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E-Cigarette Giant 'Juul' To Pay $40 Million In Settlement With North Carolina

North Carolina, the former home to many big tobacco companies, was the first state to sue Juul on May 19, 2019.
SETH WENIG
/
AP
North Carolina, the former home to many big tobacco companies, was the first state to sue Juul on May 19, 2019.

North Carolina reached a $40 million settlement agreement with e-cigarette company Juul Labs that will force it to change the way it operates in the state.

The landmark legal settlement was announced on Monday after years of accusations that the company had fueled an explosion in teen vaping. North Carolina Attorney General Josh Stein had accused Juul of unfair and deceptive marketing practices targeting young people to use it vaping products, which delivers addictive nicotine. A state judge accepted the first-of-its-kind agreement with a state.

According to the settlement, Juul will have to pay $13 million within a month to help teens who have become addicted to their products. The remaining money will be paid over the next six years and will be used toward preventive programs.

Stein says kids are attracted to e-cigarettes because of the various flavors. But this settlement will put a stop to that.

"Juul cannot sell mint, cannot sell mango, cannot sell creme brulee or any other flavor without specific authorization from the Federal Drug Administration," Stein said.

In addition to the pricy settlement, Juul — according to a release from Stein's office — has agreed to:

  • No marketing that appeals to people under the age of 21.
  • No using most social media advertising, influencer advertising, outdoor advertising near schools, and sponsoring sporting events and concerts.
  • No claims that compare the health effects of using Juul with the health effects of using combustible cigarettes in its marketing materials.
  • No online sales to anyone not age verified by an independent verification system and making sure third-party sales partners do the same.
  • No retail sales to anyone not age verified using a barcode scanner.
  • Ensure its products are sold behind counters so shoppers cannot access them without a shop employee’s assistance.
  • Maintain a retailer compliance secret shopper program in North Carolina to ensure these measures are followed and hold accountable retailers that fail.
  • No new flavors or nicotine content levels without FDA authorization.

Juul, which is partially owned by Altria Group Inc., has seen sales fall after halting all advertising and social media promotion and pulling most of its flavors except for menthol.

Various school districts have also filed lawsuits against Juul, as have at least nine other states. A group of 39 state attorneys general have been cooperatively investigating the company’s marketing and products since February 2020.

North Carolina, the former home to many big tobacco companies, was the first state to sue Juul on May 19, 2019. Stein filed the lawsuit in Durham.

"Juul sparked and spread a disease — the disease of nicotine addiction — among teens across our state and country, turning countless lives upside down," Stein said in a series of tweets. "This is a major victory for young people and their parents. I’m incredibly proud of my trial team who busted their tails for many months to achieve this win."

Teen use of e-cigarettes skyrocketed more than 70% after Juul’s launch in 2015, leading the U.S. Food and Drug Administration to declare an "epidemic" of underage vaping among teenagers. According to the N.C. Youth Tobacco Survey, use of e-cigarettes rose 48% among North Carolina middle schoolers and 78% among high schoolers from 2018 to 2019. And a 2020 survey by the FDA found that almost 40% of high school students used e-cigarettes.

Documents from Stein’s case against Juul will be made public by July 1, 2022.

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