Altria Reaches $235M Agreement in JUUL-Related Court Cases
RICHMOND, Va. — Altria Group Inc. reached agreement on terms to resolve at least 6,000 JUUL-related state and federal cases for $235 million.
"While we continue to believe the claims against us are meritless, we believe this settlement avoids the uncertainty and expense of a protracted legal process and is in the best interest of our shareholders," said Murray Garnick, Altria's executive vice president and general counsel. "This settlement brings to a close the vast majority of our pending JUUL-related litigation."
In October 2019, the U.S. Judicial Panel on Multidistrict Litigation ordered the coordination or consolidation of federal individual and class action lawsuits related to JUUL in the U.S. District Court for the Northern District of California for pretrial purposes. The cases include approximately 50 economic class actions, approximately 4,500 personal injury actions and approximately 1,500 government entity actions, including approximately 1,400 school district cases, according to Altria.
[Read more: Juul Settles With Six More States for $462M]
These cases are covered by the agreement in addition to cases in a related state-court consolidated proceeding involving 750 cases. The settlement does not apply to three cases brought by attorneys general, 35 cases brought by Native American tribes, 17 antitrust cases or three Canadian cases, the company added.
The settlement remains subject to the parties entering into one or more final settlement agreements approved by the relevant courts.
Altria expects to record a pre-tax charge of $235 million in the second quarter of 2023 and intends to treat such amount as a special item and exclude it from our adjusted diluted earnings per share.
[Read more: Altria Survey: Majority of Americans Support Tobacco Harm Reduction]
Altria & Alternative Tobacco Products
In December 2018, Altria made a $12.8-billion investment in Juul Labs Inc. The investment represented a 35 percent economic interest in Juul. However, in late September 2022, Altria disclosed its plans to end its noncompete agreement with Juul Labs in a filing with the U.S. Securities Exchange Commission.
Earlier this year, Altria exchanged its entire minority economic investment in Juul Labs Inc. for a nonexclusive, irrevocable global license to certain Juul heated tobacco intellectual property. The move came as the tobacco company entered into a definitive agreement to acquire NJOY Holdings Inc. for approximately $2.75 billion in cash. The transaction terms include additional $500 million in cash payments that are contingent upon regulatory outcomes with respect to certain NJOY products.
Richmond-based Altria is a portfolio of tobacco products for U.S. tobacco consumers age 21 and over. Its vision is to responsibly lead the transition of adult smokers to a smoke-free future. Altria is Moving Beyond Smoking, leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices.
Its wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, it owns Philip Morris USA Inc. and John Middleton Co. Its smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Co. LLC and Helix Innovations LLC.
Additionally, Altria has a majority-owned joint venture, Horizon Innovations LLC, for the U.S. marketing and commercialization of heated tobacco stick products and, through a separate agreement, it has the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System and Marlboro HeatSticks through April 2024.
Altria's equity investments include Anheuser-Busch InBev SA/NV and Cronos Group Inc., a Canadian cannabinoid company.
The brand portfolios of our tobacco operating companies include Marlboro, Black & Mild, Copenhagen, Skoal and on!. Trademarks and service marks related to Altria referenced in this release are the property of Altria or its subsidiaries or are used with permission.