Altria faces first trial over helping market Juul e-cigarettes to teenagers

Today’s news, April 21: According to foreign media reports, tobacco giant Altria Group (MO.N) is set to go on trial Monday in a lawsuit brought by the San Francisco public school district, which alleges that the company helped fuel the rise of youth e-cigarette use together with JUUL Labs Inc.

The San Francisco Unified School District said teachers and staff have had to go to great lengths to deal with a growing number of students using e-cigarettes on campus, and is seeking to make Altria pay the costs of addressing the problem.

Altria, which held a 35% stake in Juul from 2018 until earlier this year, faces thousands of similar lawsuits from individuals, local government entities, and states. The San Francisco school district case was selected by U.S. District Judge William Orrick in San Francisco, who is overseeing most of the litigation, as a bellwether or test case.

The trial before Orrick next week will mark the second time one of these cases has been submitted to a jury. An earlier trial in a Minnesota case ended in settlement late Monday, although the terms were not disclosed.

“Most of the allegations raised in this lawsuit relate to events that occurred years before we made our minority economic investment in Juul,” Altria said in a statement on Thursday. “We believe this case lacks legal merit and will defend ourselves vigorously.”

The school district did not immediately respond to a request for comment.

The district sued Juul and Altria in 2019. It accused Juul of deliberately targeting consumers under 18 with sweet flavors and eye-catching social media campaigns, while alleging that Altria helped by allowing Juul to use its sales force and by incorporating Juul advertising into its Marlboro cigarette products.

Juul has already settled the school district’s lawsuit and most similar claims against it, paying more than $1 billion to 48 states and territories and $1.7 billion to individuals and local government entities.

Last month, Altria announced that it would give up its investment in Juul in exchange for some of Juul’s intellectual property. As of December, its stake in Juul was valued at $250 million, down from $12.8 billion in 2018.

In 2019, Juul pulled most of its e-cigarette flavors from the market and halted most of its advertising under pressure from regulators. Last June, the U.S. Food and Drug Administration briefly banned the products, but after the company appealed, it suspended the ban and agreed to reconsider.

The head of the FDA’s Center for Tobacco Products said last year that youth e-cigarette use in the United States remains at an alarming level and poses a serious public health risk.

Federal health officials said last October that an estimated 2.55 million U.S. middle and high school students reported using e-cigarettes during the first four months of 2022.