N.C. Attorney General Josh Stein filed a lawsuit Wednesday against Juul Labs Inc., maker of the controversial and top-selling U.S. electronic cigarette.

In doing so, North Carolina becomes the first state to sue Juul over accusations that it targets underage youths with its products.

In the complaint made in Durham Superior Court, Stein wants a judge to require Juul to: cease selling e-cigs to N.C. minors; limit the flavors sold in the state; stop advertising and marketing practices that are intended to or likely to appeal to minors; and delete all data for customers whom Juul cannot confirm are at least 18.

Stein’s lawsuit is similar in approach to the avalanche of county- and state-level lawsuits filed against opioid manufacturers to thwart product usage.

Stein is requesting civil penalties and disgorgement of Juul profits from “its unfair and deceptive practices to the state.”

“Juul’s business practices are not only reckless, they’re illegal, and I intend to put a stop to them,” Stein said in a statement.

“We cannot allow another generation of young people to become addicted to nicotine.”

Juul draws most scrutiny

Juul entered the mainstream retail marketplace in 2015 and has proven that a startup manufacturer can compete with the Big Three manufacturers: Philip Morris USA, R.J. Reynolds Tobacco Co. and ITG Brands LLC.

The e-cig is sold in the form of a pen or a USB flash drive that’s easy to use — and hide — because the vapor typically does not have a smell and quickly dissipates.

Juul holds 74.6% of the U.S. e-cig market share, according to an April Nielsen report on convenience-store data.

That product model and non-tobacco flavorings have drawn scrutiny from the Food and Drug Administration and public-health groups.

The FDA launched its youth e-cig campaign in April 2017 with Juul square in the cross-hairs.

Stein said in October he was launching an investigation into Juul’s marketing and operational practices. He requested details on Juul’s efforts, in marketing as well as relationships with retailers and re-sellers, to verify age before purchase, and any youth education and awareness programs.

Stein said Wednesday he had determined that Juul designs, markets and sells its e-cigs and flavorings to attract young people.

He cited as an example that Juul “manipulated the chemical content of its e-cigs to make the vapor less harsh on the throats of young and inexperienced smokers.”

“As a result, vaping has become an epidemic among minors,” Stein said.

Stein said that nearly 17% of N.C. high school students, or 83,000, reported using an e-cig at least once in a 30-day period in 2017, according to a Centers for Disease Control and Prevention report.

Dr. Scott Gottlieb, who stepped down in April as FDA commissioner, and U.S. Surgeon General Dr. Jerome Adams have made similar claims about Juul and underage vaping.

Brad Rodu, a professor of medicine at the University of Louisville and an anti-smoking advocate, said Stein should broaden his legal actions beyond Juul and vaping if he’s going to rely on youth-usage reports.

In the same CDC study that Stein cited, 91,000 underage high schoolers reported drinking, which is only legal for adults over 21, and 68,000 reported using marijuana, which isn’t legal for anyone in North Carolina.

“If state officials want to protect teens, they should focus on behaviors that can hurt or kill them,” Rodu said.

Stein claimed Juul misrepresents the potency and danger of nicotine in its products, in violation of the state’s Unfair and Deceptive Trade Practices Act.

Stein relied on anti-tobacco advocacy reports in claiming that “teens aged 15 to 17 are far more likely to use Juul than Juul’s supposed target demographics of 25- to 34-year-olds.”

Stein said Juul’s social media campaigns appeal to youths, as well as its use of youth-oriented sponsors and social media influencers.

He accused Juul of using “lax age verification techniques for online purchases that allowed purchasers to avoid or circumvent age requirements.”

Juul defends youth efforts

Juul said it has addressed many of the issues cited by Stein and the FDA.

For example, on Nov. 14, Juul made a dramatic retail concession — at least temporarily — by opting to sell only tobacco, mint and menthol flavors at convenience stores and vape shops.

Juul, along with Philip Morris USA and Reynolds, have been advocating in recent months to raise the purchasing age from 18 to 21 for all tobacco products.

The creme, cucumber, fruit and mango flavors that were removed remain available at www.juul.com, but with heightened age-restriction policies and age-21 verification that requires consumers to provide their name, date of birth, permanent address and the last four digits of their Social Security number.

Juul said Wednesday that while it has not reviewed Stein’s complaint, “we share the attorney general’s concerns about youth vaping, which is why we have been cooperating with his office and why we have taken the most aggressive actions of anyone in the industry to combat youth usage.”

That includes shutting down its Facebook and Instagram accounts “while working constantly to remove inappropriate social media content generated by others on those platforms.”

“We continue to develop technologies to further restrict underage access.”

Gregory Conley, president of American Vaping Association, said that “it seems strangely appropriate that the first attorney general to file suit against Juul would be from a state that just so happens to be home to the U.S.’ second largest tobacco company.”

“Whether he intends to or not, Stein is working to benefit R.J. Reynolds and protect them from having to compete with a product that is making huge gains in reducing cigarette sales in this country.”

rcraver@wsjournal.com 336-727-7376 @rcraverWSJ

Load comments