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Texas is slated to receive $42.8 million form Juul Labs, an electronic cigarette company, in a lawsuit settlement for deceptive marketing and sales practices, the Office of the Texas Attorney General announced Tuesday.

Texas is slated to receive $42.8 million form Juul Labs, an electronic cigarette company, in a lawsuit settlement for deceptive marketing and sales practices, the Office of the Texas Attorney General announced Tuesday.

AUSTIN — Texas is slated to receive $42.8 million form Juul Labs, an electronic cigarette company, in a lawsuit settlement for deceptive marketing and sales practices, the Office of the Texas Attorney General announced Tuesday.

Texas was joined by 34 other U.S. states and territories in a lawsuit first launched in 2020 by Texas Attorney General Ken Paxton. The total settlement was $439 million, a news release said. The settlement will also forces JUUL to comply with a series of injunctive terms limiting marketing and sales practices, it said. 

“When I launched this investigation over two years ago, my goal was to make sure JUUL was held liable for any wrongdoing done in the past and ensure that they change direction to fully comply with the law going forward. This settlement helps accomplish both of those priorities,” Paxton said in a statement. “My commitment to protecting consumers from deceptive business practices is unwavering, and any company that misleads Texans, especially our youth, will be held accountable for their actions.” 

JUUL has been criticized for hooking teenagers on nicotine. 

The multistate investigation corroborated these accusations, revealing that JUUL became a dominant player in the vaping industry by willfully engaging in an advertising campaign that appealed to youth, even though its e-cigarettes are both illegal for them to purchase and unhealthy for youth to use, the release said. The investigation also found that JUUL marketed to underage users with launch parties, advertisements using young models, social media posts and free samples, it said.

In addition, the investigation found that JUUL manipulated the chemical composition of its product to make the vapor less harsh on the throats of young and inexperienced users. The company also relied on age verification techniques that it knew were ineffective to preserve its underage customer base, the release said. 

Paxton’s office said the involved states are in the process of finalizing and executing the settlement documents, but that the $438.5 million would be paid out over a period of six to ten years, with the amounts paid increasing the longer the company takes to make the payments. If JUUL chooses to extend the payment period up to ten years, the final settlement would reach $476.6 million, the release said. 

The agreement also includes marketing, sales and distribution restrictions, including restrictions on marketing to persons under age 35, limits on in-store displays and access, online sales limits, retail sales limits, age verification requirements on all sales, and a retail compliance check protocol, it said. 

JUUL has faced thousands of lawsuits that claimed the company knowingly and willingly sold its vaping products to minors.

In June, the U.S. Food and Drug Administration issued marketing denial orders to JUUL Labs, requiring the company to stop selling and distributing any of its products in the United States. JUUL continues to fight for FDA authorization as a safer alternative to smoking, publishing studies funded by the company that show that its products help smokers quit. Pending an administrative review, the FDA has paused its initial ruling allowing for JUUL products to be available for sale.

“The FDA is tasked with ensuring that tobacco products sold in this country meet the standard set by the law, but the responsibility to demonstrate that a product meets those standards ultimately falls on the shoulders of the company,” said Michele Mital, acting director of the FDA’s Center for Tobacco Products, in June. “As with all manufacturers, JUUL had the opportunity to provide evidence demonstrating that the marketing of their products meets these standards. However, the company did not provide that evidence and instead left us with significant questions.”

Following the announcement of the settlement, a company spokesman for JUUL said the it is proof of the company's "ongoing commitment to resolve issues from the past" and 

"We remain focused on the future as we work to fulfill our mission to transition adult smokers away from cigarettes - the number one cause of preventable death - while combating underage use," the spokesman said. "The terms of the agreement are aligned with our current business practices which we started to implement after our company-wide reset in the Fall of 2019."

Those resets include working with stakeholders "to combat underage use and transition adult smokers from combustible cigarettes," the spokesperson said.

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