Minnesota suit against e-cigarette maker Juul goes to trial

By STEVE KARNOWSKI
Associated Press

MINNEAPOLIS (AP) — Minnesota Attorney General Keith Ellison is slated to lead off opening statements expected for Tuesday in his state’s lawsuit against Juul Labs – marking the first time any of the thousands of cases against the e-cigarette maker over its alleged marketing to young people is going to play out in a courtroom.

Minnesota sued Juul in 2019, accusing the San Francisco-based company of unlawfully targeting young people with its products to get a new generation addicted to nicotine. Ellison has declined to put a dollar figure on how much money the state is seeking in damages and civil penalties. But he said when he announced the lawsuit that it could be in the ballpark with Minnesota’s landmark $7.1 billion settlement with the tobacco industry in 1998.

Juul has faced thousands of lawsuits nationwide but most have settled, including 39 with other states and U.S. territories. Minnesota added tobacco industry giant Altria, which formerly owned a minority stake in Juul, as a co-defendant in 2020. Altria completed its divestiture this month and says it effectively lost its $12.8 billion investment. A few days later, Altria announced a $2.75 billion investment in rival electronic cigarette startup NJOY.

“We will prove how Juul and Altria deceived and hooked a generation of Minnesota youth on their products, causing both great harm to the public and great expense to the State to remediate that harm,” Ellison said in a statement.

The jury trial, before Hennepin County District Judge Laurie Miller, is expected to last about three weeks. That contrasts with nearly four months for the landmark 1998 lawsuit by the state and Blue Cross and Blue Shield of Minnesota against the big tobacco companies.

That case forced the release of millions of pages of previously secret industry documents and ended in a $7.1 billion settlement just before the state was due to deliver its closing arguments. Part of the money went to fund anti-smoking programs, but both Juul and Altria have pointed out in court filings that lawmakers opted to spend much of the money simply to fund state government.

Ellison plans to deliver part of the state’s opening statement himself before handing it off to attorneys from two outside law firms that are handling the case for Minnesota. The lawsuit alleges consumer fraud, creating a public nuisance, unjust enrichment and conspiracy. A brief filed last week gave a preview of the state’s arguments.

“Defendant JUUL, in a conspiracy joined by Altria, 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,” attorneys for the state wrote. “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.”

Juul said in a statement that Minnesota had rejected settlement offers similar to those it reached with other states, which provided “hundreds of millions of dollars to further combat underage use and develop cessation programs in those states.”

“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,” the statement continued. “This is the approach that Juul Labs supports and has been part of implementing.”

Altria Group — the maker of Marlboro cigarettes and other tobacco products formerly known as Phillip Morris Cos. — is minimizing its role. It said in a court filing last week that it bought a 35% stake in Juul Labs in 2018 after its own vaping products failed to gain traction, and only after Juul assured Altria “and announced to the world,” that it had made “meaningful changes” to its marketing practices.

Richmond, Virginia-based Altria said the services it provided to Juul — supplying strategic counter space in stores and distributing a Juul ad and coupons to adult smokers — lasted just over a year and ended in March 2020 And it maintains that its support did not appreciably increase sales of Juul products in Minnesota nor the use of e-cigarettes by minors in the state.

Juul, which launched in 2015, became the U.S. vaping market leader on the popularity of flavors like mango, mint and creme brulee. Its rise was fueled by its use among teenagers, some of whom became hooked on Juul’s high-nicotine pods. Amid the backlash, Juul dropped all U.S. advertising and discontinued most of its flavors in 2019. Juul has since lost popularity with teens, and its share of the multibillion-dollar market has fallen to about 33% from a high of 75%.

In June, the Food and Drug Administration rejected Juul’s application to keep its products on the market as a smoking alternative for adults, though that decision is on appeal. In September, Juul agreed to pay nearly $440 million to settle a two-year investigation by 33 states into its marketing of high-nicotine products.

States with litigation still pending against Juul include New York, California, Massachusetts, New Mexico, Alaska, Illinois and West Virginia, plus the District of Columbia.