Minnesota Attorney General Keith Ellison today (Wed) announced the details of his Office’s settlement with Juul and Altria for deceptively marketing e-cigarettes, which includes $60.5 million in combined payments by the two companies and public disclosure of Juul and Altria internal documents. This announcement follows Minnesota’s three-week trial against the companies in March and April 2023.
Under the terms of the Consent Judgment filed today with the Hennepin County District Court, Juul and Altria will together pay a total of $60.5 million to the State of Minnesota over an eight-year period. The payment schedule is frontloaded: it requires JUUL and Altria to pay $22.75 million within 30 days and another $12.75 million by March 2024, meaning that the State will receive nearly 60% of the total value of the settlement in less than one year.
The value of Minnesota’s settlement with Juul and Altria is the largest per capita of all 48 states and territories that have settled with Juul. It also greater than the total value of Juul’s gross revenue from sales of its products in Minnesota from 2015–21.
Attorney General Ellison supports pending legislation that, if passed before the end of the current legislative session, would ensure that Minnesota’s recovery from the case is placed into a special fund administered by the Minnesota Department of Health that is dedicated to the prevention of youth smoking and e-cigarette use.
In the settlement, Juul and Altria are also paying the state’s legal costs, including the costs of litigation and attorneys’ fees. The near-final estimate of case costs that Juul and Altria are paying in the settlement is $8.6 million, which covers the cost of depositions, discovery, expert witnesses, and more. A portion of the payment will also be used to compensate the State’s outside counsel for their tremendous work on this matter, currently estimated at approximately $8.9 million, based on a contract between the State and outside counsel that received legislative approval in 2019. Even after costs and fees, the value of Minnesota’s settlement will still be the largest per capita in the country.
The settlement also requires Juul and Altria to publish their internal documents related to the litigation in a public document depository. The settlement ensures that Minnesota-specific Juul documents will be made public in addition to the document disclosure already secured by other states’ settlements with Juul. Furthermore, the settlement agreement requires Altria to make public the documents from Minnesota’s litigation, as well as from similar litigation by other states against Altria and from the federal multidistrict litigation matter involving Juul and Altria.
The settlement requires Juul to abide by substantial conduct restrictions, including:
- Prohibiting Juul from marketing and selling to children and young adults, including use of models under the age of 35, advertising on apparel, entertainment, and social media platforms, and the sale of flavored products;
- Restricting Juul’s ability to sponsor events and use outdoor advertising in Minnesota;
- Preventing Juul from distributing product samples;
- Requiring that Juul accurately disclose the nicotine content of Juul products;
- Directing how Juul products may be sold in-store and limiting online sales; and
- Creating a retailer compliance program for Minnesota stores to ensure that Juul products are being sold with proper age verification.
The agreement requires Altria to abide by restrictions on the sale of its own e-cigarette products that it sells in the future.
“In late March, I told a Hennepin County jury that Juul and Altria baited, deceived, and addicted a whole new generation of kids — all so they could make money. They did this after Minnesotans had slashed youth smoking rates down to the lowest level in a generation. As we did in the Big Tobacco litigation 25 years ago, Minnesotans once again demonstrated leadership by being the first, and so far only, state in the nation to take Juul and Altria to trial,” Attorney General Ellison said. “After three weeks of trial where we demonstrated over and over how Juul and Altria knowingly deceived Minnesotans — and on the verge of closing arguments — we reached this historic settlement that will quickly get resources into prevention and will put a stop to the deceptive behavior that led to this crisis in the first place. This settlement, which is the largest of its kind in the country, also sends a clear message: we will not tolerate marketing nicotine products to children and youth in Minnesota and we will hold you accountable if you do.”
“Minnesota is a state that stands up for and protects our young people. As a father and as Governor, I am proud that Minnesota is holding Juul accountable for the harm it caused so many young Minnesotans,” said Governor Tim Walz. “I am grateful to Attorney General Ellison for leading this charge and to the trial team for their work. This settlement brings us another step closer to making Minnesota the best state for kids.”
“Three and a half years ago, we heard firsthand the devastating impacts that nicotine addiction and e-cigarette use had on our young people’s physical and mental health and overall well-being,” said Lieutenant Governor Peggy Flanagan. “We have a responsibility to protect our kids. Allowing deceptive, harmful marketing to target young children is unacceptable — and we are not going to tolerate it here in Minnesota. Thank you to the Attorney General and his team for their work and to the young people who had the courage to share their stories and inspire action.”
About the litigation
In December 2019, Attorney General Ellison sued Juul on behalf of the people of Minnesota, and with the support of Governor Walz and Lt. Governor Flanagan, for violating Minnesota’s consumer-protection laws, breaching its duty of reasonable care, and creating a public nuisance. When Attorney General Ellison sued Juul, the epidemic of youth vaping was reaching its peak in Minnesota and across the country. Prior to Juul’s emergence, Minnesota had been experiencing the lowest levels of youth tobacco use in decades and those numbers were still declining when the e-cigarette industry — which Juul dominated with a majority share of the market — wiped out the State’s hard-earned progress in combatting youth tobacco use.
The State’s 2019 lawsuit detailed how JUUL developed sleek devices and flavors that were appealing to youth, and how JUUL’s youth-oriented marketing deceptively attracted and addicted young people. In 2020, Minnesota amended its complaint to include Altria as a defendant: in 2018, Altria spent $12.8 billion to acquire a 35% share in JUUL.
Of the many state and local governments that sued JUUL or Altria, Minnesota was the first to go to trial. The trial began on March 28, 2013 as Attorney General Ellison delivered the first part of the State’s opening statement.
At trial, the State showed the jury how, among other things:
- The launch of the Juul product and the accompanying “Vaporized” marketing campaign heavily appealed to youth users, as seen in Juul’s own internal video summarizing the success of the launch;
- Juul’s design, flavors, and marketing attracted youth and garnered JUUL a 75% share of the youth vaping market by the end of 2018 ;
- Internal messages from Juul marketing executives showed them joking about advertising Juul flavors directly to teen and underage users, even referring to teen users as “feens”; and
- The CEOs of Juul and Altria later acknowledged Juul’s responsibility for inciting a teen-vaping crisis.
The State presented 11 witnesses in support of its claims against JUUL and Altria before Attorney General Ellison rested the State’s case on April 11. The parties reached a settlement on April 17 and the case was stayed by the Hennepin County District Court, pending the finalization of the Consent Judgment that was filed today.
“We are proud to stand with Governor Walz, Attorney General Ellison, and Lieutenant Governor Peggy Flanagan today to close another chapter in the fight against the tobacco companies putting Minnesota youth at risk through deceptive marketing,” said Tara Sutton, lead trial counsel from Robins Kaplan. “From the groundbreaking tobacco trial in 1998 to today, Robins Kaplan has been honored to play a role in protecting Minnesota’s children.”
“As the first state to go to trial against Juul, Minnesota has proven once again, as it did 25 years ago, that it will hold tobacco companies accountable for their actions,” said Munir Meghjee, a partner at Robins Kaplan and co-lead trial counsel. “Thank you to Attorney General Ellison and our co-counsel Zimmerman Reed for partnering with us in this hard-fought battle for the benefit of Minnesota youth.”
“We knew from the outset that this litigation would be exceptionally hard-fought. And it was. But we also knew that protecting Minnesota’s youth from the dangers and addictiveness of e-cigarettes was a responsibility we owed to the future. We had to challenge these tobacco companies over their role in fueling Minnesota’s youth e-cigarette epidemic,” said Zimmerman Reed partner June Hoidal. “It has been an honor to work alongside our Attorney General and his Office and our co-counsel at Robins Kaplan to achieve such a great result for our State. We are grateful for the work we were able to contribute to this case and take satisfaction knowing that our success has made Minnesota, our cities, and communities healthier and better places for the next generation.”
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(MN Attorney General’s release)
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