Altria Lawyer Tells Jury Its Investment in Juul Brought No Benefits

Today’s news, April 26: According to foreign media reports, a lawyer for Altria Group Inc. told jurors that the company did not benefit from its US$12.8 billion investment in JUUL Labs Inc. in 2021, in a trial over whether Altria helped Juul boost sales in a way that contributed to the rise in youth e-cigarette use.

The trial was brought by the San Francisco school system.

According to Bloomberg, attorney Beth Wilkinson argued at the start of the trial Monday in federal court in San Francisco that Altria played only a passive role in Juul’s efforts to market vaping products to young users, and that it did not earn a single cent from the investment—they received no benefit from it.

She said the 2018 investment had dwindled to US$250 million, referring to the value of Altria’s Juul investment at the end of 2022, as disclosed earlier this year, when the company exchanged that investment for rights to heated tobacco technology.

Lawyers representing the San Francisco Unified School District told U.S. District Judge William Orrick that Wilkinson’s statements to the jury about the Juul investment were prejudicial to the plaintiffs and violated basic rules excluding certain information from trial.

The judge said he would address the objection before resuming the trial Tuesday morning.

The trial is forcing Altria to publicly defend itself on its own for the first time as it faces thousands of cases against both the company and Juul. Last December, Juul Labs agreed to pay more than US$1.2 billion to settle over 5,000 lawsuits accusing the company of causing the youth vaping epidemic in the United States.

Thomas Cartmell, a lawyer representing the school district, told jurors that Altria would say, “We didn’t market the product.” He said: That is true, but it is very important for you to understand everything Altria knew while pursuing and partnering with Juul. He added that Altria knew Juul’s marketing strategy would appeal to and attract young people, including children.

Cartmell said that after Altria’s 2018 investment, Juul’s sales soared, and the tobacco company helped the startup market its products and open 10,000 new stores. He said Altria knew Juul’s plans to increase sales would undermine U.S. Food and Drug Administration efforts to curb youth vaping.

According to a recent court filing, in addition to the proposed class action, the sprawling federal litigation in San Francisco includes about 4,270 personal injury lawsuits and more than 1,434 complaints brought by government entities and Native American tribes.

Juul and Altria defended the first trial, which began in March and was brought by the state of Minnesota over deceptive marketing of vaping products. The companies settled that state’s case last month, but details have not been disclosed.

In April, Juul agreed to pay US$462 million to six states and the District of Columbia to settle lawsuits and investigations over the sale of addictive e-cigarette products to children.