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.