Ferguson asserts JUUL committed tens of thousands of violations of the Consumer Protection Act

OLYMPIA — Attorney General Bob Ferguson today filed a consumer protection lawsuit against e-cigarette company JUUL. Ferguson’s lawsuit, filed in King County Superior Court, asserts JUUL violated the state Consumer Protection Act by designing and marketing its products to appeal to underage consumers and deceiving consumers about the addictiveness of its product. JUUL’s unlawful conduct fueled a pervasive and staggering rise in e-cigarette use and nicotine addiction among youth.

In addition, Ferguson’s lawsuit asserts that JUUL failed to meet Washington’s tobacco vapor product licensing requirements. From August 2016 until April 2018, every sale of a JUUL device in Washington was unlawful.

“JUUL put profits before people,” Ferguson said. “Pushing unfair and deceptive marketing strategies appealing to youth, the company fueled a staggering rise in vaping among teens. JUUL’s conduct reversed decades of progress fighting nicotine addiction, and they must be held accountable.” 

Electronic cigarettes, also known as e-cigarettes or vapes, are battery-operated devices that create an inhalable vapor containing nicotine. JUUL’s small, rechargeable e-cigarette device looks similar to a flash drive — they are even charged in a USB port — and are slightly larger than a stick of gum. The device creates vapor by heating up nicotine-infused liquid, contained in disposable cartridge known as a JUUL “pod.”

Upon the launch of the device, the company flooded social media with colorful ads of young-looking models and pushed fruit and dessert flavored products. At the same time, JUUL vehemently denied it marketed to underage users — echoing unlawful strategies used by major cigarette corporations in decades past.

JUUL’s tactics targeting youth were wildly successful. From the product’s launch in 2015 to the end of 2018, JUUL gained control of more than 70 percent of the market share for e-cigarettes.

Meanwhile, use of e-cigarettes among teenagers has skyrocketed. For example, in 2016, 13 percent of high school sophomores in Washington used vaping products. In 2018, that number nearly doubled to 21 percent.  In 2011, less than one percent (0.6) of middle schoolers used e-cigarettes. By 2019, one in 10 middle schoolers nationwide used e-cigarettes. This increase is undoing decades of advances in driving down youth smoking rates.

JUUL knew its marketing unfairly targeted underage users

When JUUL launched its products in 2015, it employed the “Vaporized” campaign on major social media platforms — including Twitter, Instagram and Facebook — with a significant underage user base. The “Vaporized” campaign featured young models with bright colors.

The lineup of flavors included in its “Vaporized” campaign included mango, “Cool Cucumber,” “Cool Mint,” and “Crème Brule,” which masked the bitter taste of nicotine vapor to make it more appealing to young users. Nearly 70 percent of high school age e-cigarette consumers use flavors.

The company encouraged its social media followers to voluntarily post about its products. JUUL hired “brand ambassadors,” selected for their influence on social media platforms, to further push the product and its marketing campaigns. These brand ambassadors were recruited because of their established following as trendsetters for youth.

JUUL knew its marketing tactics fueled underage use of its products, yet took little to no action to stop it. A 2018 study of JUUL’s Twitter audience showed that 80 percent of its followers were between 13 and 20 years old. Many teenage users voluntarily posted about JUUL products, including images and videos showing underage use of the products. The company’s employees regularly monitor its social media feeds and knew of these posts, yet did little to address them.

Even JUUL’s co-founder, James Monsees, admitted the “Vaporized” campaign was “flawed” when asked about the campaign’s appeal to youth in a 2018 interview with CNBC. Monsees acknowledged that the company achieved its success through the youth-friendly campaign.

JUUL even employed a “secret shopper” program, in which it tracked retailers that failed to ask for an ID from young-looking e-cigarette shoppers. JUUL publicly touted this limited program as an example of its commitment to keeping vaping products out of the hands of underage consumers. It claimed that it used a range of measures to penalize retailers known to sell its products to underage consumers, from education to barring the retailer from selling JUUL products. However, JUUL did nothing to impose penalties or restrict sales to retailers who didn’t comply, even when shown evidence of multiple retailers’ failure to confirm ages.

JUUL unfairly and deceptively downplayed the addictiveness of its product

It has long been common knowledge that nicotine is highly addictive and harmful. Nicotine from e-cigarettes is no exception. According to CDC surveys, e-cigarette users were far more likely to suffer from a heart attack, stroke and blood clots than non-users.

However, JUUL’s initial marketing avoided even mentioning that JUUL pods contained nicotine. Until 2018, JUUL put no information on its packaging that its products contain nicotine. The company only started disclosing the fact that its products contained nicotine when the federal government required that disclosure. One survey from 2018 showed that 63 percent of JUUL users between 15 and 24 years old did not know that JUUL products contained nicotine.

In fact, the products delivered much higher levels of nicotine than traditional cigarettes and other e-cigarettes. JUUL entered the market with a 5 percent concentration of nicotine. Prior to JUUL’s launch, most e-cigarette liquids on the market were between 1 to 2 percent nicotine concentration. Three percent nicotine was considered high and was intended for people accustomed to smoking two packs of cigarettes per day.

The company later advertised to consumers on its website that one pod carries the same amount of nicotine as a pack of cigarettes. However, the nicotine in a JUUL pod is engineered in such a way that it can deliver twice the nicotine to the body than a pack of Marlboro or Pall Mall cigarettes.

JUUL borrowed Big Tobacco’s playbook

When the company was developing its product, its founders closely studied a massive library of internal Big Tobacco documents — a trove of information made public after state attorneys general, led by then-Washington state Attorney General Chris Gregoire, sued major tobacco corporations in the late 1990s. These documents contained a detailed history of major tobacco companies’ marketing strategy going back decades, including public denials of targeting underage customers standing in stark contrast to years of youth-friendly marketing campaigns.

JUUL’s founders publicly made extensive comments about how they viewed the Big Tobacco archive as educational. In a 2015 interview, one of JUUL’s co-founders, James Monsees, said of the archive: “It became a very intriguing space for us to investigate because we had so much information that you wouldn’t normally be able to get in most industries. And we were able to catch up, right, to a huge, huge industry in no time. And then we started building prototypes.”

Rather than using Big Tobacco as a source of lessons learned about what not to do, JUUL’s founders looked to Big Tobacco as a source of inspiration. A public health expert who works on the database of Big Tobacco archives, Dr. Robert Jackler, met with JUUL’s founders in 2018. During a Congressional hearing, Dr. Jackler described feeling shocked when Monsees thanked him for the database because it was “very helpful as they designed JUUL’s advertising.”

During the product’s development, the company hired a marketing firm that initially proposed targeting an older demographic for JUUL. However, JUUL’s developers vetoed that idea in favor of targeting a young crowd, as had been successful for Big Tobacco.

JUUL’s advertisements often copied themes from traditional cigarette advertisements that were later banned for their appeal to youth. For example, JUUL echoed themes used in popular Camel ads of the past claiming its products were exceptionally “smooth.” JUUL in fact engineered its products to reduce the harsh feeling of inhaling nicotine that often drives young and first-time users away from continuing tobacco use.

JUUL’s ads used similar themes as Camel ads from the 1990s, with language like “smooth” and colorful imagery.

JUUL’s advertising used sharp patterns, bright colors and young models, specifically designed to attract young people — mimicking decades of similar ads used by tobacco brands like KOOL, Newport and Parliament.

 

 

JUUL illegally distributed product into Washington for years without a license

For nearly two years, every single JUUL sale in Washington was unlawful due to the company’s failure to follow basic licensing requirements.

In August 2016, Washington imposed specific requirements for the distribution and delivery of vapor products into the state. The company was fully aware of the deadline for completing its licensing for JUUL products. In fact, the company corresponded with state regulators about the application process. However, JUUL failed to complete the application process and did not obtain the required licenses until April 9, 2018.

Legal claims

Ferguson’s lawsuit asserts JUUL committed tens of thousands of violations of the the Washington State Consumer Protection Act, which prohibits unfair and deceptive business practices. For example, Ferguson asserts the following constitute violations:

• Every product JUUL sold without disclosing nicotine content on the package;
• Every “Vaporized” ad targeting youth;
• Every product JUUL sold unlawfully without the appropriate license.

The Consumer Protection Act allows a maximum penalty of $2,000 per violations. By law, penalties go to the state general fund. Ferguson’s lawsuit also seeks disgorgement of unlawful profits.

In addition to seeking penalties and disgorgement, Ferguson’s lawsuit asks the court to order JUUL to cease its unlawful marketing tactics.

Assistant Attorneys General Rene Tomisser, Joshua Weissman, Breena Roos and Brendan Selby are leading the case for Washington.

On Aug. 13, Ferguson filed a separate lawsuit against an online vaping retailer for selling and shipping tobacco products in Washington without verifying the ages of its customers.

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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.

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