When North Carolina Attorney General Josh Stein settled the state’s lawsuit against Juul, I said it was a good start, but identified several shortcomings. Because the settlement contained a “most favored nation” clause it would benefit from stronger settlements in the future built on the foundation of the North Carolina settlement.
That’s what happened in the state tobacco litigation of the 1990s: as each state settled, the terms got stronger and, because they all had most favored nation clauses, each state’s progress reflected back on the earlier settling states.
That’s not happening in the Juul litigation. The AGs are settling for less, not more, than the earlier cases.
Before getting into the details of the Arizona and Washington settlements (and the pending Louisiana settlement), it is useful to review the limitations in the North Carolina settlement that I was hoping subsequent settlements would address:
- The amount of money amounted to pocket change for Juul.
- There was no guarantee of funding for anti-vaping, cessation, research and making internal Juul documents available to the public, as the Master Settlement Agreement did when it created what is now called the Truth Initiative to run these programs.
- While North Carolina secured an agreement to make the Juul documents obtained in discovery public, there will be a year-long delay and Juul will have a lot of control over what information is redacted (withheld from the public).
- The “limitations” on marketing that Juul accepted simply codify limits that it was already observing to reduce public criticism.
- The settlement commits Juul not to make health or therapeutic (i.e., smoking cessation) claims through March 31, 2027, unless they are specifically authorized by the FDA, but contains a huge loophole: Juul is allowed to promote “testimonial videos of the experiences of persons thirty-five years of age and older who are or were habitual combustible cigarette smokers using JUUL products.” These testimonials have included many people claiming Juul helped them quit smoking, which are therapeutic (cessation) claims that violate federal law.
- Rather than ending all outdoor advertising, the settlement prohibits outdoor advertising within 1000 feet of schools or playgrounds but because advertisements of up to 14 sq ft at retailers are defined as not being outdoor advertising, the settlement would effectively allow ads at retailers across the street from of schools and playgrounds.
- The settlement limits the use of social media influencers through March 31, 2027, but allows Juul, not independent authorities, to determine the appropriateness of using these based on industry (not public health) standards.
- Juul, not the AG, is responsible for policing its compliance with the marketing restrictions in the settlement.
- Juul, not the law enforcement or the health department, is responsible for conducting compliance checks to monitor underage sales; it can use its enforcement activities to collect valuable marketing data.
- The restrictions on the number of Juul devices and pods that can be sold to an individual at one time or during a short period of time are huge.
Most of the provisions of the new settlements are the same as the North Carolina settlement. But, rather than remedy some of the shortcomings of the North Carolina settlement, to the extent that the new settlements are different from North Carolina, they are generally weaker.
On a population basis, Arizona, Washington, and Louisiana are getting less money than North Carolina
|State||Settlement (million)||Population (million)||Dollars per capita|
The new settlements do not require any additional document disclosure. This is a huge disappointment because, as Minnesota AG Hubert Humphrey III said of the Minnesota lawsuit in the 1990s, “the most important thing to come out of these lawsuits will be the truth.”
Juul is still in change of verifying that it is not selling to kids. Washington Attorney General Bob Ferguson’s press release described the this provision in the Washington settlement as “the strictest secret shopper program in the company’s history. But the North Carolina settlement committed Juul to conducting 50 “secret shopper” compliance checks; Washington only requires 25. As noted above, the state, not Juul, should be doing these checks.
The age of people appearing in Juul ads is lower in the Washington settlement. Whereas the North Carolina settlement prohibits Juul from using any individual under the age of 35 in its marketing materials, the threshold age under the Arizona and Washington settlements is 30.
Washington has weaker advertising restrictions. Both agreements restrict Juul from advertising in public transportation facilities and on public transportation vehicles. Under the North Carolina agreement, the only advertisements allowed at public transportation facilities are in-store advertisements in retail locations. In addition to this in-store retail carve-out, the Washington agreement allows advertising within designated smoking areas at these public transportation facilities.
Limitations on sales volumes are even more ineffective in Washington. Both agreements require Juul to limit the quantity of devices and pods that can be purchased in a single in-person retail transaction. Under the North Carolina settlement, consumers are limited to one device per retail transaction, compared to two in Arizona and Washington. The limit for pods under both North Carolina and Washington agreements is 16 pods per transaction, the limit Juul has been using already. This is a huge number of pods, delivering the nicotine of 16-32 packs of cigarettes. How many people buy 32 packs of cigarettes for themselves in a single transaction? Arizona limits sales to 60 pods per month; that’s like 2-4 packs of cigarettes a day!
The rules for what the money is to be spent on are increasingly weak. Arizona does call for the money to be used, among other things, for educational programs to reduce vaping and treating nicotine addiction, but also allows settlement funds to reimburse retailers for the cost of Juul’s electronic age verification systems. Washington does mention any specific spending priorities. Both settlements reimburse the attorney general’s litigation cost out of the settlement rather than requiring a separate reimbursement by Juul.
There are still many more cases in the courts. I hope that, as happened in the original tobacco litigation in the 1990s, the AGs will feel the need to keep upping the ante for Juul, not take the other way around. What we have now is the AGs lowering the bar on subsequent settlements and declaring victory.
My comments on the North Carolina settlement contain many specific suggestions for moving the ball forward. Hopefully other state AGs (and private litigants) will take these concerns to heart and reverse the downward spiral things are on now.
Public health needs to hold future AGs’ (and private litigants’) feet to the fire. We can do better.