WASHINGTON, D.C.– Attorney General Karl A. Racine today announced a lawsuit against JUUL Labs, Inc., a major e-cigarette manufacturer, and its original parent company, for purposely marketing nicotine products to teenagers and misleading consumers about their highly-addictive quality. In its lawsuit, the Office of the Attorney General (OAG) alleges that JUUL deliberately targeted underage consumers; failed to verify ages of purchasers; and deceived consumers about the content, strength, and safety of its products. As a result of JUUL’s conduct, roughly one-third of all e-cigarette users nationwide are middle and high school-aged kids—including thousands in the District. OAG is seeking to stop JUUL from engaging in these dangerous practices, and to impose civil penalties. Additionally, OAG is issuing subpoenas to eight other e-cigarette companies to investigate whether these companies engaged in similar practices, and to further prevent District kids from using these products.
“JUUL has created a public health emergency in the District and nationwide by marketing its highly-addictive nicotine products to children, and failing to warn consumers about the harmful effects of e-cigarettes—all in its pursuit of profit,” said AG Racine. “With this lawsuit, we are seeking to hold JUUL accountable for its illegal practices that have unfairly and unconscionably dragged a new generation into nicotine addiction.”
JUUL Labs, Inc., is a major e-cigarette manufacturing company headquartered in San Francisco. JUUL Labs was previously owned by Pax Labs, Inc., an electronic vaporizer company, and spun off into its own company in 2017. In the years following its spin-off, JUUL quadrupled in size. In December 2018, Altria—the parent company of Philip Morris USA, a major tobacco company—acquired a significant stake in JUUL with a deal that ballooned JUUL’s valuation to $38 billion. It is the most prominent company within the rapidly growing e-cigarette market.
Over the last year, the U.S. Food and Drug Administration (FDA) and the Surgeon General have warned that the country is in the throes of a teenage vaping “epidemic.” Usage levels are spiking at an unprecedented rate, reversing a decades-long decline in smoking rates among young people. According to the FDA, some 3.6 million kids in the United States use e-cigarettes, including 1 in 5 high school students. In the last few years, JUUL’s online and retail sales to District consumers, and its revenue in the District, have skyrocketed. Thousands of District teenagers use JUUL’s products. One principal of a District high school estimates that half of the school’s juniors and seniors use e-cigarettes. Within the first year JUUL products were on the market, senior managers at the company knew that their youth-friendly design and marketing had borne fruit by attracting a large underage consumer base.
OAG alleges that JUUL violated the District’s Consumer Protection Procedures Act by:
- Marketing highly-addictive nicotine products to minors: JUUL designed products, from its vaporizer to its flavor offerings, with the intent of appealing to younger consumers and with full knowledge that this would draw minors. The company explicitly sought to advertise its products through channels known to attract younger viewers, from social media platforms like Instagram, YouTube, and Twitter, to outlets like Vice magazine. It used Big Tobacco’s marketing techniques as a playbook, applying them to youth-heavy outlets within the modern media ecosystem with the express purpose of drawing in teenagers.
- Deceiving consumers about the nicotine content and strength of its products: JUUL understated the strength of its products’ nicotine content, and routinely made inaccurate comparisons to traditional cigarettes. From its launch until at least 2017, JUUL packaging offered no warning that the product contained nicotine at all. In fact, JUUL’s products contain roughly three times the level of nicotine compared to competitors in the market before JUUL’s emergence.
- Misleading consumers on its products’ safety: JUUL told consumers that its product was safe, despite knowing of the harmful effects of nicotine and other toxic chemicals in its product. In addition, a central selling point for JUUL is the claim that its products are proven to be a safer alternative than traditional cigarettes. This is unproven. Furthermore, the company markets itself as a means of quitting smoking, despite never receiving FDA approval as a nicotine replacement therapy.
- Failing to properly verify consumer ages before selling its products online: For at least three years after JUUL’s debut, the company’s online age verification system was riddled with flaws and loopholes that allowed underage consumers to purchase its products in violation of District law, which prohibits the sale of tobacco products to anyone under age 21. Further, JUUL’s online store did not comply with District law requiring photo identification checks for any purchaser suspected of being under 30 years old. Internal communications show that the company knew of these shortcomings, but prioritized sales over attempts to address them.
- Lying about efforts to combat youth smoking: JUUL touted both its age verification system, and a “secret shopper” program as key parts of its effort to stop minors from using its products. But JUUL failed to properly implement these programs in the District and they were largely ineffective.
A copy of the complaint is available at: https://oag.dc.gov/sites/default/files/2019-11/JUUL-Pax-Complaint.pdf
As part of further investigations into this burgeoning industry, OAG is also issuing subpoenas to eight additional e-cigarette companies. OAG is seeking information on the companies’ business and marketing practices in the District of Columbia, and their policies related to preventing minors from purchasing their products.
Resources for Residents Concerned About E-Cigarettes
OAG works to protect District consumers from unfair and misleading business practices—including the dangers of e-cigarettes. As part of this public interest work, OAG put together resources for parents with questions about e-cigarettes and vaping, including a fact sheet with tips.