Minnesota leaders revealed a $60.5 million settlement with Juul Labs over youth vaping Wednesday, one month after the deal ended a trial before it went to the jury.
The state won't see the entire amount. An estimated $8.6 million in litigation costs will be deducted, as well as an estimated $9 million in attorneys' fees. That will leave the state with about $43 million.
Attorney General Keith Ellison and Gov. Tim Walz say the settlement money is expected to go toward fighting tobacco use, vaping and smoking. The terms of the settlement weren't public until now.
"We're going to get out there and protect our kids," Ellison said at a State Capitol news conference surrounded by lawyers, advocates and politicians, some of whom also talked about the four-year fight to hold the e-cigarette manufacturer accountable for the resurgence of youth tobacco use that had been in retreat.
A spokesman for Ellison said the amount is more than the estimated $30 million the state would have received if it had settled before trial. The attorney general said the state recouped more than Juul saw in profits from vape sales, and going to trial was an important signal.
"It sends a message that you will not get away with this," Ellison said. "We will put you in front of a Minnesota jury and you can take your chances."
Before the emergence of vaping, Walz said Minnesota was within a decade or two of completely snuffing out youth tobacco use. But Juul's entry into the market with fruity flavors, fun ads and colorful designs erased all those gains that flowed from Minnesota's $6.5 billion settlement with Big Tobacco 25 years ago.
Because of the Juul settlement, the state has new tools. Juul cannot market to children and young adults, use models under age 35 or hand out product samples. The company is prohibited from sponsoring events, advertising outdoors or on social media or apparel.
Juul can't sell flavored products, must disclose the nicotine contents of their products and create a retailer compliance program for Minnesota stores to ensure its products are sold with proper age verification.
The settlement also requires Juul to publish internal documents related to the litigation, and co-defendant Altria must abide by restrictions on the sale of its own e-cigarette products that it sells in the future.
Before the trial, the state was especially concerned about Juul's marketing effort called "Vaporize" that featured colorful ads and social media campaigns and enticing flavors like mango, cucumber, crème brûlée and fruit medley.
Juul stopped distributing the fruity-flavored pods in 2019. The company also suspended all advertising in the United States and shut down its social media accounts.
Last summer, the federal Food and Drug Administration barred Juul from selling its vaping device along with tobacco- and menthol-flavored cartridges. Juul appealed the decision and the order was stayed by the courts pending that appeal.
Also speaking at the Capitol news conference was Katy Johnson, 21, a University of Minnesota student who works with the Minnesota nonprofit Tobacco-Free Alliance. Johnson said she took her first hit off a Juul at age 13 and quit at 20.
"It was so normalized. Many of us were vaping," she said. "This was no accident; it was predatory."
She said that if vaping tasted like tobacco, she never would have done it.
Juul spokesman Austin Finan issued a written statement Wednesday identical to the one he released when the trial ended, saying that resolving legal challenges was a priority. He noted that Juul had settled with 48 states and territories, providing more than $1 billion to combat underage use and develop cessation programs.
Altria was added as a defendant in 2020 because it bought a $12.8 billion minority share in Juul in December 2018. Formerly known as Philip Morris, Altria is based in Richmond, Va., and Juul is based in San Francisco.
