Juul reaches settlement with Minnesota at close of trial

MINNEAPOLIS (CN) — E-cigarette manufacturer Juul Labs and its former parent company, Marlboro maker Altria Group, have reached a settlement with Minnesota Attorney General Keith Ellison near the conclusion of a three-week trial in which Ellison’s office asserted that Juul had deceived consumers and actively marketed its products to minors.

The settlement, the terms of which will not be published until mid-May, came just before closing arguments were set to begin Monday morning. Minnesota filed suit seeking upwards of $100 million from Juul and Altria.

The e-cigarette company, whose product became so popular in the late 2010s that its name became synonymous with vaping nicotine, has been sued by several states and other government entities and reached 48 settlements with them – including six last week – but Minnesota was the first to bring Juul to trial. Ellison, who personally appeared at trial to deliver an opening statement late in March, said before trial that he wasn’t satisfied with Juul’s pretrial offers. 

Ellison’s office issued a statement celebrating the settlement, in which the attorney general drew parallels to a $6.5 billion settlement Minnesota reached with several tobacco companies in 1998 – also on the eve of closing arguments in a four-week trial.

“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,” Ellison said in the statement. “One of my goals in bringing this case was to send a message: we will not tolerate youth marketing of nicotine products in Minnesota.”

Prosecutors argued at trial that Juul had deliberately sought to appeal to “cool kids” with bright, colorful marketing, a USB-like vape design that made its products difficult for parents and teachers to discover, and sweet, fruity flavors. Juul contended that these factors all helped its products to appeal to adult smokers hoping to switch from smoking to vaping, and that teenagers’ uptake of the habit was an unfortunate but unavoidable side effect. 

Juul has since stopped selling fruit flavors, and the Food and Drug Administration banned it from selling menthol-flavored cartridges last summer. That decision is currently suspended pending an appeal. 

Altria, a successor to tobacco giant Phillip Morris, purchased a 35% interest in Juul for $12.8 billion in 2018, at the height of Juul’s popularity, and provided marketing assistance for the vapes. Altria gave up its stake in the company in March, saying that it had effectively lost its money, but announced a $2.75 billion investment in e-cigarette maker NJOY shortly afterward. 

Juul has now settled for a total of over $1 billion with 48 states and territories, according to a statement issued by the company Monday.

“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,” the statement read. The company cited pending applications with the FDA for authorization of new products and its products’ existing track record of converting adult smokers from cigarettes to vaping. 

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