Preliminary Approval for Juul Settlement

Juul Labs secured preliminary court approval on Jan. 20 of a $255 million settlement resolving claims by consumers that it deceptively marketed e-cigarettes, reports Reuters.

U.S. District Judge William Orrick in San Francisco said the proposed class action settlement was “fair, reasonable and adequate.”

The settlement is part of a larger, global agreement by Juul to resolve thousands of lawsuits by school districts, local governments and individuals accusing it of contributing to a youth vaping epidemic.

In December, Juul Labs settled more than 5,000 lawsuits covering more than 10,000 individual plaintiffs. The deal is valued at $1.7 billion, according to The Wall Street Journal.

The recent class action settlement resolves claims by people who say they would have paid less, or not bought the e-cigarettes at all, if Juul had not downplayed the products’ addictiveness and appealed to teenagers through social media campaigns and other means.

A pioneer in the vaping business, Juul Labs has gone from dominating the U.S. e-cigarette market to fighting for its survival in a relatively short time.

Following its initial success, the company quickly came under regulatory scrutiny over its marketing practices. Critics blame Juul Labs for contributing to an “epidemic” of underage vaping.

Thousands of lawsuits have been filed against Juul over the past several years, alleging that the company marketed its e-cigarettes to children. Juul has said it never marketed to underage users.

In September, Juul Labs agreed to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products.

Juul’s e-cigarettes were briefly banned in the U.S. in late June after the Food and Drug Administration concluded that the company had failed to show that the sale of its products would be appropriate for public health. But following an appeal, the health regulator put the ban on hold and agreed to an additional review of Juul’s marketing application.

In October, Juul published the details of its marketing denial order appeal. In late September, Juul shareholder Altria Group exercised the option to be released from its noncompete deal with the e-cigarette maker.