A landmark trial kicking off next week will decide whether Juul and Altria Group, Inc.'s vaping products and marketing to young audiences violate a legal theory that’s driven multibillion-dollar settlements for opioid makers, distributors, and retailers.
This Monday Minnesota’s first-of-its-kind trial against the electronic cigarette and tobacco giants begins in a case that could strengthen the public nuisance theory—a flexible claim allowing suits against businesses that allegedly create societal harms ranging from environmental spills to public health epidemics.
It’s the same theory used to combat the cigarette industry in the 1990s. Notching a win here could give states leverage to force settlements with vaping manufacturers—a step dozens of states have already taken with Juul. However, a loss could strengthen industry’s hand in potential litigation against Juul or other companies.
“Many states have turned to public nuisance for what they consider to be major public crises over the last few years because it allows the state to be a plaintiff and address public health concerns or public welfare concerns in a way that an individual tort suit brought by a specific plaintiff doesn’t,” University of Virginia Law School Professor Leslie Kendrick said. “This allows states to express in legal language their sense that these are public harms or social ills in a way that very few other legal avenues allow.”
Minnesota’s Case: Poisoned Youth
Minnesota Attorney General Keith Ellison’s team was the first state prosecutor office to sue Juul using the theory back in 2019. Now they’re preparing to make a case to a Hennepin County jury that the companies must pay up for public costs of addressing an uptick in youth vaping and smoking.
“We believe this is an important set of facts that need to go in front of the public,” Ellison (D) said in an interview. “These folks are poisoning young people. They did it based on deception; they did it based on slick, cool advertising.”
San Francisco-based Juul is one of the largest players in the $22 billion e-cigarette market. The company was partly owned by Virginia-based Altria, the largest cigarette maker in the United States, until earlier this month when Altria exchanged its minority stake in Juul for a nonexclusive global license to some of the startup’s heated-tobacco intellectual property.
That deal ended Altria’s $12.8 billion investment from 2018 that evaporated to a value of $250 million at the end of last year. Though the value of Juul disintegrated as the company faced regulatory blowback, new competitors, and lawsuits, the investment remains a key point in Minnesota’s case because Ellison’s team alleges this partnership allowed sales to boom.
The state alleges the Altria deal gave Juul access to valuable shelf space on the “power wall” behind checkout counters in hundreds of Minnesota stores. The company also provided Juul with lists of smokers along with sales, distribution, marketing, and lobbying services.
That partnership allegedly increased ads in which Juul encouraged smokers to “make the switch” to vaping products and provided Juul coupons along with cigarette packages. This contributed to a reversal of a public health trend to reduce smoking, the state alleges.
In the fourteen years between 2000 and 2014, Minnesota high schoolers smoking at least one cigarette in the last 30 days dropped from 32.4% down to 10.6%. Six years later, 19.3% of Minnesota high schoolers reported having vaped at least once in the last 30 days, according to a recent order in the case.
The question for the jury is going to be whether Juul enticed or tricked people into using products that harm their health. Public nuisance theory is a strong method for bringing that case, Ellison said.
“There’s no doubt that, like opioids, the marketing and sales of Juul was a nuisance,” Ellison said. “Juul basically copied the playbook of tobacco 25 years ago and replicated these deceptive, slick advertising moves.”
Industry’s Case: Theory Doesn’t Fit
Attorneys for Juul and Atria didn’t respond to a request for comment. In court briefs, the companies argued they aren’t liable for youth vaping problems in the state, and they allege that Minnesota wasn’t taking the issue seriously.
“Minnesota has reaped billions of dollars from tobacco settlements and taxes over the last decade for the purpose of preventing tobacco use and remedying its harms,” Juul said in a November motion. “Yet even after determining that there was an alleged youth vaping problem among Minnesota youth, time and time again the State chose to ignore recommended tobacco prevention funding guidelines and instead used these funds to bankroll unrelated projects—like the Minnesota Vikings football stadium.”
The court limited arguments the companies can make at trial, but the judge gave Juul and Altria permission to argue state regulators failed to mitigate youth vaping problems and are partially to blame for kids getting hooked on e-cigarettes and tobacco.
Minnesota failed to meet CDC tobacco control guidelines, and the rise in youth vaping started before Juul entered the market, the company said. Minnesota didn’t allocate funds to address youth vaping until 2021, the company said. That was after Juul had enacted measures to help thwart minors using its products.
“The State collected over $840 million in tobacco-related settlements and taxes in 2017, and another $750 million in 2018,” Juul said in its motion. “Yet both years, the State spent less than 1% of that money on prevention and cessation efforts. In other words, the State consistently collected a hundred times as much in tobacco taxes and settlement fees than it spent on tobacco-control measures.”
‘Nowhere Else to Turn’
The trial will revolve around the companies’ marketing strategy and the impacts on public health, which are similar to allegations in a class action Juul settled in federal court in California. However, public nuisance cases against Juul also represent tensions in the broader use of the doctrine.
Critics of the public nuisance theory argue the claim allows executive officers like state attorneys general to improperly step in and replace the role of administrative agencies and lawmakers, which should be the ones regulating industry.
Regulatory vacuums are breeding new claims. School districts have begun to apply public nuisance theories to suits brought against social media companies for their alleged role in creating a youth mental health crisis. Cities and state attorneys general are also bringing public nuisance investigations or suits alleging automakers Kia and Hyundai are responsible for fallout from a vehicle-stealing crime wave due to poor anti-theft protections for some car models.
Ellison’s case also broke new ground in Minnesota, allowing public nuisance cases to be brought in the state against companies for their products, contrasting with a 2022 Alaska state court ruling dismissing a similar case against Juul.
Kendrick, whose research into public nuisance theory was recently published in the Yale Law Journal, said the theory won’t replace traditional tort claims, but given this surge in applications, it’s hard to predict where the doctrine will go in the future.
“This is coming up in really high impact crisis-type situations. We’re seeing this utilized in the context of some pretty intense public health issues—opioids, vaping, climate change—but this is not your first go-to on any everyday product or someone’s conduct,” she said. “Partly where it goes depends on how well we’re regulating potentially dangerous activities and products on the front end, and whether we have these types of crises where states and localities feel like they have nowhere else to turn.”
The case is Minnesota v. JUUL Labs, Inc., Minn. Dist. Ct., No. 27-CV-19-19888, trial commences 3/27/23.
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