E-cigarette giant Juul Labs will pay Washington state $22.5 million and has agreed to a variety of reforms to prevent underage use and sales under a settlement announced on Wednesday by state Attorney General Bob Ferguson.
Ferguson filed a consumer protection lawsuit in September 2020, saying the country’s largest e-cigarette company targeted underage consumers and deceived consumers about the addictiveness of its product.
Juul products are displayed at a smoke shop in New York, on Dec. 20, 2018. E-cigarette giant Juul Labs will pay Washington state $22.5 million and has agreed to a variety of reforms to prevent underage use and sales under a settlement announced on Wednesday by state Attorney General Bob Ferguson.
Seth Wenig / AP
“Juul’s conduct harmed Washingtonians,” Ferguson said at a news conference in Seattle. “They harmed the youth of our state.”
Ferguson said that upon the product's launch in 2015, the company flooded social media with colorful ads, fueling a spike in use and nicotine addiction among teenagers. The percentage of vaping high school sophomores in Washington rose from 13% in 2016 to nearly 21% by 2018, according to Ferguson’s office.
Under the consent decree filed in King County Superior Court, Juul Labs admitted no wrongdoing in settling the case. in an email after the announcement, the company called it "another step in our ongoing effort to reset our company and resolve issues from the past."
It’s the fourth such settlement with states by the company within the past year. In November, Juul settled for $14.5 million with state prosecutors in Arizona, just months after agreeing to pay $40 million in North Carolina. As in Washington, the company promised not to market to minors in those states to and boost enforcement of retailers who sell its products.
Lawsuits in a handful of other states remain. In its statement on Wednesday, the company said it has also settled with Louisiana.
“We will continue working with federal and state stakeholders to advance a fully regulated, science-based marketplace for vapor products,” the company wrote.
Under the settlement announced in Washington state, Juul must stop all advertising that appeals to youth and is prohibited from marketing its products on social media, including Facebook and Instagram. It must also monitor for and report social media content about Juul products posted by underage users and must implement practices to prevent underage youth from buying Juul products online, including requiring an ID-verified adult signature upon delivery of the products.
The company must also confirm the age of people who file warranty claims for a Juul product.
According to Juul's website, the company had stopped all advertising before Ferguson sued in 2020 and ended sales of all flavored products except menthol and tobacco.
The company is also required to implement a secret shopper program that Ferguson says is more robust than those in previous settlements. Under the agreement, Juul must send secret shoppers on at least 25 compliance checks per month at Washington-based Juul retailers for at least two years. Those checks must be performed across the state, with at least one check-in each of the state’s 39 counties per year.
Ferguson’s office said the secret shoppers must confirm that retailers are complying with the requirement to verify a purchaser’s age and that they are complying with the requirement to limit the purchase of Juul products to one Juul device and 16 Juul pods per transaction. Juul is required to report the results of the program to Ferguson’s office every three months.
Under the consent decree, Juul is ordered to pay the $22.5 million total over the next four years. Ferguson said that money will be used to establish a new health equity unit at this office to respond to deceptive and discriminatory health care practices that disproportionately affect vulnerable communities and communities of color.
A national survey released last fall found that teen vaping plummeted while students were learning from home during the pandemic. In the national survey, 11% of high school students and less than 3% of middle school students said they were recent users of e-cigarettes and other vaping products, the Food and Drug Administration and the Centers for Disease Control and Prevention reported.
That was a roughly 40% drop from 2020 when nearly 20% of high school students and 5% of middle schoolers said they had recently vaped.
Data for 2022 has not yet been released. Schools were fully reopened in Washington in the fall of 2021.