Suit: Juul deceived state’s teens

Accusing it of consciously parroting Big Tobacco to manufacture a youth-addiction crisis, state Attorney General Keith Ellison on Wednesday sued West Coast vaping giant Juul Labs, Inc.

The company, a 2015 startup, has become a behemoth worth an estimated $38 billion, the complaint says. Its gains, the suit claims, have come in part at Minnesota’s expense.

“The rise in e-cigarettes among our youth in a few short years has erased the last 10 years of gains we made in fighting youth tobacco use,” Ellison said at a Capitol press conference Wednesday. “Juul is carrying on a tradition of Big Tobacco.”

The seven-count suit, filed Wednesday in Hennepin County District Court, accuses Juul of consumer fraud, deceptive and illegal trade practices, false advertising, negligence and creating a public nuisance. Juul also unjustly enriched itself while leaving Minnesota on the hook for the resulting public-health costs, the complaint says.

It is the latest in a string of state suits against Juul. New York, California and North Carolina have also sued the company, while Illinois and Massachusetts reportedly are investigating the possibility.

Minnesota’s suit does not deal directly with the most highly publicized elements of the vape wave—the reported 2,300 lung injuries and 47 deaths from vaping nationwide, including three in Minnesota. The Centers for Disease Control and Prevention associates the illnesses largely with the off-label use of e-cigarettes for THC vaping.

The CDC says that THC-laced vape pods, purchased on the street or online, frequently contain dangerous vitamin E acetate. Some researchers think the additive is responsible for crippling lung illnesses.

While lung injuries are not part of the present case, they could be rolled into future litigation, Ellison indicated. “It’s not escaped our attention,” he said. “We may well be in touch on that soon, too.”

But for now, he said, the state will focus on Juul’s deceptive marketing of the devices’ intended use by teens and young adults.

“If you use this product as they intended it, it’s not a good thing,” Ellison said. “It’ll addict you. It’ll harm you.”

Suit’s demands

Just as it did in the 1990s when it wrangled a $6.5 billion settlement from Big Tobacco, the AG’s office has brought in big-league private lawyers to assist in the litigation.

A team of five Robins Kaplan attorneys—including Principal Holly H. Dolejsi and firm partner Munir R. Meghjee—are signed on. So are five attorneys from Zimmerman Reed, LLP—including Managing Partner Carolyn G. Anderson and firm partners June P. Hoidal and David M. Cialkowski.

Juul is represented pro se, according to the judicial branch’s register of actions for the case.

In addition to unspecified civil penalties—Ellison said the size of a requested payout won’t be known before discovery—the suit wants Juul ordered to:

• Stop its deceptive conduct in Minnesota, including marketing to youth.
• Fund a corrective public education campaign in Minnesota about the dangers of vaping.
• Fund clinical vaping cessation programs in Minnesota, including therapies appropriate for and obtainable by minors.
• Disclose internal company research.
• Take affirmative steps to prevent the sale of vaping products to children.

“In terms of dollar amounts, look, we’re assessing the extent of the damage,” Ellison said. “It is extensive.” Asked if the ultimate payout could rival the Big Tobacco settlement, Ellison said, “I would not refute that.”

The complaint demands a jury trial. The case has been assigned to Hennepin County District Court Judge Laurie J. Miller.

Ted Kwong, a spokesman for Juul Labs, said via email that the company has yet to review the complaint.

However, he said, the company is already taking proactive steps. It is working on “resetting the vapor category and earning the trust of society,” he said. It also has been working cooperatively with state AG’s, regulators, public health officials and others to “combat underage use and convert adult smokers from combustible cigarettes.”

Juul has suspended orders for mint-flavored pods and pulled all U.S. online, broadcast and print advertising, while investing in research to develop technologies that might reduce youth vape usage, Kwong added.

“Our customer base is the world’s 1 billion adult smokers, and we do not intend to attract underage users,” he said.

‘Very intriguing space’

Not true, said Ellison.

His 82-page complaint details Juul’s rapid raise from an obscure 2015 startup to the dominant e-cigarette company. It entered 2019 with a 76% share of that market, according to the complaint.

Juul owes its meteoric rise to a “vast, targeted and effective marketing campaign” aimed at the young, the suit contends. Even the product’s, sleek, Apple Inc.-inspired design, which resembles a USB drive, is geared to the young. For instance, it is easily hidden in plain sight, encouraging teens’ natural daredevil streak by allowing vaping in class, undetected by distracted teachers, the complaint said.

Vying for the youth market, the company initially sold various flavors of nicotine-laced liquid for its vape pods. Those included fruit and dessert-like flavors, as well as mint and menthol. All were aimed at young, inexperienced smokers, through most were later discontinued. Menthol is still being marketed.

The company’s marketers also recruited youthful social media “influencers” and pop-music musicians to promote and attend flashy youth-oriented launch parties, where unlimited samples were available.

On social media, it amassed 150,000 Juul-related Tweets by the end of 2017, while 11 of its YouTube videos had more than 1 million views. A 2019 study in the journal Drug and Alcohol Dependence found that 45% of Juul’s Twitter followers were 13- to 17-year-olds, while only 20% were 21 or older.

It even paid tens of thousands of dollars to schools and to a police department for direct access to students and youthful offenders, ostensibly to educate them about the dangers of vaping. In reality, those sessions were used to systematically demonstrate product’s use and recruit new users, the complaint says.

The suit also says that, as he was preparing for launch in 2015, Juul Labs co-founder James Monsees told online publication Social Underground that he picked up marketing cues from internal corporate documents released during the Big Tobacco trial.

Many of those detailed tobacco companies’ efforts to recruit teen-aged smokers. The companies understood, Ellison’s complaint says, “that nicotine users who start as teenagers are the most likely to become lifelong addicts.”

“It became a very intriguing space for us to investigate,” Monsees told the publication. “Because we had so much information that you wouldn’t normally be able to get in most industries. And we were able to catch up, right, to a huge, huge industry in no time. And then we started building prototypes.”

The company touted its products as a safe alternative to lit cigarettes, while failing to disclose that its supposedly low 5% nicotine formula actually equates to almost two packs of cigarettes per pod. One pod can be ingested at a sitting,  the complaint said.

‘I’ve been deceived’

The message that vaping was safe hit home with Will Gitler, 17, a Hopkins High School senior who spoke to reporters at Wednesday’s Capitol press conference. As a result, he stopped smoking cigarettes and shifted to vaping—precisely what the company says it wants people to do—only to find himself more addicted than ever.

“It feels like I’ve been deceived, like the progress that I thought I was making wasn’t progress,” he said.

Gov. Tim Walz, who supports the suit, said that after the Big Tobacco settlement, youth smoking in Minnesota fell to just 5% of teens. Now, according to the complaint, 27.5% of high schoolers nationwide vape. Only 4% of adult smokers aged 25 to 66—Juul’s purported target market—use e-cigarettes, the complaint says.

Ellison warned Minnesotans that the state is in for a long, tough court battle. Walz said that Juul’s attorneys—some of whom will individually earn more money than the AG’s office’s entire budget—will argue that the problem lies not with Juul, but with flawed Minnesotans.

“They will use their merchant-of-doubt playbook to tell us we’re bad parents, to tell us we have bad kids, to tell us that we should have known, we told you,” Walz said. “Or how would we have known this was going to happen?”

He vowed that the state will dig hard to answer that question. “We’re going to get their research and I’ll damn sure guarantee you they had conversations talking about how do we get kids like Will addicted,” the governor said.

“There’s a new name for Big Tobacco,” he said. “It’s Juul and it’s vaping. It’s that simple.”

Lt. Gov. Peggy Flanagan said the Walz administration will also pursue legislation in 2020, aimed at curbing the vaping crisis. Banning flavored pods and raising the legal age limit are among possible bills.

“We’re not going to wait to take action on this,” she said.