On Tuesday, Connecticut Attorney General William Tong (D) announced that Juul Labs, the electronic cigarette manufacturer, has agreed to settle a lawsuit for $438.5 million. The case was filed by 33 states following an investigation into the company's marketing practices, reported the Associated Press.
The settlement amounted to about 25% of its total sales in the U.S. last year. Tong stated that Connecticut would receive at least $16 million from the lawsuit.
Juul Labs was targeted in 2020 for bearing significant responsibility for the surge in teen vaping. The states in the lawsuit alleged that the company marketed its high-nicotine products to underage users by throwing launch parties, running product giveaways, and featuring ads and social media posts with young models.
In addition to the nearly $440 million settlement to be paid out over a six- to ten-year period, Juul was hit with several marketing restrictions. For example, the e-cigarette company can no longer use social media advertising, product placement, depict people under 35, or advertise on billboards or public transportation. In addition, giving away free samples or paying social media influencers to promote Juul products is prohibited.
"These are some of the toughest mandates at any point on any industry," Tong said, "which is incredibly important because at the end of the day this is about protecting our kids and protecting all of us from a very significant public health risk."
After the once-dominant vaping product manufacturer came under scrutiny, it stopped hosting launch parties and running product giveaways. In response to concerns that its products were attracting younger users, it pulled fruit- and candy-flavored e-cigarettes from stores.
Since 2019, Juul has pulled all advertising in the United States. It has moved away from marketing to younger crowds and focused on providing an alternative to adults hoping to kick cigarette habits.
Juul said in a statement, "We remain focused on our future as we fulfill our mission to transition adult smokers away from cigarettes — the number one cause of preventable death — while combating underage use."
At its peak, the company made up one-third of the retail vaping market. Since then, Juul's market share has dropped by 75%.
Juul still faces an additional nine lawsuits from other states, as well as personal lawsuits from users who claim they became addicted to nicotine due to using the company's products.
The vaping product manufacturer previously settled cases in Arizona, Louisiana, North Carolina, and Washington.
The FDA also targeted Juul, attempting to remove its products from the market altogether. Juul challenged the ruling in court, and since then, the FDA has continued its safety review of the company's technology.