Juul will pay $40 million to settle a vaping lawsuit in North Carolina

Vape pen maker Juul has agreed to pay $40 million to settle a lawsuit in North Carolina, which alleged that the company marketed and sold its products to young people. The state will use the money to fund programs that prevent e-cigarette addition and to help people quit e-cigarettes. The cash will also finance research into e-cigarettes.

As part of the consent order, Juul denied any liability or wrongdoing. However, it agreed to a number of changes to its business practices in the state. Most social media and influencer advertising are off limits, and the company can't have ads near schools or sponsor concerts or sporting events. Juul and retailers that sell its products online will need to use an independent verification system to make sure customers are of legal age.

Juul will need to run a secret shopper program to make sure retailers aren't selling its vape pens to anyone under the age of 21. Retailers will need to keep Juul products behind their counter too. In addition, the company can't introduce new flavors or change nicotine content levels without approval from the Food and Drug Administration (FDA).

“For years, Juul targeted young people, including teens, with its highly addictive e-cigarette. It lit the spark and fanned the flames of a vaping epidemic among our children – one that you can see in any high school in North Carolina," North Carolina Attorney General Josh Stein said in a statement. “This win will go a long way in keeping Juul products out of kids’ hands, keeping its chemical vapor out of their lungs, and keeping its nicotine from poisoning and addicting their brains."

A Juul spokesperson sent the following statement to Engadget:

This settlement is consistent with our ongoing effort to reset our company and its relationship with our stakeholders, as we continue to combat underage usage and advance the opportunity for harm reduction for adult smokers. Importantly, we look forward to working with Attorney General Stein and other manufacturers on the development of potential industry-wide marketing practices based on science and evidence. In addition, we support the Attorney General’s desire to deploy funds to generate appropriate science to support North Carolina’s public health interventions to reduce underage use.

We seek to continue to earn trust through action. Over the past two years, for example, we ceased the distribution of our non-tobacco, non-menthol flavored products in advance of FDA guidance and halted all mass market product advertising. This settlement is another step in that direction.

Stein started investigating Juul in 2018 and sued the company the following year for "designing, marketing, and selling its e-cigarettes to attract young people and for misrepresenting the potency and danger of nicotine in its products." More than a dozen other states have sued Juul for similar reasons, though the North Carolina case is the first to reach a resolution.

The Federal Trade Commission also filed a lawsuit against Juul, Marlboro owner Altria and others with the aim of undoing a 2018 investment that gave Altria a 35 percent stake in the vape pen maker. The agency argues that agreements between the two companies stifled competition and violated antitrust laws. Meanwhile, the FDA opened a criminal investigation into vaping in 2019.