E-cigarette manufacturer Juul Labs, Inc. (Juul) recently reached a $438.5 million settlement in principle with 33 states arising from claims that Juul illegally marketed e-cigarettes and vaping products to children. Although the sizable settlement ends a two-year multistate investigation into Juul’s marketing and sales practices, Juul, along with distributors and retailers of Juul products, may continue to face litigation.
State attorneys general accused Juul of marketing its products to underage users with candy/fruit flavors, easily-concealed designs, celebrity endorsements, and advertisements on social media platforms and television networks popular with children. The attorneys general also alleged that the packaging misrepresented the amount of nicotine in the product.
In addition to paying nearly half a billion dollars to settle the claims, Juul agreed to restrictions related to marketing, distribution, and sales to combat youth vaping, including marketing restrictions based on age, limits on retail displays, limits on online sales, required age verification, and protocols for retail compliance. Juul previously settled similar lawsuits with other individual states, and several states continue to pursue lawsuits against Juul.
Three months before the multistate settlement, the U.S. Food and Drug Administration (FDA) briefly banned the sale of Juul products nationwide, before the U.S. Court of Appeals for the Eleventh Circuit set aside the FDA’s order, finding that the FDA failed to consider Juul’s plan to prevent underage access to its products.1 The FDA subsequently announced a plan to undertake additional review of “scientific issues” unique to Juul products before making a final decision regarding the products’ fate in the U.S. market. In the meantime, Juul continues to sell its e‑cigarette and vaping products, citing its mission of “transition[ing] adult smokers away from cigarettes.” The FDA’s initial order may foreshadow the agency’s future actions and restrictions on e-cigarette and vaping marketing and sales.
Juul faces thousands more lawsuits from individuals, local governments, and school districts, many of which were consolidated into multidistrict litigation in California federal court.2 In light of Juul’s agreement to restrict its marketing, distribution, and sales practices (including protocols for retailers) and the FDA’s vow to enforce restrictions related to e-cigarette and vaping products, litigation arising from Juul products could continue for years to come. That said, Juul’s multistate settlement should provide more clarity to distributors and retailers regarding the proper sale of Juul products (as long as the FDA still allows Juul to sell its products in the U.S. market).
For more information regarding how to protect your business or to learn more about current/future litigation, please contact one of the attorneys in the E-Cigarette/Vape Team.