State sues JUUL for deceptive marketing targeting youth

AG Ellison announces lawsuit with Gov. Walz as Minnesota loses 10 years of progress in fighting youth tobacco use JUUL addicts youth by deceiving them about nicotine content, following Big Tobacco marketing playbook

December 4, 2019

[SAINT PAUL] — Minnesota Attorney General Keith Ellison, along with Governor Tim Walz and Lieutenant Governor Peggy Flanagan, today announced that the State of Minnesota is suing e-cigarette manufacturer JUUL Labs, Inc. The lawsuit, filed in Hennepin County District Court, alleges among other counts that JUUL has violated multiple state consumer-protection laws, breached its duty of reasonable care, and created a public nuisance.

“My job is to protect Minnesotans from deceptive, fraudulent, and unlawful practices, and to protect their health and safety. It’s especially important for me to protect our young folks from deception and harm. I’m bringing a lawsuit against JUUL today because it has created a public nuisance that is centered around deceiving, addicting, and harming our young people,” said Attorney General Ellison.

“In Minnesota, we have a special duty to take on this fight,” Attorney General Ellison added. “Twenty years ago, we led the nation in taking on Big Tobacco. Now JUUL has stepped in to deceive consumers just like Big Tobacco did and has taken it to a whole new level. We’re not going to stand by while this company tries to deceive and addict a whole new generation of our youth.”

“Students across the state tell me they feel preyed upon by JUUL,” said Governor Tim Walz. “As a father of two teenagers and Governor of Minnesota, I’m saying enough is enough. We’re going to hold JUUL accountable for the vaping epidemic they started in Minnesota.”

“As the mom of a child with asthma, I think about a future where my daughter and kids in our community will be targeted by JUUL’s deceptive marketing practices if we don’t act now,” said Lieutenant Governor Peggy Flanagan. “The rate of eighth graders using e-cigarettes has doubled in just three years. I’m proud to join the Attorney General in this fight and work to make sure eighth graders aren’t being taken advantage of by Big Tobacco.”

The complaint that Attorney General Ellison filed today describes how JUUL developed products with higher, more potent, and more addictive doses of nicotine than conventional cigarettes and other e-cigarettes — then not only failed to disclose that to its customers, but represented that its products are a safe alternative to cigarettes.

The complaint also describes in detail how JUUL developed sleek-looking products and sweet, popular flavors that were designed to appeal to youth, and how its vast, targeted, and highly effective youth-oriented marketing campaign closely follows the Big Tobacco marketing playbook of decades past in deceptively luring young people into using and becoming addicted to its products. Indeed, JUUL’s co-founder has stated that even before JUUL launched its products, they studied Big Tobacco’s marketing strategies in detail.

In 2017, the Minnesota Department of Health reported than nearly 90 percent of Minnesota teens had seen at least one advertisement for vaping in the last 30 days.

The complaint also asserts that JUUL was negligent in its duty to correctly verify its customers’ ages, as required by Minnesota law, and deliberately turned a blind eye to the fact that its controls were not working and underage Minnesotans were purchasing their products.

In the wake of this alleged deceptive, fraudulent, and unlawful behavior by JUUL — which controls 75 percent of the e-cigarette market — tobacco use has risen dramatically among Minnesota youth.

  • In October 2019, MDH reported that in the last three years, the percentage of 11th graders who have vaped in the last 30 days has grown more than 50 percent, the percentage of 9th graders has grown 75 percent, and the percentage of 8th graders has grown nearly 100 percent.
  • This means that that in the last 30 days, 11 percent of all Minnesota 8 th-graders have vaped, 16-percent of 9th-graders have vaped, and 26 percent of 11th-graders have vaped.
  • 75 percent of Minnesota youth who use e-cigarettes had never smoked a cigarette before.

This reversal has taken place quickly: from 2000 to 2017, the prevalence of smoking in high school decreased 70 percent. The year 2017 was the first in nearly two decades that saw an increase in tobacco use among high school students.

The growth is taking place despite the known harms of vaping. E-cigarettes have been shown not only to be highly addictive, but to have the potential to cause cancer, seizures, breathing problems, and DNA damage. Young people are at a higher risk of nicotine addiction than adults because their brains are not fully formed until age 25. Studies also show that adolescent tobacco use is associated with the risk of developing major mental-health disorders.

Yet against the backdrop of JUUL’s aggressive youth-marketing campaigns, 75 percent of all Minnesota 11th-graders say they think vaping is not dangerous.

JUUL’s rise to dominance in the e-cigarette market, especially among youth, has been as swift as Minnesota’s reversal in fighting youth tobacco use. From a small, obscure start-up in 2015, JUUL grew to a value of $38 billion in 2019. In just one year, from 2017 to 2018, its revenues grew 800 percent. Its share of the e-cigarette market grew in just two years from one-quarter of the market in 2017 to three-quarters of the market in 2019.

Big Tobacco has recognized this growth. In December 2018, tobacco giant Altria — the owner of Philip Morris and other major cigarette brands — bought a 35 percent stake in JUUL for nearly $13 billion.

The complaint that Attorney General Ellison filed today on behalf of the State of Minnesota alleges that JUUL has committed: consumer fraud; deceptive trade practices; unlawful trade practices; false statement in advertisement; public nuisance; negligence and negligence per se; and unjust enrichment.

To remedy this behavior, the State asks the court to:

  • Declare JUUL is responsible for creating a public nuisance in Minnesota and violating its consumer protection statutes;
  • Order JUUL to permanently stop its deceptive conduct in Minnesota, including marketing to youth;
  • Order JUUL to fund a corrective public education campaign in Minnesota about the dangers of youth vaping;
  • Order JUUL to fund clinical vaping cessation programs in Minnesota, including programs appropriate for youth;
  • Order JUUL to take affirmative steps to prevent the sale of its products to children;
  • Order JUUL to disclose all its research relating to vaping and health;
  • Award monetary relief for the great harm and injury JUUL has caused in Minnesota;
  • Award civil penalties, investigatory fees, expert witness fees, and attorneys’ fees for violations of Minnesota’s consumer-protection laws;
  • Reimburse Minnesota for all its expenditures, since JUUL’s inception, related to controlling e-cigarette use among Minnesota’s youth; and
  • Order JUUL to disgorge all payments it received from its unlawful conduct.

The Attorney General’s Office has hired two firms, Robbins Kaplan LLP and Zimmerman Reed LLP, as outside counsel for this lawsuit. The Attorney General’s Office submitted this special-attorney appointment for the Legislative Advisory Commission for review and recommendation on October 21, 2019. Three members of the Commission made a recommendation in favor of the contract and three members made no recommendation. After the 20-day review period passed, the Attorney General’s Office proceeded with hiring the firms.

A copy of the complaint is available on Attorney General Ellison’s website.

Permalink: http://mn.gov/governor/news/index.jsp?id=1055-412319

Posted in News.