Juul settles Arizona’s lawsuit

E-cigarette maker to pay $14.5M; illegal marketing alleged

PHOENIX — E-cigarette giant Juul Labs will pay Arizona $14.5 million and vowed not to market to young people in the state to settle a consumer fraud lawsuit.

The settlement announced by Attorney General Mark Brnovich on Tuesday is the second Juul has reached with state prosecutors. It ends litigation the Republican U.S. Senate candidate filed in January 2020 against Juul and another maker of electronic cigarettes, alleging they illegally targeted young people in their marketing.

Arizona previously obtained a $22.5 million judgment against defunct vaping product maker Eonsmoke but has not and is not likely to collect any of the money.

Juul Labs admitted no wrongdoing in settling the case and called it “another step in our ongoing effort to reset our company.” The company had stopped all advertising before Brnovich sued and ended sales of all flavored products except menthol.

Juul has faced lawsuits from multiple states over marketing of its products, which it touts as a safer alternative to regular tobacco products. In June, it reached a similar deal with North Carolina’s attorney general that included a

$40 million payment and promises not to market to minors and boost enforcement of retailers who sell its products. Lawsuits with a handful of other states remain.

E-cigarettes are touted as safer than tobacco cigarettes because though they deliver the addictive drug nicotine, they do not give off smoke that contains carcinogens. But they are still addictive and dangerous to health, especially for teenagers whose brains are still developing.

The U.S. Food and Drug Administration approved the first e-cigarette last month, saying the R.J. Reynolds’ product has a clear benefit because it can reduce the use of regular cigarettes. Juul’s product remains under FDA review. Some adulterated vaping products have caused serious health effects.

All but $2 million of the $14.5 million Arizona settlement will be used for programs that discourage use of vaping products, including cessation and education programs designed to prevent use and nicotine addiction by young people. Juul also agreed in the consent decree to implement a strict retailer monitoring program where it will do compliance checks of at least 25 stores per month across Arizona for two years and take action against those that illegally sell to underage smokers.

The other $2 million will go into a state account the attorney general uses to fund consumer fraud investigations.