Two businesses and Minnesota have struck a $60.5 million settlement over the alleged fraudulent marketing of e-cigarettes to children and young people.
According to the deal, the large tobacco firm Altria and e-cigarette maker Juul Labs will have to pay the settlement sum and stop marketing to kids and young people in Minnesota. Additionally, Juul will no longer be able to offer flavoured goods.
The deal, according to the attorney general in charge of it, sends a signal to businesses that Minnesota is willing to hold them responsible for their acts. He continued by saying that moving forward, businesses will exercise greater caution in regards to young people's vape addiction.
As adolescent vaping exploded and led to high rates of nicotine addiction among teenagers, e-cigarette or "vape" manufacturers have come under fire recently. E-cigarettes with fruit or other non-tobacco flavours are to fault, according to health regulators, for making nicotine more available to children.
Following the 1998 Big Tobacco lawsuit settlement, the Minnesota Department of Health's tobacco control manager reported that youth tobacco usage decreased to single-digit percentage levels. However, in recent years, addiction rates have risen sharply due to vaping.
Juul and Altria will provide Minnesota $60.5 million over the following eight years as part of the settlement. Of that, a third must be paid in the following 30 days and 60% in a year. The settlement amount exceeds Juul's gross sales in Minnesota between 2015 and 2021.
Minnesota's legal expenses will be partially covered by the settlement. $8.6 billion in court expenses and $8.9 billion in legal fees must be paid by Juul and Altria.
In order to provide the public with additional information about what transpired in the corporations behind closed doors, the companies will also be required to reveal internal papers associated with the litigation in a public repository.
Minnesota is one of many states that have filed a lawsuit against Juul Labs for allegedly marketing flavoured e-cigarettes to children and young people. According to a business representative, the corporation has paid more than $1 billion for teenage nicotine and cessation programmes and has resolved legal disputes with 48 states and territories.
The business reached a $462 million settlement with six separate states in April. Juul disclosed a resolution in 5,000 claims brought by 10,000 plaintiffs in late 2022. In a statement, Juul expressed its desire to get past the legal issues and emphasise the potential of its products to help smokers in giving up cigarettes.
Altria is implicated in the case as a result of its $12.8 billion investment in Juul in 2018, but its withdrawal in 2023 when the vape manufacturer's value fell as a result of legal disputes and public outcry.
The trial for the case Minnesota filed against Juul in 2019 began in March. As a three-week trial came to a close last month, the attorney general made the announcement on the settlement with the tobacco and e-cigarette manufacturers. The settlement's specifics were kept under wraps until now.
According to the attorney general, Minnesota is the only state to have sued the firms and gone all the way to trial. He also stated that Minnesota's $60.5 million settlement is the most per person.
A measure that establishes guidelines for the settlement is now being advanced by parliamentarians in order to guarantee that the funds from the settlement go towards initiatives combating child nicotine addiction.