Minnesota gets $60.5M in settlement with e-cigarette maker Juul, tobacco giant Altria
ST. PAUL, Minn. (AP) — Minnesota settled its lawsuit against e-cigarette maker Juul Labs and tobacco giant Altria for $60.5 million, Attorney General Keith Ellison announced Wednesday, saying the total is significantly higher per capita than any other state that sued Juul over youth vaping and marketing practices.
The state's lawsuit was the first and still the only one of thousands of cases nationwide against the e-cigarette maker to reach trial. It settled just ahead of closing arguments last month, but the terms had to be kept confidential for 30 days until the formal papers were filed publicly with the court.
Ellison said Minnesota got the big settlement precisely because the state took Juul to trial. He said the sum exceeds what Juul made in Minnesota from 2015 to 2021.
“We were the only state willing to take this battle to trial and hold the bad actors accountable. It sends a message that you cannot get away with this," Ellison said at a news conference with Gov. Tim Walz. "We will put you in front of a Minnesota jury and you can take your chances.”
Most of the other cases have settled, including dozens with other states and U.S. territories. The largest settlement came last month when it was announced that Juul Labs will pay $462 million to six states and the District of Columbia to settle lawsuits related to its marketing tactics. As part of that deal, Juul pledged not to market its products to anyone under the age of 35 and to limit the amount customers can purchase in retail stores and online.
Ellison said ahead of the state's trial that he was seeking more than $100 million in damages. His spokesperson, John Stiles, told reporters Wednesday that if Minnesota had settled on the same terms as the six states and the District of Columbia, it would have gotten about $30 million, or as little as $15 million if it had accepted the terms most other states did.
Not only will Juul and Altria pay $60.5 million, Ellison said, they'll pay more a third of it within 30 days and more than 60% within a year. The state will get about $43 million after litigation costs and attorney's fees. Legislation is pending to dedicate the money to tobacco prevention.
In addition to the internal company documents Juul has disclosed in other settlements, Minnesota will also get documents specific to the state for a total of 10 million documents that researchers and journalists can pore through, Ellison said. “We're going to have a lot of sunlight,” he said. And unlike the other settlements, he said, Altria will disclose its internal documents on its involvement with Juul.
Walz agreed with Ellison and others at the news conference that Juul's arrival undid much of the progress that the state had made since its landmark $7.1 billion settlement with the tobacco industry in 1998, which provided money for anti-smoking programs.
“We were within a decade or two of eliminating smoking almost in its entirety, and nicotine addiction amongst the young. That's how close we got," the governor said. "And they're smart. They pivoted to a new product. They marketed it in a very deceptive way. And we have a whole generation of kids (who) got hooked this way."
The settlement specifically prohibits Juul from marketing to children and young adults in Minnesota, Ellison said, and requires the company to accurately disclose the nicotine content of its products.
One of the lead attorneys in the case, Tara Sutton, of the law firm Robins Kaplan, was a member of the firm's team that took on Big Tobacco in the 1998 case on behalf of then-Attorney General Skip Humphrey.
“We have won once again,” Sutton said. “Once again the attorney general had the courage to take on the new generation of Big Tobacco, and its name was Juul and its benefactor was Altria."
Juul declined to say anything about the details of the settlement and stood by a statement it issued when the agreement was announced.
"We have now settled with 48 states and territories, providing over $1 billion to participating states to further combat underage use and develop cessation programs,” the statement said. “This is in addition to our global resolution of the U.S. private litigation that covers more than 5,000 cases brought by approximately 10,000 plaintiffs.”
Attorneys for Minnesota argued during the case that Juul unlawfully targeted young people with vaping products to get a new generation addicted to nicotine. Juul attorneys countered that its purpose was to convert adult smokers of combustible cigarettes to a less-dangerous product — not to lure kids.
Minnesota, which won a landmark $7.1 billion settlement with the tobacco industry in 1998, filed its lawsuit in 2019 and added Altria, which formerly owned a minority stake in Juul, as a co-defendant in 2020. Altria completed its divestiture in March and said it effectively lost its $12.8 billion investment.
Washington, D.C.-based Juul Labs launched in 2015 on the popularity of flavors like mango, mint, fruit medley and creme brulee. Teenagers fueled its rise, and some became addicted to Juul’s high-nicotine pods. Amid a backlash, the company dropped all U.S. advertising and discontinued most of its flavors in 2019, losing popularity with teens. Juul’s share of the now multibillion-dollar market has fallen to about 33% from a high of 75% in 2018.
Steve Karnowski, The Associated Press