Minnesota’s Lawsuit Against JUUL Labs Begins Trial

Minnesota Attorney General Keith Ellison opened his state’s case against e-cigarette maker Juul Labs on Tuesday, accusing the company of using deceptive marketing tactics to hook children on nicotine. The state is seeking more than $100 million in damages, claiming that Juul unlawfully targeted young people to create a new generation of nicotine addicts.

“They baited, deceived, and addicted a whole new generation of kids after Minnesotans slashed youth smoking rates down to the lowest level in a generation,” Ellison argued. “Now, big tobacco is back with a new name but the same game. Juul wiped out the work of our state with their slick products, clever ads, and attractive flavors.”

Juul Labs has denied the allegations. Attorney David Bernick said that their e-cigarettes were created not to lure children but to convert adult smokers of conventional cigarettes to a less-dangerous product while still getting a satisfying nicotine experience, according to a report by the Associated Press.

The e-cigarette maker has faced thousands of other lawsuits, and Minnesota’s is the first to reach trial, as most have decided to settle. Minnesota’s resolve may be coming from the landmark $7.1 billion settlement that it won against the tobacco industry in 1998. 

“Young people are innocent, and they want to explore,” the attorney general said. “Kids are attracted to what is shiny, slick, cool — and that is exactly who Juul and Altria were targeting and preying upon.”

Bernick argued that Juul products are designed so that they would look different from combustible cigarettes because adult smokers don’t like to be seen smoking because of social stigma. They were designed so that they could be used discreetly by adult smokers and not so kids could smoke them in school.

He also asserted that Minnesota saw an exponential surge in youth vaping before the brand came to the local market in late 2017, suggesting that Juul was not responsible for the uptick in youth vaping.

Minnesota added tobacco industry giant Altria, formerly known as Phillip Morris Cos., which formerly had a minority stake in Juul, as a co-defendant in 2020. Ellison asserted that Altria invested heavily in Juul because it wanted to get kids addicted to its cigarettes. 

Altria attorney William Geraghty denied this claim and said that the company bought a passive stake in Juul because of its success in switching adult smokers of combustible cigarettes to less-harmful e-cigarettes. Altria had a competing product but it failed.

The state’s lawsuit, which alleges consumer fraud, creating a public nuisance, unjust enrichment, and conspiracy with Altria, was filed in 2019 — the trial before Hennepin County District Judge Laurie Miller is expected to last about three weeks.

Juul also still has ongoing lawsuits filed by Alaska, California, the District of Columbia, Illinois, Massachusetts, New Mexico, New York, and West Virginia.

Information for this briefing was found via the Associated Press, Fortune, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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