Vaping company Juul Labs has reached a settlement with the city of Chicago, agreeing to pay $23.8 million to resolve a lawsuit alleging the company marketed its products to underage users. The settlement is the latest in a string of payouts made by the embattled e-cigarette giant, which has faced numerous lawsuits and investigations over its marketing tactics and product safety.
According to a press release from the Chicago Department of Public Health, the city will use the settlement money for youth prevention and reduction programs, as well as education and outreach initiatives aimed at reducing underage use of e-cigarettes.
The lawsuit alleged that Juul’s marketing campaigns targeted young people with colorful and playful advertisements on social media and other platforms. The company also allegedly used high nicotine contents to fuel ongoing use among young people.
The settlement requires Juul to pay $2.8 million within 30 days and the rest of the settlement amount later this year. The company has also agreed to take steps to prevent its products from being sold to minors in the future.
In a statement, CDPH Commissioner Allison Arwady expressed concern about the use of e-cigarettes among young people, stating that “the use of any tobacco products, including e-cigarettes, among youth is a serious public health concern – to CDPH and parents across Chicago.”
A spokesperson for Juul called the settlement “another step in our ongoing commitment to resolve issues from the past, place our company on a path forward, and fulfill our mission to transition adult smokers away from combustible cigarettes while combating underage use of our products.” The company has faced intense scrutiny over the past few years as the popularity of e-cigarettes has surged among young people.
In addition to the Chicago settlement, Juul has settled thousands of lawsuits brought by families of Juul users, school districts, city governments, and Native American tribes over the past year. The company has also laid off hundreds of workers in an effort to cut costs and stay afloat as it faces mounting legal and regulatory challenges.
Last year, the U.S. Food and Drug Administration ordered Juul to stop marketing and distributing its products in the United States in order to protect public health. However, the FDA later placed a temporary hold on its decision following a legal challenge from Juul. The agency is now conducting an additional review of the company’s products to determine whether they are safe and effective for their intended use.