Juul Vaping Settlement Sends Millions From Company to State Campaigns Against Its Product

Juul Labs, an e-cigarette company, will pay $14.5 million to Arizona as part of a settlement. Most of the money will go toward state campaigns against its product.

Except for $2 million, the money will be used in programs to dissuade the use of e-cigarettes, such as educations programs created to prevent young people from getting addicted and using the products.

The company also promised not to market to young people in the state as part of the settlement. This is the second settlement Juul has made with state prosecutors, The Associated Press reported.

There was also an agreement that Juul would create a monitoring program for retailers, in which compliance checks would be conducted in 25 stores per month across Arizona for two years. In the same agreement, Juul is restricted from advertising near schools, on social media, and marketing to individuals under 21.

This ends the lawsuit Attorney General Mark Brnovich filed against Juul and another e-cigarette company in January 2020. He claimed they illegally marketed their products to young people.

Arizona previously received $22.5 million from Eonsmoke, an electronic cigarette company that has since shut down, in a different lawsuit.

Juul called the settlement "another step in our ongoing effort to reset our company" and denied any wrongdoing. Before the lawsuit, the company stopped all its advertisements and restricted sales of all flavored products except menthol.

Numerous states have sued Juul because of its marketing practices. The company advertises its products as safer alternatives to traditional tobacco products. It previously paid a $40 million settlement to North Carolina and again promised to not market to adolescents, as well as make sure to similarly increase enforcement for retailers selling its products. Not all lawsuits have been settled.

For more reporting from the Associated Press, see below.

Juul Labs, Lawsuits, Arizona, Settlement
Juul Labs, an e-cigarette company has had multiple lawsuits in numerous states and has paid over $50 million in settlements so far. In this photo, an illustration shows a man exhaling smoke from an electronic cigarette in Washington, DC on October 2, 2018. Eva Hambach/AFP via Getty Images

E-cigarettes are touted as safer than tobacco cigarettes because while they deliver the addictive drug nicotine they do not give off smoke that contains carcinogens. But they are still addictive and dangerous to health, especially for teenagers whose brains are still developing.

The U.S. Food and Drug Administration approved the first e-cigarette last month, saying the R.J. Reynolds' product has a clear benefit because it can reduce the use of regular cigarettes. Juul's product remains under FDA review. Some adulterated vaping products have caused serious health effects.

The other $2 million of the $14.5 million settlement with Arizona will go into a state account the attorney general uses to fund consumer fraud investigations.

"Today's settlement holds Juul accountable for its irresponsible marketing efforts that pushed Arizona minors toward nicotine and the addiction that follows," Brnovich said in a statement. "Combatting the youth vaping epidemic remains a priority for our office with both our undercover Counter Strike program and zero tolerance for vaping companies that mislead or deceive."

Juul said in its statement on the Arizona settlement that it will "continue working with federal and state stakeholders to advance a fully regulated, science-based marketplace for vapor products."

It said it will continue to support the "Tobacco 21" anti-smoking group's push for higher smoking age limits and back enforcement actions against illegal vaping products that "jeopardize the harm reduction potential of alternative vapor products."

The company, which is partly owned by tobacco giant Altria Group, said it is in discussions to settle lawsuits filed by other states.

Vaping among young people exploded in recent years, drawing concerns from health experts and state and federal regulators. But an FDA report released in September showed a steep drop in young people vaping as schools closed because of the coronavirus pandemic.

It was the second straight yearly drop in teen vaping and followed the 2019 enactment of a new federal law that raised the purchase age for all tobacco and vaping products from 18 to 21. Shortly afterward, the FDA banned nearly all flavors from small, cartridge-based e-cigarettes, the products blamed for the big increase in teen use.

Mark Brnovich, Arizona, Settlement, Juul Labs
Arizona Attorney General Mark Brnovich speaks at a news conference in Phoenix, on Jan. 7, 2020. E-cigarette giant Juul Labs will pay Arizona $14.5 million and vowed not to market to young people in the state to settle a consumer fraud lawsuit. Bob Christie/AP Photo, File