Tag: Juul Labs

  • Altria to Face First Juul Marketing Trial

    Altria to Face First Juul Marketing Trial

    Photo: steheap

    Altria Group is set to face trial April 24 in a lawsuit by San Francisco’s public school district accusing the company of fueling a teen vaping epidemic through its investment in Juul Labs, reports Reuters. The tobacco giant owned a 35 percent share in Juul Labs from late 2018 until March 2023, when it exchanged its stake for license to certain Juul Lab’s heated tobacco intellectual properties.

    Through its lawsuit, the San Francisco Unified School District wants to make Altria pay for the cost of tackling student vaping on school grounds.

    Thousands of individuals, local government entities and states have filed similar cases against Altria. U.S. District Judge William Orrick in San Francisco, who presides over much of the litigation, chose the San Francisco school district’s as a test case.

    Suggesting the San Francisco case lacks merit, Altria vowed to defend itself vigorously. “Most of the allegations raised in this suit occurred years before we made a minority economic investment in Juul,” the company said in a statement on April 20.

    The April 24 trial will mark the second time one of those cases goes before a jury. An earlier trial brought by the state of Minnesota, ended in a settlement, though the terms have yet to be disclosed.

  • Minnesota Settles Juul Lawsuit

    Minnesota Settles Juul Lawsuit

    Photo: mehaniq41

    Minnesota has settled its legal case against Juul Labs and Altria Group for deceptively marketing e-cigarettes. The terms of the deal will be kept confidential until formal papers are publicly filed with the court.

    “After three weeks of trial highlighting and bringing into the public record the actions that Juul and Altria took that contributed to the youth vaping epidemic, we reached a settlement in the best interest of Minnesotans,” said Attorney General Keith Ellison in a statement.

    “We followed in the footsteps of former Attorney General Skip Humphrey, who led the historic 1998 tobacco trial in Minnesota. Once again, Minnesota has demonstrated leadership in taking these cases head on, including going to trial to hold tobacco companies accountable, protect our community’s health and protect our kids. One of my goals in bringing this case was to send a message: We will not tolerate youth marketing of nicotine products in Minnesota,” said Ellison.

    Minnesota’s deal comes less than a week after Juul Labs agreed to pay $462 million to settle similar claims brought by New York, California, Colorado, Illinois, Massachusetts, New Mexico and the District of Columbia.

    Of the more than a dozen states and hundreds of local governments that have sued Juul, Minnesota was the first to go to trial. Filed in 2019, the state’s lawsuit alleges that Juul developed sleek devices and flavors that were appealing to youth and that Juul’s marketing deceptively attracted and addicted young people. In 2020, Minnesota amended its complaint to include Altria as a defendant: In 2018, Altria spent $12.8 billion to acquire a 35 percent share in Juul.

    In a statement, Juul Labs stressed the importance of resolving legal challenges from the company’s past. “We are pleased to have reached a settlement with the state and will work to finalize this agreement over the coming weeks,” the company wrote.

    Juul Labs has now settled with 48 states and territories, providing over $1 billion to participating states to further combat underage vaping and develop cessation programs. In addition, the company has resolved private litigation that covers more than 5,000 cases brought by approximately 10,000 plaintiffs.

    “As we reach total resolution of the company’s past, we are focused on our path forward to maximize the value and impact of our product technology and scientific foundation,” wrote Juul. “Our technology already has transitioned over 2 million adult smokers from combustible cigarettes. And our priorities remain to secure authorization of our PMTAs [premarket tobacco product applications] based on the science and lead the category with innovation to accelerate our mission and advance tobacco harm reduction for over 31 million adult smokers in the U.S. and over 1 billion adult smokers worldwide.”

  • Juul Labs Settles with West Virginia

    Juul Labs Settles with West Virginia

    Image: Roman Motizov | Adobe Stock

    West Virginia has reached a settlement agreement with e-cigarette manufacturer Juul Labs in litigation about the company’s advertising and marketing practices, according to state Attorney General Patrick Morrisey.

    Juul Labs has agreed to pay the state $7.9 million, based on accusations that the company violated West Virginia’s Consumer Credit and Protection Act, according to media reports.

    The company was accused of “engaging in unfair or deceptive acts or practices in the manufacturing, designing, selling, marketing, promoting and distributing of e-cigarettes” in the state, especially promotions targeting underage users, according to Morrisey.

    “This settlement puts companies like Juul in check to not copy Big Tobacco’s playbook and gear marketing strategies toward underage people,” he said. “In Juul’s case, we have alleged it has deceived consumers about its nicotine strength, misrepresented the nicotine equivalency of its products to traditional cigarettes and understated the risks of addiction that occur with such powerful levels of nicotine.”

    The settlement represents “yet another step in Juul Labs’ ongoing commitment to resolve issues from the company’s past,” said Austin Finan, vice president of corporate communications at Juul Labs.

    “The terms of the agreement, like prior settlements, provide financial resources to further combat underage use and develop cessation programs, and they reflect our current business practices, which were implemented as part of our company-wide reset in the fall of 2019,” Finan said. “With West Virginia having the highest cigarette smoking rate in the U.S., we hope that some funds will go directly to interventions to reduce the use of combustible cigarettes and improve public health in the state.”

    Juul has now settled with “40 states and territories, providing hundreds of millions of dollars to the participating states,” according to Finan.

  • Minnesota AG Opens Juul Lawsuit

    Minnesota AG Opens Juul Lawsuit

    scales of justice
    Credit: Sang Hyun Cho

    Minnesota Attorney General Keith Ellison personally opened his state’s case against Juul Labs on Tuesday, accusing the e-cigarette maker of using “slick products, clever ads and attractive flavors” to hook children on nicotine as the first of thousands of cases against the company reached trial, reports AP.

    Minnesota is seeking more than $100 million in damages, accusing Washington, D.C.-based Juul of unlawfully targeting young people to get a new generation addicted to nicotine, according to the Federal News Network.

    “They baited, deceived and addicted a whole new generation of kids after Minnesotans slashed youth smoking rates down to the lowest level in a generation,” Ellison said. “Now, Big Tobacco is back with a new name but the same game. Juul wiped out the work of our state with their slick products, clever ads and attractive flavors.”

    Juul has faced thousands of lawsuits nationwide but most have settled, including 39 suits with other states and U.S. territories. Minnesota, which won a landmark $7.1 billion settlement with the tobacco industry in 1998, has not settled. Minnesota added tobacco industry giant Altria, which formerly owned a minority stake in Juul, as a co-defendant in 2020.

    David Bernick, an attorney for Juul, promised jurors an “intense and interesting” trial. He said the purpose of Juul was always to convert adult smokers of combustible cigarettes to a less dangerous product that would still provide a satisfying nicotine experience—not to lure kids to the products. E-cigarettes aren’t safe but aren’t deadly either, he said; they’re somewhere in between. And Juul did nothing to intentionally drive youth demand, he argued, suggesting that the growth in youth vaping was more likely due to increasing adult demand resulting in “leakage” to kids.

    William Geraghty, an attorney for Altria, denied Ellison’s assertions that Altria invested heavily in Juul because it ultimately wanted to hook kids on its cigarettes, which include Marlboro. He said Altria bought its passive stake because Juul had found the key to successfully switching adult smokers of conventional cigarettes to a less harmful product while Altria’s competing e-cigarettes had failed in the marketplace.

    The lawsuit against Juul, filed in 2019, alleges consumer fraud, creating a public nuisance, unjust enrichment and conspiracy with Altria. The jury trial before Hennepin County District Judge Laurie Miller is expected to last about three weeks.

  • First Trial for Juul Youth Marketing Claims

    First Trial for Juul Youth Marketing Claims

    Credit: Mehaniq41

    A trial against Juul Labs and Altria for youth marketing begins today in Minnesota, USA. It is the first state to go to trial against the e-cigarette manufacturer and tobacco company.

    Jury selection in the trial comes more than three years after Minnesota Attorney General Keith Ellison first filed a lawsuit against Juul Labs, reports CARE11.

    “We will prove how Juul and Altria deceived and hooked a generation of Minnesota youth on their products, causing both great harm to the public and great expense to the state to remediate that harm,” said Ellison in a press release.

    Minnesota is the first case to go to trial against Juul since more than a dozen states sued the company beginning in 2019.

    “It’s a pretty significant case,” said David Schultz, a law professor at the University of Minnesota. “The case comes down to two or three basic issues. First, it’s about the claim that Juul marketed to minors. Second, it did nothing in terms of trying to prevent minors from accessing their product. And third, it was about the fact that they did not make appropriate disclosures regarding the health and safety risks surrounding the use of vaping and some of these smokeless tobaccos.”

    The state believes Juul Labs, enabled by Altria, “engaged in consumer fraud, negligence and created a public nuisance.”

    Altria Group exchanged its entire investment in Juul Labs for a nonexclusive, irrevocable global license to certain of Juul’s heated-tobacco intellectual property in early March.

    This isn’t new territory for the state. Minnesota was the first state in the country to successfully sue the tobacco industry and win in the 1990s.

    Earlier this year, a U.S. district judge handed Juul Labs preliminary court approval of a $255 million settlement resolving claims by consumers that it deceptively marketed e-cigarettes, as the company seeks to resolve thousands of lawsuits.

    The company reached a nearly $24 million settlement with the city of Chicago in mid-March.

    Juul and Altria have denied the allegations.

    In court documents from November 2022, the defendants stated, “Minnesota has reaped billions of dollars from tobacco settlements and taxes over the last decade for the purpose of preventing tobacco use and remedying its harms. Yet even after determining that there was an alleged youth vaping problem among Minnesota youth, time and again the state chose to ignore recommended tobacco prevention funding guidelines and instead used these funds to bankroll unrelated projects—like the Minnesota Vikings football stadium.”

  • Juul Settles Chicago Youth Marketing Suit

    Juul Settles Chicago Youth Marketing Suit

    Photo: steheap

    Juul Labs and the city of Chicago have reached a $23.8 million settlement over claims that the e-cigarette maker deceptively marketed its products and for selling vaping products to underage users, reports Reuters, citing the Chicago mayor’s office.

    The vaping company is currently facing thousands of lawsuits filed across the United States over claims on its marketing practices and for contributing to rising tobacco use among youth.

    In the settlement, Chicago said Juul has denied and continues to deny any wrongdoing and liability in connection with the design, manufacture, production, advertisement, marketing, distribution, sale, use and performance of its products.

    According to the settlement, the company has agreed to pay the city $2.8 million within 30 days of the execution of the agreement.

    Chicago would receive an additional $21 million payment later this year under the current schedule and may potentially receive up to $750,000 in additional, court-awarded payments, the Chicago mayor’s office said.

  • Altria Asks FTC to Drop its Juul Challenge

    Altria Asks FTC to Drop its Juul Challenge

    Photo: Paul Brady

    Altria Group has asked the U.S. Federal Trade Commission (FTC) to drop its 2020 challenge of the company’s 2018 acquisition of a 35 percent share in Juul Labs, reports Reuters. On March 3, the tobacco giant announced it had exchanged its stake for a license to Juul’s heated tobacco intellectual property rights.

    In its legal challenge, the FTC contends that the tobacco giant’s $12.8 billion investment in Juul violates antitrust law because the company acquired the position rather than continuing to compete against Juul in the market for closed-system e-cigarettes.

    In February 2022, an administrative law judge dismissed the FTC’s claims, finding that the evidence failed to sustain the alleged violations.

    The next step would have been for the full commission to decide whether to accept that decision and dismiss the FTC case.

    However, Altria recently exited its investment and previously terminated a non-compete agreement with Juul that the FTC opposed.

    “There is nothing left of the transaction to be challenged. Altria and JLI respectfully ask the commission to dismiss this matter as moot,” Altria Group and Juul Labs wrote in a filing to the FTC.

     

  • Altria Exchanges Juul Stake for HTP License

    Altria Exchanges Juul Stake for HTP License

    Photo: Juul Labs

    Altria Group has exchanged its entire investment in Juul Labs for a non-exclusive, irrevocable global license to certain of Juul’s heated tobacco intellectual property.

    “We believe exchanging our Juul ownership for intellectual property rights is the appropriate path forward for our business,” said Altria CEO Billy Gifford in a statement. “Juul faces significant regulatory and legal challenges and uncertainties, many of which could exist for many years. We are continuing to explore all options for how we can best compete in the e-vapor category.”

    As of Dec. 31, 2022, the carrying value and estimated fair value of Altria’s Juul investment was $250 million. Altria will record the financial impact of the agreement in the first quarter of 2023 and intends to treat any such amounts as a special item and exclude it from its adjusted diluted earnings per share.

    “The return of Altria’s equity stake and termination of underlying agreements affords us full strategic freedom—we are no longer limited by the terms of those agreements to pursue other strategic opportunities and partnerships,” wrote Juul in a statement. “We are free to take advantage of a range of options to maximize the value of our company while we continue to advance our leading product technology and innovation pipeline.”

    In late 2018, Altria paid nearly $13 billion for a 35 percent stake in Juul. “We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction,” said Altria’s then-CEO Howard Willard at the time. “Through Juul, we are making the biggest investment in our history toward that goal. We strongly believe that working with Juul to accelerate its mission will have long-term benefits for adult smokers and our shareholders.”

    Over the years that followed, however, regulatory scrutiny and litigation relating to Juul’s marketing practices severely eroded Juul’s valuation. On June 23, 2022, the U.S. Food and Drug Administration ordered Juul Labs to pull its e-cigarettes from U.S. store shelves, saying the e-cigarette manufacturer had submitted insufficient evidence that they were “appropriate for the protection of the public health.” After Juul challenged the marketing denial order (MDO), the FDA agreed to take another look at the company’s pre-market tobacco product application.

    The agency said it had determined that there are scientific issues unique to the Juul application that warrant additional review. 

    In early 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, which critics have blamed for sparking a surge in underage vaping.

    On Sept. 30, Altria announced it was ending its noncompete agreement with Juul. The tobacco giant is reportedly in talks to buy Njoy Holdings for at least $2.75 billion. Njoy has a roughly 2 percent of the U.S. vape market by volume, according to Jefferies. Juul, by contrast, accounts for around a quarter of American vapor product sales. Unlike Juul, however, Njoy has FDA permission to sell its products in the U.S.

    “While our appeal of FDA’s now-stayed MDO remains pending, we remain as confident in our science and evidence to support the continued marketing of Juul products,” Juul wrote after Altria announced the exchange of its investment for a license. “We also continue to pursue future applications for new products to accelerate our mission and progress for the adult smoker, public health, and an end to combustible cigarettes.”

  • Juul in Talks With Tobacco Companies

    Juul in Talks With Tobacco Companies

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    Juul Labs is in talks with leading cigarette manufacturers about a partnership, alliance or sale of its business, reports The Wall Street Journal.

    Juul executives have had separate discussions with Philip Morris International, Japan Tobacco and Altria Group, according to the newspaper.

    The talks are at an early stage and might not result in a sale of partnership, The Wall Street Journal’s sources pointed out. Altria, which owns one-third of Juul, valued the vaping company at $1 billion in October.

    Once the undisputed leader of the U.S. vape market, Juul reached the brink of bankruptcy last year after the Food and Drug Administration denied its marketing applications and ordered the company to remove its products from the market.

    The order has been stayed pending appeal but the still-unresolved dispute made it difficult for Juul to raise money to cover its legal liabilities. In December, Juul agreed to pay $1.7 billion in a broad legal settlement covering more than 5,000 lawsuits accusing the company of marketing its products to teens and children. Juul denies targeting underage consumers.

    To pay for the deal, Juul secured an equity investment from a group including two Juul directors. The settlement and financing put Juul on firmer ground and allowed the company to begin talks with potential strategic partners.

    On Sept. 30, Altria announced it was ending its noncompete agreement with Juul. The decision gave Juul the freedom to sell itself—or a significant stake—to one of Altria’s competitors.

    Altria can’t buy Juul outright because of antitrust concerns: The Federal Trade Commission is seeking to unwind Altria’s 2018 investment in Juul. Altria and Japan Tobacco in October formed a partnership to develop and sell heated-tobacco devices in the U.S. and other new tobacco products abroad.

    If the FDA ultimately halts Juul’s sales, Juul could seek U.S. authorization for a newer version of its vaporizer that has been released in Canada and the U.K. Juul also has other products under development.

  • Juul Settles Marketing Suit With Pennsylvania

    Juul Settles Marketing Suit With Pennsylvania

    Photo: niroworld

    Juul Labs has agreed to pay Pennsylvania $38.8 million to end the state’s claims that the company targeted young people with its products, state Attorney General Josh Shapiro announced in a release. As part of the deal, Juul denied any wrongdoing.

    “Juul knowingly targeted young people with tactics similar to the tobacco companies’ playbook,” said Shapiro. “They disregarded their growing audience of young users, taking no action as their market share skyrocketed on the backs of American kids. About 13 percent of Pennsylvania students have vaped in the past 30 days—this settlement is only the beginning of keeping our kids safe from the dangers of vaping.”

    Filed in Philadelphia County court, the Pennsylvania settlement forbids Juul from marketing its products near schools and playgrounds, advertising at events that include kids or in media outlets where audiences are made up of 15 percent or more of kids.

    “This settlement is a continuation of Juul Labs’ progress to resolve issues from the past. We applaud the attorney general’s plan to deploy resources to address underage use in the commonwealth,” the company said in a statement. “The terms of the agreement are aligned with our current business practices, which we started to implement after our company-wide reset in the fall of 2019.”

    Earlier this month, Juul settled more than 5,000 lawsuits covering more than 10,000 individual plaintiffs, resolving much of the legal uncertainty that had driven the company close to bankruptcy.

    Juul announced on Dec. 6 that it has secured an investment to cover the cost of the settlement. The company has been in talks with two early investors to fund a bailout that would cover legal liabilities.

    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.