Juul agrees $40M settlement in North Carolina teen marketing lawsuit
Juul Labs has agreed to pay North Carolina $40 million and change its business practices in the state.
Regulators and health officials have blamed the company for the surging popularity of e-cigarettes among teens in recent years. In 2019, federal data found that more than 1-in-4 high school students had used an e-cigarette in the past 30 days, up from 11.7% just two years prior. As of 2020, that number fell to 19.6% of high school students amid greater regulatory scrutiny and the coronavirus pandemic.
North Carolina kicked off its investigation in 2018 and announced the lawsuit the following year. In May, the judge for the case ruled that Juul destroyed documents, provided thousands of pages of irrelevant information, and ignored related court orders. The company faced millions of dollars in fines tied to that decision, but the agreement announced Monday will wipe that slate clean.
Under the agreement, Juul will not be able to target its advertising to minors, use anyone in its marketing materials who are younger than 35 years old, or pay for influencers to promote its products, among other restrictions. The deal also places limits on the number of devices and pods that North Carolina consumers can buy every month and year. The $40 million will go toward helping teens who are addicted to e-cigarettes, funding preventive programs, and the cost of the litigation.
But those aren’t the only legal cases with Juul at the center. Tobacco giant Altria is squaring off against the Federal Trade Commission regarding its 2018 investment in the start-up. The agency is arguing that the Marlboro maker engaged in anti-competitive practices when the two companies were trying to strike a deal. Since it made the initial $12.8 billion investment in Juul, Altria has written down its value three times, slashing its value by $11.2 billion.