Trial of Youth Marketing Case Against Juul Begins in Minnesota

MINNEAPOLIS — Opening statements began in the trial of the state of Minnesota's lawsuit against Juul Labs Inc. on March 27, marking the first time that any lawsuits against the e-cigarette manufacturer have reached the courtroom rather than reaching a settlement.

The suit accuses San Francisco-based Juul of using its products to unlawfully target young people and get a new generation addicted to nicotine, in the process violating Minnesota's consumer-protection laws, breaching its duty of reasonable care and creating a public nuisance, reported the Associated Press.

Although Minnesota Attorney General Keith Ellison has not stated how much money the state seeks in damages in civil penalties, upon filing the lawsuit in 2019 he stated it could be in line with Minnesota's 1998 landmark $7.1 billion settlement with the tobacco industry.

"Defendant Juul, in a conspiracy joined by Altria [Group Inc.], preyed upon and enticed Minnesota's children, through deceptive and illegal tactics, to buy a product that may sentence them to a lifetime of nicotine addiction and other destructive behaviors," Minnesota attorneys wrote in the lawsuit. "Juul embarked on a design and marketing campaign that would ensnare children, focusing on attracting 'cool kids,' creating a nicotine 'buzz,' and using social media and celebrities to act as 'pushers' of its addictive products. Defendants claim their conduct was in the name of helping 'aging smokers' to stop smoking. That claim is false; it is a smoke screen."

During the first half of the state's opening statement, Ellison listed four ways that Juul and Richmond, Va.-based Altria, which took a 35 percent stake in Juul Labs in 2018 before stepping back from its noncompete agreement in 2022, allegedly caused Minnesota citizens harm:

• Styling Juul devices similar to iPhones and to be sleek, concealable and difficult for parents and teachers to detect;
• Designing Juul products to include large amounts of nicotine and adding a "salt" that makes it easier for nicotine to be inhaled deep into the lungs;
• Adding flavors known to entice young people, such as mango, mint and fruit medley; and
• Engaging in a marketing campaign, primarily on social media, using colorful images, fun flavors and young models, including social media influencers.

"The State cannot 'childproof' the world and we're not trying to. But Minnesota law provides that its citizens are protected from companies trying to deceive, manipulate or mislead them," Ellison said. "And, especially, Minnesota law protects children from companies that engage in misleading and deceptive practices to entice them to buy an addictive product."

PAST SETTLEMENTS

Juul stated that Minnesota rejected settlement offers similar to the ones it reaches with other states, which provided "hundreds of millions of dollars to further combat underage use and develop cessation programs in those states."

In December 2022, the company resolved thousands of cases by settling with plaintiffs in federal multidistrict litigation and related Juul Labs Product Cases that were consolidated in the United States District Court for the Northern District of California, as Convenience Store News previously reported. The settlement amount was reportedly $1.2 billion.

"Effective interventions to address underage use of all tobacco products in Minnesota, including vapor, depends not on headline-driven trials, but on evidence-based policies, programs, and enforcement," Juul continued. "This is the approach that Juul Labs supports and has been part of implementing."

Altria Group stated in a court filing that it purchased its stake in Juul after the company announced it had made meaningful changes to its marketing practices. The services it provided to Juul included supplying strategic counter space in stores, and distributing a Juul advertisement and coupons to adult smokers, and lasted for just over a year, ending in March 2020, according to Altria. The manufacturer added that its support did not "appreciably" increase sales of Juul products in Minnesota, nor the use of e-cigarettes by minors within the state.

Earlier this month, Altria exchanged its entire minority economic investment in Juul for a non-exclusive, irrevocable global license to certain Juul heated tobacco intellectual property as it entered into a definitive agreement to acquire NJOY Holdings Inc. for $2.75 billion.

Juul's share of the multibillion-dollar vaping market has fallen to approximately 33 percent from a high of 75 percent.

The jury trial before Hennepin County District Judge Laurie Miller is anticipated to last around three weeks.