AG Ferguson: JUUL must pay Washington $22.5 million over its unlawful advertising practices

JUUL must check Washington stores 25 times a month with secret shoppers to keep its products away from youth

OLYMPIA — Attorney General Bob Ferguson today announced that JUUL must pay $22.5 million to resolve Ferguson’s lawsuit against the e-cigarette company. The lawsuit asserts that JUUL violated the law when it designed and marketed its products to appeal to underage consumers and deceived consumers about the addictiveness of its product.

In addition to the payment, JUUL must stop its unlawful conduct and implement a slate of reforms, including:

• Stopping all its advertising that appeals to youth
• Stopping most social media promotion
• Accurately marketing the content and effects of the nicotine in its products
• Strict practices to confirm the age of consumers who purchase JUUL products — including a robust secret shopper program and online purchase age verification. JUUL is required to conduct no fewer than 25 secret shopper checks per month at Washington-based JUUL retailers for at least two years, and perform at least one check in every Washington county per year. The company is required to send a regular report to the Attorney General’s Office detailing the results of the secret shopper program every 90 days.

This is the strictest secret shopper program in the company’s history. The Attorney General’s Office believes this is likely amongst the strictest secret shopper programs implemented by vapor products sellers anywhere in the country.

These reforms are legally enforceable. If JUUL violates these terms, the Washington Attorney General’s Office can go directly to King County Superior Court to enforce them.

 “JUUL put profits before people,” Ferguson said. “The company fueled a staggering rise in vaping among teens. JUUL’s conduct reversed decades of progress fighting nicotine addiction, and today’s order compels JUUL to surrender tens of millions of dollars in profit and clean up its act by implementing a slate of corporate reforms that will keep JUUL products out of the hands of underage Washingtonians.”

Under the consent decree, filed in King County Superior Court, JUUL is ordered to pay the $22.5 million total over the next 4 years.

The Attorney General’s Office will establish a new Health Equity unit using these resources. The unit will work at the intersection of multiple legal divisions in the Attorney General’s Office, including Civil Rights, Consumer Protection, and Complex Litigation, and respond to deceptive and discriminatory health care practices that disproportionately impact vulnerable communities and communities of color. For the next four years, the unit will focus on enforcement, outreach and education.

JUUL’s new secret shopper program and other corporate reforms

Under the court order obtained by Ferguson’s office, JUUL is legally required to implement a wide range of corporate reforms to ensure it follows the law and keeps JUUL products out of the hands of underage Washingtonians. These reforms include JUUL’s most robust secret shopper program yet in the country. JUUL must meaningfully penalize retailers that fail to confirm the age of customers who purchase JUUL products. As part of this program, JUUL is required to implement the following policies:

• JUUL is required to send secret shoppers to conduct no fewer than 25 compliance checks per month at Washington-based JUUL retailers for at least two years. JUUL must perform these checks across the state, and perform at least one check in every Washington county per year.
• The secret shoppers must confirm that retailers are complying with the requirement to verify a purchaser’s age.
• The secret shoppers must confirm that retailers are complying with the requirement to limit the purchase of JUUL products to one JUUL device and 16 JUUL pods per transaction.
• After a retailer’s first violation, JUUL must send a warning letter to the retailer. After the second and third violations, JUUL must temporarily suspend the retailer from selling JUUL products. After the fourth violation, JUUL must cease doing business with the retailer entirely.
• If the Washington State Liquor and Cannabis Board finds a JUUL retailer to be out of compliance during one of its regular compliance checks, JUUL must count that as a strike against a retailer, and penalize them accordingly under its internal secret shopper program — in addition to any standard penalties imposed by the Liquor and Cannabis Board.
• JUUL is required to send a regular report to the Attorney General’s Office detailing the results of the secret shopper program every 90 days.

The company must also implement practices to prevent underage youth from purchasing JUUL products online. This includes requiring an ID-verified adult signature upon delivery of the products and limiting the number of JUUL products that can be purchased online. If the company makes any changes to this verification policy, it must notify Washington within 30 days of the change, and provide any information the Attorney General’s Office requests about the change.

In addition to stopping its unlawful marketing practices, JUUL is prohibited from marketing its products on Facebook and Instagram. It is also prohibited from marketing on all other social media accounts, like LinkedIn, Twitter and YouTube, aside from a few, narrow exceptions. It must also monitor for and report social media content about JUUL products posted by underage users.

The company must also confirm the age of people who file warranty claims for a JUUL product. This is included to prevent a common tactic underage consumers used to obtain JUUL products: using the serial number of a JUUL device purchased by an of-age consumer to file a warranty claim and receive a “replacement” device without having their age verified.

Background of the case

According to Ferguson’s 2020 lawsuit, JUUL’s unlawful conduct fueled a pervasive and staggering rise in e-cigarette use and nicotine addiction among youth. Upon the launch of the device, the company flooded social media with colorful ads of young-looking models in fun poses that mimicked many of Big Tobacco’s ad campaigns. At the same time, JUUL pushed fruit and dessert flavored products such as mango and crème brulee. Nonetheless, JUUL vehemently denied it marketed to underage users — all of which echoed unlawful strategies used by major cigarette corporations in decades past.

JUUL’s tactics were wildly successful. From the product’s launch in 2015 to the end of 2018, JUUL gained control of more than 70 percent of the market share for e-cigarettes. Much of this was due to its popularity with teens, evidenced by the skyrocketing use of e-cigarettes among teenagers.

For example, in 2016, 13 percent of high school sophomores in Washington used vaping products. In 2018, that number nearly doubled to 21 percent. In 2011, less than one percent (0.6) of middle schoolers used e-cigarettes. By 2019, one in 10 middle schoolers nationwide used e-cigarettes. This increase is undoing decades of advances in driving down youth smoking rates.

The lawsuit asserts the company violated the Consumer Protection Act in several ways:

• Selling products without disclosing nicotine content on the package. Until 2018, JUUL put no information on its packaging that its products contained nicotine. In fact, its products delivered much higher levels of nicotine than traditional cigarettes and other e-cigarettes. It contained as much as five times the nicotine of similar products on the market at the time of JUUL’s launch.
• Targeting its ad campaigns to youth. When JUUL launched its products in 2015, it employed the “Vaporized” campaign on major social media platforms — including Twitter, Instagram and Facebook — with a significant underage user base. A 2018 study of JUUL’s Twitter audience showed that 80 percent of its followers were between 13 and 20 years old. Many teenage users voluntarily posted about JUUL products, including images and videos showing underage use of the products and tutorials on how to hide JUUL use and products from adults, yet JUUL did little to stop it.
• Selling products in Washington unlawfully, without the appropriate license. For nearly two years, every single JUUL sale in Washington was unlawful due to the company’s failure to follow basic licensing requirements. In August 2016, Washington imposed specific requirements for the distribution and delivery of vapor products into the state. The company was fully aware of the deadline for completing its licensing for JUUL products. In fact, the company corresponded with state regulators about the application process. However, JUUL failed to complete the application process and did not obtain the required licenses until April 9, 2018.

Assistant Attorneys General Rene Tomisser, Joshua Weissman and July Simpson led the case for Washington.

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Washington’s Attorney General serves the people and the state of Washington. As the state’s largest law firm, the Attorney General’s Office provides legal representation to every state agency, board, and commission in Washington. Additionally, the Office serves the people directly by enforcing consumer protection, civil rights, and environmental protection laws. The Office also prosecutes elder abuse, Medicaid fraud, and handles sexually violent predator cases in 38 of Washington’s 39 counties. Visit www.atg.wa.gov to learn more.

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Brionna Aho, Communications Director, (360) 753-2727; Brionna.aho@atg.wa.gov

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