Juul must face New York AG’s lawsuit over teen addiction

Juul e-cigarettes are seen on the counter of a vape store in Santa Monica, California, U.S., June 23, 2022. REUTERS/Lucy Nicholson

(Reuters) – Beleaguered e-cigarette maker Juul Labs Inc must face a lawsuit by New York’s attorney general accusing it of fueling teen nicotine addiction in the state through deceptive and misleading marketing.

Manhattan Supreme Court Justice Margaret Chan on Wednesday denied the company’s motion to dismiss most of New York’s 2019 lawsuit. The order comes as the U.S. Food and Drug Administration reconsiders a proposed ban on Juul’s products, and the company reportedly considers bankruptcy as it faces thousands of lawsuits.

A spokesperson for Juul had no immediate comment. The office of Attorney General Letitia James did not immediately respond to a request for comment.

James’ lawsuit claimed that California-based Juul repeatedly targeted teenagers through advertising campaigns, and illegally sold products in a variety of flavors appealing to underage New Yorkers through its website and retail stores since the company’s 2015 launch. It brought claims under various state laws.

Juul, in asking Chan to toss the case, argued that many of those claims were barred by a three-year statute of limitations. Chan, however, found that the state had alleged “a continuous series of wrongs” that continued from 2015 until the time of the lawsuit, putting the conduct within the limitations period.

The company also argued that the lawsuit was preempted by the federal Tobacco Control Act, which regulates tobacco products, as well as the broader Food, Drug and Cosmetics Act. But Chan ruled that the state law claims did not impose any requirements on the company that conflicted with or went beyond federal requirements.

The judge dismissed a single claim accusing Juul of selling to minors through its website, finding that it was improperly brought under a state statute that applied only to in-person sales.

The FDA said on June 23 that it would ban Juul’s e-cigarettes, following a nearly two-year review, but on Tuesday said it would review its decision. A federal appeals court had previously blocked the ban.

The Wall Street Journal reported late last month that the company is working with legal advisers on options including a possible bankruptcy.

Under pressure from regulators, Juul in 2018 pulled popular flavors such as mango and cucumber from retail store shelves and shut down its social media channels on Instagram and Facebook. The company is facing thousands of lawsuits from states, local governments and individuals over its marketing practices.

Juul has agreed to pay more than $87 million to settle claims from four states over related accusations that it marketed its products to minors.

The case is People of the State of New York v. Juul Labs Inc, New York Supreme Court, No. 452168/2019.

For New York: Morenike Fajana and Emily Auletta of the New York Office of the Attorney General

For Juul: Zharna Shah of Kirkland & Ellis and others

Read more:

Juul turned teens into nicotine addicts, New York claims in lawsuit

Juul ban put on hold as FDA starts additional review

Our Standards: The Thomson Reuters Trust Principles.