State of Minnesota Sues JUUL Labs, Incorporated

State of Minnesota Sues JUUL Labs, Incorporated Click to Enlarge Photo: Associated Press

(KNSI) - 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.

In a statement from the governor's office, Attorney General Ellison says, "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.

"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."

Governor Walz has taken a tour of Minnesota to speak to students regarding the dangers of vaping e-cigs. In the same statement, Walz said, "Students across the state tell me they feel preyed upon by JUUL. 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."

Lieutenant Governor Flanagan also took issue with JUUL saying, "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. 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 also 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 accuses JUUL of developing "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."

JUUL's co-founder had 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 that nearly 90 percent of Minnesota teens had seen at least one advertisement for vaping in the last 30 days.

In October 2019, the Minnesota Department of Health 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 8th-graders have vaped, 16-percent of 9th-graders have vaped, and 26 percent of 11th-graders have vaped. The report showed 75 percent of Minnesota youth who use e-cigarettes had never smoked a cigarette before, and 75 percent of all Minnesota 11th-graders say they think vaping is not dangerous.

JUUL started in 2015 and is valued at $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 statements in advertisements, public nuisance, negligence, and negligence per se; and unjust enrichment.

The state is asking 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.