Altria Agrees to Pay $235 Million to Settle Juul Vaping Device Lawsuits
According to Reuters, Altria Group Inc announced on Wednesday that it will pay $235 million to settle at least 6,000 complaints that accused Altria's previous investment in the e-cigarette manufacturer JUUL Labs Inc. of fueling the youth vaping epidemic.
The agreement resolves nearly all complaints against the tobacco giant regarding Juul from government agencies and individuals across the United States.
Sarah London, the lead attorney for the plaintiffs, stated in a release that this agreement will provide extraordinary and meaningful relief for youth, families, and government organizations across the country.
Altria expects to record a pre-tax charge of $235 million in the second quarter of 2023 and plans to exclude it from adjusted earnings.
Murray Garnick, Altria's executive vice president and general counsel, stated: "While we still believe the claims against us are without merit, we believe this settlement avoids the uncertainty and costs of prolonged litigation, which is in the best interest of our shareholders."
The company announced in March that it had divested its 35% stake in Juul in exchange for a license to 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.
The statement in the lawsuit claims that Juul marketed to youth through sweet flavors and flashy social media campaigns. They stated that Altria helped implement this strategy by allowing Juul to leverage its sales force to place its products on shelves next to Altria's.
Juul has previously settled many lawsuits against it, paying over $1 billion to 48 states and territories, and $1.7 billion to individuals and local government entities.
