Juul products are displayed at a New York tobacco store on December 20, 2018.
Seth Wenig/AP
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Seth Wenig/AP
Juul products are displayed at a New York tobacco store on December 20, 2018.
Seth Wenig/AP
Juul Labs has reached settlements covering more than 5,000 cases brought by about 10,000 plaintiffs related to their vaping products.
The financial terms of the deal were not disclosed, but Juul says it has secured an equity investment to fund it.
Battered by lawsuits, Juul announced the layoffs of hundreds of employees last month and the possibility of bankruptcy growing as it secured the financial resources to continue operating.
The e-cigarette maker has faced thousands of lawsuits brought by individuals and families of Juul users, school districts, and Native American tribes. This week’s settlement will deal with those cases, which have already been consolidated in California federal court pending several further trials.
“These agreements represent an important step in strengthening Juul Labs’ operations and securing the company’s way forward,” a company spokesperson said in a statement.
Juul rose to the top of the US vaping market five years ago thanks to the popularity of flavors like mango, mint, and creme brulee. But the startup’s rise is fueled by teen use, some of whom have been drawn to Juul’s nicotine-rich pods.
Parents, school administrators and politicians largely blame the company for the rise in teen vaping, which now includes dozens of brands of flavored e-cigarettes as options. teenagers’ favorite.
Amid the backlash of lawsuits and government sanctions, Juul dropped all ads and stop most of its flavors in 2019.
In June, the Food and Drug Administration rejected Juul’s application to keep its product on the market as an adult tobacco substitute, leaving its future uncertain. . The FDA said Juul did not adequately address key questions about the potential for chemicals to leak from its equipment. The FDA has withheld its original decision while Juul filed an appeal.
Then, in September, the San Francisco company agreed paid nearly 440 million USD to resolve a two-year 33-state investigation into the marketing of high-nicotine e-cigarette products.
That same month, the company’s biggest investor, tobacco giant Altria, announced plans to continue competing in the e-cigarette space.
Altria pulled its own e-cigarette from the market in 2018 after take nearly $13 billion stake in Juul. But that investment lost more than 95% of its value as Juul’s prospects dimmed, leaving Altria with the option of exiting the non-compete agreement.
That means Juul could soon be forced to vie for space on retail shelves with Altria, the maker of Marlboro, along with long-standing competitors like Reynolds American’s Vuse, which recently overtook Juul to take over. become the leading vaping brand in the United States.
Juul has also settled with 37 states and territories over the past year and said it is in talks with other key stakeholders to resolve the remaining litigation.
