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State adds tobacco giant Altria as defendant in JUUL lawsuit for deceptive marketing targeting youth

Amends complaint to allege Altria, like JUUL, violated state consumer-protection laws, breached duty of reasonable care, created public nuisance

 

December 11, 2020



Minnesota only second state to name Altria as defendant in lawsuit against JUUL

December 10, 2020 (Saint Paul) — Minnesota Attorney General Keith Ellison announced today that the State of Minnesota has filed an amended complaint against e-cigarette manufacturer JUUL Labs, Inc. to add Big Tobacco giant Altria Group, Inc. and four of its subsidiaries as defendants. The amended complaint, filed in Hennepin County District Court, alleges that Altria and its subsidiaries, like JUUL, violated multiple state consumer-protection laws, breached their duty of reasonable care, and created a public nuisance in Minnesota. The amended complaint also adds a new count of civil conspiracy against both JUUL and Altria.

Minnesota is only the second state to name Altria as a defendant in its lawsuit against JUUL.

“When I see the harm like the one JUUL and Altria are perpetrating on Minnesotans — especially on our youth — I won’t sit back and let it happen. That’s why we sued JUUL last year and why we added Altria as a defendant in that lawsuit today,” Attorney General Ellison said. “We in Minnesota have a special responsibility to lead the way in fighting this harm to our children. More than 20 years ago, Minnesota led the nation in taking on Big Tobacco and winning a settlement that led to historic declines in tobacco use and historic improvements in Americans’ health. Today, Minnesota is carrying forward that legacy and taking yet another stand for protecting consumers and the health of our children.”

Altria’s role

Big Tobacco giant Altria, the third-largest tobacco company in the world by sales and market value, was once a competitor of JUUL in the e-cigarette market. In October 2018, however, Altria removed its pod-based e-cigarette products from the market, professing to the U.S. Food and Drug Administration that “we believe that pod-based products significantly contribute to the rise in youth use of e-vapor products.” In the same letter to the FDA, Altria admitted that “underage use of e-vapor products is further compounded by flavors in these products.”

Then in December 2018 — only two months after bowing out of the e-cigarette market and acknowledging the role of those products in promoting youth tobacco use — Altria announced it had purchased a 35% stake in JUUL, the largest manufacturer of pod-based and flavored e-vapor products in the United States. The cost to Altria of buying that stake in JUUL was nearly $13 billion.

As part of the deal, Altria assisted JUUL in the sale, distribution, marketing, and promotion of JUUL’s products, which included providing JUUL access to Altria’s prime retail “shelf space,” its vast sales force, and its enormous distribution network. Altria also included JUUL advertisements on Altria cigarette packs known to be most popular among youth and leveraged its vast tobacco database to engage in direct e-mail and mail advertisements to Minnesota consumers.

The amended complaint alleges that these and other actions vastly extended JUUL’s reach in Minnesota, especially to Minnesota youth.

State’s lawsuit against JUUL

JUUL has risen quickly to dominate the e-cigarette market, especially among youth. 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.

On December 4, 2019, Attorney General Ellison announced that the State of Minnesota had sued e-cigarette manufacturer JUUL Labs Inc. for multiple violations of state consumer-protection laws — including laws barring consumer fraud, deceptive and unlawful trade practices, and false statement in advertising — breaching their duty of reasonable care, and creating a public nuisance. The State’s complaint 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.

Harm to Minnesota’s youth

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.

This rapid growth has wiped out the last 10 years’ worth of progress that Minnesota made in fighting youth tobacco use. 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.

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

 

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