Mr. Tobias said he was not surprised that Juul did not admit to wrongdoing.
“That almost always happens in these kinds of settlements — that’s a standard clause,” he said.
Juul has not begun other serious settlement talks, however, because none of the other 2,600 lawsuits against the company have been scheduled to begin during 2021. The company is waiting for the F.D.A. ruling before deciding how to move forward. If the F.D.A. will permit Juul’s products to stay on the market to help adult smokers quit, industry executives believe the company’s negotiating stance will be strengthened.
But settling with numerous plaintiffs would be expensive. Juul has seen sales plummet during the past year, analysts say. The company is private so does not disclose its financial data.
Marc Scheineson, a lawyer with Alston & Bird, whose practice includes small tobacco companies, called the $ 40 million in the North Carolina settlement “a relatively small sum to pay to avoid mounting legal fees and the plaintiff pile-on syndrome.”
He also noted that most of the steps Juul agreed to take in the consent degree, such as not advertising near schools and behind-the-counter sales, are actions that it has already taken in an effort to gain public favor. Mr. Scheineson also said that electronic nicotine delivery products, such as Juul, “still have an important public health use by adults as a proven effective tool to quit smoking more harmful cigarettes.”
Juul faces other legal threats, too. The Federal Trade Commission is suing Juul, along with the big tobacco company Altria and related parties, seeking to unwind the 2018 deal that gave Altria 35 percent of Juul. Altria, the maker of Marlboro cigarettes, paid $ 12.8 billion for that stake, but it has since written down the value of the investment to $ 1.5 billion.
The commission says that the two companies entered into a series of agreements, including Altria’s investment, that eliminated competition in violation of federal antitrust laws. The F.T.C. also claims that Altria and Juul started as competitors in the e-cigarette market, but that as Juul became more popular, Altria dealt with the threat by taking its own Mark Ten e-cigarette off the market in exchange for a share of Juul’s profits. Both Altria and Juul have denied the charges.
Author: Sheila Kaplan
This post originally appeared on NYT > Top Stories