs’ operations and securing the company’s path forward.”

Altria, a major stakeholder in the brand, is not out of the woods yet. The tobacco giant owned a 35% stake in Juul, an investment that has lost a significant amount of its value since the purchase in 2018. However, the Juul settlements will not impact or end claims against Altria moving forward.

  • Altria pulled its own e-cigarette products off of the market when it bought its stake in Juul.
  • The company gained the option to end an e-cigarette non-compete agreement after the investment went south, meaning the hurting brand will now have to compete with Altria alongside other major competitors.

Juul’s future remains unclear. The settlements are a step in the right direction, but its position in the market and reputation have taken a hit. Moreover, the brand is still awaiting the FDA’s decision as to whether it can remain in the US market at all. So even if it survives the settlements and manages to hold on to its position amidst stiff competition, there is no telling whether it will be around for long.

By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team

Spencer Hulse is the Editorial Director at Grit Daily. He is responsible for overseeing other editors and writers, day-to-day operations, and covering breaking news.

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