DURHAM, N.C. — North Carolina's legal victory over Juul Labs brings a historic $40 million settlement against the e-cigarette giant, striking a blow to the e-cigarette industry. The court case unfolded and the settlement was announced in Durham — a city famous for its ties to tobacco.
NC Attorney General Josh Stein accused Juul of illegally marketing its products to teens, boosting youth smoking and addiction.
So what does the decision mean for North Carolina and for the tobacco industry in general? Here are answers to some common questions.
What happened in the settlement?
Attorneys for Juul and the state agreed to the $40 million, avoiding a trial. As part of that agreement, Juul will cease its marketing on social media and near schools and will stop arguing that vaping is safer than cigarettes. Juul products are now required to be sold behind store counters.
What happens to the money?
Juul pays $13 million up-front and the rest over six years. The money goes for programs that treat addiction and prevent future use.
How serious is the e-cigarette problem?
The rate of e-cigarette use among high school students rose to 20.9% in 2019, eight years after the product was first introduced, according to the NC Youth Tobacco Survey.
Among middle schoolers, the rate topped 6%.
Of those high school users, 25% said they want to smoke within an hour of waking up and 30% reported having trouble getting through the day without smoking.
What does this mean for the industry?
North Carolina's legal success could negatively affect Juul's standing with the U.S. Food and Drug Administration, which is reviewing an application for its tobacco products. Approval is needed for them to stay on the shelves past September.
Stein has also filed a lawsuit against eight other e-cigarette companies, which have either voluntarily or been forced by court orders to stop advertising and marketing to youth.
What comes next?
Although North Carolina came first, at least nine other states have sued Juul and 39 more say they are investigating. The company faces many more lawsuits from counties and school boards.
The settlement agreement requires Juul to work with the North Carolina Attorney General's Office to help engage other e-cigarette companies and other states to establish a more comprehensive solution to addressing youth e-cigarette use.
Why Durham matters?
Durham qualified as the nation's tobacco capital, and its downtown retained an aroma of the leaves until the industry's decline in the 1980s.
Its downtown is dotted with the remains of brick tobacco warehouses that at one point produced a majority of the country's cigarettes, including Pall Malls and Lucky Strikes.
Striking a blow to smoking in a town that still boasts a Lucky Strike smokestack at its center counts as a symbolic victory even as those old warehouses now host tech companies and a WUNC studio.
Didn't the tobacco industry already settle?
In 1998, nearly every state and two U.S. territories signed the Master Settlement Agreement with major tobacco companies, which finalized dozens of lawsuits.
The agreement raised the price of cigarettes, stopped many kinds of advertising including cartoons or smoking-related merchandise and banned endorsements for product placement in movies.
It had a broad effect on smoking, changing attitudes and sharply cutting use. The National Association of Attorneys General reports that smoking has dropped by more than 50% since the MSA was signed.
The agreement, however, didn't address rules around e-cigarettes since the product didn't hit the market until many years later. It also didn't address social media advertising.
