OLYMPIA, Wash. — E-cigarette giant Juul Labs will pay Washington state $22.5 million and has agreed to a variety of reforms to prevent the use and sale of minors under a settlement announced Wednesday by state Attorney General Bob Ferguson.
Ferguson filed a consumer protection lawsuit in September 2020, claiming the nation’s largest e-cigarette company was targeting underage consumers and misleading consumers about addiction to its product.
“Juul’s conduct hurt Washingtonians,” Ferguson said at a press conference in Seattle. “They hurt the youth of our state.”
Ferguson said when the product launched in 2015, the company flooded social media with colorful ads, fueling a spike in nicotine use and addiction among teens. According to Ferguson’s office, the percentage of high school sophomores who vape in Washington rose from 13% in 2016 to nearly 21% in 2018.
Under the consent decree filed in King County Superior Court, Juul Labs admitted no wrongdoing in settling the case and in an email after the announcement called it “a another step in our ongoing efforts to reset our business and address issues of the past.”
This is the fourth such settlement with States by the company in the past year. In November, Juul settled $14.5 million with Arizona state attorneys, just months after agreeing to pay North Carolina $40 million. As in Washington, the company has promised not to market to minors in those states and to strengthen enforcement of the rules for retailers who sell its products.
Lawsuits in a handful of other states remain. In its Wednesday statement, the company said it also settled with Louisiana.
“We will continue to work with federal and state stakeholders to advance a fully regulated and science-based market for vapor products,” the company wrote.
Under the rule announced in Washington state, Juul must cease all advertising appealing to young people and is prohibited from marketing its products on social media, including Facebook and Instagram. It must also monitor and report social media content about Juul products posted by underage users, and must implement practices to prevent young minors from purchasing Juul products online, including requiring an adult signature with identity verified 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 halted 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 client program which Ferguson says is more robust than those of 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. These audits must be conducted statewide, with at least one audit in each of the state’s 39 counties per year.
Ferguson’s office said secret shoppers must confirm that retailers comply with the requirement to verify the buyer’s age and that they comply 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 program results to the Ferguson office every three months.
Under the consent decree, Juul is ordered to pay the total of $22.5 million over the next four years. Ferguson said the money will be used to create a new health equity unit in that office to address misleading and discriminatory health care practices that disproportionately impact vulnerable communities and communities of color.