Juul Labs the manufacturer of Juul electronic cigarettes has reached an agreement with plaintiffs to settle over 8,000 different cases relating to its products.
While the terms of the settlement are yet to be disclosed the latest settlement agreement marks the turnaround of the embattled e-cigarette maker. The company has been battling thousands of cases in courts across the country filed by both school districts and parents over its targeting of teens and young adults.
Already the company is feeling the heat from its numerous court cases. Last month the company announced the layoffs of hundreds of staff due to increasing financial constraints. Already some vaping industry insider says that the company is likely to face bankruptcy if it doesn’t shake off the lawsuits.
Juul has been battling over 8000 lawsuits filed by school districts, Juul users’ families and city governments among many other stakeholders who felt that the company business abused its powers by targeting teens and school-going young adults with its advertainments. The settlement reached this week resolved most of the raised issues. The cases had been consolidated into one and were heard in the California federal Court.
While speaking to the press after the agreement was reached, the company spokeswoman said that the settlement marks a major step for Juul Labs as it seeks to revive its operations in the country and regain lost ground. On their part, the plaintiff’s attorneys said that settlement would put funding in the hands of local governments and school districts for anti-vaping programs. The settlement will also put much-needed funding in the hands of victims and their families to help them seek proper rehabilitation.
Juul was the unlikely hero of the vaping industry five years ago as its products become wildly popular globally. This was thanks to the fact that the company was one of the first vaping companies to embrace non-tobacco flavours such as crème Brulee, mint, and mango among others. This fueled its popularity among teens who were more attracted to the different flavours.
However, its unorthodox marketing campaigns that targeted the young and its high nicotine content got many teens hooked to the products. This got parents, school heads and government officials concerned. To help push back on the backlash the company cut all its advertisements in the USA in 2019. However, this was too little too late as the damage had already been done.
The trouble for the company was compounded in June this year when the Food and Drug Administration(FDA) rejected its appeal to keep its products on shelves in USA stores. The FDA stated that Juul Labs had failed to address key issues relating to the content and marketing of its products. While this judgement put the company’s future in jeopardy, Juul got a reprieve as the FDA temporarily suspended its decision to allow the company to appeal.
But this is not the first case that Juul has to settle this year. In September the company agreed to a $440 million settlement for a two-year investigation conducted jointly by 33 states for selling high-nicotine products. This pushed the company’s largest shareholder Altria to announce its plans to enter the e-cigarette space that has been dominated by JUUL. This means that Juul will now have to compete with its leading investor, the giant tobacco manufacturer Altria among many other emerging competitors.
